[ExI] thin cat capitalists
spike66 at att.net
Mon May 2 14:54:30 UTC 2016
Once in a while, Aeon whacks one out of the park:
In the neighborhood, we have all the usual kid heroes: firemen, professional
football players (the SF 49ers have a stadium up the street) but everyone
wants to be Elon Musk. He's the local fat cat capitalist with a herd of
thin cats chasing him and wanting to be him.
I won't buy a luxury electric car, but that whole landing a rocket on its
feet is such a cool stunt, I am cheering for him too. Go Space-X!
I don't think Aeon will sue me if I paste the whole thing here:
A gifted child, an adventure, a dark time, and then ... a pivot? How Silicon
Valley rewrote America's redemption narrative
by Kat McGowan <https://aeon.co/users/katmcgowan>
writes about health, medicine and science for magazines including Nautilus
and Quanta, and is a contributing editor at Discover. She lives in New York
City and California.
Edited by Pam Weintraub <https://aeon.co/users/pamweintraub>
Like the great entrepreneurs who came before him, Elon Musk's life story
reads like myth. Or maybe a comic book. He was a precocious child of extreme
intelligence who read the encyclopedia for fun; not surprisingly, he was
picked on relentlessly. Bullies once pushed him down a flight of stairs and
beat him so badly he ended up in hospital.
But even as a child, he was obsessed with visions of a better future,
convinced that he must try to save humanity. Eventually, he identified five
possible species-ending threats to mankind, and resolved to address them.
The most solvable, in his opinion, was the need for sustainable
energy-production, and the need for a backup plan - say, a self-sustaining
million-person colony on Mars.
He began implementing this vision seriously in the early 2000s, using a $180
million payout from selling PayPal, his first huge company, to launch the
private rocketry firm SpaceX. A few years later, he put millions into the
electric car manufacturer Tesla. Car makers and tech people ridiculed his
plan to build a high-performance luxury electric vehicle and, eventually, a
cheap mass-market version. Everyone else started laughing when the first
SpaceX launch vehicle exploded, then another, and then a third.
By 2008, as the financial markets around the world melted down, his plans to
save the world through enlightened entrepreneurship were circling the drain.
Tesla cars were months behind schedule, and there was enough money only for
one more rocket launch. If this rocket exploded too, if the cars didn't
arrive, if the investors didn't come through, the game was over. Both of his
businesses would collapse, and his own fortune would vanish.
Musk says he was on the edge of a nervous breakdown, and then suddenly it
all turned around: the launch succeeded, NASA gave SpaceX an enormous
contract, the cars were delivered, and today Musk runs two groundbreaking
businesses, each worth billions. Now, it's Elon Musk's world. We just live
in it - until we move to Mars.
In Silicon Valley these days, you haven't really succeeded until you've
failed, or at least come very close. Failing - or nearly failing - has
become a badge of pride. It's also a story to be told, a yarn to be
unspooled. When a tech startup stumbles or fails, as most of them eventually
do, it is customary for the company's founder to detail how and why it
In fact, it's become a ritual. Many post-mortems appear on Medium; others
are collected at Autopsy.io, a site curating first-person tales of flops, or
at FailCon, a convention dedicated to picking apart failures. The stories
tend to unfold the same way, with the same turning points and the same
language: first, a brilliant idea and a plan to conquer the world. Next,
hardships that test the mettle of the entrepreneur. Finally, the downfall -
usually, because the money runs out. But following that is a coda or
epilogue that restores optimism. In this denouement, the founder says that
great things have or will come of the tribulations: deeper understanding,
new resolve, a better grip on what matters.
Silicon Valley is a sun-drenched utopia of money and world domination. Tech
entrepreneurs are household names. So why the tales of woe, the obsession
with darkness overcome? Why are people still preoccupied with Musk's
near-failures, even as they worship his current success? Unconsciously,
entrepreneurs have adopted one of the most powerful stories in our culture:
the life narrative of adversity and redemption.
Each of us has a story we tell about our own life, a way of structuring the
past and fitting events into a coherent narrative. Real life is chaotic;
life narratives give it meaning and structure. Studies in the field of
narrative psychology suggest that these tales we tell aren't just a
convenient way to describe the past: the way we formulate our own story
moulds who we are.
For Americans, the redemption narrative is one of the most common and
compelling life stories. In the arc of this life story, adversity is not
meaningless suffering to be avoided or endured; it is transformative, a
necessary step along the road to personal growth and fulfilment.
For the past 15 years, Daniel McAdams, professor of psychology at
Northwestern University in Illinois, has explored this story and its five
life stages: (1) an early life sense of being somehow different or special,
along with (2) a strong feeling of moral steadfastness and determination,
ultimately (3) tested by terrible ordeals that are (4) redeemed by a
transformation into positive experiences and (5) zeal to improve society.
This sequence doesn't necessarily reflect the actual events of the
storyteller's life, of course. It's about how people interpret what happened
- their spin, what they emphasise in the telling and what they discard.
Believing that you have a mandate to fix social problems requires a sense of
self-importance, even a touch of arrogance
In his most recent study
<http://skateboardingalice.com/papers/2015_McAdams.pdf> , the outcome of
years of intensive interviews with 157 adults, McAdams has found that those
who adopt this line tend to be generative - that is, to be a certain kind of
big-hearted, responsible, constructive adult. Generative people are deeply
concerned about the future; they're serious mentors, teachers and parents;
they might be involved in public service. They think about their legacy, and
want to fix the world's problems. But generative people aren't necessarily
mild-mannered do-gooders. Believing that you have a mandate to fix social
problems - and that you have the moral authority and the ability to do so -
also requires a sense of self-importance, even a touch of arrogance.
No wonder that the redemption narrative is so popular in Silicon Valley,
where the script of Musk's life emerges again and again in the stories that
founders tell. The Silicon Valley version of the Redemption Story has
adapted the format put forth by McAdams with three main chapters that tech
founders claim as their own: The Awesome Journey, The Pivot and, finally,
Making the World a Better Place.
The founder's story usually begins with the fun stuff - frantic work,
hair-raising scrapes with bankruptcy, and at least one long, dark night of
the soul in which the founder is nearly destroyed by doubt. In tech culture,
this is called 'the awesome journey' (as in 'It's been an awesome journey,
with tons of learning along the way') and relentless hours of work; Uber's
CEO Travis Kalanick refers to these as the 'blood, sweat and ramen' years.
In a talk a few years ago at FailCon, he told the epic tale of the business
he founded prior to Uber, and the marathon that kept it alive. He endured
two lawsuits, the burst of the first dot-com bubble, a bankruptcy, and
months of living at his parents' house on zero pay. After that, his
co-founder defected to Google, stole his main engineer, and scuttled a
million-dollar deal. Kalanick's talk focused on the gory details, which is
what his audience wanted to hear. The fact that his startup was eventually
acquired was a side note.
The awesome journey is equivalent to the 'moral challenge' of the classic
narrative. By recapping the hero's difficulties, it demonstrates his
resolve. McAdams describes the theme this way: 'I am a gifted adventurer who
journeys forth into a dangerous world.' The adversities encountered during
this phase are what later unlock the doors to triumph. For entrepreneurs,
these are not merely newbie errors. They are cathartic moments of suffering
that enable later greatness.
But first, the moment of truth.
It's a myth that Silicon Valley loves the demoralising experience of
failure. So startup postmortems aren't neutral accounts of what went wrong
and why. They promote the idea that failure enables later success.
That's why tech entrepreneurs refer to failure as a pivot. Originally
popularised by The Lean Startup (2011), a guidebook for entrepreneurs,
'pivot' has come to mean a moment of reckoning, the moment when one set of
plans is abandoned.
People pivot when it becomes obvious that their business plan is too
complicated, will never gain traction, has no potential customers, or is
just a bad idea. But tech is not like other sectors, where bad ideas merely
sink without a trace. People pivot, and they begin again. Pivoting turns
failure into rebirth, in which the difficulties and setbacks of the past
give rise to a new, stronger, better vision. This is not incremental
improvement; it is a transformation. A phoenix rises from the ashes, a door
opens, a new vision emerges from the old. In this moment of redemption, the
slate is wiped clean.
Obviously, this is a mythos, an outlook rather than a neutral accounting of
the facts. In reality, the idea that failure breeds success is empirically
wrong, points out the historian Leslie Berlin, who researches the history of
innovation at Stanford University. In a Harvard Business School study
<http://www.hbs.edu/faculty/Publication%20Files/09-028.pdf> of thousands of
venture-backed companies, those entrepreneurs who succeeded the first time
were more likely to succeed again the second. Those who failed once were
just as likely to fail again the second time. 'In other words, trying and
failing bought the entrepreneurs nothing - it was as if they never tried,'
Berlin wrote in The New York Times. The narrative device of the pivot
sustains hope against this cruel reality.
'This is what happens when you work to change things. First they think
you're crazy, then they fight you, and then all of a sudden you change the
But while faith in the pivot might be delusional, it is a valuable illusion.
When people think about their misfortunes as life-changing opportunities,
they gain an advantage, McAdams has found. 'The failures become part of the
grand narrative of progress: "That had to happen, and I needed that setback,
or I wouldn't have made this discovery",' he says. It keeps morale high. It
fosters grit and perseverance. People who tell these stories tend to be more
satisfied and feel that their lives are coherent and meaningful. People in
McAdams's interviews said that they turned the bad into good, or found new
strength inside themselves. It's a mindset that encourages resilience,
something every entrepreneur needs.
In the redemption narrative, the payoff for steadfastly enduring all the
challenges is a fresh opportunity to do good. People told McAdams that they
intended to create a better future for their family, community, or society
as a whole.
There's a reason that the idea sounds familiar: it's become a running joke
about the self-importance of tech. In the first season of the HBO spoof
Silicon Valley (2014-), one startup founder after another deploys that
mantra to convince investors to pump money into esoteric projects. Example:
'We're making the world a better place through canonical data models to
communicate between endpoints!'
The joke hits home. The iPhone tagline was 'This changes everything'. In
Google's S-1 - the regulatory paperwork a company submits before going
public - an entire section is titled 'Making the World a Better Place'.
That mentality was perfectly captured in just two sentences by Elizabeth
Holmes, the founder of the former Silicon Valley darling Theranos, which is
developing an improved blood-testing technology. The company, recently
valued at more than $9 billion, abruptly fell from grace in 2015 when it
became clear that the technology was not ready for prime time. In her
appearance on CNBC, Holmes played the notes of tech redemption: 'This is
what happens when you work to change things,' she declared. 'First they
think you're crazy, then they fight you, and then all of a sudden you change
Sure, it sounds presumptuous, maybe even a bit phoney. The usual assumption
is that when people in tech talk about changing the world like that, it's
just a cynical bid for attention. That's because Silicon Valley has a
reputation for selfishness, where vast wealth stays in the pockets of CEOs
and founders rather than being diverted toward museums or universities -
never mind toward changing the world.
But an essential point about the redemption narrative is that, through the
telling, it culminates in a genuine desire to improve the world - and in the
case of tech, the conviction that it is possible to do so.
So maybe we've got it all wrong about tech. The logic of the redemption
narrative predicts that when Musk says that he plans to convert the world to
solar power and establish a colony on Mars, he's entirely sincere, as crazy
as he might sound. In a redemption narrative, the will to succeed in
business is perfectly compatible with a desire to change the world.
In fact, the idea of doing good by doing well goes back to the early years
of Silicon Valley. In his book From Counterculture to Cyberculture (2006),
the Stanford historian Fred Turner describes the origins of this train of
thought in the late 1960s, when visionaries such as Stewart Brand of the
Whole Earth Catalog rubbed shoulders with artists, military-funded
cybernetic theorists and commune-builders; the same utopian spirit lives on
today at the Burning Man festival in Nevada. For people who belong to this
world, it's self-evident that technical innovators can also solve social
problems. It's taken for granted that entrepreneurialism is the fastest road
to a better future.
So it seems possible that in the coming decade, as the tech titans of today
hit middle age, the most generative stage of life, they will unleash an
unprecedented wave of philanthropy. These optimists, fuelled by vast sums of
money and unwavering confidence in their own ability to fix things, might
become world-builders on an unprecedented scale. Already we see hints of
that: in the efforts of the Bill and Melinda Gates Foundation to eliminate
malaria; in Mark Zuckerberg's efforts to improve schools; in Sean Parker,
the founder Napster, pledging $600 million for research into cancer and
malaria, among other causes.
Musk is taking that just a few steps further, by hoping to seed other
planets with human beings to avert the inevitable extinction of the species.
In fact, the launch of SpaceX could be seen as the ultimate act of
generativity. Musk says that when he founded the company, he knew the odds
were against him. The stakes were just too high. 'An engineered virus,
nuclear war, inadvertent creation of a micro black hole, or some
as-yet-unknown technology could spell the end of us,' he wrote in 2008.
'Sooner or later, we must expand life beyond our little blue mud ball - or
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