Silicon Valley’s innovations helped bring computers, the internet and smartphones to mainstream consumers — forever changing the way we work and communicate. Along the way, it’s built an astonishing amount of capital, with a total annual economic output of around $275 billion, according to one estimate, outpacing the whole country of Finland.
But where Silicon Valley had once been invested in innovation and disruption, its largest companies — Alphabet, Amazon, Apple, Meta and Microsoft — are now primarily concerned with keeping themselves extremely profitable and powerful and fending off threats to their tight grip over user data and privacy. Of course, this is their mandate as dictated by the companies’ investors and shareholders, but it underscores why people should no longer look to Silicon Valley as a primary source of innovation.
The Promise of Web3
Most members of the crypto community know this. It’s why we’re building Web3: the decentralized evolution of the internet built on blockchains. This next stage of the internet will be about turning users into owners — anathema to Silicon Valley’s ethos of growing larger and centralizing power at all costs.
What Problem Does Web3 Solve?
The swell of interest over the past several months alone shows that mainstream consumers would welcome Web3’s tenets of decentralization. Over the past decade, the American public has consistently lost faith in the ability of large tech companies to work in the public interest, and most think that tech companies have too much power.
What Blockchain Technology Unlocks
So what will companies look like under this new model? Tech firms will no longer be bound to a specific location or investors, but to smart utilization of blockchain technology.
We’ve already seen this in action. After becoming frustrated with the video game World of Warcraft, Vitalik Buterin saw the dangers of centralization and started researching Bitcoin. He went on to create Ethereum, an alternative blockchain with a market capitalization that has reached nearly half a trillion dollars. Although Buterin founded Ethereum, its community has decided its direction, (evidenced by the blockchain’s multiple forks). Amazingly, this was only in 2014 at the very start of the crypto revolution, and the space has only grown larger and more advanced since then.
If one frustrated teenager can go on to create a network worth $500 billion, imagine what can be accomplished when the concepts of crypto are in the hands of more people. Silicon Valley should be terrified.
A New Growth Vector for Professionals and VCs
It shouldn’t be surprising that many former managers and tech executives have jumped into crypto projects. For example, Sandy Carter, a former VP at Amazon Web Services and general manager at IBM, joined Unstoppable Domains, an NFT domain name provider, as senior VP of business development. And Cecile Duparc, a former Disney and Netflix comms director, is now global head of PR and social media at Bitstamp, a crypto exchange. Only a week ago former Global Head of Gaming Ryan Watt left YouTube for Polygon, a provider of Ethereum scaling solutions for Web3 developers.
This past year, we’ve already seen huge investments into crypto startups. As of late November, more than $27 billion has been invested into crypto startups globally — more than the previous 10 years combined — according to PitchBook data cited by the New York Times. The paper points out that “many of the investments were made by the venture capital arms of crypto companies, businesses whose continued growth will depend on the ecosystem expanding.”
Venture capital investors, the primary bearers of capital in Silicon Valley, have an interest in extracting as much value from as many people as possible, all to be kept by as few people as possible. They love IP. But this slows down innovation and competition, which ends up hurting all of us.
VCs drive innovation based on their own self-interest, not the interest of what helps the most people. That’s why most seem to be staying away from crypto projects at the moment, but we can be sure they’re trying to figure out ways to extract value from them. Once they do jump in, we should be wary.
Of course, there will always be people trying to build the next Google or Apple for VCs to pour their money into, but with the innovations coming with Web3, it’s clear the time for those startups has passed.
We'll soon judge innovation by how much it empowers users, not by how much profit a company generates for its investors on Wall Street. And that means the end of Silicon Valley as we know it.