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Some meandering thoughts on:

Founding vs Inheriting, Balaji S. Srinivasan

Posted: 5/7/2021

Editors note: This is a review of Balaji's post written partially for a shot at $100. I'm always looking for new and creative ways to sell out.

This is a deep and important dichotomy that takes many names and often goes unnoticed. Those who cannot do, teach. Everyone's a critic. P vs. NP. Founding vs. Inheriting. They all mean slightly different things but they all get at the basic truth that it's easier to build on things: to copy, read, verify or maintain, than it is to start with a blank page and create, write, solve or start.

When stated abstractly it's obvious. Something we all know. But somehow the vast gap between watching and doing is easy to forget in practice. Think of the student who imagines themselves understanding the steps of a lecture but then can't do the problems later. Think of an individual with strong opinions on some subject who can't defend their position in conversation when they can't recall the data, anecdotes or other evidence they had imagined they had learned from reading.

Similarly from the outside founded and inherited institutions can present so similarly it can be easy to forget the essential difference in the relationship of their executive to the organization. Consider the US government and Facebook. They're both massive organizations that have been around for decades. They're both entities that I to some extent have to interact with to live a normal life when and where I am. Both of them make decisions through opaque process I have no effect on (though they like to pretend otherwise) which effect me directly. If either organization becomes aware of me as more than an entry in a database I'm probably completely fucked.

But Zuckerberg can move quickly and break things. He can expend a huge amount of capital acquiring early stage competitors like Instagram or key adjacencies like WhatsApp and Oculus [1]. He has much more agency to bring Facebook towards his vision of its future than Biden.

By analogy consider admitting states to the union [2]. From 1791 to 1912, 35 states were admitted to the union. That's an average of a state every 3 years with a longest gap of 13 years. The last state to be admitted is Hawaii over 60 years ago. Imagine trying to get Puerto Rico admitted to the united states today. It's twice as populous as Hawaii, closer to the United States and has been a US territory for two years longer. But it's not going to happen [3]. And why not? To first order surely it's in the best interests of the United States to grow to as much territory and as many people as possible. But the people in charge are not thinking about the first order effects they are thinking of the second order effects. Any given new state will change the balance of power of republicans and democrats and is therefore politically impossible. Many other issues are understood in this way by those in power:

But what does this mean for the individual and society? I think as an individual one shouldn't organize their life with the assumption some organization will always be around, benevolent and competent.

As a society maybe we should be more willing to let things fail? Maybe we shouldn't bail out banks? Maybe when we make an organization we should have an idea of how it'll die instead of letting it decay slowly? Honestly I don't know anything about how that would look so don't take those thoughts too seriously.

What of the future? This view seems to predict Google, Amazon and Apple should be in the decline. Balaji extols the victories of tech and the failures of the east coast over the past year but all these company's founders are gone. They'll sunder on for a long time but I suspect in the fullness of time it will be clear that by 2021 their best years were behind them. Google cancels products left and right, I just ordered something from Amazon Tuesday that won't be here until Saturday and Apple hasn't done something terribly cool since 2008. It's easy to dump on the NYT (and perhaps I'm taking Lindy too seriously here) but I think it's not unlikely it outlives the FAANG companies. At least some of them.

[1] I'm sort of just listing the ones I know about here. Facebook has acquired 78 companies for at least 23 billion.

[2] Obviously not a perfect analogy and there are some geographic reasons for the slowdown. But I think the comparison highlights how these organizations are in different stages of their life cycle

[3] disclosure: I hold NO here and am trying to get out at 98.