World After Capital: Work In Progress & Preface

NOTE: One of my goals for 2018 is to bring my book World After Capital to the point where I feel it is good enough to publish in paper form. I have come to realize that if I just keep blogging about other topics at the same time I won’t get there. So going forward every Monday I am planning to post revised pages or whole sections of the book starting today with the sections titled “Work in Progress” and “Preface.”

Work in Progress

This book is a work in progress. What you are reading now is a draft with known problems and placeholders. It does, however, include all the major ideas and what remains is a process of gradual improvement.

The process of writing in this way is an example of what I call the “knowledge loop” in the book. The knowledge loop consists of learning, creating and sharing. My writing is based on what I have learned. By sharing early, others can learn from my ideas and I, in turn, can learn from their feedback.

I know how powerful this approach is from my experience with blogging for nearly a decade. I have learned a great deal from reader comments. The same will be true here.

You can see some of the amazing initial feedback. Thanks to everyone who has taken the time. You can either comment inline by highlighting text or email me at albert@worldaftercapital.org.

I am using gitbook to write World After Capital and you can track the changes I am making on github. I retain final “commit rights” for changes and as such take responsibility for any and all errors.

There is also a separate FAQ which I will be updating periodically. If you prefer reading on paper or on an eReader, you can download a copy in PDF, ePub or Mobi.

The contents of the book will always be freely available at worldaftercapital.org under a Creative Commons license.

Preface

As a Venture Capitalist (“VC”), I get asked the question a lot “What’s next?” People want to know what I think the next big technology will be. They are looking for an answer like “robotics” or “machine learning.” But that’s not the question that I am interested in answering. Instead, what I believe matters much more is what we as humanity decide to do with all the new technologies available to us.

In particular, I am convinced that we are in the middle of a transition that’s as profound as when we went from the Agrarian Age to the Industrial Age [1]. This transition is being driven by the advent of digital technologies, and we must now collectively decide what comes after the Industrial Age. In World After Capital, I am arguing that the proper next age is the Knowledge Age—and that in order to get there we need to focus on the allocation of attention (rather than capital).

Why write a book as a VC? Or more pointed: isn’t this a distraction from finding and managing investments in startups? Working with startups gives me a window into the future. I get to see certain trends and developments before they become more widely understood. That puts me in a good position to write about the future. At the same time, there is a feedback loop with investing: Writing about the future that I would like to see, helps me find and invest in companies that can help bring that future about. I am writing World After Capital because I feel compelled to do so by what I see, but writing the book has also made me a better investor.

Why write this specific book now? A big transition means lots of uncertainty. Many people fear change and they start to support populists who tend to have a simple message: Go back to the past. This is happening all over the world. We saw it with Brexit and with the election of Donald Trump as president of the United States [2]. I started writing World After Capital considerably before both of those events occurred, but they serve to underline the importance of a future-oriented narrative. Going back is not a viable option. It never has been. We did not remain foragers after inventing agriculture. We did not remain farmers having invented industrial machines. We will not remain laborers having invented digital technologies.

One of the messages in World After Capital is that we all need to have a purpose in life. As we leave the Industrial Age behind, our purpose can no longer be derived from having a job (or from consuming). Instead, we need to find a purpose that is compatible with a Knowledge Age. I feel incredibly fortunate to have found my purpose in investing in Knowledge Age startups, writing and speaking about why this transition is happening now, and suggesting how we might go about it.

I deliberately use the term Knowledge Age, instead of Information Age. We are drowning in information, which spews forth endlessly from our computers and phones. Knowledge, by contrast, are the scientific explanations and the works of art and literature that have withstood the test of time and have been refined through the process of critical inquiry. Knowledge is what makes human life possible and worthwhile.

In a strange and wonderful way, much of what I have done in the past has brought me to this point. As a teenager in my native Germany, I fell in love with computers early in the 1980s. I got to work, even before going to college, writing software for companies. I studied both economics and computer science as an undergraduate student at Harvard and wrote my senior thesis about the impact of computerized trading on stock prices. As a consultant, I saw the impact of information systems on the automotive, airline and electric utility industries. As a graduate student at MIT, I once again studied both economics and computer science and wrote my dissertation about the impact of information technology on the organization of companies. As an entrepreneur, I co-founded an early and ultimately unsuccessful Internet healthcare company. And finally as an investor, I have had the good fortune of being able to invest in companies that are providing transformative digital technologies and services, including Etsy, MongoDB and Twilio.

I am grateful for all the people who have helped me along the way: my parents who wholeheartedly supported my interest in computers at a time when it was quite unusual and expensive to do so; my wife Susan Danziger and our children Michael, Katie and Peter who made me a better person; my many teachers, including Erik Brynjolfsson and Bengt Holmström, from whom I learned so much; my partners at Union Square Ventures, starting with Fred Wilson and Brad Burnham who invited me to join the firm they had started; the many entrepreneurs I have had the opportunity to work with; the philosophers and scientists, such as David Deutsch, who have demonstrated the power of human knowledge; the friends who have been there through good and bad times; and the many people who have taken the time to comment, who have invited me to speak, who have contributed in ways small and large, with special mentions for Seth Schulman for work on an early draft, Basil Vetas for capable research assistance, and Max Roser for extensive data collection and visualization.