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A Local Revolution?

paulgraham.com

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Re: A Local Revolution?

#41

Post by sharpn »

tjic wrote: post #3

> There are already signs that startups may not spread particularly well. The spread of startups seems to be proceeding slower than the spread of the Industrial Revolution Government was much smaller at the time of the Industrial Revolution. The theory of "regulatory capture" says that government is responsive to those firms that are affected by government regulation and have the money to buy favorable legislation. T…

From Europe, whilst many elements of our culture are less conducive to entrepreneurs than the US, these examples are not among them (except I don't know about the legal docs thing - I agree with earlier replies that critical information providers need to have rigorously maintained qualifications). My mate set up an internet wine company here without any problems, it's easy to pay directors of a company in equity [but non-directors get minimum wage protection], and the real estate industry is 'self-regulated' here in the UK. Oh, and we have free universal healthcare. All that said, I still believe the next game-changing startups will come mostly from the US - which is still the destination of choice. And I agree with your central argument that 'big government' generally stifles innovation.

Re: A Local Revolution?

#42

Post by ellyagg »

prospero wrote: post #30
dantheman wrote: post #20

Earlier quoted context omitted.

>>In most of these cases, it's not the government protecting existing companies, it's the government protecting the naive population. You won't fire someone after six months of unpaid labor, but someone else will. Your expert system might create air-tight contracts, but someone else will cut corners. This untrue, throughout history companies get laws to make upstarts more difficult. There is no reason you need to go…

Do you want to back up that assertion? I'm not saying regulatory capture doesn't exist, I'm just saying it's not the primary driving force behind legislation. You don't get to just say I'm wrong and make vague references to historical trends. Unless a company already has lawyers on staff, they have no way of determining whether a legal expert system is a good product or not. For that reason, it cannot be a substitute…

But, see, you claim it would harm a great many other people. We claim, on balance, it will help many more people than it hurts. Down with guilds!

Re: A Local Revolution?

#43

Post by pg »

tjic wrote: post #3

> There are already signs that startups may not spread particularly well. The spread of startups seems to be proceeding slower than the spread of the Industrial Revolution Government was much smaller at the time of the Industrial Revolution. The theory of "regulatory capture" says that government is responsive to those firms that are affected by government regulation and have the money to buy favorable legislation. T…

We've funded lots of startups and we hardly ever see cases where they're crushed by big companies. The biggest exception is music. But though the record labels have certainly captured congress, their lawsuits tend to destroy startups before government regulation does.

Re: A Local Revolution?

#44

Post by raheemm »

ChristianPerry wrote: post #4

I felt the effect of being in Silicon Valley the moment I moved out here. The area is not only teeming with endless talent, energy, and enthusiasm, but (and this is important) we have an entire culture that makes this talent, energy, and enthusiasm possible in the first place. When I moved to San Francisco from Chicago, I felt the change immediately. People simply get me out here. They understand why I'm doing what I…

PG might be on to something here. I used to live in Austin back in the mid-90s. It has has great weather, a great university and several startups that went onto become big (Dell, Pervasive, etc). And yet Austin has failed to compete with Silicon Valley and in the last decade might have even become less relevant in the tech sector.

Re: A Local Revolution?

#45

Post by ellyagg »

mechanical_fish wrote: post #16
tjic wrote: post #3

> There are already signs that startups may not spread particularly well. The spread of startups seems to be proceeding slower than the spread of the Industrial Revolution Government was much smaller at the time of the Industrial Revolution. The theory of "regulatory capture" says that government is responsive to those firms that are affected by government regulation and have the money to buy favorable legislation. T…

Government was much smaller at the time of the Industrial Revolution. Is this true? Is it really such an open-and-shut case? In some senses it is obviously true: There were a lot fewer people, a lot fewer filing cabinets and a lot fewer regulations. A lot of the tools needed for our big modern system -- hygiene, communications, literacy -- just weren't there yet. There were essentially no worker protections in the ea…

Yes, government was much smaller at the time of the Industrial Revolution, at least in the US. The federal budget, as a share of the GDP, was 3% right before FDR. Now it's some giant, horrible amount I don't even want to say out loud.

Given this, the idea that there could be less (or about the same) regulatory interference of business today is, frankly, ludicrous. For one thing, simply reducing business budgets (taxes) at the rate the government does is an onerous burden all by itself. Arguments can certainly be made that it's a net gain for society, but please do not be disingenuous in stipulating the facts.

Re: A Local Revolution?

#47

Post by markessien »

On the other hand, it's easy to break into the startup industry from anywhere in the world. You just need to gain a certain number of customers and following, and you will be noticed. Contrast that with the film industry, where the need for expensive equipment means that financing is critical to every venture.

It makes sense for the film industry to be concentrated in hubs because of the huge expenses in each film. It does not make sense for startups, because such expenses don't exist, and the need for connections, while important, is not critical.

So, though the trend may look like it's going towards major hubs for now, over time this will normalise itself as those players who are not able to go to the startup hubs will fragment and create successful companies all over.

There will be few major hubs for technology startups - but they won't be ever as concentrated as hollywood - simply because there is no need for them to be so.

Re: A Local Revolution?

#48

Post by abhinav »

I wonder if a smaller local revolution has happened before: formation and spread of great research universities. Govts have tried to set up great research universities by will, China is trying hard, India is making small steps, so are places like Germany. But they have not succeeded yet. Even in a small country like UK, only 3 great universities have emerged.

Within US, Stanford is today a great research university but it was not so in 1945. Great luck like the combination of cold war spending and the idea of steeples of excellence by Terman made it happen. Uni. of Florida or ASU may be today aspiring to greatness, but they are fighting the 'locality' of research universities. Maybe some random events will help them out.

Re: A Local Revolution?

#49

Post by mechanician »

Excellent essay, as usual. Question: does this imply that Silicon Valley will continue to grow as a result of being the dominant location for startups? And if so, is there a point at which its size will diminish its superiority?

Re: A Local Revolution?

#50

Post by dantheman »

prospero wrote: post #30
dantheman wrote: post #20

Earlier quoted context omitted.

>>In most of these cases, it's not the government protecting existing companies, it's the government protecting the naive population. You won't fire someone after six months of unpaid labor, but someone else will. Your expert system might create air-tight contracts, but someone else will cut corners. This untrue, throughout history companies get laws to make upstarts more difficult. There is no reason you need to go…

Do you want to back up that assertion? I'm not saying regulatory capture doesn't exist, I'm just saying it's not the primary driving force behind legislation. You don't get to just say I'm wrong and make vague references to historical trends. Unless a company already has lawyers on staff, they have no way of determining whether a legal expert system is a good product or not. For that reason, it cannot be a substitute…

Well there are many cases of regulator capture, the AMA, the railroad industry, the airplane industry (pre-deregulation), the telephone industry (pre-deregulation), and the cable industry.

The recent mandates on testing toys for lead, has pretty much outlawed small toy producers. You can't prepare food at your house and legally sell it (even if you say this was cooked at my house). The FDA debacle with juice pasteurization vs more modern UV processes.

> And while this would certainly harm lawyers, it would also harm a great many other people.

Once again you make a statement that claim to be true with no real backing. Say 1 person is harmed by this newer cheaper law advice, and 10,000 are saved due to the reallocation of resources to medicine -- this is of course a hypothetical example, but it has just as much grounding as yours.

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