How the world came to hate Silicon Valley
theage.com.au
theage.com.au
The real story is how a certain section of the media loves to blow up anything anti-Google, no matter how trivial or insignificant (a few dozen people staging a rally? two months ago?), into The Biggest Problem Ever. One imagines that they make big advertising dollars from spreading their ideology of hate, just as William Randolph Hearst did a few generations back. Or maybe Bill Gates ran over their puppy back in 1982 and now they've dedicated their lives to petty revenge.
"Look Who’s Gawking: Inside Nick Denton’s phony, hypocritical class war against tech workers": http://pando.com/2013/12/26/look-whos-gawking-inside-nick-de...
It's not a contest, we can all be douchebags. The point isn't that we're the worst, it's that supposedly we're up there.
Wall Streeters are greedy, but they don't go out of their way to ruin peoples' careers (except in the movies). They'll do a lot of things to get that $10 million bonus, but they don't hold long-term grudges and wreck careers of people who've since flown away from them. A trader will get you fired if it suits his career goals, because he is ruthless, but once you're out of his way, he'll take an active interest in making sure you get a better job afterward. Valley people, when they separate, tend to make it really ugly: lots of gossip, negative references, long-term grudges and other nonsense that wouldn't exist among people who cared more about themselves winning than about other people losing.
Silicon Valley attracts people who want power, and those tend to be worse than those who want money. It also attracts, more than nerds, people who come on specifically to take advantage of nerds. The latter set tend to be horrible, and to rise fast.
Finally, there's the false poverty effect. If you make $10 million in a year, you're rich. If you're a trust-fund kid, but you're only paying yourself a $25,000 salary because that's all your investors will let you take out, you feel more entitled to fuck people over because you're "the little guy" and because, being "scrappy" (or "lean"), you "can't afford" the costs of being ethical.
How confident are you about this claim?
I don't think anyone sat down and said, "I'm going to create a housing bubble, tank the economy, have people forced out of houses they couldn't afford because of said bubble, and cost millions of people (including myself, with high likelihood) their jobs".
Wall Street has had some very negative effects on the economy, but I don't think those were intended. There wasn't malice. It's just that we, as humans, are terrible at handling complexity beyond certain levels. Take one of those now-infamous mortgage-backed securities. To analyze the thing, you need an economist, a mathematician to model it, a programmer or two to write (and test!) the modelling code, business people who know the involved counterparties and how they will behave under distress-- that is, will our counterparty make good, or default?-- and lawyers (because the damn things are, at the end of the day, contracts). The things are dangerous because no single person on earth holds even half the knowledge to know what the thing is actually worth. But (as in government) that complexity is the product of creep, not (in most cases) intentional malice.
Wall Street people are ruthless and greedy. If the trade they want to do means getting up at 3:00 am (or, even, getting the team up) for the European open, they'll do it. They want to win, and they play hardball. However, Wall Street's rules are well-defined (unlike in VC) and most of the obviously unethical things have been made illegal. Wall Street people, for the most part, don't like being in jail and would rather avoid that. Most people on Wall Street are (although ruthless) actually ethical. There are exceptions but they tend to take a lot of collaboration (see: housing bubble) and it's actually hard to get people like that to "conspire" on anything. It just has to happen, emergently, and it only happens once every 10 years or so.
See, predictable, greedy, and mostly ethical people (with a few unethical ones in the mix, as anywhere) aren't that dangerous a set. If someone costs you your job, you get another one. No big deal. It's true that you have about a 20% per year chance of getting laid off on the street, but it's not stigmatized and your co-workers (and often your managers) will go to bat to help you get a better next job. (Silicon Valley probably has the same 20%/year job-loss rate, but startups refuse to have an honest lay off and mask those firings as "performance"-related or "cultured fit", meaning there's no severance and the startup's reputation is preserved at the expense of the ex-employee.)
In the Valley, people may not be as open about liking money, but they are more hung up on power and, at high levels, it's like high school. That's why social proof is so important in raising the first round of funding: because it's essentially adolescence all over again. The stakes are lower (Silicon Valley can't tank the economy in the way that Wall Street can) but the petty personal grudges are more common and people are much more willing to go out of their way just to hurt someone they dislike.
It used to be, in the Valley, that people went out of their way to help each other. If a startup CEO had to lay people off, he introduced the laid-off people to investors so they could start their own companies (presuming they didn't compete directly with him). Now, that same reputation economy exists but, instead of it being powered by people helping each other out, it's powered by people pushing each other down to solidify their own positions.
Oh, c'mon, jail time is not a realistic threat for Wall Street types: http://www.rollingstone.com/politics/news/why-isnt-wall-stre...
http://www.forbes.com/sites/nathanvardi/2013/07/22/carl-icah...
people in every industry hold long term grudges and wreck each others careers. They simply just exist in whatever industry you choose.
I'm a nobody who came to Silicon Valley and has done relatively well for himself as a founder. I've seen many, many other founders with similar stories. We raised a significant amount of money and can spend it however we want. The worst I can say about my experience with investors is sometimes they can be arrogant. The ones that did invest in us have been nothing but incredibly humble and helpful. But going out of their way to screw someone over? I just haven't ever seen anything close to that happen to anyone in the 3 years I've been here.
I used to work in finance where they're much more ruthless. I have a classmate from undergrad who recently was arrested for "stealing trade secrets" from a hedge fund: http://www.forbes.com/sites/nathanvardi/2014/02/19/analyst-c.... Who knows what actually happened but that sort of stuff would never fly in Silicon Valley.
That's not to say I have the correct perspective but I always see these generalizations coming from you that seem so far off from my reality that I wonder what's going on. What happened to you?
I've worked for two startups as a programmer. They were both broken, and each was broken in its own way. I don't think that the founders of them were bad people or out to screw me. They were, however, way in over their heads. Startups are hard.
I also founded a startup. It was also broken in its own way, despite trying to avoid all the mistakes that I'd seen my previous bosses make. Startups are hard. Luckily, I didn't take anyone else down with me - it was just me and my cofounder, he soft-landed at business school and I soft-landed at Google.
I now work at Google. It is significantly less broken than any previous startups I've worked at. However, there are still a bunch of things about it that are annoyances.
No place is ever going to be perfect, but if you tar each new employer with the same broad brush that made you leave the last one, then chances are the same broad problems will come up.
In 3 months, I saw... bait-and-switch hiring all over the place, multiple people hired into the same management role, and (after I left) a CEO who spent months trying to destroy my reputation.
At 3 months, I was brought into a room with HR and the CTO. Upper management wanted to get rid of early hires with "too much" equity and wanted to pull my technical credibility to justify their firing, but the documents I was asked to sign constituted perjury (blaming people for nonexistent technical shortfalls, claiming that I directly managed people I didn't even know, etc.) Some of the claims would have required revising my past and saying I'd consulted (a consulting VP/Eng, I can't make this shit up) with the company before the start date (in order to make the rest of the story check out). They fired me for refusing to do it. When I pointed out that I had grounds for a lawsuit, the CEO threatened to pull family connections and bribe judges.
I'm sorry, but I don't do "We're giving you 10 reports, and your job is to fuck over all of them over the next two months." I may or may not be a leader (that's not for me to decide) but I am surely not a henchman.
This is one of the VC darlings and although it was almost a down round (barely above flat) and dilution was heavy, they raised again in late 2013 (almost 2 years after that happened). Granted, this last VC round is essentially a severance, giving the company a couple years to run on fumes while its executives find better things to do with their lives. But I didn't get a severance, so why should they?
Now, I think companies that are that shitty are pretty rare, even in the VC-funded world. That might be bottom 1% overall and bottom-10% in the VC-funded world. Even most startups and ex-startups (e.g. Google) aren't nearly as bad, but there is a certain crappiness to the tech world in terms of how regular people are treated. Companies care a lot about image (being sexy, "cool", VC darlings, whatever) but not about long-standing reputation-- at least, on the latter, not enough to seriously value doing the right thing.
The old Silicon Valley was a pay-it-forward economy. Even when you separated, you were good to other people. If you had to cut people in your startup, you introduced them to investors. People helped each other out. You didn't fuck over a talented engineer, because you might want to work with him 5 or 10 years later. That's gone now.
I do have to offer this disclaimer, though. I never worked on the West Coast. Maybe it's different out there, but the things I've heard convince me that it's not that different, and I've definitely met dodgy characters in California.
Day to day, what angers me is the general lack of respect for engineers in the "new" Silicon Valley. I'm talking about the startups offering pathetic equity slices, and about the companies that are actually very business-driven posing as "tech companies". Engineering and research talents aren't really valued, despise the mouth-honor paid to them.
LOL okay I guess that explains it. I've been in the Bay Area since the dot-com times, and the type of behavior you describe is something I've never seen, not even once. I've worked for some real assholes, and I don't deny that this probably happens here, but not often for it to be a discernible trend.
Yes, you had a bad experience, but no it's not all like that, at all. I work for a YC startup, something I never thought I would do, and the cofounders are genuine, smart and people I'm ready to put my career and financial future behind even though I'm roughly 15 years older.
This is not a comparison group you should aspire to be in at all.
Regular Facebook employees aren't Mark Zuckerberg, and certainly aren't paid like it. Most tech workers make less than twice the median family income in the Bay Area—good pay, but not obscene.
If people have a problem with income inequality, they should be siding with tech workers—we're way closer to barista wages than being in the 1%.
So why are tech workers the ones getting attacked? You can bet Larry Page isn't taking the bus, but he's the one making the money.
Not even, the protestors manage to direct their wrath at the employees low enough level to be riding the shuttles.
It's pretty ironic seeing the ostensible radical leftists following the lead of the Valley Wag's middle brow demagoguery.
Yes, SF's banking-class and politicians are loving this. The middle-class is distracted fighting their middle-class peers.
Or are you truly unable to see that you are not making anything remotely near average wages ? That you are not middle class, and certainly also not working as hard as the average middle classer ? You get sundays off, for one.
The result of these actions is people getting thrown into the streets by their landlords. Here's a tip : there does not exist an argument that will make people OK with that. Stop looking for it.
I mean, the immediate cause is landlords and the ultimate market cause is the lack of housing in Silicon Valley. Tech workers in SF are just dominoes in a chain.
And the cause for Tech workers being better paid is the failure of the average workers to defend their wages. You could defend your living standard by the left-wing means of unionization or by the right-wing means of providing more value to your employer so if you just sit on your ass and attack higher paid workers, you deserve contempt from any point of view.
(I thought the plural "bricks through the window" in the subheadline was particularly indicative, when as far as I know that was brick singular)
The world, meanwhile, follows a bit of news about tech companies, they have opinions about some of the bigger ones, and they like taking sides over their favorite phone brand, but they continue to steadfastly not care about Silicon Valley. Seriously. Go on vacation, get out of the bubble, talk to people. They don't even have an opinion on the place.
These protesters are either misinformed or being deliberately malicious if they are targeting the ordinary tech employee. At $39000 average spending per year ($3250/month according to the article), how much do they exactly think SV engineers get paid? At say, 100k, which would be considered pretty decent by an SV engineer, the 28% tax bracket, leaves 72k actual income. Minus the $39000 housing expenses mentioned, that's $33000/year, or $2750/month for food, clothing, paying for your kids' education. etc. If your spouse doesn't work, you will be living a pretty Spartan life. Hardly the kind of money you imagine rich assholes throwing around, is it?
A) income tax is progressive and continuous, you can't say $28k in taxes for the 28% bracket (however, FICA and CA income taxes mean that number is in the right ball park)
B) a couple living on one income in a 2-bedroom isn't considered a birthright in dense cities like SF
C) $100k would be an unusually low salary even for someone just out of school taking the megacorp buses, and this is before bonuses and RSUs
So I disagree with the thesis that Bay Area tech workers are by any measure living a spartan life.
I'm not so sure that low six figures is considered low for someone straight out of school, remembering that not all hires are superstars, and there are a lot of less technical positions being filled as well.
And in the Bay Area, childcare and/or education expenses are likely to add up unless you've got a very good local public school.
Oh no! I don't have any money left after I'm done saving all my money!
Part of those "subsistence wages" are the funds which cover your expenses when you aren't working. Whether due to disability, between gigs (part of Smith's detailed discussion of the basis of wages in Book I, Ch. VIII of Wealth of Nations, I recommend it strongly), or in old age.
Your 401k funds are not generally available to you to meet pre-retirement expense needs. There are some exceptions, but in almost all cases, you're very strongly advised not to make use of them: you can borrow against 401k funds, but this 1) costs you the earnings on those funds (part of the basis of the whole concept) and 2) the loan must be repaid (though without interest) if you terminate a relationship with a loan sponsor. Which is to say: at the very time you're most likely to have a cash crunch (you're transitioning employment), you have to repay the loan.
Early distribution is also possible, but with very significant financial penalties.
Your comment is juvenile and specious.
Look, I get where you're coming from, in that you don't feel rich, especially in the context of San Francisco, but seriously...
"The median household income in the United States today is $50,000. Half of all households make more than this. Half of all households make less. The big expenses in the Xxxxxxxxx family budget--their $60,000 a year in contributions to tax-favored retirement savings vehicles, their $25,000 a year savings building home equity, their $55,000 for housing, their $60,000 in private school costs, even their $10,000 a year for new cars--are simply out of reach for the overwhelming majority of Americans."
http://delong.typepad.com/sdj/2010/09/in-which-mr-deling-res...
Yep. That's going to be a problem.
Even many of those who do have a 401(k) (or equivalent) are subject to market losses, insufficient funding, interrupted employment (how many 30-40 somethings do you know with significant interruptions in the professional lives -- right in the middle of their peak earning years)? One of a number of messes we're busily creating.
I've been arguing in another thread about what a minimum living wage means, and on those terms, you've got to allow for retirement. Otherwise the alternative (including state support of retirees) remains yet another net welfare support for businesses which were paying insufficient salaries in the first place.
See thread here: https://news.ycombinator.com/item?id=7337228
And post here: http://www.reddit.com/r/dredmorbius/comments/1z5vfb/thoughts...
The tech workers are just showing up with buying power. The decision of whether or not to pursue ellis act evictions is not carried out by tech workers, but the San Francisco landlords who are trying to free up their rent controlled units to be able to jack up the price.
Many of these landlords are either San Franciscans who still live in the city or those that grew up here, but moved out to the supports and now just manage rentals in the city. So at the end of the day its fellow San Franciscans to whom these protestors should direct their anger.
Sure conjecture and conspiracy-theoryish but why the fuck else would any part of the media be paying attention to 10 protesters and a staged, crass fake "nerd" pretending to be a Google employee?
[1] http://www.marinij.com/novato/ci_25251868/lib-at-large-novat...
Many people have concerns, but a) even most of them don't all the time, and b) as a proportion of world adult population, not many.
The First Estate of Silicon Valley (here, including San Francisco) are the highly influential angels, VCs, and corporate executives who can force acquisitions. The Second Estate are the engineers, mid-level product managers, and data scientists. The Third Estate is everyone else. Naturally, the First Estate is trying to prevent any chance of alliance between the Second and Third Estate, and actively encourages tension between the those two groups. It's also clear, however, that the First Estate screws the Second (all of the collusion/anti-poach agreements that have been uncovered). In fact, the Second and Third Estates have a common enemy in the First. They've just been prevented from realizing it, in large part, by all the obfuscation that's going on.
To people in poverty, $120,000 per year is a large amount of money, but it's not nearly enough to bribe city councils into enacting the NIMBY policies that make San Francisco unaffordable.
The real bad guys don't ride Google buses. They have private drivers, and the Google buses don't stop on Sand Hill Road.
That would mean the Zeroth Estate are the landlords. Remember, Google proposed to Mountain View to build their own damn neighborhoods of townhouses and apartments for housing their own employees. They got denied. The city council somehow felt that the current situation was better than letting a company, God help them, actually get some housing built for all those employees they hire.
It's sortof like high school. Popular people treat the unpopular badly. Type A's are revered, have lots of friends, and get lots of sex.
Nerds are treated badly because they are "different". There isn't much compassion for people who are "different". You better be funny and Type A or you got some serious character flaws ;-)
Nonetheless, it's still a game. It's also a cold world. Some people transcend and live a more meaningful life, some don't.
Trust me, I know - I was born and raised in Australia, and because of the country's heavy Socialist/British background and identity, we were taught to hate everything about America. My wife and I lived in Melbourne from 2009-2012, and she suffered horrible discrimination for being from the US.
Silicon Valley is one of the great monuments to American individualism and entrepreneurial spirit, and it sickens most Aussies to see the success and fortune that has come of it.
The Age is ensuring that the anti-American sentiment is kept at a poisonous and noxious level.
Firstly, this Melbourne Age piece is syndicated from The Telegraph, a British newspaper from my home country. As a regular visitor to Australia, with relatives living there, I had presumed that the article was syndicated even before I reached the byline. This due to a clarity of language unusual in locally written newspaper articles.
It sounds atrocious, the treatment of your wife, and if her treatment was as widespread as I'm inclined to take on trust from what you say, then I'll need to reassess a thing or two.
Australians know virtually nothing about Americans as people, and that's a pity. Their television is acutely americanised, and their culture inculcated with American influence, but I've noticed that hardly any Australians have actually met an American. It's hardly polite or even civil to blame the rare American they meet for the perceived wrongs of the US body politic. And I can empathise with your experience somewhat.
It can be parochial. I watched Grease the movie on Australian TV recently, and it reminded me that Australians love John Travolta because he loved Olivia Newton John, who's really a Brit anyway. He's in if he can say g'day. On the other hand Mel Gibson was Aussie and became American. He's not claimed anymore.
But I haven't found hate as you appear to have. Australia is a lot bigger than the left wing inner city self styled intellectuals you apparently met too many of.
Go to country NSW and they all dress and sing like Chet Atkins.
According to Wikipedia, Mel Gibson was born in the US to American parents and moved to Australia when he was 12. Somehow I remembered that factoid when I read your comment :)
Pride and Prejudice.
Wow, how unbelievably arrogant. Spending his money however the fuck he wants? Paying people to render him services of their own free will? What an asshole. He must've forgot signing that social contract with angry poor radicals that once you hit $(whatever today's immoral amount of money is) you no longer have the right to spend it... oh wait.
Whatever. Give me a break. This article is really about the worst side of SF - not the successful businessmen, but the unsuccessful, jealous, negative, unproductive "radicals" whose politics boils down to "I hate everything that I don't understand, and I'm not going to bother to try and understand it because I hate it."
an arrogant and often tone-deaf industry
The only arrogant people here are these fucking losers who think they deserve to live in the one of the world's most expensive and desirable cities, and think they deserve to dictate how other people can and should behave, despite providing absolutely nothing of value to anyone.
Perkins is right. The closest parallel to the mindless, hate-drenched opprobrium of these people is Nazi Germany turning on the Jews (a similar group of successful, largely innocuous businesspeople.)
This perverse non-analogy is an embarrassment. It reads like absurd satire. Please stop repeating it.
I am amazed. Wait ... no I'm not. I'm even inclined to call those claims justified.
Nobody signed a contract with these people promising to let them live there forever. They were rentors, and if they didn't understand that they could be asked to leave at any time by the true owners of the property, that's their fault. And if they were so concerned about their ability to continue living there indefinitely, maybe they should have worked harder to ensure their position? Maybe they should have striven to provide more economic value, so they could have purchased this apparently extremely important good?
These people have no excuse. They knew the rules. The rules were clear to everyone. They were happy as long as they got what they wanted. Now the situation no longer favours them, they want the rules to be changed - so that they get everything exactly how they want it.
> Nobody signed a contract with these people promising to let them live there forever.
No but they agreed to something stronger than a contract called "Rent control". And before you say otherwise, if you read this law, it specifically states that it overrides contract provisions. Since we live in a democracy, those landlords agreed to this.
> And if they were so concerned about their ability to continue living there indefinitely, maybe they should have worked harder to ensure their position?
Ah the mafia argument. As if this is anything but money grabbing through threats. As if there is any amount of money that would leave these vultures satisfied.
> These people have no excuse.
Look I am normally pretty right wing, but make this statement to my face and I'll be the first to start throwing bricks through your window. It's that simple.
Btw : do I get to throw you out into the streets the second you are less economically valuable than me too ? Fair's fair after all.