This XSeed blog was written by XSeed Capital Partner, Robert Siegel, and originally appeared in The Accelerators blog of the Wall Street Journal.
As I recently re-read the opening of Charles Dickens’ “A Tale of Two Cities,” I realized just how prescient he was about modern Silicon Valley.
It Was the Best of Times in Silicon Valley
At the start of the twenty-first century, the most talented and brightest from all over the world flocked to Silicon Valley to build great companies and change the planet. At universities such as UC Berkeley, Stanford and UCSF the top minds in engineering, medicine, law and business wrestled with the hardest problems of the day. The quality of people and the resources they had available prompted some to describe this place and time as the “Florence of the 21st century!” And they were right.
Technology and media created unprecedented ways for the species to communicate. New computing and communication platforms enabled news and entertainment to always be with us. We could easily connect and reconnect with friends and loved ones all over the world. If a piece of information could not be recalled, it could be summoned on a moment’s notice from the computers in our pockets. Some said that it was a new dawn in the spread of knowledge and information amongst individuals all over the world. And they were right.
The accumulation of wealth led to unprecedented acts of kindness and generosity. Personal donations of hundreds of millions of dollars were made to address poverty. Institutes were started to study and promote emotional well-being for people all over the world. Resources were allocated to helping entrepreneurship not only flourish in the richest parts of the world, but also in the poorest. Amidst the materialism and angst, people showed the power of individuals to have a broad, positive impact on the planet. Some posited that we were up close and personally seeing humans at their best. And they were right.
There is something magnetic about Silicon Valley that attracts people who not only want to make money, but who also want to make the world a better place at an unprecedented scale just because of who they are. No matter your religion, skin color, socioeconomic background, etc., if you have something to contribute there is a seat for you at the table. And they are right.
It Was the Worst of Times in Silicon Valley
The aged stereotype had been that people in Northern California were down to earth, working for the better good and simply trying to make “insanely great things.” Many claimed that Silicon Valley had become so materialistic that people could no longer see that they had become archetypes of conspicuous consumption. And they were right.
Schisms developed between those who were “in” and those who were “out.” One of the well-established East Coast media companies wrote about the battle between young and old. Rising housing prices led to social agitation not only against corporations, but also individuals — many of whom were not the titans of the times. And the impact to the children was alarming — not only the potential addictions of thenew technology, but also the impact to young people’s social and mental health. People worried that we had unleashed an unforgiving dark side with these new tools. And they were right.
Valuations for certain companies reached ridiculous and unsubstantiated proportions and the vernacular came to call these events “unicorns.” If a person was lucky enough to get a unicorn, he or she would have no more financial worries and was celebrated by the press, whether the company was large and profitable or not. Some argued that people were chasing fairy dust and fantasies — it did not matter if a unicorn was real or not — it just mattered to get one. And they were right.
New applications for smart phones were launched that allowed people to comment anonymously both on the Silicon Valley culture and on other people. Entrepreneurs spoke ill of VCs and other entrepreneurs. VCs wrote derogatory things about entrepreneurs. An entire ecosystem of pain and shallowness both thrived and was celebrated – money was made available and data showed that people kept returning to the app over and over and over again. Some said that the app enabled and enhanced behavior that was like a train wreck, horrible and gory, but from which it was hard to turn away. And they were right.
So, has the Valley changed in ways not for the better? Absolutely. Has the chase for commercial success blinded people to the ugliness of their behavior? Yep. Is the dark underside of Silicon Valley far more pervasive than what people show the outside world and especially on social media? Without a doubt.
Yet, despite these things, we should be careful not to “look at the donut and see the hole.” The trick is to keep it all in perspective.
Optimism is a choice.