A (Deeply) Broken Innovation Ecosystem

be radical Briefing | April 18th, 2023


Dear Friend,

Here is a curious thought for you: If innovation is predominantly the recombination of already existing things in new and interesting ways, and if what systems like ChatGPT do is to recombine existing knowledge in new and interesting ways, will these systems become very, very good at innovating? Or, at least, allow their human operators to leverage them for much higher innovation output?

Read on for a reflection on how broken our innovation ecosystem might be – and what that might lead to.

Decode. Disrupt. Transform.

Last weekend, the New York Times published two worthwhile pieces on the fraught dynamics of the tech innovation ecosystem.

The first, by Erin Griffith, is provocatively (optimistically?) titled The End of Faking It in Silicon Valley. It surveys the recent spate of fraud investigations and convictions in the startup world and suggests that with the general scaling back of the sky-high valuations and abundant VC investment that characterized the 2010s, we’re witnessing the aftermath of an era that was especially conducive to a willingness on the part of investors to ignore red flags, suspend disbelief, and generally not look too hard under the hood of the flying robotaxi – if you will. The headlines (and salacious docuseries) typically focus on the misdeeds and scandals of the founders themselves, but this piece takes in a bit of the bigger picture and points, correctly, to the awkwardness of VCs – whose basic raison d’être hinges on being not only earlier but also more shrewd than the rest of us in recognizing spectacular potential – now painting themselves as victims of fraudulent startups fronted by “Machiavellian narcissists.”

The dynamic on display is one of a broken system or rather, a system well designed to produce results that make innovation often feel broken. Many of the incentives and structures of VC have historically selected for a certain type of firm and founder that was also working very hard to make itself look like the type of firm and founder favored by the VC system, and then, once part of the system, the firm would adopt that system’s logic and incentives as its own imperative – much of which boiled down to showing spectacular growth by any means necessary. Ethical or sometimes, not so much.

Disturbingly, the tech innovation ecosystem can feel just as broken on the other end of the spectrum, where some of the most powerful and highly capitalized companies in the world play. The day after Griffith’s piece ran, Ezra Klein argued that many engineers and researchers at the major-player firms in the accelerating AI arms race strongly (…if quietly) believe that development in the field should be regulated, slowed, and perhaps rethought. But those better angels of cautious, ethical innovation are forever running up against the ground truth of the industry: “No one company can slow down to a safe pace without risking irrelevancy.”

Let that one sink in for a minute. In their own way, the big firms may find ethical decision-making and innovation leadership just as disincentivized or systemically compromised as do the startups. Fixing that innovation ecosystem will require courage and humility (both hard things) from its leaders, but as this pair of analyses suggests, it will likely require another thing that might be even harder: effective, thoughtfully designed regulation to align incentives with positive outcomes in the longer term. (via Jeffrey)

What We Are Reading

😎 How Incumbents Survive and Thrive “How Incumbents Survive and Thrive” by Julian Birkinshaw won the 2022 HBR Prize for the best HBR article of the year. His research on the world’s biggest companies shows that digital disruption is less destructive than you might think. JaneRead

💑 Your ChatGPT Relationship Status Shouldn’t Be Complicated Do you consider your interaction with ChatGPT a social interaction? Some people do, and it can get complicated. MafeRead

🌏 The Geopolitical Labyrinth The grand global uncertainty about how tensions between China and the US will evolve isn’t just about China and the US: It’s also very much about how their allies position themselves with regard to the global economy, complex supply chains, and strategic autonomy. JeffreyRead

😫 People Are Sick and Tired of All Their Subscriptions It might not just be you being lost in all those subscriptions. Not only are governing bodies and B2C businesses attempting to find solutions, but users themselves are also catching up too. JulianRead

🤯 What your headache is trying to tell you 52% of the world’s population has experienced some type of headache over the last year. This article gives you a simple taxonomy of what a headache is, how many types exist, and what to do for each case. PedroRead

🏘️ Researchers populated a tiny virtual town with AI Left to its own devices (and with some prodding), AI can be rather wholesome. PascalRead

The Thin Wisps of Tomorrow

🥽 Our friend and colleague Aaron Frank on “Finding Relevant Use Cases for ‘the Metaverse’: A Business Guide

🍏 For some weekend reading – the Steve Jobs Archive published their free eBook “Make Something Wonderful” featuring select writing and speeches from Steve.

🤑 Molly White’s take-down of the Andreessen Horowitz Web3 / State of Crypto report - a must read! (her thread, not the report)

🧑‍⚖️ A.I. Is Coming for Lawyers, Again.

👀 The Innovation Potential of ChatGPT.

🦮 Maximizing the Potential of LLMs: A Guide to Prompt Engineering.

Internet Finds

As someone who has had way too many pizza parties – spot on! “Why employees hate ‘pizza parties’ but HR loves having them” 🍕

In Other Parts of the Radical Universe

🏴‍☠️ The Heretic: Perfection Sucks, and It’s Boring 🎧 Listen 📺 Watch

🧨 Disrupt Disruption - The Podcast: We brought Christina Nesheva, CEO at Officinae Bio, back to talk about leadership. Listen now.

📕 Disrupt Disruption – The Book: Get your copy of our bestselling book and learn how to decode the future, disrupt your industry, and transform your business here.