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In defence of tech
With news unfolding about a relatively unheard of bank going under, many have questioned why they should care – the answer is more broadly, about tech.
The last 72 hours have been tough. Since the SVB story started to unfold on Thursday, it fast become the only topic of conversation within the ecosystem.
For those working in tech – the founders, operators, investors, and suppliers – this has been three days in hell. VCs instructing founders to get money out the bank. The UK arm then reassured dozens of investors and founders that the UK branch was isolated. Only to then find out after banks closed on Friday, that the BoE was putting it into insolvency. Most founders I know didn't get money out in time, or had sums too large to be able to put into another bank at speed. All of this off the back of some of the rockiest years facing entrepreneurs in history.
I questioned on Twitter why it wasn’t getting more mainstream attention, and the replies have been fascinating.
Even Simon Jack, the BBC's Business Editor, asked me "Can you quantify wider effects? Be super interested if you can."
For many, this was one small, insignificant bank that wouldn't have impact on the wider banking sector. Simon Jack reiterated this: 'the BoE tell me no systemic risk.'
For some, this was just rich tech bros who were finally getting some comeuppance (for what, I'm not sure).
And for many, this seemed to be about headcount. 'How many people are employed/affected?'.
So what, as Jack asked, was the wider effect? I realised this goes to the heart of the role of tech within society itself.
Technology is the biggest equalising factor in our society.
30 years ago, if you wanted to listen to all of the world's music at your convenience, you would have to have been rich enough to purchase that collection.
If you wanted to take up professional photography or video-editing as a passion, you'd have had to invest thousands in equipment.
If you wanted to communicate with long-lost relatives, or build relationships with those across the world, you'd have been stuck before you got started.
If you wanted to network and build a community outside of the people you went to school with, you'd have been hard-pressed.
If you wanted to try to improve your mental health, or build positive habits around fitness, health or other well-being, you'd have had to enter into complicated systems.
If you wanted to improve your relationship with your finances, make your money work better, or build your way out of debt, it was harder.
If you wanted to choose to buy from artisans or people who had shared your values on the environment or culture, you had little choice.
30 years ago, to achieve any of these things required you to be rich.
Today, everyone in the world has access to those things in their pocket.
From culture, entertainment, and the arts, to our finances, wellbeing, and our health, technology makes our lives better.
Technology by its very nature puts into the hands of the many, that which was previously only available to the few.
And yet the chances of creating a successful startup that achieves these things are close to zero.
60% of small businesses fail within the first 3 years of life. And the failure rate is even higher amongst startups. The last three years have been some of the hardest that any entrepreneur has faced. And in the startup sector, where you invest in growth and build product before you become cash flow positive, that has been felt even more so.
Tech very often looks like a toy before it becomes a central part to our lives. When the electron was discovered in the late 19th century, it had no value. Today our entire world lives on electronics.
The value the tech sector creates goes beyond the people it employs today. It's more financially valuable than its contribution to today's GDP. The fallout of SVB if some resolution can't be found, would be greater to society, than the systemic risk to the banking sector. This is now a question of whether we value and want to back technology and the people within it. Tech has saved us for years, for me, it's now time to save tech.