Day: March 19, 2025

But there’s also an incentive towards exuberant narratives and over-confidence deeply embedded in the business model of Silicon Valley. In many ways, Silicon Valley looks less like capitalism and more like a nonprofit. The way you get rich isn’t to sell products to consumers, because you’re likely giving away your product for free, and your customers wouldn’t pay for it if you tried to charge them. If you’re a startup, and not FAANG, the way you pay your bills is to convince someone who’s already rich to give you money. Maybe that’s a venture capital investment, but if you want to get really rich yourself, it’s selling your business to one of the big guys.

You’re not selling a product to a consumer, but selling a story to someone who believes in it, and values it enough to put money towards it. That story of how you can change the world could be true, of course. Plenty of nonprofits have a real and worthwhile impact. But it’s not the same as getting a customer to buy a product at retail. Instead, you’re selling a vision and then a story of how you’ll achieve it. This is the case if you go to a VC, it’s the case if you get a larger firm to buy you, and it’s the case if you’re talking ordinary investors into buying your stock. (Tesla’s stock price is plummeting because Musk’s brand has made Tesla’s brand toxic. But Tesla’s corporate board can’t get rid of him, because investors bought Tesla’s stock—and pumped it to clearly overvalued levels—precisely because they believe in the myth of Musk as a world-historical innovator who will, any day now, unleash the innovations that’ll bring unlimited profits.) (Silicon Valley has, however, given us seemingly unlimited prophets.)