Why Did Big Tech Stop Building Useful Products?

Inventing the future versus improving the present

0:00Here's something about the technology industry that I've been thinking about recently. How did we go from this? An iPod, a phone, and an internet communicator.

0:15These are not three separate devices. This is one device.

0:24To this.

0:30Now, for those who are just listening, the first clip was of Steve Jobs introducing the iPhone, and the second clip was from a recent Tesla product demo where they showed a Tesla Roadster, and I don't know how else to describe this, but to say, doing a rocket-powered kickflip over a parked vehicle. So if in the first clip we have Jobs trying to convince the audience that this new product is going to immediately make their lives much better, that second clip can best be described as a circus act.

1:04Now, if I'm going to describe this trend, here's the way I would say it. We are seeing more companies that are like Tesla than they are like Steve Jobs' Apple. Companies that are focusing more on inventing the future instead of trying to improve the present, right? It's not just Tesla doing this. I mean, how much of this have we seen, for example, in the generative AI industry over the last three years, where instead of these companies coming out and saying, look at this product that is going to make your life much better, we get the benchmark graphs that no one understands.

1:38We get companies humble bragging about how rogue their rogue AI agents are, and the other company will try to out-rogue them. Well, ours are even more rogue than yours, and they're doing even more scary things, or the inscrutable math proofs that OpenAI dropped on the math community last month, and the mathematicians were like, hey, that's not how we do math. We don't want this. Who asked for this? It doesn't matter. They're just trying to show you that they're being futuristic. They're not trying to create products that they can convince you will actually make your life better. Why is this trend happening?

2:09What does it mean? What should we do about it? I've been asking myself these questions. I think it's an important topic of conversation, so I thought I would jump on the mic real quick here and record a quick episode to give you my thoughts on this. All right, so let's get into it.

Three explanations for the tech industry shift

2:26All right, so our question here is, why are more technology companies today focusing on inventing the future instead of trying to improve the present? I have three explanations that I want to try on for size. The first explanation actually comes from Corey Dockdrow, and it's this idea that these companies want to be seen as growth companies instead of stable companies. All right, so a growth company is a company that has shown the potential

2:57for in the future having some sort of massive growth, whereas a stable company, you know what you're getting. They sell a certain type of product, they make a certain amount of money, and they're going to try to keep doing that as time goes on. Growth companies, as Dr. Al points out, get much larger valuations from investors than stable companies because instead of trying to value how much money a company is realistically making in the near future, you're betting on some sort of potential unicorn-style distant future.

3:31This, I think, is playing a big role in current Silicon Valley thinking because current Silicon Valley has become very focused on making a small number of early-stage investors incredibly wealthy. They don't want to just be kind of wealthy. They want to be, our yacht is too big to fit under the major bridge in Denmark wealthy. That's what they're trying to do. And to get that type of return on your early investments, you need these startups, these tech companies to be seen as growth companies. So that is why, for example, you have Tesla doing this sort of absurd circus act demo.

4:07No, they're not going to sell a rocket car. If you actually look at the details of that concept car that did that particular demo, it turns out that it has these massive carbon fiber tanks, the whole compressed nitrogen or CO2. The whole back of the car is filled with one. The passenger seat is filled with one. They take seven hours to fill, and you get five seconds of discharge. This is not a product you're going to sell. They had dozens of engineers working for God knows how many thousands of hours

4:38just to build a demo. But it's futuristic. Tesla is a public company. And so long as the market, in this case the stock market, feels like it's a company that might have more innovations in the future, it's a growth company. And they get this huge valuation as compared to an older car company that's just selling cars, right? So you want to be a growth company. We see the same thing with the AI companies. They're not public yet, but they're looking to IPO, right? They're going to get a much higher valuation the more they feel like there's a huge amount of innovation and growth

5:09still to come in the future. So that's why they might focus on demos like the math proofs that have no actual commercial application, or they're not even that worried about scary things like rogue agents that are getting increasingly powerful because it gives their company the sheen of being futuristic, a company that in the future could be bigger than people imagine. So trying to be a growth company gives you a higher valuation. That turns your focus on inventing the future instead of trying to convince the present that you can make their lives much better right now.

5:42Factor number two that I think is involved here, engagement pilling. Silicon Valley in the last 15 years has been built on a foundation of engagement. The social media boom, which essentially fracked our attention, used high-tech means to extract as much value as possible out of our brains, has created massive fortunes and trillions of dollars of market cap valuation. So not surprisingly, Silicon Valley cares a lot about engagement.

6:13They think of engagement as the key thing. What could be more important than being able to capture attention, to be at the center of online discussion? I think in their brains this really matters. This is probably particularly true of Elon Musk. There's a lot of people who know him who have argued some variation of the idea that Twitter rotted his brain. That also helps explain something like this Roadster demo. It's not a reasonable product, but man, it's one hell of a meme.

6:45That thing is getting spread everywhere. And I really think for someone who's engagement pilled like Elon Musk, that's kind of half the battle. What could be better? People are talking about me. People are talking about the thing I'm doing. I think this ethos also affects the AI companies, right? I mean, we want people in these online worlds we created, where we live. And honestly, if you look at, you know, Post Musk's Musk Acquisition X, it is a lot of tech bro booster types.

7:17There's an echo chamber here. And I think there's a real push if you run one of these companies to get X super excited about what you're doing. I have to spend time on there because of the reporting I do in the technology sector. And I can't tell you how tired I'm getting of these sort of bro-y tweets that start with, holy expletive. So-and-so just did whatever. This is the craziest timeline. It's just this whole world of everyone is just seeking out disruption as a source of meaning, and engagement is the currency that rules above all else.

7:47So I think engagement pilling in current contemporary Silicon Valley also leads towards this bias towards trying to invent the future instead of trying to create products that are relevant right now. All right. The final factor I think might explain this trend is that it's hard to build useful products. I mean, people respect what Steve Jobs did, but I think we might be underestimating actually just how exceptional his peak run at Apple actually was.

8:19It's really hard to build a product that people love and that makes their lives much better. And because of that, you can sell a lot of them. He made it look easy with the iMac, with the iPod, with the iPhone, with the iPad. Time and again, he did this, but it's actually really hard to do. So it might not be for lack of trying that we have more and more companies trying to be vaguely futuristic than creating really useful products because, I don't know, it's not easy to build useful products. I mean, look at the AI companies in particular.

8:51These aren't brilliant product designers. Sam Altman was like a Silicon Valley gadfly that was, you know, in charge of a Wicom Incubator and was friends with Elon Musk. He was like, hey, let's start this nonprofit that tried to make sure that we get the good superintelligent AI god and just like, hey, we want to be in charge of this. Dario Amadei was a physicist and engineer at OpenAI who was like, they're not doing a good enough job of making sure that we get the good superintelligent AI god and not the bad one, so we should start our own company.

9:21These aren't brilliant product strategists who came up through the ranks or had startups that created huge new product categories. So they're in over their heads perhaps when it comes to how do we build something that a lot of people are going to think makes their life much better. So I think that's part of it. That's why we get so much focus from those companies on demos and benchmarks that don't directly lead to giant markets. It's because that's what they know how to do. They're looking for places where their current technology can do something impressive

9:52and they lean into that so they have something to show. Ironically, Elon Musk, before he got engagement pilled and Twitter sort of rotted his brain, was actually pretty good at this. I think he was the best person at creating actual useful products since Steve Jobs. And I'm talking about Starlink. That is a useful product that delights its users. I'm talking about the original Tesla, which brought high-end electric car experience into the mainstream. I'm talking SpaceX, which really did drive down the price. It really did drive down the price of doing space, putting things into orbit by quite a bit.

10:25But then things have sort of drifted and now we have vaporware roadsters doing rocket-powered kickflips. So I think it's just hard to build useful products and it's not what we're seeing. The existing companies are like, I don't know. So I would rather just try to create massive returns on a small number of earlier investors. This other stuff seems too hard.

The consumer cost and how to respond

10:46This is a problem. It's a problem for us, the actual consumer, because inventing the future doesn't make our lives easier and it has a lot of risks for us. So we are taking on all the risk without getting all the benefits. AI focusing on inventing the future is creating this giant sort of unstable investment bubble and data center build-outs and AI software investment that is that, you know, this is a house of cards, which almost certainly is going to fall at least to some degree. And who's that going to hurt?

11:17Anyone with their retirement funds in the market, anyone who owns index funds or mutual funds. It's going to create a lot of problems so that they can, you know, compete to be like who looks like the bigger growth company. Growth companies in general just drive up the price of stocks. It doesn't actually create products that make our lives easier. It creates a sort of false economic growth because you get a lot of money into these things. And then if they collapse, all that money goes away. It's not nearly as stable as creating, you know, products that actually transform the way that people live.

11:47And it can create a lot of hype and fear and anxiety. Like it doesn't help the consumers. We don't need companies to invent the future. Let like R&D labs do that. We need our companies, the companies that are well-financed and are taking a lot of our money and influencing the stock market. They need to make our lives better. They need to be focusing on products. So what can we do about this? Well, we can demand that.

12:08As consumers, we can demand that. Say what we care about is show me what you're building that will make my life better this year. That's what I want to hear about. Don't engage with the tech bros on X that like their whole life just comes from the more disruptive the future seems. At least they get some meaning. It's basically a digital fight club over there where they're getting meaning in life not by hitting each other but trying to outdo each other about who can tell the scarier tale about how everything is going to change. It's a sort of like nihilistic engagement farming.

12:41I'm not interested in that. Don't play that game. When you have the cousin at the table at Thanksgiving that's like, I got to tell you about like how cool, blah, blah, blah. Say, look, is it a product that's going to make my life easier in the near future? Then I don't really care about it. I'm not an R&D scientist. Talk to me when you have something that's going to make my life easier. I don't need to see a Tesla doing a kickflip. I want the next iPhone. And so I think there is a consumer mindset shift here where we can say, hey, Silicon Valley, it's not our goal to help your ego with engagement or make sure that your early stage investors become so wealthy that they can buy a country.

13:15Build us things that are useful. The media should talk about them that way too. The critics should talk about that way too. Build useful things. That is the foundation for making people's lives better and growing an economy. Stop trying to invent the future. Build things that improve the present. All right. These are not super form thoughts. You know, it's just something I've been thinking about. It was really that Roadster demo. You know, I was like, this captures something. And I think that's what the button it was pressing in me is. There's this shift that we're having that's making me unsettled. So anyways, just some thoughts.

13:47Hopefully you enjoy them. See you again soon. Hey, if you've made it this far, you must be ready to join my fight for depth in a distracted world. Now, the best way to do this is to join over 125,000 people who receive my email newsletter each Monday. You can sign up at calnewport.com slash ideas. And when you do, I will send you a free guide to my seven best ideas about cultivating a deep life. Sign up today, calnewport.com slash ideas.