23 May 2022. Art | Finance
The technology of seeing. // Telling stories about venture capital
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1: The technology of seeing
The conceit of the ‘Hockney’s Eye’ exhibition in Cambridge, which I was able to get to recently, is that it’s about ways in which artists have used technologies to inform their perspectives of the world. (If you’re in striking distance of Cambridge, it’s at the Fitzwilliam Museum until 29th August, and free.)
The technologies long predate the camera: we’re talking about things like perspective, the camera obscura, and the camera lucida. The exhibition guide quotes Hockney to this effect:
'What does the world really look like? I know it doesn’t look like photographs. The camera sees geometrically, and we must see psychologically.’
Innovation around perspective started almost as soon as its conventions had been established in the 15th century. The convention is of a series of lines running from the artists’s viewpoint to a point of convergence in the distance—the so-called ‘vanishing point’.
(A perspective viewfinder. Note the lines. I should probably have got a bit lower down. Photo: Andrew Curry, CC BY-NC-SA 4.0)
But even by the 1440s, the artist Domenica Veneziano had painted something with two vanishing points, to create a visual effect of untidiness in the street scene. The exhibition had a video that had used LIDAR technology to recreate a 3D impression of the street in the painting, and the actual street depicted by Veneziano.
Hockney’s not a fan of perspective. He says it requires you to come to a stop in the landscape. The exhibition includes several of his works where he has deliberately upended its conventions to bring in “time, memory, and motion.”
Obviously these technologies don’t supplant the work of the artist. Ingres’ pencil portraits, for example, don’t depend on the fact that they’re likely done with the help of a camera lucida, but they gain precision from it. All the same, as Hockney says, the pictures are “not done for you.”
There’s a series of Hockney portraits in the exhibition, some pencil portraits of people such as Alan Bennett and Ian McKellen, and some of National Gallery attendants inspired by Ingres, for which he used the camera lucida.
(A camera lucuda in the Fitzwilliam. Photo: Andrew Curry, CC BY-NC-SA 4.0)
Canaletto used the larger camera obscura to help him construct his large scale panoramas of Venice’s Grand Canal. The Fitzwilliam has installed a camera obscura in its grounds for the duration of the exhibition to remind us the way in which they create clear images of the surrounding area.
(The front of the Fitzwilliam seen from the camera obscura. The Hockney self-portrait on the exhibition poster can be seen top right. Photo: Andrew Curry, CC BY-NC-SA 4.0)
It’s also worth mentioning Nicolas Poussin, who was known to use a ‘Grand Machine’—a kind of light box’—in which he used models of his painting to make sure that the light was right. The Fitzwilliam had created one of these for a Poussin in its own collection.
(A version of Poussin’s ‘Grand Machine’. Fitzwilliam Museum. Photo: Andrew Curry, CC BY-NC-SA 4.0)
Which is a cue for a quick note about the curation of the exhibition. The Hockney paintings, and the relevant interpretative boards, are scattered through many of the museum’s galleries, in conversation with other works. This works because Hockney himself is steeped in art history, and endlessly curious in the methods of other artists.
I’ve long been interested in the explosion of devices in the late 19th century that were designed to create the ‘illusion of movement’. The zoetrope is the most famous of these, but there were several others, such as Edison’s Kinetoscope. The excitement that these caused seem to be a sign of an emerging cultural and social sense of both desire and anticipation, that was satisfied only when the Lumiere brothers finally cracked the quite complex technology of all of this.
Emmanuelle Toulet’s book Cinema is 100 Years Old—which seems to be out of print but still available second hand—has a good summary of this pre-history of cinema.
It’s one of those cases where you can see a desire for what a technology can do before the necessary technology appeared. We see something similar in the later 19th century around aviation as well.
But walking around ‘Hockney’s Eye’, I realised that this technological prequel has a prequel of its own. One of the boards in the exhibition put it this way:
The period 1800-1880 witnessed an extraordinary flourishing of theoretical innovation, practical innovation and popular interest in optical theory and the development of optical instruments.
The camera lucida, for example, was invented in 1806. Within a decade, scientists and instrument-makers had invented more sophisticated devices. The Graphic Telescope, patented five years later, extended the range of magnification. Giovanni Battista Amici improved upon this a few years later.
These devices were not just of interest to artists. Scientists and astronomers used them too: John Herschel used the camera lucida to sketch specimens. But they weren’t easy to use, and there’s a twist in this tale:
William Henry Fox Talbot’s frustration with his abject efforts to draw with devices led him to explore ways of using light-sensitive chemicals to ‘fix’ the elusive images, and so to the birth of photography.
2: Telling stories about venture capital
There’s a sceptical review by the radical historian Kim Phillips-Fein in The New Republic of Sebastian Mallaby’s recent book about venture capital, The Power Law: Venture Capital and the Making of the New Future. For those of you who like decoding British names, Sebastian Mallaby is as he sounds: she describes his book as a “jaunty depiction”, and summarises his thesis crisply early on:
By helping to create “networks” that link inventors with ideas to investors with capital, VC funds have played an “unmistakable” part in developing new technologies, ranging from personal computers to routers to e-commerce to biotech. Besides all the tech, without this “strange tribe of financiers,” a “staggering amount of wealth might never have been created.”
You don’t have to follow venture capital (VC) or venture capitalists particularly closely to recognise this as the story they tell about themselves. It is, however, worth re-winding to check whether such myth-making matters:
Venture capital refers to investment funds that invest in companies in their early stages, often giving fledgling entrepreneurs capital in return for shares of stock in the new business. Frequently, they seek some form of control over the company in addition to their equity—such as the power to appoint a CEO with expertise in running a company (as opposed to the inventor who has developed a new technology but has no actual experience managing a business). They cash in when the successful company finally has an IPO, or initial public offering, selling its stock to the broad public.
As it happens, they’ve been doing well recently, at least in raising money. A lot of new money has come into VC funds; they’ve funded a lot of new deals; the number of companies with a stock valuation, at least on paper, if not on an actual stock market, of a billion dollars—the so-called ‘unicorns’—is at a record high. There are 1,000 such companies worldwide today, up from fewer than 200 in 2016. As she notes earlier in the piece, it all smells a little like 1929.
The notion of the ‘power law’ in Mallaby’s title is something of a VC mantra. Venture capital investing isn’t about the average return of your portfolio, but the one or two companies at the edge of the ‘long tail’ that manage to scale. They look, by their account and Mallaby’s, for companies promising a ‘radical departure from the past’.
This follows the argument made by Peter Thiel in the book he wrote with his amanuensis, Blake Masters, Zero to One, summarised as
the “best investment” in a venture fund must be capable of outperforming the rest of the fund combined.
It turns out, at least by Mallaby’s account, that Silicon Valley’s history needs to be retold. It’s not driven by California’s hippie culture, but by maverick financiers. Of course, there is something in this. It’s not mentioned in the review, but in Anna-Lee Saxenian’s study of why the West Coast’s Silicon Valley took off, and the East Coast’s Route 128 didn’t, she pointed both to the networks of firms and people, and also to Californian money, less hidebound and undoubtedly less risk averse than that in Wall Street.
This story also explains why the entrepreneurs who go a long way are those who can tell a good story that disguises a mundane business as a transformational one—Adam Neumann at WeWork, Travis Kalanick at Uber, for example—or just make ‘transformational’ stuff up, as Elizabeth Holmes did at Theranos.
It’s also possible to look at all of this and wonder if the whole model of venture capital was just an accident of place and timing—that some people with loose money just happened to be around as the long digital wave started to happen around them. Since that wave is now slowing, it’s going to be harder to repeat the trick. And the VCs themselves seem to be investing in later stage companies rather than early stage start-ups:
the companies that are winning funds today are a far cry from the foundational technology—the transistors, semiconductors, routers, personal computers, web browsers, search engines—that venture capitalists once backed. One has to wonder: Might not the early VCs have entered on the ground floor of a unique wave of technological innovation, itself based upon post–World War II investments in education and basic science—which has run its course, so that today’s investors are left to throw their cash at the best apps for editing grammar and hailing rides?
It’s also hard to unravel the history of venture capital from the rise of inequality in the 1980s, and by extension, private holdings of wealth. Or from the cult of individualism that ran alongside the waves of deregulation and privatisation that followed. And in looking at this, there’s a vicious circle at play:
These kinds of firms have played a key role in promulgating the antisocial libertarianism that often reflects the views of owners who have to answer to no one but themselves.
But none of that is a solution to the increasingly collective problems that society faces today, even if Peter Thiel seems to believe that he will escape the consequences of climate change in a dream bunker in New Zealand, at least, if he ever gets planning permission. As Phillips-Fein writes:
Our society actually does face a real crisis of investment, even innovation... The real challenges are familiar and seemingly intractable: how to build good schools for everyone in our cities; how to invest in bridges and roads and basic infrastructure; how to make higher education available to all; how to invest in basic science; how to provide health care. All of these are serious problems of “the future,” but they are about politics and public finance rather than entrepreneurship.
It’s at least possible that the ‘new future’ that the venture capitalists made is already behind us. Of course Phillips-Fein is going to dislike Mallaby’s book. But she may have a point. The signs might already be there.
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