Truth And Lies Of Silicon Valley

on November 25, 2013
Reading Time: 5 minutes

It’s a privilege to write here, and a joy to focus on the long-term trends in technology, the rise and fall of companies and leaders, and the impact this region has upon not only America, but the entire world. I suspect Silicon Valley’s output will come to equal the impact of Detroit, my hometown, which effectively created the middle class, ensured the Allied victory in World War 2, and fundamentally altered how and where people live.

Silicon Valley is also a region that rivals Hollywood and Washington for talking about itself. It frequently displays the worst elements of both pack mentality and herd mentality, and aggressively covers up its failings, including a truly dismaying inequality in wealth and an almost gleeful ageism, all while insisting it knows best for California, the United States, for industry, for government, and for the world.

I now live here. These are my personal, unvarnished observations on Silicon Valley.

Almost all of the work in tech is done by companies and by people which tech bloggers pay scant attention to or worse, openly mock.

Patent lawsuits have about the best margins of any product or service in Silicon Valley. Consider that Apple recently won $290 million in a suit against Samsung. All told, Steve Jobs’ thermonuclear war has resulted in nearly a billion dollars in jury awards. If Apple only ultimately collects less than a third, $300 million, for example, that’s still about a 10X or greater return, no matter how they account for legal fees.

Does Coca Cola even make 10X on its syrup?

Computing is the new oil. The Silicon Valley “ecosystem” integrates smart people, start-ups, venture capital, and a cozy relationship between universities and for-profit corporations, has them all working at light speed and with almost zero consideration of the long-term or the existing order of things. It absolutely can be replicated in many parts of the world. This comes with a caveat, however. This area has optimized on this proven model while focused almost exclusively on computing (hardware, software, standards, apps, data, cloud, social media). Unless the copycats focus their efforts on computing-related activities, their returns will never be like what we have here. Note the very limited impact of Silicon Valley’s biotech efforts thirty years in.

Never, ever believe anyone that says Silicon Valley and Washington, DC do not mix. Washington, DC has the power, Silicon Valley has the money. The courtship is in full swing, and it’s far more than simply Washington leaders searching for big campaign contributions and re-election algorithms. Consider that under President Obama, the annual deficit alone is larger than the total value of Apple, the Valley’s biggest, richest company. Follow the money. Silicon Valley and Washington are the new Wall Street and Washington.

I always assume that any start-up whose value is based upon artificial limits is doomed. For example, Snapchat. The company is optimized for mobile, social media and the visual web. That’s almost a can’t miss. Yet, it is riding atop a temporal distortion, a gimmick whereby owners of digital content and services create artificial limits. In Snapchat’s case, the artificial limit is time (e.g. your picture or ad will vanish in 5,4,3,2,1). We all know this is not true. You may remember the briefly popular, and much-blogged-about Mailbox app, which created a sign-up list, despite the near-infinite scalability of such digital services. It may pay off in the short-term, but if you can’t cash out in the short-term, I suspect you will get burned.

There are real limits and there are made-up limits. If the limit is made-up, I don’t invest.

Speaking of investing, anyone using Snapchat for (illegal) insider trading may wish to re-consider their actions.

Almost everything you do online, and almost every time you carry your smartphone with you outside, is a far greater security risk than leaving your home WiFI open. Stop refusing to share. Stop handing over all your private data so easily.

Most people I meet here are very smart and work very hard. This is critical to their success — and to the region. Bonus: most that I meet are good people.

I have been around the world and all about this great country. Nowhere in the US is there a more socially inclusive environment than Silicon Valley — nor a more politically intolerant one. You will be branded if you are a Republican, a conservative.  Just so you know.

Connections matter above all else. Except, brainpower. If your brainpower sits atop the 0.1%, you will do exceedingly well. If  at the 1%, you will still do great. Nonetheless, and though I can’t say how many people at Apple have actual “humanities” degrees, I can assure you that you better have an engineering degree, science degree, and/or economics degree if you want a good job. It’s not about humanities or the social sciences out here.

Too many here are focused on creating the future or disrupting the current order, and not at all on preserving what is best. This is too bad. Think of all the great stuff we’ve been able to re-capture almost without trying. For example, thanks to iPhone, Yelp and Foursquare, I never again have to eat at fast food joints or franchise restaurants. Now, no matter where I am, I can find a great, local, mom-and-pop eatery. Similarly, classical music in the US, effectively dead on radio, is now readily available, for free, on Pandora and iTunes. I suspect the region is missing a giant opportunity is overlooking things to preserve.

We spend more on apps than on software.

I know of no one here who spends more on television than on connectivity. Internet, WiFi, smartphone and tablet connectivity wildly crush cable television, DVD rentals and the like. And yet, the new cool is to tell the world you’re going to stop reading email, stop tweeting, maybe go off-grid for a week or two. In my experience, no one who tells you this is ever telling you the truth. To be disconnected in Silicon Valley, even for a moment, is to be without air.

In physical space, absolutely no one ever mocks anyone for their choice in smartphone or computer.

Perhaps because there are so many smart, competitive, reasonably well-off people here, but attractiveness and fitness command a premium.

The rest of the world will know soon enough: the best source for breaking news is Twitter. The best links to the best analysis of current events is via Twitter.

In Silicon Valley, the cloud is your real hard drive and your physical hard drive is just a backup, likely to crash.

The last thing we see at night and the first thing we see in the morning is our smartphone.

We get our music recommendations come from iTunes and YouTube.

Design is hard. Really hard. BMW has been making cars for about 100 years. The new 750i is ugly. If BMW still can’t get car design exactly right, 100 years on, it’s probably no wonder that so much hardware, so much software, so many apps, nearly every UI design is so poor. Still, bad design is an obvious failing, with Silicon Valley a leader.

In my time here, I’ve witnessed radically more communications failures and personal angst based on people with obviously different Myers-Briggs assessments than on whether the person was black or white, male or female, for example.

There are so many people out here, so many cars, so little space. Yet barring a literal seismic catastrophe, I believe this area is on a growth trajectory that will continue for at least another generation or two.