A new year resolution: give us a better class of silly idea

Pipistrel

When berating a dumb idea on social media, we, your correspondent included, will often say, “Silicon Valley reinvents the [X].”

Hyperloop, or ‘Silicon Valley reinvents high-speed rail’, attempted to leverage today’s technology to revive a discredited idea from the 1700s. This was not by itself a terrible idea, but as the initial flood of venture capital (VC) funding became a trickle, the scope of the idea contracted; first, it was trains, then ‘pods’; then its backers abandoned the idea of putting humans in them altogether. Now, it probably will not happen at all.

Elon Musk’s ‘The Loop’ promised that cities would be criss-crossed with super-fast underground individualised highways. But when it became clear that all the project would amount to was a traffic jam in a very small tunnel, he later claimed it was not merely a cool-sounding, basically dumb idea, but rather a Machiavellian strategy to kill high-speed rail in California. (We do Mr Musk great credit by taking him at his word).

Such start-ups were legion, and venture capital firms would invest omnivorously and copiously, in the hope of uncovering a ‘unicorn’ – the rare company which would be ‘the next Facebook’ and make everyone rich. Even governments would be convinced to join in, diverting tiresome public funding (yawn) into cutting edge-sounding prospects, like the SoftBank Vision Funds 1 and 2. (At time of writing, these funds have lost $21bn and gained $22.6bn between them, leaving $1.6bn of gains in 8 years. Taken together, the two funds substantially underperformed compound interest rates over the period)

In the virtually zero interest rates of the 2010s, the approach cost nothing; but buying all the lottery tickets makes sense only if there is a prize to eventually be won. Since the early 2020s, interest rates have made many of these unicorn gambles untenable. Faced with the sudden pressure to put their pretty renderings into practice, many start-ups duly folded. Over time, dishonest ‘rug pulls’ became more difficult to distinguish from companies working in good faith with genuine ambition and good ideas.

This week, one that held on longer than most, Volocopter, filed for bankruptcy. The promise was of an all-electric vertical take-off and landing (EVTOL) vehicle, which could depart and arrive anywhere. Silicon Valley had reinvented the helicopter – but one which could be charged with renewable energy, and could carry a person or cargo.

Yes, no doubt would it be very cool to fly over a city, maybe even buy a ‘big mac’ at 50 storeys, like in Fifth Element. But really, the economics seem a little suspect, don’t they?

Each Volocopter would need a highly qualified pilot, presumably concomitantly compensated, to act as a taxi driver. The economics of trundling things along the ground using battery power are still a struggle, let alone catapulting them into the sky. No-one who isn’t actively planning a terrorist attack could be reassured by the accident rate among even the most seasoned helicopter pilots; and moving enough air to generate lift would be loud whether powered by four large blades or 32 small electric ones.

Let’s not forget that economics disallows good ideas just as frequently as it enables dumb ones. When Mr Musk keeps his politics out of it, distributed satellite network Starlink undeniably improves connectivity in remote regions. ‘Silicon Valley (actually a handful of European companies) reinvents the sail’, a barefacedly dumb idea, is developing rather well, producing excellent results for many ship types.

Good ideas – electrified rail, near-shoring, additive manufacturing, nuclear fusion – might have to wait. For the rest of the 2020s, perhaps the best we can hope for is a better class of silly idea.