Dwarkesh Patel: uncertainty

Transcript context

…So this is the thing that got me so convinced on social media relatively early. Even before the Arab Spring, I don’t know if you remember, you might be too young, but there was this overwhelming critique of social media between inception in like 2001 to basically mainstreaming in like, 2011-2012. There was a decade where there was just this overwhelming critique from all the smart people, as I like to say. That was basically — this thing is useless. This is narcissism. This is just pointless self ego stroking, like narcissism. Nobody cares. The cliche always was Twitter is where you go to learn what somebody's cat had for breakfast. Who cares what your cat had for breakfast? Nothing will ever come from any of this. And then I remember, you could pick up any newspaper on any given day through that period and you could read something like this. And then I remember when Erdoğan was consolidating control of Turkey. Erdoğan came out and he said, “I think Twitter is the primary challenge to the survival of any political regime in the modern world,” And I was like — Okay, all the smart analysts all think this is worthless and then a guy who's actually trying to keep control of a country is like, this is my number one threat. The spread of what that meant, of what the outcomes meant. I was just like — “Oh my god.” My conclusion was Erdoğan is right and all the smart westerners are wrong. And quite honestly, I think it’s still quite early on. We’re still pretty early in the long arc of social media. The high level thing here would be — the world in which 5 billion people are on the internet is still only a decade or so old. That’s still really early. The world in which 5 billion people are on social networks is like five years old. It’s still super early. If you just look at the history of these transitions in the past, just look at the printing press as a prescient example. It took 200 years to fully play out the consequences of the printing press. We’re still in the very early stages with these things. I was like ten in 2011 so I don’t know if I would’ve personally. I would’ve liked to think I would’ve caught on if I was older but maybe not. It’s hard to know. But it is kind of interesting. You are personally invested in every single major social media company. So it’s interesting to get your thoughts on where that sector might go. Do you think the next ten years will look like the last ten years when it comes to Big Tech? Is it just going to keep becoming a bigger fraction of GDP? Will that ever stop? As a fraction of GDP, it’s only gonna go up. It is the process of tech infusing itself in every sector. And I think that’s just an overwhelming trend. Because there are better ways to do things. There are things that are possible today that were not possible ten years ago. There are things that will be possible five years from now that aren’t possible today. So from a sector standpoint, the sector will certainly rise as a percent. I’m putting my money where my mouth is in the following statement — Entrepreneurial capitalism will deliver most of that. A lot of that gain will be in companies that were funded in the venture capital, silicon valley kind of model. For the basic reason we discussed which is you do need to have that throwback to the bourgeois capitalist model to do new things. Incumbents are generally still very poor at changing themselves in response to new technology for reasons we’ve discussed. So that process will continue to play out. Another thing that I would just highlight is — The opportunity set for tech is changing over time in another interesting way. We’ve been good at going over the dynamic but small slices of GDP in the last fifty years. And more and more now, we’re going to be going after the less dynamic but much larger sectors of GDP. Education, healthcare, real estate, finance, law, government are really starting to come up for grabs. They are very complicated markets and they’re hard to function in. As startups, it’s harder to build the companies but the payoff is potentially much bigger. Because those are such huge slices of GDP. So the shape of the industry will change a bit over time. What is technology? Technology is a better way of doing things. At some point, the better way of doing things is the way that people do things. At some point that does shift market share from people doing things the old to the people doing things the new way.…

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