Human beings have a preference for stability. We spend our lives working to achieve it and our political systems are not only built to create it, they favor those who enshrine the status quo. And except for a few thrill seekers and those who are deeply disadvantaged by stasis, rapid change is stressful to everyone. An illustration of stability an object depends largely upon the environment it is in. Pushing a marble in situation A, and it will return to the middle. In B, it will continue to roll until stopped by something else, but will largely stay in the state it was last left in. And in C? The marble’s stability was tenuous and, once pushed, will accelerate away from the center and never return. Humans like systems that return to “normal” and we fear systems where the marble rolls off the table and across the floor.
For those of us in the startup ecosystem, the last few days have been one of those moments of massive change. And let me tell you, it was stressful. In case you have not seen the news, Silicon Valley Bank had a bank run that caused it to be closed by regulators and for companies throughout the startup world to suddenly realize that the money they had entrusted to SVB was suddenly very much at risk. It was like a scene out of “It’s a Wonderful Life”.
CEOs of startups around the world had to explain to employees that payroll was at risk, and many were looking at the potential of a forced closure of their companies within days. Investors scrambled to find funds that weren’t locked up to support their investments, customers had services impacted, and employees had to deal with the real fear that the job they were depending upon had evaporated in the span of hours. It was a lot of stress.
But we, collectively, didn’t let that happen. Government institutions – the Fed, the FDIC, and the US Treasury – came together to provide stability. They leveraged mechanisms and assets to secure the deposits that SVB was entrusted with. And life goes on. Though there are going to be a series of aftershocks, by the end of the month it will likely be a fading memory. Like “It’s A Wonderful Life”, it seems like it will all work out in the end. The marble will mostly return to where it started.
Underlying it all though is that change was happening, somewhat imperceptibly. That change was gradual. Until it wasn’t. Like an actual earthquake, small, imperceptible changes built upon one another until the pressure caused a series of rapid shifts that moved the landscape. Differing from an actual earthquake, however, is that our society generally pushed things from the SVB collapse back to where we want them. CEOs made payroll and employees breathed a sigh of relief.
In the real world, earthquakes like the ones that have befallen Türkiye and Syria cause permanent change. Buildings collapse. Lives are lost. And the marble rolls down the table a bit.
As I have lived immersed in the news of climate change for years, one of the things that I have grown accustomed to is that we are entering a world of rapid change. Our marble was balanced very carefully. Overshadowed by the news from SVB was also a piece about the disappearing Thwaites Glacier in Antarctica. If you haven’t heard of Thwaites, you’re not alone, but climate scientists have tried everything they can to bring it to the public’s attention, even dubbing it the “doomsday glacier”. It is so named because it acts like a retaining wall for the West Antarctic ice sheet, preventing the ice of that part of the world from rapidly melting into the ocean and which would cause sea levels to raise rapidly by ten feet. And the news that was hidden last week is that Thwaites it is eroding faster than climate scientists knew. To the majority of us, Thwaites Glacier is changing – slowly and imperceptibly.
Until it changes rapidly. When Thwaites breaks free it is expected to collapse as suddenly as other glaciers have. Ten feet is a lot of ocean rise and in the United States, it means that New Orleans, Norfolk, Houston, Tacoma, New York, Boston, and every coastal city in Florida are permanently lost, either in whole or in significant part. And if that sounds like I’m being alarmist, remember that SVB was considered a stable, industry-leading bank by almost everyone until 96 hours ago. Your and my preference for stability biases us to dismiss alarming events, but it doesn’t make them untrue. Thwaites will become dislodged sooner than even climate scientists had predicted.
The difference with Thwaites is that unlike SVB, it exists in the real world. Once lost, it will not return. Uncorked by the loss of Thwaites, the West Antarctic ice sheet will melt, seas will rise, and cities will be lost. The marble will roll off the table. And there is nothing we will be able to do other than adapt to our new world.
The changes of climate will be cascading and compounding. Our lives will continue to change - more and more rapidly. And just like with SVB, there will be post-mortems discussing what went wrong and who is to blame, but the underlying facts will remain: change happened and we did not prepare adequately for its coming or work to reduce its impact. So what is the lesson I think you need to take from this?
It is time for you to get comfortable with the need to change. It is going to accelerate.
It is time for you to steer the change towards favorable outcomes. On climate, it does not now really matter about what you have done, but what you will do.
And it is also time for you to adapt to the world that is coming. The indications are there, even if you want to ignore them, and not preparing for them will have an outcome far rougher than what came out of the SVB collapse.