As a Venture Capitalist (“VC”), I get asked the question a lot “What's the next big thing?” People tend to ask this looking for a trend in technology and expect an answer such as “robotics” or “virtual reality.” But that's a boring interpretation of the question, as these trends come and go as part of hype cycles. Instead I answer “Oh nothing much, just the end of the Industrial Age.” That momentous change is the subject of my book.
World After Capital is unabashedly about things that are truly big. In order to tackle why the Industrial Age is ending and what comes next, I examine foundational questions that include the nature of technology and what it means to be human. That is wildly ambitious, yet nothing less will do. We are faced with a transition that is as profound as the one from the Agrarian Age to the Industrial Age, which resulted in a complete rearrangement of how humanity lives.
The current transition has been made possible by the advent of digital technology. Therefore understanding the nature of digital technology and how it fundamentally differs from prior technology is essential. So is examining the philosophical foundations for what we want to accomplish, as 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 (hence the title of the book).
Markets are bad at allocating attention because prices do not, and in some cases can not, exist for directing our attention to crucial areas. The climate crisis is both more severe and more imminent than most people believe largely as a result of such a failure to pay attention. How quickly we fix that will play a large role in determining the shape of the current transition. If we do not make drastic changes in short order, getting into the next age will be worse than getting into the Industrial Age, which involved two world wars.
The transition is already underway and has brought with it massive disruptions and uncertainty. Many people fear change and they start to support populists who tend to have a simplistic 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. I started writing World After Capital before both of those events occurred, but they 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 after inventing industry.
Each of these prior transitions required that we find new sources of purpose. 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 the 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.
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 in the early 1980s. I got to work, even before going to college, writing software for companies. I studied both economics and computer science as an undergraduate at Harvard and wrote my senior thesis about the impact of computerized trading on stock prices. After graduating I worked as a consultant, experiencing the impact of information systems on the automotive, airline and electric utility industries. As a doctoral 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 a venture investor, I have had the good fortune of backing companies that are providing transformative digital technologies and services, including Etsy, MongoDB and Twilio.
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.