Silicon Valley wasn’t created in the 1950s by government intervention — which favored neither California nor Massachusetts at the time. It wasn’t just northern California’s counterculture or Stanford. Its ability commercialize basic products was the interweaving of egalitarian openness and capitalistic competitiveness that venture capital created.
So argues The Power Law: Venture Capital and the Making of the New Future, a 2022 book by economics journalist Sebastian Mallaby. What early Silicon Valley culture did have was a true ecosystem of people gossiping and swapping ideas and sharing. It reminds me of why free speech emerged in Europe.
The book is a history of venture capital, though it adds nuance to another book I read that is a pure history. This book gets its title from the the power law concept, in which you lose only 1x your money but if you miss a deal you could lose out on 10x or 100x your money. That fuels big bets.
Mallaby’s book is exhaustive. I appreciated its deep history, others might not. The book does feel full of survivorship bias, of war stories from successful people (mostly men) describing why they were successful. Quirks of the writing come up — he uses the subjunctive a lot like “in 1986, he had offered,” and sprays the term “Presently” all over the place — but I mightily appreciated the book. Give it a try.
I share my notes below for future reference.
Continue reading The Power Law: Venture Capital and the Making of the New Future
