Silicon Valley is Dead

Update: Please read the book Give and Take. Give and Take is not positive or negative. Givers aren’t always just founders (many VC Givers) and Takers aren’t always investors (many Taker founders), and there are nuances to the methodology that missing below, and I have capitalized Give and Take intentionally to denote it’s not the generic “giver / taker.”

In 2008, I wrote a post declaring SEO is Dead. Nearly 10 years later, I still get nastygrams now and again, calling me evil and all kinds of stupid. Was I right? Did SEO die?

No. But, my point that SEO needed to become a core function of a company as it was just one “growth hacking” tool, was, well, dead on. What I didn’t realize was that SEO, and later growth at all costs would doom the place, and philosophy, that shaped and impacted on my life more than any religion, school or person.

A couple of months back, I was in Boulder, Colorado visiting with three friends. Each of them have known me in different ways and for different times, but each knew me. I asked Brad Feld, Jerry Colonna and David Cohen the same question: “Am I still a founder?”

First some background, I grew up in the Bay Area, Mountain View and San Jose. True story, I never realized people actually lived in SF growing up. Figured most people just went to see the Exploratorium and maybe the left handed store at Pier 39, with their school. But live there? Why? All the cool stuff was happening at Stanford University and the South Bay.

My mom and I moved to East Palo Alto from Fort Collins, Colorado, when I was about 2, after she and my biological father divorced. We quickly met my step (now adoptive) father and they got married when I was 5. Their combined salary was $1,025 a month. My mom made more than my dad, who was pouring concrete for the city of Mountain View.

My father, a transplant of Albion, Michigan rapidly became enthralled by the innovation being created in Silicon Valley, and over the next 30-ish years, was the Forrest Gump of the internet boom. He attended the Homebrew club, where Steve Jobs and Steve Woz showed off their project. He was asked to join Cisco when there were 4 employees. Was there when David Filo and Jerry Yang were kicked off campus for using too much bandwidth.

My favorite story was when a young cat named Scott came to my dad looking to sell a slick new computer named after the Stanford University Network.

“These are great!” My dad told Scott. “How much are you selling them for?”

“Haven’t figured that out yet,” Scott McNealy, founder of SUN replied.

That is the world I grew up in. You couldn’t ride your bike past a garage without imagining what people were building inside. Innovation wasn’t a word, it was a way of life.

Go watch the documentary Something Ventured. In many ways, Silicon Valley venture capital started in a coffee shop. Innovation beget innovation.

This is what I love. And it’s dying.

That day in Boulder, the question I asked Brad, Jerry and David wasn’t a question about my ability to be innovative, nor was I asking permission. I wanted to know if I was serving the world I loved so deeply as I stepped further and further away from it and became more and more complacent with the safety net Amazon was providing me.

In that conversation, David Cohen suggested I read a book by a Wharton professor called Give and Take. I did. It blew my mind. I have since joked with Professor Grant that his book has become my bible and has fundamentally changed my world view. If you don’t want to read all of it, just read the intro about David Hornik of August Capital. Or watch this:

I am a giver. I know this. I give and give, and then get pissed when I feel the karma is so outta wack and act like a dick. It passes, and then I give again.

This is my cycle. It’s not healthy, so I am going to work on it.

How does this all relate to the death of Silicon Valley?

“I want to put a ding in the universe.” — Steve Jobs

As an informal student of the history of Silicon Valley, it is clear that most companies began with the premise of “lets do it better.” HP was a better calculator; Apple a better PC; Google a better search engine.

Quickly followed by “how do we get everyone to use this?”

In essence: “This is broken, lets fix it and then give it to the world.”

Did money factor in? Of course. Was it the primary driver? No.

“Success depends heavily on how we approach our interactions with other people.” — Give and Take

Take that reality out of the individual interaction between two people, and put it in the context of the entrepreneur. Our interactions are between product(company) and user(world). If the question is:

“Every time we interact with another person at work, we have a choice to make: do we try to claim as much value as we can, or contribute value without worrying about what we receive in return?” — Give and Take

Givers, by definition, are looking to add value to the user; whereas Takers are looking to extract value from the user.

In Silicon Valley terms, this is the difference between innovating and building for returns.

As returns became outsized, more and more investment dollars entered the space. Founders that were looking to build truly innovation “ding the universe” type companies were getting pushed out by people worrying about the exit before even starting.

The givers (innovators) are getting replaced by the takers ($$$) and it’s strangling Silicon Valley.

Yes, it’s expensive to live in Silicon Valley, but if we make more money, it doesn’t matter. Right?

Yes, important, large technology companies are here: Facebook, Intel, Google, etc. but the world-moving innovations are starting to happen elsewhere. It is not rocket science to understand why.

Leading to the greatest benefactors of the Givers being pushed out of Silicon Valley by the Takers being ecosystems like Los Angeles, Seattle, New York and others. Our best engineers, designers and product minds are relocating because they want to build.

In the workplace, givers are a relatively rare breed. They tilt reciprocity in the other direction, preferring to give more than they get. Whereas takers tend to be self-focused, evaluating what other people can offer them, givers are other-focused, paying more attention to what other people need from them. These preferences aren’t about money: givers and takers aren’t distinguished by how much they donate to charity or the compensation that they command from their employers. Rather, givers and takers differ in their attitudes and actions toward other people. If you’re a taker, you help others strategically, when the benefits to you outweigh the personal costs. If you’re a giver, you might use a different cost-benefit analysis: you help whenever the benefits to others exceed the personal costs. Alternatively, you might not think about the personal costs at all, helping others without expecting anything in return. If you’re a giver at work, you simply strive to be generous in sharing your time, energy, knowledge, skills, ideas, and connections with other people who can benefit from them.

Every startup ecosystem has a distinct balance. Too much of one thing (founders) and not enough of the other (investors) and it doesn’t expand.

Silicon Valley is out of balance.

The Founders who are willing to do most anything to see their vision come to life are being taken advantage by the Takers who are looking to extract value from everything.

Takers have a distinctive signature: they like to get more than they give. They tilt reciprocity in their own favor, putting their own interests ahead of others’ needs. Takers believe that the world is a competitive, dog-eat-dog place. They feel that to succeed, they need to be better than others. To prove their competence, they self-promote and make sure they get plenty of credit for their efforts. Garden-variety takers aren’t cruel or cutthroat; they’re just cautious and self-protective. “If I don’t look out for myself first,” takers think, “no one will.” — Give and Take

As the Givers in Silicon Valley leave (46% of millennials want to), they are not being replaced by more Givers. In fact, in many cases, other Givers are following in their moving vans.

It’s sad. I have lived, off and on, in Silicon Valley my entire life. I started my first “business” when I was nine in response to my parent’s inability to pay for a movie. I have a group of friends that will spend time thinking about innovative solutions/inventions to problems from the silly to the sublime. Innovation still exists in Silicon Valley, it’s just drowned out by Techcrunch funding posts.

And it’s dying. We may soon be surpassed (as a Northern California kid, this really hurts me to say) by LA. Or Austin. Or worse, NY. *shudders*

Givers succeed in a way that creates a ripple effect, enhancing the success of people around them. You’ll see that the difference lies in how giver success creates value, instead of just claiming it. — Give and Take

My heart will always be here, regardless of where I live. I will always innovate here. I will do my best to give to, and support, my fellow innovators that choose to be here.

Silicon Valley used to know this. Let’s find it again, before it’s too late.

(thanks to Brain Pickings for sourcing many of the quotes above.)