Uncapped #18 | Peter Fenton from Benchmark

**Peter Fenton** (0:00)
Six minutes in, you're like, okay, there's 40 coding companies and this and that, but there's one person who has this clarity.

**Jack Altman** (0:07)
Totally.

**Peter Fenton** (0:07)
And you just don't even have to finish like the five minutes in the meeting you're done. But then it's clumsy because you're like, it's a relationship. So you want to have a two way, you want to have a, you don't want to just say, oh my gosh, yes, you had me five minutes in.

**Jack Altman** (0:18)
Peter, really excited to have this conversation with you. Thank you for making time for this.

**Peter Fenton** (0:22)
Drilled to be here. What a joy.

**Jack Altman** (0:24)
So I asked you what ideas you've been thinking about lately. And you shared that the idea of Darwinism you think is still underappreciated and how evolution applies to areas outside of biology. Can you just share a little bit about that idea?

**Peter Fenton** (0:39)
Well, I think that in the last 50 plus years, the biggest intellectual progression that maybe we'll look back and see in hindsight has been generalizing Darwinism. What does that mean? You know, we're in these complex systems. We're sitting at the center of the Silicon Valley, which is an interesting complex ecosystem that is undergoing the same mechanisms of Darwinism that I think you can see visible in evolution by natural selection, but also in cultural evolution, in technology evolution. It comes down to these very base mechanics that I think generalize and give us insight into the systems that we work in, be they cities or companies or industries. The three mechanics of evolution we all know to be random mutation, but I'd call that planned and unplanned variance. Interestingly, unplanned being more important than I think we all have appreciated, and take that for even the unplanned mutation of chat CPT. Secondly, you have selection, which is some force that determines the reproductive or fitness or whatever is usually just, what's the likelihood that that thing is going to be around in evolution by natural selection? It's a, it's reproduction and survive and reproduce. In an ecosystem in a company, it's of course, you know, surviving and then creating more profits, more revenue, whatever, more customers. And then the third variable in evolution is, of course, inheritance. And so, there's this idea that things are all on a continuum in evolving through these three mechanics. And so, why is that relevant to the world of the Silicon Valley? You know, I spent a fair amount of time in France, and, you know, ten years ago. And I really got to think, why hasn't the Silicon Valley been created somewhere else? And then, you ask another question, why is it most likely, in probabilistic thinking, that the next trillion-dollar company will come out of the Silicon Valley? Why is the Silicon Valley the most likely ecosystem to identify, adopt and scale the next disruptive technology? I mean, you look at the Internet, it didn't have to happen here, but it did. Of course, obviously, there's Amazon up in Seattle, but I think if you look at the supermajority of market cap, the gravities here, social and mobile here, crypto is interesting because it was not of a place, even though Coinbase got started here and you'd still say that it's rooted in the Silicon Valley. But then AI, of course, this is home.
I think one of those examples, any one of them reveals the whole picture of we have the most adaptive ecosystem in the Silicon Valley because it's evolved, and it has the mechanisms of being able to tolerate mutations, identify and put selection pressure, which to me is like capital teams, entrepreneurs, and then the inheritance is that each company is taking with it the past experience of entrepreneurial success. So these things compound in the health of the ecosystem of Silicon Valley, we were in a malaise in 2021, 22, like we've sort of lost the epicenter. It's now like a Zoom world, everything's distributed and what's come back, rocketing back, and I think you feel it every day when you walk in these streets is that this ecosystem is so vital and so adaptive that we will, I think in 50, 100 years, still be the epicenter. And okay, there's what about New York, Austin, I'm not taking anything away from those ecosystems, but there's, I think real health and understanding what's behind the evolutionary power, the adaptive landscape. I think the same model, I've spent a lot of time in board meetings, I'm on 15 boards, and I'm challenging my companies to think about this idea of you have an evolving organism, and there are mechanisms of natural selection or selection that are at work, and either they're implicit and you're not tracking them, or they're explicit and you can guide them.