Sam Altman has an interesting post up on his blog talking about what he feels is a changing cultural environment in San Francisco (which is where he is based). His argument is that heresies are good for innovation and for moving the world forward. We need people to question established norms. But for that to happen we need environments and cities that encourage it, or at the very least allow it.
Here’s an excerpt:
Restricting speech leads to restricting ideas and therefore restricted innovation—the most successful societies have generally been the most open ones. Usually mainstream ideas are right and heterodox ideas are wrong, but the true and unpopular ideas are what drive the world forward. Also, smart people tend to have an allergic reaction to the restriction of ideas, and I’m now seeing many of the smartest people I know move elsewhere.
In San Francisco he is starting to feel that it is becoming increasingly difficult to have wacky ideas and to work on wacky startups. And for this reason, people are starting to leave the city in search of more open cultures. Openness used to be a hallmark of San Francisco. It was once the epicenter of counterculture. Has that changed?
Here is a final excerpt:
I don’t know who Satoshi is, but I’m skeptical that he, she, or they would have been able to come up with the idea for bitcoin immersed in the current culture of San Francisco—it would have seemed too crazy and too dangerous, with too many ways to go wrong. If SpaceX started in San Francisco in 2017, I assume they would have been attacked for focusing on problems of the 1%, or for doing something the government had already decided was too hard. I can picture Galileo looking up at the sky and whispering “E pur si muove” here today.
Click here to read the full post.
“Great ideas alter the power balance in relationships. That’s why great ideas are initially resisted.” -Hugh Macleod
I have been following the work and writing of designer Tobias van Scheider for quite some time now. If you don’t subscribe to his newsletter and you end up liking this post, you should consider signing up.
Recently I stumbled upon something he published back in October called “Ignore Everybody”, where he argues that when you’re exploring something new – that could potentially fail – one of the best things you can do is ignore everybody.
And that’s because:
“We have to understand that ideas are by nature very fragile. They’re like little naked babies, unable to protect themselves. If we really believe in a new idea, we have to protect her with great effort. This is difficult, because oftentimes the greatest ideas get killed by the people around us. Executing on a great idea is by nature a lonely path. If everyone would agree with you, the idea is probably not that great anyway.”
I am incredibly interested in how new things get started and how new ideas thrive. Fostering innovation has become a critical component of city building in today’s world. But sometimes I feel as if we’re thinking too top-down, as opposed to bottom-up.
As Tobias rightly points out in his article, lots of great ideas started as stupid little projects. Who would have thought that a teen sexting app with disappearing messages (Snapchat) would become a company worth many billions of dollars?
It’s for this same reason that Sam Altman of Y Combinator recently wrote that sometimes its better to call your new company a project, rather than a business. When you call it a business you impose all kinds of biases onto it in terms of viable business models, and so on. But when you keep it a “project”, it becomes more acceptable to be experimental.
As an example of all this, I was fascinated to learn this past weekend about a Toronto-based ad agency called OneMethod. Because as part of their agency they have a division called the MethLab, where the goal is to simply experiment with “absurd ideas.”
One of those absurd ideas was a social media campaign slash pop-up taco restaurant – remember, they are an ad agency not restauranteurs. It was so grassroots that they ended up having to sell original art work that happened to come with a “free” taco in order to get around all the legal requirements for serving food. Brilliant.
The idea was so well received that it has grown into a fully fledged restaurant called La Carnita, which today operates across 3 permanent locations and happens to be one of the most popular taco restaurants in Toronto.
But let me ask you this, if they had instead gone out to investors – as an ad agency wanting to get into the taco business – would they have been able to raise the money for their first physical restaurant? I can imagine this being a lot more difficult.
On a larger scale, this is exactly what Google is doing with Alphabet. The company was reorganized and rebranded so that they could continue to work on absurd ideas outside of the Google cash cow. If the idea/project takes off, then it becomes a fully fledged company. If it doesn’t, then it gets shut down and something else is tried.
This is what people and companies are doing today to stay relevant in the innovation race.
But in some ways it feels like a battle to allow the absurd to survive. That’s why the best approach might be to just ignore everybody. There’s value in the absurd but maybe you’re the only one who sees it right now.
Yesterday afternoon Sam Altman of Y Combinator published a blog post talking about a new YC Fellowship program for even earlier stage companies.
For those of you who aren’t familiar with Y Combinator, they are a super successful funding platform for early stage startups. They are located in Mountain View, California.
What’s unique about their approach is that they invest a relatively small amount of money ($120,000 for 7% of your company) in a relatively large number of companies. Their most recent cohort was around 85 companies and they do that twice a year.
The rationale behind this approach is that it can be incredibly hard to predict which people and ideas will produce the next great company. Oftentimes the best ideas appear really shitty at first. (Here’s a post by one of the cofounders of Airbnb talking about the company’s early rejections.)
So instead of putting all of their eggs in one basket, YC invests smaller amounts in more companies.
But beyond this being beneficial to them, it’s also a model that I think helps to reduce the barriers to people starting a company. It gives more people the chance to prove that their company has the potential to be something great.
And that’s precisely what makes this new YC Fellow program/experiment so interesting to me.
Instead of $120,000, YC fellows will receive $12,000 and they won’t have to move to the Bay Area (although it’ll be encouraged). They’ll still get mentorship and advice like the regular YC program, but it’ll be a kind of light version.
Though this is almost certainly just the beginning. Here’s how Sam ended his announcement post:
“Someday if it works, we’d love to fund 1,000 companies per year like this.”
Now all of a sudden that’s some scale.
What’s exciting about this is that I believe our cities have the potential to be far more innovative than they are today. Every city is trying to be the next Silicon Valley, but every city is not the next Silicon Valley.
I saw a great tweet the other day that went something like this (I wish I could remember who the author was):
“Entrepreneurs aren’t risk takers. They’re just rich kids with big safety nets.”
It’s a bit of a tongue-in-cheek generalization. But to unlock the full potential of our cities, we should be figuring out how to get everyone participating and building their ideas, not just those with a head start.
I think there are a lot of people around the world who could be doing great things, but they just haven’t been able to take that first step for one reason or another.
Hopefully organizations like Y Combinator will be able to help them take it.