A Local Revolution?

He notes that the industrial revolution spread quickly because there were geographical areas with middle class populations and cultures that let people keep the large sums of money they made. He also notes that the culture necessary for large numbers of start-ups is not present in many areas.

IMO, we're no way near the railroad stage of the start-up revolution. I think we're in the early renaissance. The valley is like Venice in the 1400s. It's a very localised concentration of merchant traders and a culture of what we now call "modern values", meanwhile the rest Europe is living in the "dark ages". It wasn't until the plague spread across Europe and gave the surviving working classes more influence that the culture started to change. Even then, it's another 300 years before society really starts to change.

Looking at Europe in the 1400 hundreds you might well have thought that Venetian style modernism would be a very localised revolution and that these new fangled "banks" would only ever be established in small areas.

Start-ups are not the "railroads" of the industrial revolution. They are the "banks" of the industrial revolution.

That depends crucially on which business you're talking about. Exceptions abound. Consider that example of the mail-order wine business. Do you know how hard it was to start such a business in the days before FDR? There was a lot of "regulatory interference", personified by guys like "Eliot Ness". You couldn't start a wine business in the USA, full stop -- unless you kept it underground. That era also had a devastating effect on our brewing industry that took a generation to recover from.

One could also ask some of the people who run porn sites about the complex history of "regulatory interference" in their business.

And, as we now know all too well, there have been times when regulation of the financial industry was much more strict than it is today. That's not a simple history, either: Corporations and stock exchanges have existed since the 17th century, but their degree of regulation has changed in complicated ways over time.

And a relentless focus on taxes obscures other forms of interference that were more important at certain times, for certain industries. However onerous it is to start a telecom-based company today, it was probably harder back in those days before FDR, when AT&T held a government-sanctioned monopoly over all of US telephony:

http://en.wikipedia.org/wiki/Ma_Bell

In 1934, the government set AT&T up as a regulated monopoly under the jurisdiction of the Federal Communications Commission, in the Communications Act of 1934... by 1940 the Bell System effectively owned most telephone service in the United States, from local and long-distance service to the telephones themselves. This allowed Bell to prohibit their customers from connecting phones not made or sold by Bell to the system without paying fees. For example, if a customer desired a type of phone not leased by the local Bell monopoly, he or she had to purchase the phone at cost, give it to the phone company, then pay a 're-wiring' charge and a monthly lease fee in order to use it.

That the Internet managed to come into existence at all is the result of a complex interplay of antitrust law, the rise of government-funded research under guys like Vannevar Bush, and the Cold War (DARPA, which funded the Internet, was born in the days after Sputnik).

Today, our cable and phone companies also wield virtual monopolies with the help of the FCC. The situation is pretty bad in the USA. But I'm not sure it's significantly worse than it was back in 1940.

I think the point that people like the google founders were many many times more productive than their equally-smart employees counterpat is important, but I think the same contrast can be found on people working on their free software projects compared to people working on their day-job projects.

I personally think that things like free software will have much more impact in the future economic revolutions than the concept of "start-up".

* sorry for my weak english :/

It will be more like a culture barrier. For a culture that has no sense of custom satisfaction, the user interface for e-commerce will never be as good as Apple or Amazon. We as technologists sometime forget a lot of our assumptions are based on our environment.

The first half is correct, but not the second half. A few examples: the software that runs on spy satellites, the software used to design stealth planes, the software used in sigint, "smart bomb" guidance systems, the software used to design nuclear weapons, etc.