On September 2nd, 1945, Imperial Japan’s foreign minister, Mamoru Shigemitsu boarded the USS Missouri in Tokyo Bay and signed the Japanese Instrument of Surrender on behalf of the Japanese government.
That photograph marked the beginning of an era that Eric Weinstein aptly named The Big Nap.
On Joe’s show I talked about the end of what I termed the Big Nap, which I define as the period beginning on September 2nd 1945 and ending 75 years later on February 19, 2020, which would signal the end of World War II and the beginning of the slide from the peak of the stock market when the world began to accept that the coronavirus was indeed a serious pandemic respectively.
The Big Nap, in this theory, is itself divided into three sections. First, the Power Sleep, between 1945 and 1970. When economic growth was extraordinary and the memory of World War 2 was still fresh. This was followed by the Mysterious Transition for three years between 1971 and 1973, when the post-war magic suddenly evaporated and the Deep Sleep, from 1974 up until the present day in 2020 at the time of this recording, characterized by what i’ve termed the elsewhere the New Gimmick Economy, in which leaders at first looked to restart growth, but some time in the 1980s actually gave up and began selling claims against the future so that a small leadership class could continue to pretend that growth was indeed continuing by transferring wealth from their descendants futures and from workers who could not politically protect themselves from predation.
The Big Nap, at least in the developed ‘free world’, was essentially characterized as a run of extraordinary good luck and serenity, at least by the historical standards set by previous world wars, pandemics, oppressions and depressions.
But that run of extraordinary good luck and serenity is over.
Last Saturday, Marc Andreessen published IT’S TIME TO BUILD, a critique of the West's complacency throughout the last 75 years and a call to arms, with building as the ultimate defense mechanism against stagnation.
Just like we are still quoting Andreessen's 2011 essay Why Software is Eating the World, a decade from now we'll remember IT'S TIME TO BUILD as the wake up call from The Big Nap for the technology industry.
Today's Seedtable is about IT'S TIME TO BUILD.
My essay is not a critique. I agree with his main thesis that every Western institution was unprepared for the coronavirus pandemic. Plus, it's hard to critique the chief builder. We already have pseudo-tech journalists trying and looking ridiculous.
But Andreessen growing up in a small Minnesota town makes his writing very American-centric. This is a response from a European perspective and our own call to arms.
A failure of imagination, smug complacency and desire
The essays starts by trying to identify what got us here. Here's Marc Andreessen:
"Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t *do* in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to *build*."
But I don't think Europe is suffering from a failure of imagination.
Northvolt is working on green lithium-ion batteries to secure a sustainable energy future. Alan is reinventing health insurance and accuRx is reimagining healthcare communication. Lilium and Volocopter are inventing on flying vehicles. Healx is trying to discover new treatments to rare diseases. emitWise and CarbonCulture are fixing climate change. Jobbatical is attempting to eliminate borders. Improbable is helping others create new worlds. Benevolent.ai wants to accelerate scientific discovery.
We won't build the next Google, but we have a shot at making the world a better place.
Here's Marc Andreessen again:
"You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life."
But I don't think Europe is suffering from smug complacency.
Europe has been growing and trying to tackle significant problems. There are over 500 European tech companies tackling at least one of the UN's Sustainable Development goals. In 2019 alone, investors have invested over $4 billion in purpose-driven European tech companies, up more than 6x over the past five years.
And not even governments – the most static of systems – are complacent. 2019 was a brilliant year for France with the revamp of their tech visa and the launch of a €4 billion fund. And Estonia has been at the cutting edge of technology with programs like Startup Visa.
Here's Marc Andreessen one more time:
"The problem is desire. We need to *want* these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things. And the problem is will. We need to build these things."
But I don't think Europe is suffering from lack of desire.
Nearly 50% of first-time founders set up and start their companies with less than $25,000. 55% of women start their business with no capital.
America has its fight, we have ours
Here's Marc Andreessen:
"And we need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building."
One of the benefits of being a largely fragmented market – across geographies, language, culture, and even regulations – is that we are fragmented across political lines as well. Our enemy isn't bipartisanship and we don't need to fight a political gap that looks like the San Andreas Fault.
But don't think for a minute that we are clear. We have our scary demons in the shape of century-old defaults.
Building a company in Europe is not an acceptable path for Talent. The default is academia, consulting, hedge funds, climbing the career ladder. It's the safe choice and the respected choice.
One of the reasons we haven't started a Google is because our Larrys and Sergeis are "working at Goldman Sachs". In Europe you don't get brownie points for being a founder.
We need to make building companies an acceptable path for our people, and this is more important than ever.
It's time to keep building
Despite our demons and our limitations, Europe has been building.
In 2014, we had 20 unicorns and now we have over 100. From 2010 to 2014 we raised €34b in capital and had 75 acquisitions, versus €113 billions and 148 exits in the 2014-2019 period.
COVID-19 is threatening our progress in various ways. But the biggest risk for European technology is reverting the progress we've been doing in terms of capital, talent and company formation.
Here's Tom Wehmeier, partner and Head of Insights at Atomico writing for the latest EuropeanStartups.co report:
"While we may see a shakeout, any long-term damage would be less severe if this were constrained to a withdrawal of more short-term-oriented capital and talent, sometimes known as the ‘tourists’ that are attracted during ‘top of the market’ times. This will likely lead to a decline in total investment levels, as well as accelerated failure rates for weaker companies. European tech is strong enough now to navigate that challenge in a relatively robust way. What would be much more damaging is if more resilient and sophisticated entrepreneurs, operators and investors retrench or withdraw entirely."
It's time to keep building because our builders will go somewhere else and when they do, capital and progress will go with them.
I'm more than aware building is terrifyingly hard. Here's where Marc Andreessen one last time:
"Building isn’t easy, or we’d already be doing all this. We need to demand more of our political leaders, of our CEOs, our entrepreneurs, our investors. We need to demand more of our culture, of our society. And we need to demand more from one another. We’re all necessary, and we can all contribute, to building."
"But I do think we need to demand more from one another."
The Big Nap is over. Let's make sure the world knows that in Europe it's time to keep building.