Reinventing the Wheel

Every once in a while, Silicon Valley is ridiculed for reinventing the wheel. You’d think there are only so many wheels left to reinvent, but apparently we’re still in the first-bite phase of software eating the world.

There are plenty of examples. Dropbox famously reinvented FTP servers. Lyft reinvented public transportation. Kindle reinvented libraries. Soylent reinvented, well… Soylent. People-free this time.

Why do pessimists think this way? Of course there’s general ignorance. But the pattern of criticism seems too specific to be random. It’s also lazy to assume that Valley outsiders “just don’t get it.”

So what subtleties are lie behind the curtain? There are a handful of relevant things I can imagine:

  • Aversion to changing norms
  • Dispersion of existing power hierarchies
  • Setting precedent, e.g. about public vs private services
  • Cost of switching platforms/infrastructure

As I’ll mention later, each of these can be reverse-engineered to find ways to solve problems and capture value. But first, let’s walk through some examples of these ulterior motives playing out.

Lambda School is the most recent and striking example of such criticisms. Check out this hit piece published by none other than The Guardian.

It’s so interesting because there’s some grain of truth to each gripe, even if it’s not coherently argued by the journalists covering it.

On changing norms: LS is guilty of the same crime as the Thiel Fellowship. Normalizing alternative career paths and dropping out is scary to a lot of people. Although it can be a positive signal in the Valley, it’s rightfully a strong anti-signal elsewhere.

On dispersion of power hierarchies: not only are universities and modern hiring pipelines vulnerable to LS-style disruption, literally everyone with a college degree stands to lose out too because such credentials are largely (but not entirely) zero sum. Read Bryan Caplan’s excellent book The Case Against Education for more on this. Even if its title is gratuitously provocative.

On setting precedent: LS, much like Airbnb and Lyft, is a lightning rod for statist vs individualist conflict. It’s the charter schools debate playing out at the college level. You’d be reasonable to assume that LS-style thinking will seep into many parts of society, and that could be very good or very bad depending on your viewpoint. For one of those groups, it’s best to explain this away as “nothing new here — ISAs already exists in state-run form in Germany.”

On switching cost: If you’re enrolled in college or sourcing talent based on university talent or credentials, your life simply gets harder. Either you switch to LS which incurs sunk-cost and hassle, or you don’t and you might be on a suboptimal path.

My point is that both operators and investors should think more deeply about the “reinventing the wheel” trope. It’s a hint about the structure of underlying incentives.

I don’t think any of this is intrinsically good or bad. I do however think it’s perfectly natural.

There are a couple different lessons you could draw from this post. On the surface level, visceral gut-reactions are probably more rational than you’d otherwise think. That’s important to consider when building and communicating a product.

Taking it one step further, you can follow these patterns to find wheels actually worth reinventing (meaningful startup ideas). This framework can help you filter through such ideas. Otherwise you’d just waste your time tearing down Chesterton’s fence everywhere you look.

Addendum: The Pessimists Archive is an excellent podcast that dovetails well with these themes.

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