Creative Destruction

The New New Thing: A Silicon Valley Story

Jim Clark is perpetually dissatisfied. In most people this trait is an affliction, but in people like Clark and other prominent Silicon Valley innovators, it’s a strength-at least from an economic point of view. What Michael Lewis calls “the greatest legal creation of wealth in the history of the planet” has been powered by engineers convinced that something in the world needs fixing.

Lewis went to Silicon Valley to understand what Austrian economist Joseph Schumpeter would have labeled the “creative destruction” of the old economy by the new. It was natural that he should gravitate to Clark, whose own lust for change led him to found three of the Valley’s heaviest-hitting companies: Silicon Graphics, Netscape and Healtheon.

Lewis is a first-rate storyteller, and no one in Silicon Valley has lived as many stories as Clark. The former mathematician’s dissatisfaction with his life as a Stanford professor in the early 1980s led him to build his famous Geometry Engine chip, which became the cornerstone of Silicon Graphics. Clark’s contempt for the executives who took control of the firm led him into a rival project to create interactive television. That technology turned out to be impractical, but Clark’s interest in interactive media led to the founding of Netscape. Once Microsoft launched a counterattack and Netscape’s glitter dulled, Clark was on to Healtheon, which aimed to eliminate paperwork in the health-care industry by mediating every transaction between doctors, patients, hospitals and insurers. When Healtheon struck it rich, Clark once again lost interest and dreamed up myCFO, an Internet “money butler” where the super-rich can pool their billions and buy world domination at a quantity discount.

In his spare time, Clark prodded the Justice Department to sue Microsoft for antitrust violations and built Hyperion, the world’s largest computerized sailboat. Lewis accompanied Clark on helicopter rides, sailing trips and other hyperkinetic adventures, and saw firsthand that the multibillionaire achieves contentment only when all hell is breaking loose. On Hyperion’s maiden crossing of the Atlantic, for example, Clark got interested only when the computer erroneously disabled the engine, a halyard snapped or the sail began to rip in half. “Now that his boat was falling apart, Clark actually appeared to be happy,” writes Lewis.

Lewis argues that Clark is to Silicon Valley as Silicon Valley is to America: a great disruptive force. The Internet is bringing to the U.S. economy the same kind of chaos and uncertainty that Clark thrives on in his personal life. And if, as Lewis asserts, the United States is to the world what Silicon Valley is to the United States, the change won’t stop here-and it won’t be peaceful. “Progress does not march forward like an army on parade,” Lewis writes. “It crawls on its belly like a guerrilla.”

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From the latest smartphones to advances in quantum computing, the hardware behind today's digital age is rapidly changing.

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