Max Levchin and Peter Thiel are not ones to mince words: “Innovation in this country is somewhere between dire straits and dead,” Levchin said at TechCrunch’s Disrupt conference today.
PayPal’s co-founders are collaborating on a book with Russian grand chestmaster Garry Kasparov called The Blueprint about what they see as a slow decline of innovation in the U.S.
“If you look outside the computer and the internet, there has been 40 years of stagnation,” said Thiel, who pointed to one of his favorite examples: transportation. ”We are no longer moving faster,” Thiel noted. Transportation speeds, which accelerated across history, peaked with the debut of the Concord in 1976. One decade after 9/11, Thiel says, we are back to the travel speeds of the 1960s.
OMG I totally agreed with this!! The Concorde was cancelled due to high maintenance costs and high ticket prices, which ultimately people could not afford, but at the time, I thought how horrible to be going backwards! We must be able to be more efficient and safe today, no? Bring it back!
This is hardly a new theme for the Facebook financier. When FORBES profiled Thiel last February, he blamed the world’s problems on what he calls “stalled technological innovation.” What a wonderful world this would be, he mused, if we could time travel back to the late 1950s and ’60s and realize predictions of science fiction that never materialized: ubiquitous space travel and colonization, desalinization, reforestation of deserts, and underwater cities.
Taking the stage today, Thiel reiterated that philosophy but took specific aim at the energy industry. “Clean tech,” he said. “Is increasingly a large disaster. People in Silicon Valley aren’t even talking about it anymore.”
On many levels, this is true. Just look at the number of VCs who beat the cleantech drum for years, only to spend the majority of their time today buying up late shares of Facebook, Groupon and Twitter. But there is also a certain hypocrisy at work here. Thiel stopped building transformative companies to launch his (largely failed) hedge fund, Clarium Capital. His venture firm, Founders Fund, allocates half its capital to consumer internet companies like photo-sharing service Path and Yammer, Twitter for the enterprise.
Similarly, Levchin was quick to call out the number of “me too” start-ups in the Valley today. “Innovation ultimately ends up being about solving very hard problems. If you’re trying to build one more wrinkle on the Angry Birds idea,” Levchin said. “You’re not solving a very hard problem.”
A valid, albeit questionable point coming from an entrepreneur who used the skills he acquired building PayPal to start yet another photo-sharing app. His company, Slide, made applications like “fun wall” and “fortune cookies” before Google acquired it last year and recently, shut it down.
On stage today, Levchin danced around that unpleasant fact, saying only that he was still on “Google’s payroll” and therefore could not discuss the search giant’s “secret plans” for disruption.
Asked how the two would jump start innovation today, Levchin said: ”The solution is simple: Aim almost ridiculously high.” He noted how much residual innovation was created when the U.S. decided to put a man on the moon (think composites and fuel efficiency). Today, he said, ”The space program is on its last legs” and the U.S. has lost its appetite for similar risk.
I don’t agree with spending billions of dollars to put men on the moon when we have billions of people starving to death and billions of people who don’t have clean water on earth. Increase farming, organic farming, farming equipment, clean water alternatives, solar and wind energy, educating second and third world (maybe even first world,) citizens to provide/farm for themselves, some medical, internet software, niche internet companies is what I would invest in, off the top of my head. Just my two cents.