Dwarkesh Patel: evaluation

Transcript context

…So, we take it as being earlier. It is Stanford. I traced through this, I think in Triumph. Yeah, it was a company called Federal Telegraph Company that was founded by a guy called Cyril Frank Elwell, who was a radio pioneer, and he was tapped by his teacher to head this radio company. The story was, as I remember it, there’d been this local genius in San Francisco who had attracted all these investors and was going to do this wireless telegraphy company. Then he died in a freak carriage accident. These investors wanted to find someone else, and they went to Stanford’s nearby factory and asked, who should we hire? It was this guy Elwell who founded Federal Telegraph. Federal Telegraph then licensed, I think Danish technology which was originally the Poulsen Telegraph Company. They then hired some fairly bright people like Lee DeForest and they did incredibly well in World War I off of federal Navy contracts, off of Navy contracts. They then did things like providing jobs for people like the young Fred Terman, whose father was a Stanford scientist. Now, Fred Terman then plays an outsized role in this story because he goes to MIT, studies engineering there, and then comes back to become Dean of Stanford’s engineering program. He really played an outsized role in setting up the Stanford Industrial Park which attracting Fairchild Semiconductor. Then there’s this sort of random thing about how the Fairchild Semiconductor attracts these people and then repels them because you have this brilliant guy Shockley, right? He’s both brilliant and sort of personally abhorrent and manages to attract brilliant people and then repel all of them. So they all end up dispersing themselves into different companies, and they create this incredibly creative ecosystem that is the heart of Silicon Valley. In its day, it had this combination of really smart people and really entrepreneurial ethos, which just made it very, very healthy. I think the thing that many of us worry about is that Silicon Valley more recently, feels much more like it’s a one-industry town, which is dangerous. It feels more like it’s a bunch of industrial behemoths rather than a bunch of smart and scrappy startups. That’s a recipe that feels much more like Detroit in the 1950s than it does like Silicon Valley in the 1960s. Speaking of startups, what does your study of cities imply about where tech startups should locate and what kind of organization in person or otherwise they should have? I think there’s a lot to like about in person, certainly. Relying too much on remote feels quite dangerous if you’re a scrappy startup. But I like a lot the Sunbelt smart cities. I sort of have a two-factor model of economic growth, which is it’s about education, and it’s about having governments that are pro-business. If you think about sort of the US, there’s a lot of heterogeneity in this. If you think about the US versus other countries, it’s heterogeneity. So the US has historically been better at being pro-business than, let’s say, the Northern European social democracies, but the Northern European social democracies are great on the education front. So places like Sweden and the Netherlands, and Germany are also very successful places because they have enough education to counter the fact that they may not necessarily be as pro-business as the US is. Within the US, you also have this balance, whereas places like Massachusetts, and California are certainly much less pro-business, but they’re pretty well-educated. Other parts of the country may be more pro-business, but they’re less so. The real secret sauce is finding those places that are both highly educated and pro-business. So those are places like Charlotte and Austin and even Atlanta, places in the Sun Belt that have attracted lots of skilled people. They’ve done very, very well during COVID. I mean, Austin, by most dimensions, is the superstar of the COVID era in terms of just attracting people. So I think you had to wait for the real estate prices to come down a bit in Austin, but those are the places that I would be looking at. I don’t know if you know, but I live in Austin, actually. I did not know that. [laughs]…

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