A Silicon Valley Wake Up Call

We often talk about the ways that Silicon Valley is selfless. How we improve lives with world changing technology. How we spend our time helping other, younger entrepreneurs. But we rarely spend time talking about the ways that Silicon Valley is selfish.

I must admit that most of my last decade building and investing in tech companies has been spent trying to figure out how to make my businesses work for me. How do you get users to click on more things? How do you get them to spend more time or more money? How do we raise more money, increase our value, sell our company, enrich ourselves? Silicon Valley is the Wall Street of the 80s: Greed is good. For us, the market has been the ultimate arbitrator of value: if you make a product lots of people use and give you money for, you’ve definitionally done something that has made a positive impact in the world. Because here it has been possible to make an incredible fortune so quickly, clearly Silicon Valley must be changing the world!

Visit http://bloom.bg/2fXKRNT for the full Bloomberg interview. Original airdate 11/16/2016.

This week was an eye opener for me. In coastal bubbles a Trump presidency was literally inconceivable. Silicon Valley was optimizing around the margins; the main battle finished, it was picking new battles (sometimes with Thiel affiliates who were pro-Hillary!). The election results showed something completely different: 50% of voting Americans, and the majority of the electoral college sent a giant Fuck You to the establishment and went Trump.

The mistake is thinking that people voted Trump because the majority of them are racist, sexist, or otherwise. Most of them voted for him despite those things, because they demand change at any cost. While not all of the same people, this is the same populist groundswell that supported Bernie: a large part of the electorate does not believe the current system is working for them. And they are largely right.

The current system is working for elites, for business leaders, for shareholders, and increasingly those people are from the tech industry. We’ve recovered from the Great Recession, but workers haven’t seen their wages increase. In Silicon Valley, we’ve seen record levels of investment, and an ever increasing number of unicorns, and briefly this year the five largest companies in the world were all tech companies. But these gains haven’t been shared by the rest of the country.

At the same time, we relish the chance to disrupt traditional industries (and openly brag about it), without any thought to the consequences our disruptions will have for other Americans. Uber is amazing for shareholders and riders, and it started off well enough for drivers, but constant pricing pressure from the company has lowered driver wages over time.

What will happen to those drivers when Uber moves to self-driving cars, and wages go to zero? What will happen to truck drivers when self-driving trucks are here? Delivery drivers when delivery robots show up? This isn’t just limited to blue collar work: radiologists will be replaced by computer vision, lawyers by machine learning.

As globalization began the process of eating the American middle class in the last decades, technology advancements have the potential to finish the meal. What we do about it is important. Trump is a wake up call. The next wave of the displaced and dispossessed might create something even worse.

Technological advancement is amoral, and we’ve always found a way to create new jobs and industries to replace them. The hard part is the transition, often an incredibly painful process for the individual who has spent decades doing a job that no longer exists. As a society we can react and retrain those people, but unless the policy and support exist to do so the gap might stretch unrest in the working class to a breaking point.

We need to work on an inclusive vision for all of America. The tech industry has been focused on the White Collar American Dream: the executive of a growing startup. That’s not accessible to everyone. Not everyone will become a programmer.

The Blue Collar American Dream doesn’t exist any more. But that doesn’t have to be the case.

We saw Trump promise to bring back the coal industry and thought: how destructive! terrible for the environment. Let that industry die. But it’s easy to care about the environment when you work in an office and live in the Bay Area. It’s not as easy when you are choosing between the environment or your livelihood. Alternative energy subsidies might be preserving our future on this planet, but they are also a massive economic transfer from the Rustbelt to California and Chinese solar panel manufacturers. It’s an incomplete solution, missing the second half. Why not create economic incentives for alternative energy and against fossil fuels, but also invest in retraining to create solar panel factory jobs in Ohio?

Some of our tech companies have user populations larger than the biggest countries. We need to hold ourselves and our tech and business leaders to a higher standard. One where the value we are creating isn’t just ad impressions, acquisitions and share price, but where we are fulfilling our part of the social contract with the rest of America (more on this later).

We need to create a more thoughtful tech industry. A more inclusive tech industry. A tech industry where everyone wins, not just the few. I believe we can change our industry. We must, if we want to have a country.