Software - We love you, but you won't save the world.

Software. It's become the lifeblood of nearly every decent business. Even for those dinosaurs like myself who are relentlessly committed to hardware-centric deep tech, if you can't let your customers order, deliver or interact with your product better with software, you'll rapidly (and rightfully so) be displaced by someone who can. Being able to use my phone to start my Tesla Model 3 (after of course, activating my smart-home cloud enabled garage door opener) has ultimately been a delightful experience I'm unlikely to want to walk away from in the future. It has the unexpected drawback of forgetting my wallet and keys more often (those who know me will not be surprised), but as a result, a few less things to carry around is nice. My jeans last longer.

All manner of delightful efficiencies can result. As a result, any business that is still trying to figure out how to make decent software is woefully painful to deal with. I really am looking forward to the day when I can press the "pizza" icon on my phone and a small EVTOL aerial drone promptly delivers a hot slice of pizza to my backyard. Just like we all wish we could reclaim the moments of our lives at work we spend in meetings that should have been emails, so too we will soon (if we don't already) feel like we want back the time we spent waiting in line to pick up rental cars, check in to hotels, do our civic duty by voting in elections, and other tasks that primarily involve transactions of information that should benefit from the deepest and richest integration of digital, mobile devices and networks.

Ultimately, we all knew this was coming. Even in the dark days of the dot-com crash that aligned with the start of my career, we all knew that the Internet, and the resulting explosion in our ability to move information around would fundamentally change how the world worked and how we were going to do business. Yes, some fantastic carnage resulted. The exuberance was beyond irrational. But the dream ultimately and inevitably came true. The Internet did (and is doing) what it was always supposed to do, and like it or not, we moved out of the mail-order-call-center-Blockbuster-Video-public-library-wait-six-to-eight-weeks-for-delivery 1990s and into the world we live in today, where transactions of information are no longer an impediment to doing things. Life is undeniably better for all of this.

But now, the single greatest threat to our way of life comes not from the collateral damage of transactions of information, but transactions of energy. We seem to have invested so much capital (in financial, emotional, political and human forms) in the ways we exchange and use information and comparatively so litttle in the ways we exchange and use energy that we'll arrive in a digital utopia at the same time as we experience climate armageddon. And as wonderful as software is, and as wonderful it can help make traditional products better, there is no information-CO2 equivalency; that means that no number of lines of code, finely trained neural networks, or 5G or subsequent low-latency high-bandwidth networking standards will help us prevent more irreparable damage to the Earth's climate. Case in point; the relentless retreat of this Icelandic glacier lead the country to host a funeral for it in 2019.

I can't blame investors; software companies deliver great returns, and do so quickly. Even if and when they fail, they fail fast (and therefore cheaply). Pesky hard-tech problems come with uncertainty, R&D, tooling, factories, machinery, industrial and supply chain scale-up--Who needs 'em?! Lengthy prototype cycles and the expensive and heartbreaking lessons that come with them? Thanks, but no thanks.... Expensive, costly multi-disciplinary engineering challenges? Why bother!? And if you actually engineer something that works and matters and makes a difference, the need to achieve operational excellence to manufacture with scale, yield, rate and quality to make the product a contender... sounds....difficult. Can't we just code our way out of this?

Simply put, no. We need bold action to change the course of anthropomorphic climate change. A little here and there is not enough. Algorithms to pack freight smarter, route passengers better, fly planes more efficiently or help us sniff out zombie electrical devices that use energy even when turned off are nice to have. So while it's nice to see that software is helping us do these things (as opposed to all the other wonderful things it does for our lives in the information realm), the required cuts to carbon emissions to have hope of averting climate change are simply too large to achieve by these types of software-enabled fine tuning.

If investors are serious about being committed to carbon emissions reduction, we need technologies that do not exist yet, and we need scale-up of the technologies that displace carbon emissions faster, not optimizations of ones that do. And yes, this means (gulp) hardware.

Hardware is how we generate electrical power, produce steel and cement, manufacture consumer and industrial goods, transport people and goods over long distance, convert chemicals into other, more useful chemicals, grow and harvest food. (These activities account for the bulk of greenhouse gas emissions caused by human activity). Hardware is unfortunately also how we generate carbon emissions. I believe in energy efficiency and conservation, but I also believe that ultimately our individual access to energy is fundamentally linked to our quality of life. With more energy, we can provide more people with shelter, heat, light, pharmaceuticals, transportation and other things we deem vital parts of modern life. Therefore, I believe that conserving our way out of a carbon-fed climate crisis with current technologies will lead to people becoming or remaining homeless, hungry and deprived of these fundamental things. Only with different hardware can we reach a state that is both more equitable and sustainable for all of us.

Many firms argue that only the largest of investors have the portfolio size, clout and investment horizon to make these types of investments--but I argue there are challenges large and small that will yield to effort, and when solved, can represent an important part of the solution, and a return for both investors and the environment alike.

Importantly; we need all of this now. I'll borrow a line I always liked to use to talk about the software projects I spent the most time with, hard real-time embedded systems where doing something too late is sometimes no better than not doing at all. There is no climate/carbon bank. We can't borrow gigatonnes of carbon reduction now and wait for technologies in the future. When that account goes into overdraft protection, millions of people are displaced, our natural habitats are changed forever, and our ability to pay back goes away. In the words of former colleague Berton Vite,

...of all of the engineering units, time is the most interesting, as it is the one that you can't get back.

As I famously wrote on a chalkboard a few years ago, perfect is the enemy of good (Voltaire). We need moonshots (some even say we need starshots), but we also need the (much more immediate and likely to succeed) multiplicative effect of thousands of good ideas. Waiting until we have no choice but to figure out how we can pull carbon dioxide out of the air is indeed like closing the barn door after the animals have escape.

Many investors say that they are more and more concerned about sustainable investing and making a positive difference. But this is not matched with a commitment to backing hard-tech companies. I love success stories of all types--don't get me wrong. But we have lots of streaming video platforms, social media sites and dating apps, all of which with ever less and less differentiation. But if the actions of the venture investment community speak louder than words, they see us heading towards a world where the exchange of information approaches perfection only to experience one climate disaster after another.

How we choose to wield the overwhelming power of deploying capital to solve problems decides where we go as a society. 20 years after the dot-com era, still the largest fund of 2019 was TCV's 10th Fund, focused mainly on, you guessed it, IT infrastructure and consumer internet ventures. The hardest problems of all are still woefully under-resourced--and in my mind by far the most lucrative and world-changing. So go ahead, live a little. Climb down from the ivory tower of code. Dig elbow deep into the science and mechanics of materials, chemistry and thermodynamics. Refamiliarize yourself with Laplace, Arrhenius and Bernoulli. Lay out a circuit board, tape out a chip. Experience, as Rudyard Kipling called it, "the heartbreaking perversity of inanimate things". Come join us down in the lab and watch something that every simulation said would not break/overheat/make horrible grinding noises do exactly that. And somewhere along the way, make a dent in the hardest problems of all.

And don't get me started on crypto.

-PJW, 2021 (400+ ppm CO2 and counting)