- Can America maintain the power it has accumulated in the 20th century?
- Marc Andreessen and Ben Horowitz believe startups can play a key role in that process.
- But they worry that startups face forces that could devastate — and America’s global leadership.
Marc Andreessen and Ben Horowitz are worried about 21st century America.
Less than 24 hours after the Fourth of July, the two investors who head the venture capital firm A16z delivered a lengthy, Silicon Valley-style speech about how America can maintain the power it built in the 20th century.
They call it the “Little Tech Agenda.”
Simply put, the agenda is about “little tech” startups, as opposed to big tech companies like Apple, Google, Meta, etc. If America wants to stay on top, investors argue, it needs to fully understand the opportunities little tech presents and the threats it faces.
It’s worth noting that both Andreessen and Horowitz are heavily incentivized to focus their venture capital efforts on startups. In April, the two firms announced they had raised $7.2 billion to lead investments in startups that are leaders in multiple sectors, including “American dynamism,” a catch-all term for founders who lead companies that “support the national interest.” Examples include aerospace, defense, education, housing, and manufacturing.
That said, Silicon Valley veterans are ready to make the case for why concerns about the future of startups extend to concerns about the future of America itself.
Little Tech Agenda Explained
Andreessen and Horowitz have a simple explanation for their new policies: They want to replicate the success that gave America unchallenged leadership in the 20th century.
However, it is unclear whether this can be achieved under the current circumstances.
The blog, published on Friday, noted that the US enjoyed unipolar dominance in the world order in the 1900s thanks to the Second Industrial Revolution, the widespread use of computers, its promotion of the free market system and its overwhelming military power.
But they acknowledge there is a growing consensus that such success may never be achieved again. “Naysayers say America’s best days are behind us and that the 21st century will see a decline in America’s role,” they write. “We disagree.”
As venture capitalists, their disagreement is rooted in their belief that startups have a vital role to play in America’s continued role as the world’s leading nation-state — that the spirit that gave birth to Ford, Lockheed Martin and SpaceX is the spirit we need for future prosperity, they argue.
But they believe the startup spirit is being destroyed by those who need it to ensure their continued strength.
Andreessen and Horowitz argue that if the political machine in Washington, DC, doesn’t prevent startups from realizing their potential, “there’s no reason why the 21st century can’t be the second American century.”
In their words, the US government has become “far more hostile towards startups than before,” and regulators are allowed to “use aggressive investigations, prosecutions, intimidation and threats” to cripple growing industries like artificial intelligence.
He also argued that regulators are disrupting market activity like takeovers and proposing new taxes targeting “unrealized capital gains” that would “utterly devastate both start-ups and the venture capital industry that funds them.”
Now, it’s worth asking whether voicing these concerns is not just about helping venture capitalists make more money, but about keeping the US in a tough spot on the world stage until 2100.
“Regulatory Capture”
For example, since the launch of ChatGPT, the tech sector has been tilted towards generative AI, which has so far heavily favoured big tech companies over venture capitalists and startups, with the Nasdaq-leading Silicon Valley giants getting a much larger share of the economic benefits from AI than startups.
One reason is that big tech companies can now easily secure the massive amounts of capital and computing power needed to run the large, intensive language models that drive up AI costs.
Andreessen and Horowitz also argue that Big Tech’s dominance has been fuelled by “regulatory capture”, which has served to “protect and strengthen their position”.
The end result, they say, is “stagnation and decline.” They now hope others share their view that America’s future depends heavily on self-made founders with a dream.
