Time for Little Tech?
Mark Andreesen and Ben Horwitz of the famed venture capital firm a16z posted a blog last July that is gaining renewed attention. The incoming administration’s deregutoary focus is driving the conversation. Broadband Breakfast will focus on “The Little Tech Agenda” in an upcoming discussion.
The Little Tech Agenda explores the various problems with the current state of the economy, specifically regulatory barriers startups face. Large firms embed themselves with government agencies, often hiring former agency officials to lobby for the benefit of the powerful. Inserted rules or tainted enforcement decisions make open competition harder for startups. They typically don’t have the means or the energy to focus on compliance. Instead, they’re occupied with more pressing matters like surviving another month and becoming profitable. This phenomenon is known as regulatory capture
Corporatism harms Little Tech
Regulatory capture and similar concepts like ‘Concentrated benefits/Disbursed Costs’ are part of a larger governance structure known as corporatism. Corporatism is a malleable term but generally involves the biggest private firms combining with a strong central government to write the rules for society, leaving little room for the individual or startup.
Corporatism has long been the preferred governing and economic structure in the West. Even in America corporatist tendencies date back to Woodrow Wilson and “War Socialism.” During WWI, “Dollar-a-Year-Men”—titans of industry—colluded with government to set prices, production levels, and entrench powerful players. Two decades later the New Deal permanently cemented corporatism through the administrative state.
Little Tech faces regulatory barriers
Specifically relating to tech startups, Andreesen and Horwitz list the problems as:
- Regulatory agencies have been green lit to use brute force investigations, prosecutions, intimidation, and threats to hobble new industries, such as Blockchain.
- Regulatory agencies are being green lit in real time to do the same to Artificial Intelligence.
- Regulatory agencies are applying direct pressure to banks to cut off disfavored startups and founders from the financial system.
- Regulatory agencies are punitively blocking startups from being acquired by the same big companies the government is preferencing in so many other ways.
- The federal government as a customer in critical sectors like defense and intelligence is more wired than ever to favor big incumbents over innovative startups.
- And, the government is currently proposing a tax on unrealized capital gains, which would absolutely kill both startups and the venture capital industry that funds them.
Andreesen and Horwitz join other uber-successful “tech bros” like Elon Musk, Jeff Bezos, and Vivek Ramaswamy in lamenting the overregulation of the American economy. Musk and Ramaswamy have the new president’s ear with DOGE. Bezos recently decried regulatory burdens in a New York Times DealBook Summit. And Andreessen has released a manifesto on X called, A Call to Arms Against the Oligarchy.
It’s Time for Little Tech
What all this means for Little Tech remains to be seen. Clearing out the morass of petty rules and the bureaucrats who write them won’t happen overnight. Entrenched special interests like the three-million federal workers know how to work the system to survive the occasional political upheaval.
But for the first time the country’s most successful entrepreneurs are coalescing around the problem and trying to address it. If they succeed it will be Time for Little Tech.
By Jossey PLLC