Fascism For First Time Founders

Innovation

from the democracy-is-actually-important-for-innovation dept

Over the last year or so I’ve seen a disturbing tendency in tech/startup/VC worlds to buy into the neoreactionary view that for startups to be successful they need to get on board the Trump train. Yes, there are the big name folks who everyone knows about and who didn’t really surprise anyone—Peter Thiel, Marc Andreessen, David Sacks, Elon Musk (pre-fallout)—but the more troubling trend has been watching younger entrepreneurs and VCs listen to their podcasts, read their posts and books, and slowly nod along to the idea that democracy is holding back innovation.

The logic might seem compelling at first: regulations slow us down, politicians don’t understand tech, wouldn’t it be better if someone who “gets it” could just cut through all the bureaucratic nonsense? But this line of thinking leads directly to the neoreactionary conclusion that what we really need is a “tech-friendly” strongman to sweep away democratic institutions and let the smart people (spoiler: they mean themselves) run things.

It seems like it might be useful to point out how incredibly dangerous and counterproductive that utter nonsense is. The idea of a benevolent dictator to get past the nonsense is appealing for those who can’t think more than a step or two ahead and consider what happens next.

Look, I get it. You’re building something cool. You heard the stories some are telling of the Biden admin looking to regulate crypto or AI (not that any such regulations ever actually appeared) and you think “ugh, too heavy handed, just let me code.” And then you hear Trump promising to “cut red tape” and “unleash American innovation,” and you think: Finally, someone who gets it, someone who will stay out of my way.

But before you start crafting your “make coding great again” hat, let’s have a little chat about why embracing fascism is probably the worst possible business strategy for anyone actually trying to build something innovative.

I know, I know. “Fascism” sounds hyperbolic. You’re not goose-stepping around your WeWork space. You just want lower taxes and fewer forms to fill out. And trust me, I’ve spent 25 years calling out idiotic tech policy proposals by clueless politicians, so the idea of getting an administration that will “free up” tech sounds appealing.

But here’s the thing: there’s a reason this “tech-friendly dictator” fantasy has been bubbling up in VC circles and startup accelerators for years. It’s not just about cutting red tape—it’s about the fundamental belief that techbros like themselves shouldn’t have to deal with the messy compromises that democracy itself requires. They’d rather sweep away all those pesky democratic institutions and let the “smart people” (spoiler: they mean themselves) run things.

The basic pitch is seductive: democracy is messy, slow, and often staffed by people who don’t understand technology. Wouldn’t it be better to have someone in charge who just… gets it?

No. No, it would not.

The Dictator’s Innovation Trap

Here’s what the “just let tech bros run everything” crowd fundamentally misunderstands about how innovation actually works: It requires exactly the kind of chaotic, unpredictable, open ecosystem that authoritarianism systematically destroys.

Real innovation happens when companies have to compete on merit, not on who can kiss the leader’s ass most effectively. In a functioning democracy with actual rule of law, the best products have the opportunity to win. In an authoritarian system, the company that makes the dictator happy wins—and that’s it.

Think that sounds far-fetched? Look at how quickly Elon Musk’s companies started getting favorable treatment once he became Trump’s Number One donor. And then look at how quickly Trump turned on Elon and threatened to pull all the subsidies his businesses get from the federal government as punishment over Elon criticizing his budget plan. That’s not competition driving innovation—that’s cronyism driving mediocrity.

This isn’t theoretical. When political favor becomes more important than product quality, innovation dies. The companies that survive aren’t the ones building the best, most innovative products—they’re the ones best at navigating the whims of whoever’s in power.

The Brain Drain You’re Not Thinking About

Want to know what really kills innovation? Brain drain. And nothing drives brain drain like encroaching fascism.

And the brain drain has already started.

Foreign students are looking to study elsewhere rather than deal with visa uncertainty and hostile rhetoric. Many of America’s smartest researchers are being wooed to other countries that offer more stable funding and less political interference. International PhD students, postdocs, and visiting researchers—the people who often go on to start the most innovative companies—are increasingly choosing Canada, the UK, or other destinations over the US.

This isn’t just the H-1B visa holders that the Trump inner circle loves to demonize. It’s the entire global talent pool that has always seen America as the place where you could build something amazing without worrying about arbitrary political interference.

The United States became the global innovation leader in part because we attracted the best and brightest from around the world. They came here because we had something other countries didn’t: a stable, democratic system where merit mattered more than connections, where you could build something without worrying that tomorrow’s political winds might destroy everything you’ve worked for.

But that’s been trashed. In mere months.

History shows us what happens when countries drive away intellectual talent. When authoritarian regimes came to power in the past, they didn’t just drive out targeted groups—they drove out anyone who valued intellectual freedom and scientific integrity. The result? Countries like the United States got Einstein, Fermi, and a whole generation of brilliant minds who helped build the post-war economy.

You think the smartest engineers and entrepreneurs from around the world are going to want to move to a country run by a dictator? Even a supposedly “tech-friendly” one?

The Infrastructure You Take For Granted

You know what else makes innovation possible? Boring stuff like universities, research institutions, and a functioning legal system.

You know what authoritarian regimes love to do? Gut all of those things.

Think about where most breakthrough technologies actually come from. Not from some genius in a garage (though that’s a nice story). They come from decades of basic research funded by institutions that operate independently of political pressure. The internet you’re using to read this? That was DARPA. The GPS in your phone? Military research. The algorithms powering AI? University research.

Here’s how the ecosystem actually works: government funds basic research that has no obvious commercial application. Universities and research institutions build on that work, training graduate students who become the next generation of researchers and entrepreneurs. Some of those students go on to start companies that turn basic research into products. Others stay in academia and continue pushing the boundaries of what’s possible.

Yes, eventually the private markets and companies take over the commercialization, but so much of the core infrastructure of innovation comes from elsewhere.

And none of this happens overnight. The internet took decades to go from ARPANET to the web. GPS took years of satellite launches and signal processing advances. The machine learning techniques powering today’s AI boom are built on decades of research in statistics, computer science, and neuroscience.

Fascists hate independent institutions. They see them as threats to their authority. So they defund them, politicize them, or just straight-up destroy them. And when they do, innovation dies—not immediately, but over the course of years as the pipeline of basic research dries up.

The Trust Problem

Here’s something else you might not have considered: innovation requires trust. Not just between individuals, but institutional trust. People need to believe that contracts will be enforced, that property rights will be protected, that the rules won’t change arbitrarily based on the whims of whoever’s in charge.

Building a startup requires long-term thinking. You’re asking employees to bet their careers on your vision. You’re asking investors to put money into something that might not pay off for years. You’re asking customers to trust that your product will be supported and improved over time.

None of that works in an environment where the rules change based on political caprice.

You think venture capitalists are going to invest in your startup if they’re worried that next month’s political purge might decide that your industry is suddenly “unpatriotic”? You think customers are going to adopt your product if they’re concerned that using it might put them on some government enemies list? Biden may not have been the most tech friendly president, but he didn’t threaten to deport a tech CEO over a policy disagreement.

Authoritarian systems are fundamentally unpredictable. The rules change based on the leader’s mood, personal vendettas, or political needs. That’s the opposite of the stable, predictable environment that innovation requires. When political favor matters more than legal precedent, no one can plan for the future.

The Historical Precedent

Here’s the thing about fascism: it never ends well. Not for the countries that embrace it, not for the people who live under it, and definitely not for the entrepreneurs who think they can ride the tiger.

Every authoritarian regime in history has eventually turned on the business community that initially supported it. The oligarchs who think they can control the dictator always end up learning the hard way that the dictator controls them.

You think the tech bros who are currently sucking up to Trump are going to maintain their influence indefinitely? Just ask Elon Musk. One day you’re the world’s richest man and Trump’s “first buddy,” the next day you’re being publicly humiliated and threatened with the destruction of your business empire because you criticized his “one big beautiful bill” for being a disaster.

And that’s just the beginning. Historical patterns are clear: authoritarian leaders use business elites to consolidate power, then systematically eliminate them as independent actors. The German industrialists who bankrolled Hitler’s rise thought they could control him. The Russian oligarchs who backed Putin in the early days thought they could maintain their influence through personal relationships.

They were all wrong. Dictators don’t share power. They accumulate it. And when they’re done using you, they discard you—or worse.

The Choice

So here’s your choice: you can embrace the chaotic, messy, sometimes frustrating democratic system that has produced more innovation than any other system in human history. Or you can bet your company’s future on a dictator who eagerly promises to make everything simple and efficient mainly by ignoring the nuances and complexities of reality.

One of these has a track record of creating the richest, most innovative economy in human history. The other has a track record of destroying everything it touches—including those who support it early on.

Democracy isn’t perfect. It’s slow, it’s messy, it’s often staffed by people who don’t understand technology. But it’s also the only system that has consistently created the conditions for innovation to flourish: open competition, institutional independence, predictable rules, and the freedom to build something without worrying about political retaliation.

Fascism is really good at one thing: making everything worse.

If you’re really building something that matters, something that could change the world, you want that world to be one where merit matters more than loyalty, where competition drives progress, where the best ideas win regardless of who came up with them.

You want democracy. You just might not realize it yet.

Filed Under: competition, democracy, fascism, innovation, vcs