Creative Destruction – Julie Fredrickson

Day 1937 and The Great Rektening

Anytime you see dumb headlines and bizarre deal points show up on Bloomberg it’s worth doing a head tilt. The time for consolidation and winners in the first wave of artificial intelligence automation is here and surprise we replaced ourselves.

The first industry being automated is the creative destruction business that is big technology. Don’t worry we destroyed our own jobs first?! First up Google doesn’t having a coding product.

Catching up with various consumer offerings hasn’t mattered as AI coding is the stuff of money and even their own staffers might prefer Claude. Or refuse to use AI at all? That that sounds like the pampered Googlers we all know and sort of dislike.

Second up is the weirdest “deal” I’ve ever seen between Cursor and SpaceX I’ll share with a gift link link as I’ve never seen anything quite like this.

SpaceX said it has an agreement to either acquire AI coding startup Cursor for $60 billion later this year or pay $10 billion for its work together, as it works to catch up to rivals in AI coding

You know shit is rough out there when the billionaire with the space monopoly and the compute is offering up something this bizarre to the coding startup that was about to raise 2 billion to catch up to Anthropic but is now maybe going to buy extra time on Elon Musk’s dime. I’m sure stuff is fine at OpenAI right?

I honestly don’t know what the heck is going on except that it’s a good time to consolidate if you don’t have compute (and previous few have enough as hysteria builds in the dare center and power works) and if you have investments in energy you literally can’t go fast enough. It’s feeling a little rekt vibes out there. And I ain’t even ready to address the end of the cease fire.

My parents were hippies. Thanks in particular to my mother’s great interest in the spiritual world, I spent time in ashrams, communes and retreats as a kid. One was a great big sprawling former summer camp in the Catskills. I adored spending time there.

There is something amusing about being in a Christian family who has decided to study Kashmir Shivaism in an old Borscht Belt resort. But it was thanks to these adventures in expanding our minds and spiritual horizons that I learned about Shiva the Destroyer. And Shiva has had a profound impact on how I think about startups.

I won’t get into the full theology of Shiva but he creates, protects and transforms the universe. His power is set against the goddess Shakti (sorry Parvati can’t get into your whole deal) for a kind of death and creation in one balanced whole. To this day, I chant Shiva’s mantra “Om Namah Shivaya” when I mediate. It more broadly has a meaning of the “universal consciousness is one” which I tend to interpret as ego death. Shiva is the destroyer of my ego for which I am grateful.

The idea that creation and destruction were interlinked, and indeed matched, spoke to me as a child. Some kind of pre-rational understanding of the first law of thermodynamics. Energy is neither created nor destroyed. Maybe Shiva and Shakti are just godhead metaphors for the eternal spiral of creation and destruction that we’ve come to dimly understand thanks to the study of physics. I’m neither a theologian nor a physicist.

But I am a business person. Shiva lead me to appreciate the economist Joseph Schumpeter. You see, metaphysics aside, I took the lesson that destruction wasn’t inherently bad quite to my heart. That sometimes, for new things to be formed in the world, old manifestations needed to be destroyed or transformed. Schumpeter’s gale or, more commonly, creative destruction, held my imagination.

I thought to myself “dismal science my ass!” Economics has dedicated an entire discipline to the study of apocalypses and the utopia’s that are created in their wake and we call it good business management. Wealth by way of eschatology. Obviously I was hooked.

According to Schumpeter, the “gale of creative destruction” describes the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”

Startups are known for their creative destruction. Small changes and innovations slowly, and then all at once, implode and destroy old ways of doing business. if we are lucky more wealth is created in the process. Sometimes enough to change entire cultures and people for the better. And sometimes not. But if there was ever going to be a god of startups I think it would be Shiva.