The Republic of Venice was surely the most technologically advanced, financially sophisticated and organizationally most capable state of the twelfth century. They applied their abilities, above all, to navigation and trade. Applying the capabilities allowed them to maintain them, since commerce financed the fleet and practicing nautical science made it possible to continuously improve it. The Venetians were also pioneers in the production of ships, with their famous arsenal, where they manufactured Henry Ford-style ships, employed thousands of people and stored large quantities of ships that they could assemble and launch quickly in situations of emergencies
Its sailors were pioneers in the use and development of compasses, nautical charts, waybooks and sailing in cinchida (sailing against the wind). Let’s remember that a ship is primarily a complex and expensive technological artifact that needs an ecosystem. The Venetians observed that, in the sea, the deeper you go, the deeper it is and the more difficult and dangerous it becomes.
The technology itself is not something necessarily useful or differentiating. A GPS, without more, would have been a useless eccentricity in a Venetian galley, because to operate it needs electricity, a constellation of satellites and minimally qualified personnel. All technologies need the cost/benefit tetrahedron, people, solving a problem and operating in an appropriate environment. They are vehicles that need these four wheels.
We can see the same where there is the greatest stress: on the battlefield. There is a missing wheel in Ukraine: the use of Western technology is limited by serious environmental deficits, specifically the lack of ammunition and land vehicles. These limitations make today’s Ukrainian armed forces stagnant and their objectives dangerously fragile. By contrast, the Russians today are effective because, despite technological limitations, they are filling their own ammunition deficits with old North Korean arsenals. Right now they have four wheels, which aren’t very good, but they work.
We can also observe how cost/benefit is key in technology. On the battlefield missiles do not compete well with drones in some areas for a cost reason. A missile is faster, carries more cargo and can reach farther, but is more expensive than a drone. If missiles worth 400,000 euros are used to shoot down drones worth 35,000 euros, the victory becomes what King Pyrrhus described: “Another victory like this and I’m lost.”
Sam Bankman-Fried created a cryptocurrency exchange, FTX, in the deregulated paradise of the Bahamas, a complex, almost lysergic financial technology that is not clear what it solves. Its market imploded because it didn’t have a tetrahedron, not because of technological problems or a lack of vision. He’s been sentenced to 25 years in prison for lying to investors and has gone, in a sneeze, from being a twenty-something billionaire with enviable hair, loved and universally admired to being a convicted felon, with no income and abandoned by his friends and girlfriend, who testified against him. He is the crewman who is abandoned half-naked on a deserted island as punishment.
Investors in technology companies would do well to remember that you need to know what you are investing in and that technology itself has no value, nor is it a good investment without a tetrahedron. Never buy a car, no matter how good it is, if it doesn’t have four wheels.
