Friday, November 18, 2016

#323 / Maybe Take Your Foot Off That Accelerator?

Sam Altman, described by Wikipedia as an "entrepreneur, programmer, venture capitalist and blogger," is the current president of Y Combinator. That organization calls itself an "accelerator," with a mission to promote and inspire new high-tech startup businesses that will make lots of money. Money for the startups, certainly, but also money for Y Combinator. How that works is explained by a recent article in The New Yorker:

They created the greatest business model of all time. For basically no money” — YC gives each company just a hundred and twenty thousand dollars, to cover expenses — “they get seven per cent of a lot of the best startups in Silicon Valley!” Collectively, YC companies are worth eighty billion dollars, a valuation that has grown seventeenfold in the past five years.

In fact, Y Combinator is the "top accelerator in the country," according to a recent article in The New York Times, and has directed $10.2 billion in financing to the startups it has fostered. That start up capital is what has produced that eighty billion dollar valuation for the companies that were financed. The Times article, and The New Yorker article, which is titled, "Sam Altman’s Manifest Destiny: Is the head of Y Combinator fixing the world, or trying to take over Silicon Valley?" will tell you a lot about Y Combinator specifically, and about "accelerators" in general.

Altman, who is only thirty-one years old, is clearly an unusual personality, at least as depicted in The New Yorker article:

"I like racing cars,” Altman said. “I have five, including two McLarens and an old Tesla. I like flying rented planes all over California. Oh, and one odd one—I prep for survival.” ... He explained, “My problem is that when my friends get drunk they talk about the ways the world will end. After a Dutch lab modified the H5N1 bird-flu virus, five years ago, making it super contagious, the chance of a lethal synthetic virus being released in the next twenty years became, well, nonzero. The other most popular scenarios would be A.I. that attacks us and nations fighting with nukes over scarce resources.” ... “I try not to think about it too much,” Altman said. “But I have guns, gold, potassium iodide, antibiotics, batteries, water, gas masks from the Israeli Defense Force, and a big patch of land in Big Sur I can fly to.”

In essence, the Y Combinator method for wealth creation is education plus contacts. According to The New Yorker, "YC provides the university experience they wish they could have had." Maybe in the future aspiring entrepreneurs will have that experience at a university. Or maybe they are already having it!

Steve Blank, a Silicon Valley "entrepreneurship guru," has recently reported that my old alma mater, Stanford University, is now nothing more than "an incubator with dorms." Blank revealed in a blog post that Stanford now has 145 courses on entrepreneurship in its catalogue. That includes a course in "Hacking For Defense," aimed at mobilizing student talent to support U.S. military adventurism. These courses have, very clearly, displaced courses devoted to what used to be called the "humanities," and the "liberal arts." 

The bottom line for the "accelerator" concept is always measured in money, and that "make more money" objective, if generally adopted, will doom our species to a perpetual search to increase consumption. Buying things (from cars, and planes, and houses in coastal communities, and property in Big Sur) is what money is good for.

What's good for those who have the money, however, is most emphatically not good for the rest of us.

Let's take our foot off that accelerator!

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