As a venture capitalist, I am often asked ‘What’s the next big thing?’ People tend to ask this when they are looking for a trend in technology, expecting me to talk to them about robotics or virtual reality. But I think that’s a boring interpretation of the question, as these trends come and go as part of hype cycles that represent the waxing and waning of media interest in a particular technology. Instead I answer, ‘Oh, nothing much – just the end of the Industrial Age.’ And that momentous change is the subject of this book.
The World After Capital is unabashedly about some truly big subjects. In order to tackle why the Industrial Age is ending and what is going to come next, I will examine such things as the nature of technology and what it means to be human. It might seem a wildly ambitious thesis, but we are facing a transition as profound as that which took humanity from the Agrarian Age to the Industrial Age, so nothing less will do.
The current transition has been made possible by the advent of digital technology, so it is essential that we understand the nature of this technology and how it differs from what preceded it. It is also essential that we examine the philosophical foundations for what we want to accomplish – after all, we have the opportunity to decide what will follow the Industrial Age. In The World After Capital I will argue that the next age will be the Knowledge Age, and that in order to get there we must focus on the allocation of attention rather than capital.
Markets fail at allocating attention because prices cannot exist for directing our attention to problems and opportunities crucial for the survival and thriving of humanity. The climate crisis, for instance, is both more severe and more imminent than most people realize, and it is a direct result of our failure to pay attention. How quickly we address this crisis will to a large part determine the shape of the current transition. If we do not make drastic changes quickly, getting to the next age will be even more painful than the transition to the Industrial Age, which started in the eighteenth century, involved numerous violent revolutions and didn’t conclude until the end of the Second World War.
The transition from the Industrial Age is already underway and has caused massive disruption and uncertainty. Many people are fearful of change and react by supporting populist politicians who promote the simplistic message that we should return to the past. This is happening all over the world; we saw it with the vote in the 2016 UK referendum to leave the European Union and with the election of Donald Trump as President of the United States in the same year. I started writing The World After Capital before both of those events, but they underline the importance of a future-oriented narrative that shows a path forward for humanity. Going back is not a viable option, and never has been. We did not continue foraging for food after the invention of agriculture, and nor did we remain farmers after the invention of industry (farming is still important, of course, but it is carried out by a tiny percentage of the population).
Each of these transitions required us to find new sources of purpose; as we leave the Industrial Age behind, our purpose can no longer be derived from having a job or from an ever-growing consumption of material goods. Instead, we need to find a purpose that will be compatible with the Knowledge Age. I feel incredibly fortunate to have found my purpose in investing in startups, as well as in examining why this transition is happening now and suggesting how we might go about it.
In a strange and wonderful way, much of what I have done in my life so far has brought me to this point. As a teenager in my native Germany in the early 1980s, I fell in love with computers. I started writing software for companies and then studied economics and computer science as an undergraduate at Harvard, writing my senior thesis on the impact of computerized trading on stock prices. After graduating I worked as a consultant and experienced the impact of information systems on the automotive, airline and electric utility industries. As a doctoral student at MIT, I wrote my dissertation on the impact of information technology on the organization of companies. As an entrepreneur, I co-founded an early Internet healthcare company. And as a venture investor, I have had the good fortune to back companies that provide transformative digital technologies and services, including Etsy, MongoDB and Twilio.
You might be wondering why I would choose to write this book as a VC – after all, surely it’s a distraction from finding and managing investments in startups? However, working with startups gives me a window into the future; I get to see trends and developments before they become widely understood, and this puts me in a good position to write about what is going to happen. At the same time, writing about the future that I would like to see will help me find companies that can help bring that future about. I am writing The World After Capital because what I see compels me to do so, but I am also confident that writing it has made me a better investor.