I believe the 'fire' is something akin to the post-2000 tech bubble collapse. When markets correct or collapse, investors tend to become more conservative (or outright scared) and risk averse. That dries up the sources of capital available to more risk-prone endeavors, like funding tech startups. Even with lower capital costs, a VC firm looking for tech opportunities will be more selective in post-correction market. Whether that means startups will be more innovative or diverse, to impress VCs, or become more homogenous but cost-effective, in order to attract investment, is an issue I don't know enough about to predict. In any event, I like the idea of a fire ecology. I think it's a good one.

"Coming back to your points we have reached a certain kind of equilibrium in the startup ecosystem where the incumbents through network effects have become entrenched"

So, with ~50% of the top venture backed companies being founded by immigrants and 75% of them having immigrants in key product/management positions, you think we're in a "burn it down" moment? This doesn't even account for the non-immigrants-non-insider people who succeed in the Valley every day. I'm all for working to reduce cronyism, racism, ageism, etc. But I don't think we're remotely near needing to set fire to things (metaphorically or otherwise).