Why Silicon Valley Funds Instagrams, Not Hyperloops
Folks. There's no crisis of innovation. This would be a lot clearer if people understood how Silicon Valley has always worked:1. Government pays for really big long-term high-risk core technology development. Things like microprocessors, the internet, voice analysis, lasers, space rockets, highways, etc.2. These are mostly done under the rubric of defense spending. (This is important.)3. Private sector steps in to commercialize the projects that bear fruit.Hyperloop falls under category #1. Those projects take billions invested over decades with very uncertain prospects. Usually supported by military procurement. Yes, even highways were built ostensibly for the military. And Siri on your iPhone? Funded by the CIA.That kind of Really Big Fundamental innovation is funded by the government. It's never been VCs. They focus on the "last mile".Space X is a good example of that: bringing a foundation of core tech developed by NASA to market, adding commercial-oriented innovation on the scale of a few years and a couple hundred million from the private sector. But even at this stage, there's still many more hundreds of millions in government procurement (prepaid launch contracts).The reason Hyperloops don't get funded is that the government doesn't have a military application (or pretext) for it.Now we could go on to ask why Silicon Valley's megabucks foundation is military spending and not, say, direct government investment in sustainable public services. But then we get to some uncomfortable issues, like how the public might feel more entitled to the fruits of those investments. Whereas if core science and tech is seen as a kind of "military surplus", free or cheap for the taking, then the VC private sector gets to keep the profits from commercialization.