Silicon Valley

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pages: 361 words: 81,068

The Internet Is Not the Answer by Andrew Keen

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3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, augmented reality, Bay Area Rapid Transit, Berlin Wall, bitcoin, Black Swan, Bob Geldof, Burning Man, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, David Brooks, disintermediation, Donald Davies, Downton Abbey, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, full employment, future of work, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Metcalfe’s law, move fast and break things, move fast and break things, Nate Silver, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, Plutocrats, plutocrats, Potemkin village, precariat, pre–internet, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Robert Metcalfe, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, TaskRabbit, Ted Nelson, telemarketer, The Future of Employment, the medium is the message, the new new thing, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber for X, urban planning, Vannevar Bush, Whole Earth Catalog, WikiLeaks, winner-take-all economy, working poor, Y Combinator

For data on Rochester’s very high 2012 murder rate, see Karyn Bower, John Klofas, and Janelle Duda, “Homicide in Rochester, NY 2012: Comparison of Rates for a Selection of United States and International Cities,” Center of Public Initiatives, January 25, 2013. 3 Rory Carroll, “Silicon Valley’s Culture of Failure . . . and the ‘Walking Dead’ It Leaves Behind,” Guardian, June 28, 2014. 4 “How I Failed,” Cultivate Conference, New York City, October 14, 2013, cultivatecon.com/cultivate2013/public/schedule/detail/31551. 5 “‘Fail Fast’ Advises LinkedIn Founder and Tech Investor Reid Hoffman,” BBC, January 11, 2011. 6 “Failure: The F-Word Silicon Valley Loves and Hates,” NPR.org, June 19, 2012, npr.org/2012/06/19/155005546/failure-the-f-word-silicon-valley-loves-and-hates. 7 Eric Markowitz, “Why Silicon Valley Loves Failure,” Inc., August 16, 2012, inc.com/eric-markowitz/brilliant-failures/why-silicon-valley-loves-failures.html/1. 8 MIT Technology Review, September/October 2013, technologyreview.com/magazine/2013/09.

In many ways, failure is as endemic here as it is in Rochester. “After decades in which the country has become less and less equal,” mourns the Palo Alto–born-and-bred George Packer, “Silicon Valley is one of the most unequal places on earth.”35 Figures from the Chapman University geographer Joel Kotkin suggest that the Valley has actually hemorrhaged jobs since the dot-com crash of 2000, losing some forty thousand jobs over the last twelve years.36 A 2013 report by Joint Venture Silicon Valley confirms Kotkin’s findings, adding that homelessness in Silicon Valley has increased by 20% between 2011 and 2013 and reliance on food stamps has reached a ten-year high.37 In Santa Clara County, the geographical heart of Silicon Valley, the poverty rate shot up from 8% in 2001 to 14% in 2013, with the food stamp population jumping from 25,000 in 2001 to 125,000 in 2013.

Even though, as the entrepreneur and academic Vivek Wadhwa reminds us, female-founded startups are more capital-efficient than those founded by men and have lower failure rates and higher annual revenues, women are still radically underrepresented in Silicon Valley.41 The numbers on this are disturbing. Fewer than one in ten venture-funded startups in Silicon Valley are led by women, with only 3% of that venture money going to all-female teams.42 An estimated 2–4% of engineers at tech companies are women,43 and, according to Measure of America, these Silicon Valley women earn less than half of what Silicon Valley men do.44 Equally troubling, there is a persistent sexist culture among many of the young male programmers, the so-called tech bros, who openly treat women as sexual objects and unashamedly develop pornographic products such as the “Titshare” app introduced at the 2013 TechCrunch Disrupt show in San Francisco,45 designed to humiliate their female colleagues.


pages: 103 words: 24,033

The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent by Vivek Wadhwa

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3D printing, card file, corporate governance, crowdsourcing, Elon Musk, immigration reform, labour mobility, Marc Andreessen, open economy, pattern recognition, Ray Kurzweil, Sand Hill Road, Silicon Valley, Silicon Valley startup, software as a service, the new new thing, Y2K

Indian immigrants outpaced their Chinese counterparts as founders of engineering and technology companies in Silicon Valley. Saxenian reported that 17% of Silicon Valley startups from 1980 to 1998 had a Chinese founder and 7% had an Indian founder. We found that from 1995 to 2005, Indians were key founders of 13.4% of all Silicon Valley startups, and immigrants from China and Taiwan were key founders in 12.8%. The outsized impact of Indian founders was logical. Between 1990 and 2000, the population of Indian scientists and engineers (S&E) in Silicon Valley grew by 646% (while the total foreign-born S&E workforce grew by 246% and the region’s total population of S&E, both native and foreign-born, grew by only 103%). The overall percentage of immigrant-founded companies in Silicon Valley almost perfectly matched the population at large. In Silicon Valley, 52% of the S&E workforce was foreign-born.

Then the Immigration and Nationality Act of 1990 nearly tripled the number of immigrant visas awarded for special occupational talents, from 54,000 to 140,000.20 In Silicon Valley, the presence of these ambitious, hardworking immigrants quickly became a poorly kept secret. Valley insiders joked that IC engineers—meaning “Indian and Chinese” rather than “integrated circuit” (which is commonly abbreviated as IC)—built the region’s tech industry. Silicon Valley legend and former Stanford engineering professor James Clark (who co-founded Netscape and later WebMD) famously sung the praises of Indian engineers in the pop-culture version of Silicon Valley history and the Internet in Michael Lewis’s book The New New Thing. Few doubted that these immigrant engineers had become significant contributors to the rapid growth and cycle of innovation of Silicon Valley. But how much of a contribution had they made? Using a combination of US Census data and interviews with 175 immigrant entrepreneurs, AnnaLee Saxenian arrived at some surprising conclusions in the report “Silicon Valley’s New Immigrant Entrepreneurs,” published in 1999.

Using a combination of US Census data and interviews with 175 immigrant entrepreneurs, AnnaLee Saxenian arrived at some surprising conclusions in the report “Silicon Valley’s New Immigrant Entrepreneurs,” published in 1999. Over a mere two decades, immigrant entrepreneurs in general, and Chinese and Indian entrepreneurs in particular, became a powerful force in Silicon Valley value creation and company formation. She found that Chinese or Indian engineers served as CEOs or leaders at roughly one-quarter of all high-technology businesses in Silicon Valley. The companies they ran accounted for 58,000 (mostly high-paying) jobs and more than $16.8 billion in sales. The swift rise of this cadre from 1980 to 1998 was breathtaking. Indian and Chinese CEOs managed 13% of Silicon Valley tech companies started between 1980 and 1984. That rose to 29% of Valley tech companies started between 1995 and 1998.


pages: 146 words: 43,446

The New New Thing: A Silicon Valley Story by Michael Lewis

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Albert Einstein, Andy Kessler, business climate, Chance favours the prepared mind, creative destruction, data acquisition, family office, high net worth, invention of the steam engine, invisible hand, Jeff Bezos, Marc Andreessen, Menlo Park, pre–internet, risk tolerance, Sand Hill Road, Silicon Valley, Silicon Valley startup, the new new thing, Thorstein Veblen, wealth creators, Y2K

133 10 God Mode 142 11 How Chickens Become Pork 151 Page 12 12 New New Money 160 13 Cheese Sandwiches for Breakfast 176 14 Could Go Either Way 189 15 At Sea in the Home of the Future 206 16 Chasing Ghosts 223 17 The Turning Point 238 18 The New New Thing 250 19 The Past outside the Box 262 Epilogue 267 Acknowledgments 269 Page 13 Preface This book is about a search that occurs on the frontiers of economic life. Maybe the best way to introduce it is to explain why I bothered to write it. In the second part of the 1990s Silicon Valley had the same center-of-the-universe feel to it as Wall Street had in the mid-1980s. There was a reason for this: it was the source of a great deal of change. Up until April 4, 1994, Silicon Valley was known as the source of a few high-tech industries, and mainly the computer industry. On April 4, 1994, Netscape was incorporated. Suddenlyas fast as thatSilicon Valley was the source of changes taking place across the society. The Internet was a Trojan horse in which technogeeks entered all sorts of markets previously inhospitable to technogeeks. Wall Street, to take just one example, was turned on its head by new companies and new technologies and new social types created just south of San Francisco.

I really do think, and not just because I happen to be writing a book about it, that the business of creating and foisting new technology upon others that goes on in Silicon Valley is near the core of the American experience. The United States obviously occupies a strange place in the world. It is the capital of innovation, of material prosperity, of a certain kind of energy, of certain kinds of freedom, and of transience. Silicon Valley is to the United States what the United States is to the rest of the world. It is one of those places, unlike the Metropolitan Museum of Art, but like Las Vegas, that are unimaginable anywhere but in the United States. It is distinctively us. Within this unusual place some people were clearly more unusual than others. Many of those who sought and found fortune in Silicon Valley in the 1990s could just as easily have found it on Wall Street in the 1980s or in London in the 1860s.

From the start of my investigation of Silicon Valley, I knew I was trying to describe a process: how this fantastic wealth got created. It just so happened that the process was best illustrated by this character. After all, the greatest legal creation of wealth in the history of the planet came directly from the new new thing. When you asked, "How is it that an entire economy made this little leap?" you were really asking, "How is it that some person gave an entire economy a little push?" Believe it or not, there are people, inside and outside of Silicon Valley, who consider it almost their duty to find the new new thing. That person may not be entirely typical of our age. (Is anyone?) But he is, in this case, representative: a disruptive force. A catalyst for change and regenera- Page 16 tion. He is to Silicon Valley what Silicon Valley is to America.


pages: 364 words: 99,897

The Industries of the Future by Alec Ross

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23andMe, 3D printing, Airbnb, algorithmic trading, AltaVista, Anne Wojcicki, autonomous vehicles, banking crisis, barriers to entry, Bernie Madoff, bioinformatics, bitcoin, blockchain, Brian Krebs, British Empire, business intelligence, call centre, carbon footprint, cloud computing, collaborative consumption, connected car, corporate governance, Credit Default Swap, cryptocurrency, David Brooks, disintermediation, Dissolution of the Soviet Union, distributed ledger, Edward Glaeser, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, fiat currency, future of work, global supply chain, Google X / Alphabet X, industrial robot, Internet of things, invention of the printing press, Jaron Lanier, Jeff Bezos, job automation, John Markoff, knowledge economy, knowledge worker, lifelogging, litecoin, M-Pesa, Marc Andreessen, Mark Zuckerberg, Mikhail Gorbachev, mobile money, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, open economy, Parag Khanna, peer-to-peer, peer-to-peer lending, personalized medicine, Peter Thiel, precision agriculture, pre–internet, RAND corporation, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Rubik’s Cube, Satoshi Nakamoto, selective serotonin reuptake inhibitor (SSRI), self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, social graph, software as a service, special economic zone, supply-chain management, supply-chain management software, technoutopianism, The Future of Employment, underbanked, Vernor Vinge, Watson beat the top human players on Jeopardy!, women in the workforce, Y Combinator, young professional

SIX THE GEOGRAPHY OF FUTURE MARKETS World leaders take notice: the 21st century is a terrible time to be a control freak. “We want to create our own Silicon Valley.” If there’s a single sentence I’ve heard in every country I’ve been to, it’s this one. Silicon Valley has been home to technology-driven innovation for a long time, but the 20-year period from 1994 to 2014 was something special. People all over the world witnessed a spectacular level of innovation and wealth creation, all emerging from a small 30-mile long, 15-mile-wide strip of Northern California. Other states and countries have been attempting to build the “next Silicon Valley” for years now. At this point, there’s even a formula. As Marc Andreessen writes: The popular recipe for creating the “next” Silicon Valley goes something like this: • Build a big, beautiful, fully equipped technology park; • Mix in R&D labs and university centers; • Provide incentives to attract scientists, firms and users; • Interconnect the industry through consortia and specialized suppliers; • Protect intellectual property and tech transfer; and, • Establish a favorable business environment and regulations.

DOMAIN EXPERTISE With the industries of the future, new avenues of opportunity for countries and people alike will hinge on domain expertise—deep knowledge about a single industry, which tends to concentrate in specific cities or regions. Detroit has domain expertise in cars, Paris has it in fashion, and Silicon Valley has it in Internet-based businesses. Domain expertise for the industries of the future is still broadly distributed. To understand domain expertise, consider the following question: Why do a ridiculously high percentage of Internet companies still come out of Silicon Valley when massive investment is being made around the world to compete with it? Many factors are at play, but domain expertise is the most important. For more than 20 years, the world’s best computer scientists have overwhelmingly been based in Silicon Valley. They could have been born anywhere, but they came to Silicon Valley for school (Stanford or Berkeley), employment (which creates a self-reinforcing cycle that concentrates talent), and investment (with the Valley offering far and away the most access to early-stage capital in the world).

It is also the case that while the powers that be in Silicon Valley might not be the earliest movers in fields like precision agriculture, once success is achieved elsewhere, they don’t just sit back as passive bystanders and watch it grow. Google chairman Eric Schmidt recruited an Israeli entrepreneur, Dror Berman, to move to Silicon Valley and head up Innovation Endeavors, a large venture firm that invests Schmidt’s money. Israel is home to many of the 20th century’s great innovations in farming. Berman brought the intellectual curiosity about agriculture with him to Silicon Valley and developed Farm2050, a partnership that aspires to combine data science and robotics to improve farming with a group of partners as diverse as Google, DuPont, and 3D Robotics. Dror recognized that Silicon Valley can be a little too navel-gazing, and told me that 90 percent of the region’s entrepreneurs focus on 10 percent of the world’s problems.

The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley by Leslie Berlin

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Apple II, Bob Noyce, collective bargaining, computer age, George Gilder, informal economy, John Markoff, laissez-faire capitalism, low skilled workers, means of production, Menlo Park, Murray Gell-Mann, open economy, Richard Feynman, Richard Feynman, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, Steve Wozniak, union organizing, War on Poverty, women in the workforce, Yom Kippur War

One year later, the Congressional Joint Economic Committee issued a study that concluded, “High technology companies offer a brighter future for America but they [also] offer salvation for those regions of America that have borne the brunt of our economic decline.”17 In the mid-1980s, regions across the country and around the world began trumpeting their high quality of life and low cost of living to trafficand mortgage-weary technologists in Silicon Valley. “Remember the Silicon Valley as it was 20 Years Ago? That’s Albuquerque Today!” promised one representative advertisement in the San Jose Business Journal. By 1989, the United States boasted regions calling themselves Silicon Forest (Portland, Oregon), Silicon Gulch (Phoenix, Arizona), Bionic Valley (Salt Lake City), Silicon Valley East (Troy-Albany, New York), Silicon Prairie (Dallas, Austin), and Silicon Mountain (Colorado Springs). Several European and Asian countries also possessed technology regions named in homage to Silicon Valley.18 Arguably the most successful of the American “Silicon Elsewheres,” as they were derisively called on the San Francisco Peninsula, was Austin, Texas.

Business machine: Andy Grove, handwritten notes titled “Stanford talk—Si Valley,” IA. Look around Silicon Valley: Noyce quoted in “Bob Noyce talks to Upside,” Upside, July 1990 [interview date is 23 May 1990]. Former Stanford Dean of Engineering James Gibbons, a long-time participant in and observer of Silicon 356 62. 63. 64. 65. 66. Notes to Pages 255–258 Valley, makes the identical point—“the heroes in Silicon Valley are the entrepreneurs” in James F. Gibbons, “The Role of Stanford University: A Dean’s Reflections,” in The Silicon Valley Edge: A Habitat for Innovation and Entrepreneurship, ed. Chong-Moon Lee, William F. Miller, Marguerite Gong Hancock, and Henry S. Rowen (Stanford: Stanford University Press), 200–217. Why do we love: Martin Meeker, “Silicon Valley’s Silver Lining,” (Letter to the Editor), Inc., Dec. 1982, 11.

“Silicon Chips and Spatial Structure: The Industrial Basis of Urbanization in Santa Clara County, California,” Berkeley Institute of Urban and Regional Development Working Paper 345. ———. “The Genesis of Silicon Valley,” in Silicon Landscapes, ed. Peter Hall and Ann Markusen, 20–34. Boston: Allen and Unwin, 1985. ———. “Contrasting Patterns of Business Organization in Silicon Valley,” Environment and Planning D: Society and Space, Vol. 10, 377–391. ———. “In Search of Power: The Organization of Business Interests in Silicon Valley and Route 128” Economy and Society, Vol. 18, February 1989, 25–70. ———. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge: Harvard University Press, 1994. Schaeffer, Dorothy. “Management by Objectives.” Supervision, July 1978, 4. Schoonhoven, Claudia Bird. “High Technology Firms: Where Strategy Really Pays Off.”


pages: 284 words: 92,688

Disrupted: My Misadventure in the Start-Up Bubble by Dan Lyons

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activist fund / activist shareholder / activist investor, Airbnb, Bernie Madoff, bitcoin, call centre, cleantech, cloud computing, corporate governance, dumpster diving, fear of failure, Filter Bubble, Golden Gate Park, Google Glasses, Googley, Gordon Gekko, hiring and firing, Jeff Bezos, Lean Startup, Lyft, Marc Andreessen, Mark Zuckerberg, Menlo Park, minimum viable product, new economy, Paul Graham, pre–internet, quantitative easing, ride hailing / ride sharing, Rosa Parks, Sand Hill Road, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Snapchat, software as a service, South of Market, San Francisco, Steve Ballmer, Steve Jobs, Steve Wozniak, telemarketer, tulip mania, Y Combinator, éminence grise

The personal computer was still a relatively new thing. We were getting in on the ground floor of what would become a huge new market. In the 1980s Silicon Valley technology companies were boring places where engineers worked in drab office parks writing software or designing semiconductors and circuit boards and network routers. There weren’t any celebrities, other than Steve Jobs at Apple, and even he wasn’t such a big deal back then. In the early 1990s the Internet era began, and Silicon Valley changed. The new companies were flimsy, based on hype and grandiose rhetoric and the promise of making a fortune overnight. The dotcom boom of the late 1990s was followed by the dotcom bust, and then came a period when Silicon Valley felt like a ghost town. Slowly, a new generation of Internet-related companies arose, and while this second boom wasn’t a direct copy of the first one, there were some worrisome similarities, chief among them the fact that none of these companies seemed to be generating a profit.

The result, according to countless articles in publications like Fortune, the New Republic, Bloomberg, and New York Magazine, is that Silicon Valley has become a place where people live in fear. As soon as someone better or cheaper comes along, your company will get rid of you. If you turn fifty, or forty, or thirty-five; if you demand a raise and become too expensive; if a new batch of workers comes out of college and will do your job for less than what you are paid—you’re gone. So don’t get too comfortable. This new arrangement between workers and employers was invented by Silicon Valley companies and is considered an innovation as significant as the chips and software for which the Valley is better known. Now this ideology has spread beyond Silicon Valley. We are living in a period of huge economic transformation, in which entire industries—retail, banking, healthcare, media, manufacturing—are being reshaped by technology.

Some current and former HubSpotters agreed to be interviewed for the book, but only on condition that our conversations remain off the record. Some people were afraid to talk to me at all. At the time I thought their concerns were silly. But as things turned out, those people may have been right to be afraid. Regarding terminology: When I use the term Silicon Valley I do not mean to denote an actual geographic region—the sixty-mile peninsula between San Francisco and San Jose, where the original technology companies were built. Instead, like Hollywood, or Wall Street, Silicon Valley has become a metaphorical name for an industry, one that exists in Los Angeles, Seattle, New York, Boston, and countless other places, as well as the San Francisco Bay Area. The term bubble, as I use it, refers not only to the economic bubble in which the valuation of some tech start-ups went crazy but also to the mindset of the people working inside technology companies, the true believers and Kool-Aid drinkers, the people who live inside their own filter bubble, brimming with self-confidence and self-regard, impervious to criticism, immunized against reality, unaware of how ridiculous they appear to the outside world.


pages: 413 words: 119,587

Machines of Loving Grace: The Quest for Common Ground Between Humans and Robots by John Markoff

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A Declaration of the Independence of Cyberspace, AI winter, airport security, Apple II, artificial general intelligence, Asilomar, augmented reality, autonomous vehicles, basic income, Baxter: Rethink Robotics, Bill Duvall, bioinformatics, Brewster Kahle, Burning Man, call centre, cellular automata, Chris Urmson, Claude Shannon: information theory, Clayton Christensen, clean water, cloud computing, collective bargaining, computer age, computer vision, crowdsourcing, Danny Hillis, DARPA: Urban Challenge, data acquisition, Dean Kamen, deskilling, don't be evil, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dynabook, Edward Snowden, Elon Musk, Erik Brynjolfsson, factory automation, From Mathematics to the Technologies of Life and Death, future of work, Galaxy Zoo, Google Glasses, Google X / Alphabet X, Grace Hopper, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, haute couture, hive mind, hypertext link, indoor plumbing, industrial robot, information retrieval, Internet Archive, Internet of things, invention of the wheel, Jacques de Vaucanson, Jaron Lanier, Jeff Bezos, job automation, John Conway, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, knowledge worker, Kodak vs Instagram, labor-force participation, loose coupling, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, medical residency, Menlo Park, Mother of all demos, natural language processing, new economy, Norbert Wiener, PageRank, pattern recognition, pre–internet, RAND corporation, Ray Kurzweil, Richard Stallman, Robert Gordon, Rodney Brooks, Sand Hill Road, Second Machine Age, self-driving car, semantic web, shareholder value, side project, Silicon Valley, Silicon Valley startup, Singularitarianism, skunkworks, Skype, social software, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, strong AI, superintelligent machines, technological singularity, Ted Nelson, telemarketer, telepresence, telepresence robot, Tenerife airport disaster, The Coming Technological Singularity, the medium is the message, Thorstein Veblen, Turing test, Vannevar Bush, Vernor Vinge, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, William Shockley: the traitorous eight, zero-sum game

While most businesspeople were still chained to their BlackBerrys, the Sidekick found popularity among young people and hipsters, many of whom switched from PalmPilots. Rubin was a member of a unique “Band of Brothers” who passed through Apple Computer in the 1980s, a generation of young computer engineers who came of age in Silicon Valley as disciples of Steve Jobs. Captivated by Jobs’s charisma and his dedication to using good design and computing technology as levers to “change the world,” they set out independently on their own technology quests. The Band of Brothers reflected the tremendous influence Jobs’s Macintosh project had on an entire Silicon Valley generation, and many stayed friends for years afterward. Silicon Valley’s best and brightest believed deeply in bringing the Next Big Thing to millions of people. Rubin’s robot obsession, however, was extraordinary, even by the standards of his technology-obsessed engineering friends.

Population Projections: 2005–2050,” Social & Demographic Trends, Pew Research Center, February 11, 2008, http://www.pewsocialtrends.org/2008/02/11/us-population-projections-2005-2050. 56.“Baby Boomers Retire,” Pew Research Center, December 29, 2010 http://www.pewresearch.org/daily-number/baby-boomers-retire. 4|THE RISE, FALL, AND RESURRECTION OF AI 1.David C. Brock, “How William Shockley’s Robot Dream Helped Launch Silicon Valley,” IEEE Spectrum, November 29, 2013, http://spectrum.ieee.org/at-work/innovation/how-william-shockleys-robot-dream-helped-launch-silicon-valley. 2.David C. Brock, “From Automation to Silicon Valley: The Automation Movement of the 1950s, Arnold Beckman, and William Shockley,” History and Technology 28, no. 4 (2012), http://www.tandfonline.com/doi/abs/10.1080/07341512.2012.756236#.VQTPKCbHi_A. 3.Ibid. 4.John Markoff, “Robotic Vehicles Race, but Innovation Wins,” New York Times, September 14, 2005. 5.John Markoff, What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry (New York: Viking, 2005). 6.Pamela McCorduck, Machines Who Think: A Personal Inquiry into the History and Prospects of Artificial Intelligence, 2nd ed.

By 2010 he had a deep surprise in store for an industry that did not change easily and was largely unfamiliar with Silicon Valley culture.5 The DARPA races created ripples in Detroit, the cradle of the American automotive industry, but the industry kept to its traditional position that cars were meant to be driven by people and should not operate autonomously. By and large the industry had generally resisted computer technology. Many car manufacturers adhered to a “computers are buggy” philosophy. However, engineers elsewhere in the country were beginning to think about transportation through the new lens of cheap sensors, the microprocessor, and the Internet. In the spring of 2010, rumors about an experimental Google car began to float around Silicon Valley. Initially they sounded preposterous. The company, nominally a provider of Internet search, was supposedly hiding the cars in plain sight.


pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent

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big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

* The late 1990s was a wild time in Silicon Valley. The NASDAQ was soaring, and seemingly anyone could start a company, stick a .com at the end of its name, put together an IPO and retire a millionaire. The great boom ultimately took on a speculative character that led to wasted investments and the collapse of many poorly grounded operations. But it was rooted in a surge of not-unrealistic optimism about the potential of the Internet to change the world of business. Among the striking features of the era, one of the most startling is this: the rate of high-tech entrepreneurship in Silicon Valley seems to have been below the national average from 1996 to 2000, according to a recent analysis of business creation during the tech boom. And from the late 1990s to the early 2000s -- after the bust -- Silicon Valley’s rate of high-tech entrepreneurship actually increased.

But these factors could just as easily have driven an increase in new firm formation and employment as a rise in salaries. Silicon Valley experienced more of the latter than the former because workers were scarce. During the late 1990s, the unemployment rate across Silicon Valley dropped well under 3%, eventually sinking to nearly half the national level. There was essentially no surplus labor in the whole of the region. Firms therefore had to bargain hard to hire qualified workers, and this meant giving up a substantial share of firm surplus in the form of salary, benefits, and profit sharing. That, in turn, made it more attractive to be a worker than an entrepreneur. And this brings us to the crux of the matter: why was the Silicon Valley labor market so tight? If the unemployment rate was so much lower than it was elsewhere in the country, and if compensation was rising so much more rapidly than elsewhere in the country, why weren’t people pouring into Silicon Valley from elsewhere in the country?

If the unemployment rate was so much lower than it was elsewhere in the country, and if compensation was rising so much more rapidly than elsewhere in the country, why weren’t people pouring into Silicon Valley from elsewhere in the country? More remarkably, why were people moving in the opposite direction? If you can believe it, Silicon Valley’s main metropolitan centers were losing residents to other parts of the country during the Dot Com boom. From 1998 to 1999, for instance, San Francisco and San Mateo counties each lost a net of about 10,000 residents to other parts of the country. Santa Clara County, the heart of the Valley, lost a net of 30,000 residents.[11] For the decade as a whole, the losses were even more substantial; roughly 176,000 more residents of Santa Clara County moved out than moved in during the 1990s.[12] The Silicon Valley labor market was tight because even as wages were soaring, residents were decamping for other locations.


pages: 268 words: 74,724

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank by John Tamny

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Airbnb, bank run, banks create money, Bernie Madoff, bitcoin, Bretton Woods, Carmen Reinhart, corporate raider, correlation does not imply causation, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, liquidity trap, Mark Zuckerberg, market bubble, money market fund, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Uber for X, War on Poverty, yield curve

As of this writing, with the dollar stronger alongside a slowly reviving economy, it’s fair to say that much of the new money supply would find its way to Silicon Valley. Think back to the discussion in chapter 4. Silicon Valley is in the midst of another boom. There are more than 124 unicorn companies in the Valley that can presently claim private valuations of $1 billion and above. Of course, the unicorns are mere minnows relative to the larger public companies that are worth a great deal more. American Enterprise Institute scholar Bret Swanson has noted that the “market value of seven American technology firms—Apple, Google, Facebook, Amazon, Oracle, Intel, and Microsoft—totals $2.3 trillion, more than the entire stock markets of Germany or Australia.”14 Five of those seven are based in Silicon Valley. To be clear, Silicon Valley doesn’t have a money-supply problem. So aggressively is money chasing all the innovative production in northern California that even the chefs that work at high-flying tech companies are in play.15 Money follows production, and at least for now, Silicon Valley is one of the more popular destinations for the money that can command real economic resources.

More specifically, why does the proverbial credit window shut so quickly for money-losing directors yet remain open for entrepreneurs who preside over imploding start-ups? At a first glance, the obvious answer is that Silicon Valley start-ups generally don’t have $85-million budgets to lose. Assuming Town & Country had cost $10 million, it’s fair to say that Warren Beatty’s reputation in the eyes of film financiers wouldn’t have suffered so much. Second, and of much greater importance, tech has a higher upside than film does. The number of movies that can claim box-office receipts of more than $1 billion can generally be counted on one hand in a very good year. By contrast, companies valued at $1 billion or more are increasingly the norm in Silicon Valley. The term used to refer to these billion-dollar companies is “unicorn.” As of August 2015, there were 124 unicorns in Silicon Valley.2 When the potential for outsize returns is grand, credit sources are more adventurous and more forgiving of past mistakes.

Profits are what determine income, the value of equity options, and bonuses. If regulations reduce them, so will they reduce the quality of talent that migrates to banking. At present, some of the world’s brightest minds are taking their talents to Silicon Valley. The passion to innovate certainly factors into this decision, but the potential to achieve staggering wealth can’t be minimized as a major driver of this modern gold rush. What is notable here is that the frequency of failure in Silicon Valley also means the sky is the limit in terms of potential wealth gains. For the sake of comparison, consider Detroit. It was the Silicon Valley of the first half of the twentieth century, based on how failure was the norm. That its carmakers now largely owe their existence to government is a signal that not a lot of staggering wealth is being created there.


pages: 373 words: 112,822

The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World by Brad Stone

Affordable Care Act / Obamacare, Airbnb, AltaVista, Amazon Web Services, Andy Kessler, autonomous vehicles, Burning Man, call centre, Chuck Templeton: OpenTable, collaborative consumption, East Village, fixed income, Google X / Alphabet X, housing crisis, inflight wifi, Jeff Bezos, Justin.tv, Kickstarter, Lyft, Marc Andreessen, Mark Zuckerberg, Menlo Park, Necker cube, obamacare, Paul Graham, peer-to-peer, Peter Thiel, race to the bottom, rent control, ride hailing / ride sharing, Ruby on Rails, Sand Hill Road, self-driving car, semantic web, sharing economy, side project, Silicon Valley, Silicon Valley startup, Skype, South of Market, San Francisco, Startup school, Steve Jobs, TaskRabbit, Tony Hsieh, transportation-network company, Uber and Lyft, Uber for X, Y Combinator, Y2K, Zipcar

Brian Chesky, “Our Commitment to Trust & Safety,” Airbnb, August 1, 2011, http://blog.airbnb.com/our-commitment-to-trust-and-safety/. 20. James Temple, “Airbnb Victim Describes Crime and Aftermath,” SFGate, July 30, 2011, http://www.sfgate.com/business/article/Airbnb-victim-describes-crime-and-aftermath-2352693.php. 21. Claire Cain Miller, “In Silicon Valley, the Night Is Still Young,” New York Times, August 20, 2011, http://www.nytimes.com/2011/08/21/technology/silicon-valley-booms-but-worries-about-a-new-bust.html. 22. Jim Wilson, “Good Times in Silicon Valley, for Now,” New York Times, August 13, 2011, http://www.nytimes.com/slideshow/2011/08/13/technology/20110821-VALLEY-5.html; Geoffrey Fowler, “The Perk Bubble Is Growing as Tech Booms Again,” Wall Street Journal, July 6, 2011, http://www.wsj.com/articles/SB10001424052702303763404576419803997423690. 23.

Yet both have demonstrated extraordinary levels of ambition and boldness and a willingness to bet big despite the prospect of humiliating failure. So how did it all happen? How did they maneuver past entrenched, politically savvy incumbents to succeed where others had failed and build large companies in a staggeringly short amount of time? How much of their success was luck? What does it take to survive and thrive in modern Silicon Valley? These were questions, I judged back in 2014, that were ripe for exploration in a book. But the practical question was this: Would the startups cooperate with such an in-depth project? At most Silicon Valley tech companies, the time and public images of the top executives are obsessively guarded. Uber and Airbnb had graduated into this secretive sanctum. The only way to find out was to ask. Living up to its mission to foster hospitality, Airbnb promptly invited me to discuss the project. I met Brian Chesky at his company headquarters at 888 Brannan Street in San Francisco, a lavishly renovated former battery factory.

All these investors had concerns about the size of the market, about the absence of any real users, and about the founders themselves, who didn’t resemble the wonky innovators who’d created great Silicon Valley companies, people like Mark Zuckerberg and Steve Jobs. Design students seemed risky; Stanford computer science dropouts were considered a much better bet. And, frankly, the idea itself seemed small. “We made the classic mistake that all investors make,” wrote Fred Wilson, a Twitter backer, a few years later. “We focused too much on what they were doing at the time and not enough on what they could do, would do, and did do.”11 The year 2008 was also an anxious time in Silicon Valley. The tech industry had recovered from the devastation of the dot-com bust a few years before and had been buoyed by the Google IPO in 2004 and the budding success of Facebook.


pages: 176 words: 55,819

The Start-Up of You by Reid Hoffman

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Airbnb, Andy Kessler, Black Swan, business intelligence, Cal Newport, Clayton Christensen, commoditize, David Brooks, Donald Trump, en.wikipedia.org, fear of failure, follow your passion, future of work, game design, Jeff Bezos, job automation, late fees, Marc Andreessen, Mark Zuckerberg, Menlo Park, out of africa, Paul Graham, Peter Thiel, recommendation engine, Richard Bolles, risk tolerance, rolodex, shareholder value, side project, Silicon Valley, Silicon Valley startup, social web, Steve Jobs, Steve Wozniak, Tony Hsieh, transaction costs

These companies provide not only a new model for corporate innovation, but also the entrepreneur mind-set needed to succeed in individual careers. What do these companies have in common? The principles of Silicon Valley are the principles in this book. Take intelligent and bold risks to accomplish something great. Build a network of alliances to help you with intelligence, resources, and collective action. Pivot to a breakout opportunity. You can think like a start-up, whoever you are and whatever you do. Anyone can apply this entrepreneurial skill set to his or her career. This is a book about how to do just that. It’s about keeping Detroit from happening to you and making the Silicon Valley way work for you. THE PATH TO THE FUTURE In 1997 Reed Hastings, a software entrepreneur living in the hills of Silicon Valley, was faced with a problem. He had rented Apollo 13 from a video store, returned it days late, and was dealt a late fee so nasty that he was too embarrassed to tell his wife what had happened.

In the months leading up to our first meeting, Ben visited dozens of countries and met thousands of students, entrepreneurs, journalists, and businesspeople—from community college students in middle America to small-business owners in rural Indonesia to government leaders in Colombia. In these far-flung places he spoke about his own experiences and simultaneously observed and learned about the aspirations and attitudes of the talented local people. The remarkable thing he noticed was that entrepreneurship—in the broad sense of the word—was everywhere: thousands of miles from Silicon Valley, in the hearts and minds of people not necessarily starting companies. While they may not have considered themselves entrepreneurs, their approach to life seemed every bit the Silicon Valley way: they were self-reliant in spirit, resourceful, ambitious, adaptive, and networked with one another. From these experiences he arrived separately at the same conclusion that I did: entrepreneurship is a life idea, not a strictly business one; a global idea, not a strictly American one. (Which I also experienced by serving on the board of the global entrepreneurship organization Endeavor.)

The forces of change that toppled the once great city and industry risk toppling all of our careers—no matter how secure they may seem at the moment. Fortunately, there is another path—both metaphorically and physically thousands of miles away from Detroit. Silicon Valley has become the twenty-first-century model for entrepreneurship and progress and has had multiple generations of entrepreneurial companies over the decades: from Hewlett Packard’s founding in 1939 to Intel, Apple, Adobe, Genentech, AMD, Intuit, Oracle, Electronic Arts, Pixar, and Cisco, and then to Google, eBay, Yahoo, Seagate, and Salesforce, and then more recently to PayPal, Facebook, YouTube, Craigslist, Twitter, and LinkedIn. In each passing decade, Silicon Valley has kept and intensified its entrepreneurial mojo, with dozens of companies creating the future and adapting to the evolution of the global market. These companies provide not only a new model for corporate innovation, but also the entrepreneur mind-set needed to succeed in individual careers.


pages: 510 words: 120,048

Who Owns the Future? by Jaron Lanier

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3D printing, 4chan, Affordable Care Act / Obamacare, Airbnb, augmented reality, automated trading system, barriers to entry, bitcoin, book scanning, Burning Man, call centre, carbon footprint, cloud computing, commoditize, computer age, crowdsourcing, David Brooks, David Graeber, delayed gratification, digital Maoism, Douglas Engelbart, en.wikipedia.org, Everything should be made as simple as possible, facts on the ground, Filter Bubble, financial deregulation, Fractional reserve banking, Francis Fukuyama: the end of history, George Akerlof, global supply chain, global village, Haight Ashbury, hive mind, if you build it, they will come, income inequality, informal economy, information asymmetry, invisible hand, Jacquard loom, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Kevin Kelly, Khan Academy, Kickstarter, Kodak vs Instagram, life extension, Long Term Capital Management, Marc Andreessen, Mark Zuckerberg, meta analysis, meta-analysis, Metcalfe’s law, moral hazard, mutually assured destruction, Network effects, new economy, Norbert Wiener, obamacare, packet switching, Peter Thiel, place-making, Plutocrats, plutocrats, Ponzi scheme, post-oil, pre–internet, race to the bottom, Ray Kurzweil, rent-seeking, reversible computing, Richard Feynman, Richard Feynman, Ronald Reagan, self-driving car, side project, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, smart meter, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, Ted Nelson, The Market for Lemons, Thomas Malthus, too big to fail, trickle-down economics, Turing test, Vannevar Bush, WikiLeaks, zero-sum game

Terms like self-actualization became ubiquitous. You’d develop yourself, and your success would be manifest in societal status, material rewards, and spiritual attainment. All these would be of a piece. It’s hard to overstate how influential this movement was in Silicon Valley. Not est specifically, for there were hundreds more like it. In the 1980s the Silicon Valley elite were often found at a successor institution called simply “the Forum.” The Global Business Network was a key, highly influential institution in the history of Silicon Valley. It has advised almost all the companies, and almost everyone who was anyone had something to do with it. Stewart Brand, who coined the phrases “personal computer” and “information wants to be free,” was one of the founders. Now Stewart is a genuinely no-nonsense kind of guy.

It might merely serve as a check on the excesses of conventions that might otherwise become enshrined. If this all sounds a little grandiose, understand that in the context of the community in which I function my presentation is practically self-deprecating. It is commonplace in Silicon Valley for very young people with a startup in a garage to announce that their goal is to change human culture globally and profoundly, within a few years, and that they aren’t ready yet to worry about money, because acquiring a great fortune is a petty matter that will take care of itself. Furthermore, these bright little young bands succeed regularly. This is just Silicon Valley’s version of normal. Our idealisms and dreams often turn out to find fulfillment in events in the real world. Hopefully the ideas presented here work fractionally, and not just in the useless theater of ultimates.

If only we could live for free and get whatever we want without any worry that politics might be messy, that some political process might not make the best decision on our behalves, that cartels would never form around what isn’t perfectly free or automated . . . if only we could carelessly let our levees melt away and throw ourselves into the waiting arms of utopia. I imagine that the academics from top technical schools will do fine. Honestly, there’s no way Silicon Valley would stand to see MIT fall. That wouldn’t be a danger anyway because the top technical schools make money from technology. Stanford sometimes seems like one of the Silicon Valley companies. What about liberal arts professors at a state college? Some academics will hang on, but the prospects are grim if education is seduced by the Siren song. A decade or two from now, if nothing changes, the outlook will recall the present state of recorded music. In the case of that industry, making a pre-digital system efficient through the use of a digital network shrank it economically to about a quarter of its size fairly quickly.


pages: 559 words: 155,372

Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcia Martinez

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Airbnb, airport security, always be closing, Amazon Web Services, Burning Man, Celtic Tiger, centralized clearinghouse, cognitive dissonance, collective bargaining, corporate governance, Credit Default Swap, crowdsourcing, death of newspapers, drone strike, El Camino Real, Elon Musk, Emanuel Derman, financial independence, global supply chain, Goldman Sachs: Vampire Squid, hive mind, income inequality, information asymmetry, interest rate swap, intermodal, Jeff Bezos, Malcom McLean invented shipping containers, Marc Andreessen, Mark Zuckerberg, Maui Hawaii, means of production, Menlo Park, minimum viable product, move fast and break things, move fast and break things, Network effects, Paul Graham, performance metric, Peter Thiel, Ponzi scheme, pre–internet, Ralph Waldo Emerson, random walk, Ruby on Rails, Sand Hill Road, Scientific racism, second-price auction, self-driving car, Silicon Valley, Silicon Valley startup, Skype, Snapchat, social graph, social web, Socratic dialogue, source of truth, Steve Jobs, telemarketer, urban renewal, Y Combinator, zero-sum game, éminence grise

After all the threats and strong-arming to keep us from leaving, in the same way that an abusive husband brings home flowers to make it all right, Murthy gifted us an unsolicited intro to one of the big power attorneys in Silicon Valley, Ted Wang of Fenwick & West. With much to-do, Murthy declared that this going-away present was a posthumous homage to Rajeev. He might even have gotten a bit misty-eyed as he said it. I immediately scheduled a call with Ted to relay our fears about the guy who had brought us together. I didn’t trust Murthy to let us go so easily. Ted turned out to be a savvy and knowledgeable Silicon Valley player. From the earliest days, his was a voice of wise counsel in dealing with Murthy. When that conflict escalated into a full-on lawsuit three months later, he unhesitatingly threw Fenwick into the fray, less because of the value of AdGrok as a startup, and more due to outrage at the offense against the informal Silicon Valley rules. A large company didn’t sue a small company just because it could.

Adchemy’s venture capital patrons were two absolutely first-class, blue-chip firms: August Capital and the Mayfield Fund. The partners at those funds were John Johnston at August, whose comically WASPy name matched his appearance and pedigree. At Mayfield, it was Yogen Dalal, the usual cocktail of the Indian Institute of Technology and Stanford that populated many a Silicon Valley boardroom. We had leverage over such Silicon Valley players thanks to funding trends that were then seizing Silicon Valley, and are now so commonplace as to scarcely merit mention. Here’s why: Traditionally, early-stage startup funding was the exclusive province of either the entrepreneur’s personal wealth, friends and family, or business “angels.” In their original form, angel investors were wealthy individuals, often former entrepreneurs themselves, who for fun or profit punted around in embryonic companies.

On a sunny Saturday afternoon, its beer garden is the best hangout in San Francisco. You’ll get high as a kite from the secondary pot smoke alone. * While raised in the cradle of the Cuban exile in Miami, I was born in Southern California, making me more Californian than most Silicon Valley denizens. * Marketers use “conversion” to indicate a sale, the way Mormons refer to souls saved. * CrunchBase is the database of people and companies that’s the who’s who (if I can use that phrase without puking) of Silicon Valley. The parent publication of CrunchBase, TechCrunch (hence the name), is the day-to-day news and gossip rag of the Silicon Valley carnival. † The origin of the term “dogfooding” is supposedly found in eighties Microsoft, which coined the phrase from Alpo dog food commercials at the time wherein Lorne Greene assured a perhaps dubious public that he fed his own dogs Alpo.


pages: 169 words: 56,250

Startup Communities: Building an Entrepreneurial Ecosystem in Your City by Brad Feld

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barriers to entry, cleantech, cloud computing, corporate social responsibility, Grace Hopper, job satisfaction, Kickstarter, labour mobility, Lean Startup, minimum viable product, Network effects, Peter Thiel, place-making, pre–internet, Richard Florida, Ruby on Rails, Silicon Valley, Silicon Valley startup, smart cities, software as a service, Steve Jobs, text mining, Y Combinator, zero-sum game, Zipcar

In her PhD work at MIT, AnnaLee Saxenian (currently Dean of the UC Berkeley School of Information) noticed that external economies do not fully explain the development and adaptation of startup communities. In particular, in her seminal book Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (1994) Saxenian noted that two hotbeds for high-tech activity—Silicon Valley and Boston’s Route 128—looked very similar in the mid-1980s. Each area enjoyed agglomeration economies associated with the nation’s two high-tech regions. Yet just a decade later, Silicon Valley gained a dominant advantage over Route 128. External economies alone did not provide an answer. Saxenian set out to resolve the puzzle of why Silicon Valley far outpaced Route 128 from the mid-1980s to mid-1990s. Saxenian persuasively argues that a culture of openness and information exchange fueled Silicon Valley’s ascent over Route 128. This argument is tied to network effects, which are better leveraged by a community with a culture of information sharing across companies and industries.

We’ll begin with one of my favorite myths: “We Need to Be Like Silicon Valley.” WE NEED TO BE LIKE SILICON VALLEY It is usually among the first questions I get asked as I travel around the world researching and talking about entrepreneurship, innovation, and venture capital. The question is, of course, how can we create our own Silicon Valley? To save time, here is the answer to the Silicon Valley question: You can’t—you only think you want to. Granted, everyone thinks they do. It has become a cliché, but there is a Silicon pretty much everywhere as you travel around, to the point that it is meaningless. It is also a reminder how many places get things confused, thinking that they can, by borrowing the trappings of the Bay area, create their own working facsimile of it. The superficial trappings of Silicon Valley are obvious. They include: bountiful VC; research universities; lovely weather; a host of young technology startups; and a few large, successful companies.

This argument is tied to network effects, which are better leveraged by a community with a culture of information sharing across companies and industries. Saxenian observed that the porous boundaries between Silicon Valley companies, such as Sun Microsystems and HP, stood in stark contrast to the closed-loop and autarkic companies of Route 128, such as DEC and Apollo. More broadly, Silicon Valley culture embraced a horizontal exchange of information across and between companies. Rapid technological disruption played perfectly to Silicon Valley’s culture of open information exchange and labor mobility. As technology quickly changed, the Silicon Valley companies were better positioned to share information, adopt new trends, leverage innovation, and nimbly respond to new conditions. Meanwhile, vertical integration and closed systems disadvantaged many Route 128 companies during periods of technological upheaval.


pages: 275 words: 84,418

Dogfight: How Apple and Google Went to War and Started a Revolution by Fred Vogelstein

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Apple II, cloud computing, commoditize, disintermediation, don't be evil, Dynabook, Firefox, Google Chrome, Google Glasses, Googley, John Markoff, Jony Ive, Marc Andreessen, Mark Zuckerberg, Peter Thiel, pre–internet, Silicon Valley, Silicon Valley startup, Skype, software patent, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Tim Cook: Apple, web application, zero-sum game

Over the years these perks and oddities have been so widely imitated by other corporations that it is now impossible to explain Silicon Valley without mentioning them. Google’s company bus fleet is arguably driving an entire reconfiguration of work-life patterns in the Bay Area. Most big Silicon Valley companies now offer such buses. The one downside of working in Silicon Valley after college used to be living in suburban Mountain View, Palo Alto, or Sunnyvale. City life in San Francisco wasn’t worth the more than two hours of driving it required to live there. Google’s buses, which all have Wi-Fi, make those commutes not only tolerable but some of the most productive hours of the day. So many high-tech workers now live in San Francisco that some of the newest technology companies have followed them. A decade ago companies such as Zynga and Twitter would have automatically located in Silicon Valley. When they started more than six years ago, they located in San Francisco.

And they felt justified in having them. To them, it wasn’t just that Rubin had started Android or built the Sidekick, it was that he probably knew more about the mobile phone business than anyone else at Google, maybe all of Silicon Valley. Then forty-four, he’d been building cutting-edge mobile products in Silicon Valley since the early 1990s. It was his vocation and his avocation. People describe his home as something akin to Tony Stark’s basement laboratory in Iron Man—a space jammed with robotic arms, the latest computers and electronics, and prototypes of various projects. Like many electronics whizzes in Silicon Valley, he had Tony Stark’s respect for authority too. At Apple in the late 1980s he got in trouble for reprogramming the corporate phone system to make it seem as if CEO John Sculley were leaving his colleagues messages about stock grants, according to John Markoff’s 2007 profile in The New York Times.

But despite the power of Facebook, Amazon, Netflix, and Microsoft, at the moment they all still have to largely go through two companies—Apple and Google—to get to the increasingly massive audiences using smartphones and tablets for their news, entertainment, and communications. What this means is that the Apple/Google fight is not just a story about the future of Silicon Valley. It is about the future of media and communications in New York and Hollywood as well. Hundreds of billions of dollars in revenue are at stake, and for at least the next two years, and probably the next five, these companies, their allies, and their hangers-on will be going at it full bore. * * * In many ways what is happening now is what media, communications, and software moguls have been predicting for a generation: The fruits of Silicon Valley’s labor and those of New York and Hollywood are converging. This is as close to tragic irony in business as one ever gets. For two decades—the 1980s and 1990s—a procession of celebrated media executives marshaled the best technology they could assemble to position themselves for the new world they saw coming.


pages: 102 words: 29,596

The Alliance: Managing Talent in the Networked Age by Reid Hoffman, Ben Casnocha, Chris Yeh

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Airbnb, Amazon Web Services, centralized clearinghouse, cloud computing, Jeff Bezos, Jony Ive, Marc Andreessen, new economy, pre–internet, Silicon Valley, Silicon Valley startup, software as a service, Steve Jobs

Getting Value from Entrepreneurial Talent We three authors come from a business environment where the employment alliance has already taken root—the high-tech start-up community of Silicon Valley. It’s the best place in the world for adaptation and innovation, as demonstrated by its economic growth over the past decade. If you want your organization to be able to survive and thrive in an environment where change is rapid and disruptive innovation rampant, you need to develop the adaptability that is the hallmark of this ecosystem. Obviously, not every industry works like Silicon Valley, nor should many established companies attempt wholesale adoption of start-up strategies. The question is which lessons from Silicon Valley are generally applicable. Mainstream media’s coverage of Silicon Valley tends to focus on flashy details. But attributing the valley’s success to four-star meals in cafeterias, Foosball tables, or even stock options is like attributing a Ferrari’s power to its bright red paint job.

But attributing the valley’s success to four-star meals in cafeterias, Foosball tables, or even stock options is like attributing a Ferrari’s power to its bright red paint job. The real secret of Silicon Valley is that it’s really all about the people. Sure, there are plenty of stories in the press about the industry’s young geniuses, but surprisingly few about its management practices. What the mainstream press misses is that Silicon Valley’s success comes from the way its companies build alliances with their employees. Here, talent really is the most valuable resource, and employees are treated accordingly. The most successful Silicon Valley businesses succeed because they use the alliance to recruit, manage, and retain an incredibly talented team of entrepreneurial employees. Entrepreneurial employees possess what eBay CEO John Donahoe calls the founder mind-set.

The finite term of the tour of duty provides crisper focus and a mutually agreeable time frame for discussing the future of the relationship. It gives a valued employee concrete and compelling reasons to “stick it out” and finish a tour. Most importantly, a realistic tour of duty lets both sides be honest, which is a necessity for trust. We recognize the irony of looking to Silicon Valley for lessons on building long-term relationships. After all, Silicon Valley is where an engineer can update her LinkedIn profile in the morning and have five job offers by lunchtime. But this is precisely why you can learn from Silicon Valley. This is one of the fastest-moving, most competitive economies on the planet. It’s immensely difficult to retain quality employees, so the companies and managers that convince their people to stay must be doing something extraordinary. The talent management techniques—such as tours of duty—that work in this brutal environment are battle-tested.


pages: 323 words: 92,135

Running Money by Andy Kessler

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Andy Kessler, Apple II, bioinformatics, Bob Noyce, British Empire, business intelligence, buy low sell high, call centre, Corn Laws, Douglas Engelbart, family office, full employment, George Gilder, happiness index / gross national happiness, interest rate swap, invisible hand, James Hargreaves, James Watt: steam engine, joint-stock company, joint-stock limited liability company, knowledge worker, Leonard Kleinrock, Long Term Capital Management, mail merge, Marc Andreessen, margin call, market bubble, Maui Hawaii, Menlo Park, Metcalfe’s law, Network effects, packet switching, pattern recognition, pets.com, railway mania, risk tolerance, Robert Metcalfe, Sand Hill Road, Silicon Valley, South China Sea, spinning jenny, Steve Jobs, Steve Wozniak, Toyota Production System, zero-sum game

Here is another one—‘Standards are great but can hold back innovation.’ ” “That was a few issues ago. I liked that one too.” Hey, maybe this guy wasn’t so bad after all. I wasn’t sure anyone read my drivel. We talked and talked. This guy knew more about Silicon Valley than I did. I was so used to getting stuck next to some brainless Meeting Mr. Zed 41 investment banker from Robertson or Goldman talking about some boring-ass disk drive company. It was nice to talk to someone without an altitude problem. “So, what do you think it is?” “What what is?” I asked. “What it is that makes Silicon Valley so special?” he asked. “I don’t know. I’ve been coming out here for years—on these stupid American Airlines flights, I’m so sick of them. All I know is that every time I come out, whatever I figured out on the last trip is now cheaper.”

“Miners.” “So the British became the world’s miners?” “Well, no.” “What did they become?” “Ironworkers?” “Are you asking me or telling me?” “Both?” This was not going well. “Does Silicon Valley provide the greatest silicon to the world?” “No.” “So, find out what sucked up that horsepower. Why did they need so much of it? Find the scale.” “But where?” I asked. “Everywhere. Underwear.” And then he hung up. I think he’d seen this movie before too. > > > Object Lesson FREMONT, CALIFORNIA—JANUARY 1997 OK, enough of the history lesson—it’s time to find some stocks that go up. Shouldn’t be too hard—this is Silicon Valley, not Shropshire. “What are we going to ask these guys?” I asked Fred. We were headed in to see one of the recent IPOs, Versant. We owned a little, and the stock was running. “I want see who their big customers are and then check out management.

Are you going to invest in ships or railroads?” “No, but—” “How about electric utilities? Textile makers? Auto companies?” “Well, no.” “The Industrial Revolution is dead.” “But there are lessons there.” “Of course, you didn’t waste your time. But don’t think like an industrialist. Silicon Valley isn’t an industry, it’s a giant design shop, as far as I can tell.” “That’s true,” I said. “So, go figure that out. Your numbers for your first year are pretty good.” “Thanks, but—” “But 25%? That’s nothing. How is it that Silicon Valley can generate all that wealth but hardly even make anything themselves? Can we invest in that model or is that same little quirk? Teach me—I’m not sure myself.” All of the names that were working in our fund really didn’t 100 Running Money make anything themselves—they just designed stuff made elsewhere.


pages: 353 words: 104,146

European Founders at Work by Pedro Gairifo Santos

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business intelligence, cloud computing, crowdsourcing, fear of failure, full text search, information retrieval, inventory management, iterative process, Jeff Bezos, Lean Startup, Mark Zuckerberg, natural language processing, pattern recognition, pre–internet, recommendation engine, Richard Stallman, Silicon Valley, Skype, slashdot, Steve Jobs, Steve Wozniak, subscription business, technology bubble, web application, Y Combinator

Basically, what do you think are the biggest differences, challenges, and opportunities for European entrepreneurs vs. US entrepreneurs? Because there is this Silicon Valley vs. the rest mentality. What's your opinion on that? Klein: I think I really don't like that notion. I think it's a very cheap idea that is only sort of useful for getting re-tweets and blog headlines. I think the reality is that it's not about Europe vs. Silicon Valley. The best entrepreneurs in Europe understand Silicon Valley very well. They have spent time in Silicon Valley and developed relationships in Silicon Valley. Take all of that and all of the value that comes from that because you're a fool if you think that Silicon Valley isn't the most sophisticated, vibrant place for technology start-ups on the planet. It probably will continue to be so for the next twenty-five to fifty years because of the network.

It probably will continue to be so for the next twenty-five to fifty years because of the network. And the ecosystem is so profound there and keeps on getting stronger with Zynga, with Twitter, with Facebook, etc. I think any European entrepreneur or any entrepreneur in this space that doesn't want to spend time or learn from Silicon Valley is foolish. But I think there's a lot of things that you can learn and be aware of as an entrepreneur if you're not in Silicon Valley, that you can use to your advantage. I think many times there is a groupthink that emerges in Silicon Valley. The main argument is that there are many people in Europe who have fundamentally changed industries. From Niklas and Janus in the telecom space, to Daniel Ek in music, to Martin Mickos in enterprise software, to the guys who reinvented anti-virus software at Message Labs and AVG, Ventee Privee, Wonga—the list goes on.

We need in Europe (including Israel) to learn how to develop the conditions to create serious scale. Right now, Silicon Valley is peerless at both supporting innovation and creating serious scale. There’s been no master plan, but the 60-year interplay of government as an early catalyst; academia and established companies as early customers and sources of talent; and of course, investors willing to take risks and a long term view, have given entrepreneurs fertile ground to sow seeds and try to grow monsters with dragon’s teeth ready to conquer the world. You need every element of this ecosystem working perfectly to create monsters—and Facebook, LinkedIn, Salesforce, Twitter, VMware, and Zynga have all been recent beneficiaries there. In fact, the capacity for serious scale is almost part of the muscle memory of Silicon Valley’s residents. As a newly-minted founder, you have unparalleled access within a 10-mile radius to a living ecosystem of talent and investors who have been part of businesses in almost every technology sector.


pages: 606 words: 157,120

To Save Everything, Click Here: The Folly of Technological Solutionism by Evgeny Morozov

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3D printing, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, augmented reality, Automated Insights, Berlin Wall, big data - Walmart - Pop Tarts, Buckminster Fuller, call centre, carbon footprint, Cass Sunstein, choice architecture, citizen journalism, cloud computing, cognitive bias, creative destruction, crowdsourcing, data acquisition, Dava Sobel, disintermediation, East Village, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, Firefox, Francis Fukuyama: the end of history, frictionless, future of journalism, game design, Gary Taubes, Google Glasses, illegal immigration, income inequality, invention of the printing press, Jane Jacobs, Jean Tirole, Jeff Bezos, jimmy wales, Julian Assange, Kevin Kelly, Kickstarter, license plate recognition, lifelogging, lone genius, Louis Pasteur, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, moral panic, Narrative Science, Nicholas Carr, packet switching, PageRank, Parag Khanna, Paul Graham, peer-to-peer, Peter Singer: altruism, Peter Thiel, pets.com, placebo effect, pre–internet, Ray Kurzweil, recommendation engine, Richard Thaler, Ronald Coase, Rosa Parks, self-driving car, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Slavoj Žižek, smart meter, social graph, social web, stakhanovite, Steve Jobs, Steven Levy, Stuxnet, technoutopianism, the built environment, The Chicago School, The Death and Life of Great American Cities, the medium is the message, The Nature of the Firm, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, transaction costs, urban decay, urban planning, urban sprawl, Vannevar Bush, WikiLeaks

In this book, I have no such luxury, and I question both the means and the ends of Silicon Valley’s latest quest to “solve problems.” I contend here that Silicon Valley’s promise of eternal amelioration has blunted our ability to do this questioning. Who today is mad enough to challenge the virtues of eliminating hypocrisy from politics? Or of providing more information—the direct result of self-tracking—to facilitate decision making? Or of finding new incentives to get people interested in saving humanity, fighting climate change, or participating in politics? Or of decreasing crime? To question the appropriateness of such interventions, it seems, is to question the Enlightenment itself. And yet I feel that such questioning is necessary. Hence the premise of this book: Silicon Valley’s quest to fit us all into a digital straightjacket by promoting efficiency, transparency, certitude, and perfection—and, by extension, eliminating their evil twins of friction, opacity, ambiguity, and imperfection—will prove to be prohibitively expensive in the long run.

The Perils of Willpower On Frictionless Traps Technologies and Truths Postscript Notes Acknowledgments Index Copyright Page To my parents Introduction “In an age of advanced technology, inefficiency is the sin against the Holy Ghost.” —ALDOUS HUXLEY “Complexity is a solvable problem in the right hands.” —JEFF JARVIS Silicon Valley is guilty of many sins, but lack of ambition is not one of them. If you listen to its loudest apostles, Silicon Valley is all about solving problems that someone else—perhaps the greedy bankers on Wall Street or the lazy know-nothings in Washington—have created. “Technology is not really about hardware and software any more. It’s really about the mining and use of this enormous data to make the world a better place,” Eric Schmidt, Google’s executive chairman, told an audience of MIT students in 2011.

“There are a lot of really big issues for the world to get solved and, as a company, what we are trying to do is to build an infrastructure on top of which to solve some of these problems,” announced Zuckerberg. In the last few years, Silicon Valley’s favorite slogan has quietly changed from “Innovate or Die!” to “Ameliorate or Die!” In the grand scheme of things, what exactly is being improved is not very important; being able to change things, to get humans to behave in more responsible and sustainable ways, to maximize efficiency, is all that matters. Half-baked ideas that might seem too big even for the naïfs at TED Conferences—that Woodstock of the intellectual effete—sit rather comfortably on Silicon Valley’s business plans. “Fitter, happier, more productive”—the refreshingly depressive motto of the popular Radiohead song from the mid-1990s—would make for an apt welcome sign in the corporate headquarters of its many digital mavens.


pages: 319 words: 90,965

The End of College: Creating the Future of Learning and the University of Everywhere by Kevin Carey

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Albert Einstein, barriers to entry, Bayesian statistics, Berlin Wall, business intelligence, carbon-based life, Claude Shannon: information theory, complexity theory, David Heinemeier Hansson, declining real wages, deliberate practice, discrete time, double helix, Douglas Engelbart, Douglas Engelbart, Downton Abbey, Drosophila, Firefox, Frank Gehry, Google X / Alphabet X, informal economy, invention of the printing press, inventory management, John Markoff, Khan Academy, Kickstarter, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, meta analysis, meta-analysis, natural language processing, Network effects, open borders, pattern recognition, Peter Thiel, pez dispenser, ride hailing / ride sharing, Ronald Reagan, Ruby on Rails, Sand Hill Road, self-driving car, Silicon Valley, Silicon Valley startup, social web, South of Market, San Francisco, speech recognition, Steve Jobs, technoutopianism, transcontinental railway, Vannevar Bush

By the time the incumbents are truly threatened, it is much too late for them to change. The consonance with the theory and culture of Silicon Valley is obvious, which is why Christensen was cited ad nauseam by everyone we met. Companies built for such disruption, Maples said, are like thunder lizards. They lay radioactive eggs, breathe fire, pick up and consume trains. They also grow at a terrifying rate. Silicon Valley is a breeding ground for thunder lizards, companies that go from $0 to incredibly valuable, in the many billions of dollars, in very short periods of time. That’s why Godzilla was sitting on the conference table. It’s also a good example of how Silicon Valley is dominated by metaphor. Having good instincts about the onrushing future is only part of what it takes to make it big. Successful investors have to process an onslaught of new information about inflows and outflows of money, burn rates and stock prices, the comings and goings of key engineers and technologists at different firms, other companies proceeding from similar insights, broader economic trends, and the disruptive progress of other thunder lizards that are changing the same landscape—sometimes for good and sometimes not—that your thunder lizards are planning to traverse.

And computing devices evolved into more than tools left on the office desktop at quitting time. They became an essential part of how people interacted with one another in everyday life—a social network. Mobile, social, and cloud, each driven by venture-backed technology companies in Silicon Valley. Decades of increasingly powerful technology married to capital and the best minds of the research university had created a distinct and powerful culture in the converted industrial buildings south of Market Street in San Francisco and the storefronts and garages around the academic and industrial giants of Silicon Valley. It was a belief system in which people were not just augmented but liberated by technology—a place where people could discard the compromises and confusions of human living and build something more rational and enlightened in their place

Staton explained that Enterprise Software and eCommerce were fully converted to a digital marketplace and Media & Entertainment was about half-converted. Yet, while education dwarfed them all in size, it is still, in terms of how money is spent, almost entirely an analog business. Now the moneymen in Silicon Valley were looking at the big yellow circle and seeing a tremendous business opportunity. Venture capital investment in education technology companies increased from less than $200 million in 2008 to over $1.2 billion in 2013. There is, of course, a great deal of complexity sitting inside of the big yellow $4.6 trillion circle—thousands of potential business models and strategies for getting a piece of the pie. As Staton and I drove around Silicon Valley from one new business to another, certain broad categories of start-up became clear. Some of the companies we visited were going after parts of the big yellow circle.


pages: 464 words: 155,696

Becoming Steve Jobs: The Evolution of a Reckless Upstart Into a Visionary Leader by Brent Schlender, Rick Tetzeli

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Albert Einstein, Apple II, Apple's 1984 Super Bowl advert, Bill Gates: Altair 8800, Bob Noyce, Byte Shop, computer age, corporate governance, El Camino Real, Isaac Newton, John Markoff, Jony Ive, Marc Andreessen, market design, McMansion, Menlo Park, Paul Terrell, popular electronics, QWERTY keyboard, Ronald Reagan, Sand Hill Road, side project, Silicon Valley, Silicon Valley startup, skunkworks, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, Tim Cook: Apple, Wall-E, Watson beat the top human players on Jeopardy!, Whole Earth Catalog

McKenna was expert at presenting a company’s tale, but he was also a master corporate business strategist. Silicon Valley has long depended on marketers nearly as much as it has depended on engineers. Every technological advance must be framed in a beguiling narrative if it’s to get off the workbench and into businesses or homes. These advances often are foreign concepts, after all, with potential that seems opaque if not daunting, so the job of a great marketer is to wrestle the concept back to earth and make it approachable for mere technophobic mortals. McKenna’s consultancy would have a hand in the creation of many of the elite companies in Silicon Valley and beyond, including National Semiconductor, Silicon Graphics, Electronic Arts, Compaq, Intel, and Lotus Software. McKenna quickly saw that Steve was unusually articulate and driven. “He had what I’d call Silicon Valley street smarts,” says McKenna.

If Steve and Woz were going to have any chance of producing and selling such a snazzy machine, they would have to scrounge up some serious working capital. They needed far more than they could get by continuing to cadge personal loans from friends, parents, and advance payments from proprietors of hobby shops. Not knowing exactly where he could get that kind of money, Steve began to make a real effort to connect with Silicon Valley’s cloistered world of successful entrepreneurs, marketers, and financiers. In 1976, the route to success in Silicon Valley wasn’t remotely as well mapped as it is today, when entrepreneurs can find the path to financing by simply Googling “venture capital.” Back then the Valley had a much smaller mix of lawyers, financiers, and managers, and most business was conducted face-to-face. But Steve had several qualities that made him a superb networker. “I was really lucky to get into computers when it was a very young industry,” he once told me.

Robert Noyce was charismatic and forward-thinking and had only been able to start Intel after leaving the shadow of the most imposing figure in semiconductor history, William Shockley. The systems that Andy Grove put in place were more complex and rigorous than anything Mike Scott had ever seen, and yet Grove had also been able to make his company one of the most creative places in Silicon Valley. And Regis McKenna became so adept at deftly navigating the constant shifts and tremors of Silicon Valley culture that he would wind up writing several books explaining how others could do the same. These were well-rounded, complicated, deep, and fascinating men. They were comfortable with change, and they lived where Steve wanted to live himself—at the intersection of technology and something that was more like the liberal arts. They were people who played the corporate game by rules of their own devising.


pages: 222 words: 70,132

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin

1960s counterculture, 3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American Legislative Exchange Council, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, commoditize, creative destruction, crony capitalism, crowdsourcing, data is the new oil, David Brooks, David Graeber, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, future of journalism, future of work, George Akerlof, George Gilder, Google bus, Hacker Ethic, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, life extension, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Mother of all demos, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, Paul Graham, Peter Thiel, Plutocrats, plutocrats, pre–internet, Ray Kurzweil, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, smart grid, Snapchat, software is eating the world, Steve Jobs, Stewart Brand, technoutopianism, The Chicago School, The Market for Lemons, Tim Cook: Apple, trade route, transfer pricing, trickle-down economics, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator

Thiel’s stated reason was to destroy Gawker, one of whose publications, Valleywag, had outed Thiel in 2007. After that incident Thiel had stated, “Valleywag is the Silicon Valley equivalent of al-Qaida.” Nine years later he got his revenge, telling the New York Times, “I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.” The revelation quickly exposed the battle lines between Silicon Valley and the media. Mark Zuckerberg had publicly stated that privacy norms were evolving and his board member Thiel had backed him up. But with Gawker, Thiel was reasserting his right to privacy, even though it was general knowledge in Silicon Valley that he was gay. The irony was that Owen Thomas, the gay writer who wrote the Valleywag piece, ended with this statement: “That’s why I think it’s important to say this: Peter Thiel, the smartest VC in the world, is gay.

Grover Norquist, the libertarian antitax advocate who vowed to “shrink the government to the size that he could drown it in a bathtub,” told Vox’s Ezra Klein that the only things keeping Silicon Valley money in the Democratic Party were cultural issues. With “gay marriage off the table,” he said, “it could be a very easy case” to persuade the big Silicon Valley players to give money and support to the Republicans, who oppose teachers’ unions, oppose regulating the sharing economy, and are wholeheartedly in favor of free trade. 5. The unreality of the world of tech billionaires came home to me when I spent two days in 2015 at an invitation-only conference with Graydon Carter, editor in chief of Vanity Fair, and the swells of Silicon Valley in San Francisco. The conference, called the Vanity Fair New Establishment Summit, left me wondering whether there isn’t a kind of bubble in the Valley that has nothing to do with the inflated valuations of the “unicorns” (private companies worth more than $1 billion), which were so much a focus of conversation onstage and envy offstage—especially from established Hollywood moguls, who are drawn to Graydon Carter like moths to a flame.

The original mission of the Internet was hijacked by a small group of right-wing radicals to whom the ideas of democracy and decentralization were anathema. By the late 1980s, starting with eventual PayPal founder Peter Thiel’s class at Stanford University, the dominant philosophy of Silicon Valley would be based far more heavily on the radical libertarian ideology of Ayn Rand than the commune-based principles of Ken Kesey and Stewart Brand. Thiel, who was also an early investor in Facebook and is the godfather of what he proudly calls the PayPal Mafia, which currently rules Silicon Valley, has been clear about his credo, stating, “I no longer believe that freedom and democracy are compatible.” More important, Thiel says that if you want to create and capture lasting value, you should look to build a monopoly. Three of the companies that have played the largest role in imperiling artists are clear monopolies.


pages: 385 words: 48,143

The Monk and the Riddle: The Education of a Silicon Valley Entrepreneur by Randy Komisar

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Apple's 1984 Super Bowl advert, barriers to entry, belly landing, discounted cash flows, estate planning, Jeff Bezos, Network effects, new economy, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs

We hear variations on this theme from childhood on: Walk before you run. No peas, no pie. Pay your dues. Or, perhaps in the case of Jack Dolan, as Lenny saw him, work, then retireassuming you live long enough to retireand then devote your time to your passion. The Deferred Life Plan certainly dominates Silicon Valley. Most people think getting rich fast provides the quickest way to get past the first stepand where can you get rich faster than Silicon Valley? The problem is that, despite the undisguised affluence, the verdant hills, and media-generated mythos, the vast majority of people in Silicon Valley will not get rich. Most business ideas do not find funding. Even the majority of those that are fundedthat is, vetted by very smart people who think enough of the ideas to invest in themultimately fail. And the lucky winners may get to step two only Page 66 to find themselves aimless, directionless.

* * * title : The Monk and the Riddle : The Education of a Silicon Valley Entrepreneur author : Komisar, Randy.; Lineback, Kent L. publisher : Harvard Business School Press isbn10 | asin : 1578511402 print isbn13 : 9781578511402 ebook isbn13 : 9780585296623 language : English subject Komisar, Randy,--1954- , Businesspeople--United States--Biography, Entrepreneurship--United States--Biography. publication date : 2000 lcc : HC102.5.K66A3 2000eb ddc : 338/.04/092 subject : Komisar, Randy,--1954- , Businesspeople--United States--Biography, Entrepreneurship--United States--Biography. Page iii The Monk and the Riddle The Education of a Silicon Valley Entrepreneur Randy Komisar with Kent Lineback Page iv Copyright 2000 Randy Komisar All rights reserved Printed in the United States of America 04 03 02 01 00 5 4 3 2 The Web sites or URLs mentioned in this book originated in my imagination.

"I usually make the presentation on a computer, you know, throw it up on a screen, if I can. That's how Frank saw it. But I checked it out earlier. Too much glare in here. So we'll use the dead tree version." Here it comes. The pitch. People present ideas for new businesses to me two or three times a week. If I chose to, I could hear a pitch every dayall day, every day. Just as everyone in L.A. has a screenplay, everyone in Silicon Valley has a business planmost of them nowadays for Internet businesses. I've been around Silicon Valley and involved with young companies since the early '80sstartups, spinouts, spin-ins, what have you. I'm not in the phone book or listed in any professional directory. If you don't know someone I know, you can't find me. I wonder what Frank had in mind when he set me up with Lenny. I prefer to riff on ideas, brainstorm, prod and provoke, have some constructive give-and-take around a business concept.


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

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Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, capital controls, complexity theory, computer age, computerized trading, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, John Markoff, knowledge economy, knowledge worker, labor-force participation, labour market flexibility, labour mobility, laissez-faire capitalism, Leonard Kleinrock, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Robert Metcalfe, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, zero-sum game

So, there has been, at the same time, a process of concentration of technological know-how in transnational production networks, and a much broader diffusion of this knowhow around the world, as the geography of trans-border production networks becomes increasingly complex. I will illustrate this analysis with developments in Silicon Valley in the late 1990s. Seizing new opportunities of innovation spurred by the Internet revolution, Silicon Valley increased its technological leadership in information technology vis-à-vis the rest of the world. But Silicon Valley in 2000 is, socially and ethnically, a totally different Silicon Valley from what it was in the 1970s. Anna Lee Saxenian, the leading analyst of Silicon Valley, has shown, in her 1999 study the decisive role of immigrant entrepreneurs in the new make-up of this high-tech node. According to Saxenian: Recent research suggests that the “brain drain” may be giving way to a process of “brain circulation,” as talented immigrants who study and work in the US return to their home countries to take advantage of promising opportunities there.

Meanwhile, California’s complex of technology-related sectors increasingly relies on Taiwan’s speedy and flexible infrastructure for manufacturing semiconductors and PCs, as well as their fast-growing markets for advanced technology components.100 The California connection is not limited to Asia. Two of Saxenian’s students have shown a similarly powerful connection between Silicon Valley and the booming Israeli software industry, and a significant, if still small, presence of Mexican engineers in Silicon Valley.101 Thus, Silicon Valley expanded on the basis of the technological and business networks it spun around the world. In return, the firms created around these networks attracted talent from everywhere (but primarily from India and China – in just proportion of the world population), who ultimately transformed Silicon Valley itself, and furthered the technology connection with their countries of origin. Granted, Silicon Valley is a very special case because of its pre-eminence in information technology innovation. Yet, it is likely that studies in other hightechnology regions around the world will show a similar mechanism, as networks reinforce themselves, cutting across national borders, and attracting embodied know-how, which is the most significant process of technology transfer and innovation in the Information Age.

It was this technology transfer from Shockley to Fairchild, then to a network of spin-off companies, that constituted the initial source of innovation on which Silicon Valley and the micro-electronics revolution were built. Indeed, by the mid-1950s Stanford and Berkeley were not yet leading centers in electronics; MIT was, and this was reflected in the original location of the electronics industry in New England. However, as soon as knowledge was available in Silicon Valley, the dynamism of its industrial structure and the continuous creation of start-up firms anchored Silicon Valley as the world’s micro-electronics center by the early 1970s. Anna Saxenian compared the development of electronics complexes in the two areas (Boston’s Route 128 and Silicon Valley) and concluded that the decisive role was played by the social and industrial organization of companies in fostering or stymieing innovation.65 Thus, while large, established companies in the East were too rigid (and too arrogant) to constantly retool themselves toward new technological frontiers, Silicon Valley kept churning out new firms, and practicing cross-fertilization and knowledge diffusion by job-hopping and spin-offs.


pages: 394 words: 108,215

What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry by John Markoff

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Any sufficiently advanced technology is indistinguishable from magic, Apple II, back-to-the-land, beat the dealer, Bill Duvall, Bill Gates: Altair 8800, Buckminster Fuller, California gold rush, card file, computer age, computer vision, conceptual framework, cuban missile crisis, Donald Knuth, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Thorp, El Camino Real, Electric Kool-Aid Acid Test, general-purpose programming language, Golden Gate Park, Hacker Ethic, hypertext link, informal economy, information retrieval, invention of the printing press, Jeff Rulifson, John Markoff, John Nash: game theory, John von Neumann, Kevin Kelly, knowledge worker, Mahatma Gandhi, Menlo Park, Mother of all demos, Norbert Wiener, packet switching, Paul Terrell, popular electronics, QWERTY keyboard, RAND corporation, RFC: Request For Comment, Richard Stallman, Robert X Cringely, Sand Hill Road, Silicon Valley, Silicon Valley startup, South of Market, San Francisco, speech recognition, Steve Crocker, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, Ted Nelson, Thorstein Veblen, Turing test, union organizing, Vannevar Bush, Whole Earth Catalog, William Shockley: the traitorous eight

Funded by the Pentagon’s Advanced Research Projects Agency, at the height of its most creative and unconstrained period, SAIL served as a home to many of the most inventive minds in the computing world. SAIL was as unconventional as it was innovative. Researchers lived in the attic above their offices, encounter groups met in the steam tunnels in the basement, and from that tumult emerged the technological insights that would help reshape both Silicon Valley and the entire world during the next decade. At dinner with Engelbart, I realized that, in spite of reading widely about the history of Silicon Valley and computing, I wasn’t familiar with the stories being told that evening. What struck me was that the tales weren’t about the technologies but rather about the lives of the researchers themselves, their personal relationships, the drugs they took, the sex they enjoyed, the rock and roll they listened to, and the political protest in which they took part.

The stage is set for a clash of values that echo the very forces that created Silicon Valley. ACKNOWLEDGMENTS Let me first pay my respects to those who have gone before me. From 1981 to 1984, I worked with both Paul Freiberger and Mike Swaine at a start-up weekly newspaper, Infoworld, which had set out to become either the Rolling Stone or Sports Illustrated (it was never quite sure which) of the personal-computer industry. I watched the two of them struggle through the exercise of writing history while it was still being made as they researched Fire in the Valley. At about the same time, a New York–based Rolling Stone writer, Steven Levy, showed up at our Palo Alto offices and took me out for pizza at the Roundtable on University Avenue in downtown Palo Alto. Steven had come to Silicon Valley to do research for what would become Hackers: Heroes of the Computer Revolution, an account that seventeen years later is still the definitive work on the culture of the modern computing world.

Also, I have to give special thanks to friends who were willing to listen to me chatter endlessly about what my reporting had dug up. Paul Saffo has been one of the sharpest thinkers in Silicon Valley for more than two decades, with a wonderful critical eye. Michael Schrage was once upon a time a competitor at The Washington Post but was one of the first people to give me encouragement. Kevin Kelly helped me explore the idea of what was special about a certain time and place. Gregg Zachary has taught journalism with me at the University of California at Berkeley, and at Stanford, and when he covered Silicon Valley for The Wall Street Journal during the 1990s he was the competitor I dreaded most. Steve Lohr preceded me on a New York Times–sanctioned book leave and filled me with fear, trepidation, and ultimately hope, as from a safe distance I watched him labor on his own book.


pages: 387 words: 112,868

Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper

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4chan, Airbnb, Apple's 1984 Super Bowl advert, banking crisis, bitcoin, blockchain, Burning Man, capital controls, Colonization of Mars, crowdsourcing, cryptocurrency, David Graeber, Edward Snowden, Elon Musk, Extropian, fiat currency, Fractional reserve banking, Jeff Bezos, Julian Assange, Kickstarter, life extension, litecoin, lone genius, M-Pesa, Marc Andreessen, Mark Zuckerberg, Occupy movement, peer-to-peer, peer-to-peer lending, Peter Thiel, Ponzi scheme, price stability, QR code, Satoshi Nakamoto, Silicon Valley, Simon Singh, Skype, slashdot, smart contracts, Startup school, stealth mode startup, the payments system, transaction costs, tulip mania, WikiLeaks

Jed’s new company, named Ripple, was a cryptographic network that could be used to send any currency, not just Bitcoins. That made it less threatening to governments and banks and more attractive to people like Andreessen and Thiel, who both offered small seed investments. But both of these key Silicon Valley figures were also getting more comfortable with Bitcoin itself. The investment firm that Thiel had helped create with some of his PayPal riches, the Founders Fund, began talking with an engineer at Facebook who had founded an e-mail list for Silicon Valley insiders, dedicated to Bitcoin, about joining the firm to look for virtual currency investments. The growing openness to Bitcoin was helped along by Silicon Valley’s ballooning sense of self-importance in early 2013. With the Nasdaq composite stock index soaring, shares of Google at an all-time high, and startups selling for mind-boggling sums, many in the tech industry believed that they were going to be able to revolutionize and improve every element of modern life.

Because there is no identifying information attached to Bitcoin addresses, the terrorist cell could receive money without anyone noticing. That is very different from a traditional bank, in which every account is tied to a specific person or organization. Coinbase had to repeatedly convince Silicon Valley Bank that it knew where the Bitcoins leaving Coinbase were going. Even with all these steps, on several days in March Coinbase hit up against transaction limits set by Silicon Valley Bank and had to shut down until the next day. At the end of the month, an item was posted on SVBitcoin, an invite-only e-mail list for the Silicon Valley Bitcoin community: “The Time Has Come for the Bitcoin Community to Own a U.S. Based Federally Chartered Bank.” The author, an investor named David Johnston, wrote that the skepticism of traditional banks toward virtual currencies was the biggest roadblock facing Bitcoin’s growth.

New York Attorney General Elliot Spitzer said PayPal was breaking the law by facilitating payments for gambling companies, and the Department of Justice decided PayPal was violating the USA Patriot Act. The new limits and restrictions imposed took it further and further from its ambitious original goals. Thiel and Levchin left PayPal soon afterward. This had scared much of Silicon Valley away from tinkering with finance, which was seen as largely resistant to new technology because of all the regulations. But the PayPal experience also explained why there was a hunger for the idea of a virtual currency. There was a lingering memory of this unfulfilled dream of Silicon Valley. While the Internet had freed information and communication from the postal service and the publishing industry, the Internet had essentially never disrupted money, and dollars remained bound by the old networks run by the credit card companies and the banks.


pages: 598 words: 140,612

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier by Edward L. Glaeser

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affirmative action, Andrei Shleifer, Berlin Wall, British Empire, Broken windows theory, carbon footprint, Celebration, Florida, clean water, congestion charging, declining real wages, desegregation, diversified portfolio, Edward Glaeser, endowment effect, European colonialism, financial innovation, Frank Gehry, global village, Guggenheim Bilbao, haute cuisine, Home mortgage interest deduction, James Watt: steam engine, Jane Jacobs, job-hopping, John Snow's cholera map, Mahatma Gandhi, McMansion, megacity, mortgage debt, mortgage tax deduction, New Urbanism, place-making, Ponzi scheme, Potemkin village, Ralph Waldo Emerson, rent control, RFID, Richard Florida, Rosa Parks, school vouchers, Seaside, Florida, Silicon Valley, Skype, smart cities, Steven Pinker, strikebreaker, the built environment, The Death and Life of Great American Cities, the new new thing, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, upwardly mobile, urban planning, urban renewal, urban sprawl, William Shockley: the traitorous eight, Works Progress Administration, young professional

Yet so far at least, skilled Americans and Europeans seem to have gotten more from the ability to work the world market than they’ve lost from foreign competition. The most-skilled people in the rich countries have thrived by selling their ideas to the world and by using worldwide labor to produce their inventions more cheaply. The software producers in Bangalore haven’t made Silicon Valley obsolete. Instead, they’ve made it cheaper—and thus easier—for Silicon Valley firms to develop software. The Rise of Silicon Valley America’s greatest information technology hub is Santa Clara County, California, which most people know better as Silicon Valley. Much like Bangalore, the Valley achieved this status by making its luck with education. A century ago, when New York and Nagasaki were old, computers didn’t exist, and Santa Clara County was covered in orchards and farms. This agricultural community became a world capital of high technology because Senator Leland Stanford, a railroad magnate, decided to build a university on his eight-thousand-acre horse farm.

By that time, Shockley had left Bell Labs and headed out to California, where his enormous abilities—and a fatal flaw—would both assert themselves and both contribute to the success of Silicon Valley. Like Pericles and the Abbasid caliphs, he had a rare talent for attracting geniuses. In his first years, he searched America’s campuses and brought great young minds eager to come to Silicon Valley and work with the Nobel laureate. But Shockley was a capricious and dictatorial manager who couldn’t keep the talent that he had attracted. In one notorious incident, he made his workers take lie detector tests in order to establish who was responsible for a secretary’s cutting her hand on a pin. By attracting and then repelling genius, Shockley both brought talented people to Silicon Valley and ensured that they would be starting their own firms instead of just working for him. At one point, eight of his best young scientists collectively quit.

Two former Hewlett-Packard employees, both members of Silicon Valley’s Homebrew Computer Club, mixed hardware and software innovations when they started Apple Computer. A former Apple employee started eBay in the 1990s, when Silicon Valley also became the place for pioneering the Internet. Both Yahoo! and Google were formed by Stanford graduates not far from their alma mater. In some ways, Silicon Valley is like a well-functioning traditional city. It attracts brilliant people and then connects them. Walker’s Wagon Wheel played a legendary role as a place where smart entrepreneurs shared ideas with one another outside the confines of their various day jobs. Silicon Valley’s concentration is also a response to the curse of communicating complexity; all that cutting-edge technology can be pretty complicated, and geographic proximity helps the flow of information. Like all of today’s successful cities, its strength lies in its human capital, which is nurtured by Stanford University and attracted by economic opportunity and a pleasant climate.


pages: 538 words: 147,612

All the Money in the World by Peter W. Bernstein

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Albert Einstein, anti-communist, Berlin Wall, Bill Gates: Altair 8800, call centre, corporate governance, corporate raider, creative destruction, currency peg, David Brooks, Donald Trump, estate planning, family office, financial innovation, George Gilder, high net worth, invisible hand, Irwin Jacobs: Qualcomm, Jeff Bezos, job automation, job-hopping, John Markoff, Long Term Capital Management, Marc Andreessen, Martin Wolf, Maui Hawaii, means of production, mega-rich, Menlo Park, Mikhail Gorbachev, new economy, Norman Mailer, PageRank, Peter Singer: altruism, pez dispenser, popular electronics, Renaissance Technologies, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Sand Hill Road, school vouchers, Search for Extraterrestrial Intelligence, shareholder value, Silicon Valley, Silicon Valley startup, stem cell, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, the new new thing, Thorstein Veblen, too big to fail, traveling salesman, urban planning, wealth creators, William Shockley: the traitorous eight, women in the workforce

The Valley’s relatively contained geography: AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, Mass.: Harvard University Press, 1994), p. 29. 21. “From the outset”: Ibid. Much of the information on the history of Silicon Valley comes from Saxenian’s book. 22. They had become friends: Kaplan, The Silicon Boys, p. 34. 23. Later he encouraged the duo: Saxenian, Regional Advantage, p. 20. 24. Hewlett and Packard are the iconic models: The information on Hewlett and Packard’s early days in Silicon Valley comes mainly from John Markoff, “William Hewlett Dies at 87: A Pioneer of Silicon Valley,” obituary, New York Times, Jan. 13, 2001. 25. In a 1983 Esquire article: Tom Wolfe, “The Tinkerings of Robert Noyce: How the Sun Rose on the Silicon Valley,” Esquire, Dec. 1983. 26. At Fairchild, Noyce designed: Kaplan, The Silicon Boys, p. 56. 27.

In 2004, a year after Google went public, Brin and Page joined the list, each with a fortune of $4 billion that has since ballooned to $14.1 billion and $14 billion, respectively. * * * At Home in Woodside Once they make their fortunes, many of the most successful Silicon Valley entrepreneurs head to the historic Silicon Valley town of Woodside. A community of about five thousand people, Woodside is a place of bucolic, two-lane country roads lined with old-fashioned, horseshoe-shaped mailboxes. Looking around, it is difficult to imagine that this town is, in fact, one of the wealthiest in the nation. Although the primary residences of Larry Ellison and Steve Jobs are in nearby Silicon Valley communities, both of which are not more than a twenty-minute drive away, they also maintain estates in Woodside, a town where a billionaire can buy some privacy. Many houses are partly hidden from view, screened by long driveways, stands of redwoods, and dense foliage.

Microsoft’s successful deal with IBM made it possible for Gates to import talented engineers from around the world, such as his top software architect Charles Simonyi, who relocated from Silicon Valley to Microsoft’s relatively isolated corporate campus in Redmond. Microsoft’s headquarters was a place where employees were not liable to be lured away by job offers from rival software company executives at the local coffee shop, as they could be in Silicon Valley. “Even back in the late seventies,”19 says Charles Simonyi, “Bill anticipated what would happen. In Seattle, there would be stability in the workforce.” In contrast to the one-industry town of Redmond, the story of the Bay Area and Silicon Valley is much more dynamic and colorful. Every few years at least four or five new members from the Bay Area make the Forbes 400 list, while another four or five fall off.


pages: 193 words: 47,808

The Flat White Economy by Douglas McWilliams

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access to a mobile phone, banking crisis, Big bang: deregulation of the City of London, bonus culture, Chuck Templeton: OpenTable, cleantech, cloud computing, computer age, correlation coefficient, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, eurozone crisis, George Gilder, hiring and firing, income inequality, informal economy, knowledge economy, loadsamoney, low skilled workers, mass immigration, Metcalfe’s law, Network effects, new economy, offshore financial centre, Pareto efficiency, Peter Thiel, Productivity paradox, Robert Metcalfe, Silicon Valley, smart cities, special economic zone, Steve Jobs, working-age population, zero-sum game

And with the traditional banking system still inhibited by the aftermath of the financial crisis, which has held back its ability and willingness to lend, there is a niche that needs filling. Fintech – the business of financing technology – is still in its infancy in London. But it has shown substantial growth in the past decade, and particularly since 2008. London accounts for 8.9% of world technology finance – a long way short of the 30% contributed from Silicon Valley but nevertheless a figure which indicates an emerging growth. In the five years to 2013 London fintech growth was twice that of Silicon Valley. The UK and Ireland (which is, in practice, chiefly a London measure) accounts for more than 50% of European technology venture capital measured by number of deals – and 69% measured by funds invested. Deal volume in London has been growing at an annual rate of over 70% since 2008 and grew by 117% in the year to Q1 2014.

At the same time, there has been a huge rise in the number of people getting on their bikes – 176 per cent more since 2000.”17 But the significant danger of at least serious injury must be a discouragement to many potential cyclists. Clothing According to Business Insider, Peter Thiel, founder of PayPal and one of Silicon Valley’s key venture capitalists, “hates suits”. While he cautions that there are “no absolute and timeless sartorial rules,” Thiel says that, “in Silicon Valley, wearing a suit in a pitch meeting makes you look like someone who is bad at sales and worse at tech.” Maybe that’s why he has a simple rule for investing: never bet on a CEO in a suit. Thiel says that this rule has helped him avoid making poor bets on slick business folk compensating for crap products with well-dressed charm.

According to Technology Review, “Amazon has moved a mobile development team to the area, Google has expanded quickly into new buildings and drug companies are piling in too.”4 Around Silicon Roundabout in London, rents shot up in 2013 to over £40 per square foot (£70 including services), but have fallen back slightly since as new space has been attracted on to the market. In Paris, Moscow and Beijing the drive to replicate Silicon Valley is strongly supported with government money. Yet economists argue about whether it is possible to promote technology top down. On the one hand, the original development of Silicon Valley had much to do with US government defence spending and the current development of the Israeli technology sector is again driven by military spending. In addition, in China, technology giant Huawei allegedly grew out of the communications arm of the People’s Liberation Army, while the Russian technology cluster also appears to have had historic links with military developments.


pages: 265 words: 69,310

What's Yours Is Mine: Against the Sharing Economy by Tom Slee

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4chan, Airbnb, Amazon Mechanical Turk, asset-backed security, barriers to entry, Berlin Wall, big-box store, bitcoin, blockchain, citizen journalism, collaborative consumption, congestion charging, Credit Default Swap, crowdsourcing, data acquisition, David Brooks, don't be evil, gig economy, Hacker Ethic, income inequality, informal economy, invisible hand, Jacob Appelbaum, Jane Jacobs, Jeff Bezos, Khan Academy, Kibera, Kickstarter, license plate recognition, Lyft, Marc Andreessen, Mark Zuckerberg, move fast and break things, move fast and break things, natural language processing, Netflix Prize, Network effects, new economy, Occupy movement, openstreetmap, Paul Graham, peer-to-peer, peer-to-peer lending, Peter Thiel, pre–internet, principal–agent problem, profit motive, race to the bottom, Ray Kurzweil, recommendation engine, rent control, ride hailing / ride sharing, sharing economy, Silicon Valley, Snapchat, software is eating the world, South of Market, San Francisco, TaskRabbit, The Nature of the Firm, Thomas L Friedman, transportation-network company, Uber and Lyft, Uber for X, ultimatum game, urban planning, WikiLeaks, winner-take-all economy, Y Combinator, Zipcar

In its outer reaches it is an ambition manifested in ideas of Seasteading (a movement to build self-governing floating cities, started by PayPal founder Peter Thiel) and the Singularity (a belief in “the dawning of a new civilization that will enable us to transcend our biological limitations and amplify our creativity,” originating with the ideas of inventor and now Google employee Ray Kurzweil). Just as Hollywood is both a physical location and a global industry with a distinctive set of traditions, beliefs, and practices, so Silicon Valley is more than a place—it is shorthand for the world of digital technology, specifically Internet technology. Silicon Valley includes big companies like Apple, Google, Facebook, Amazon, and Microsoft, and it includes a ­never-ending stream of ambitious startups, not all physically located in Silicon Valley proper, but all driven by and products of the broader Internet culture. The Sharing Economy takes its inspiration from one particular tenet of that culture: a belief in the virtues of openness. Openness and sharing go hand in hand: to make something open is to stop it being a commodity, to take it out of the realm of private property and make it shareable among members of a community.

In many cultures self-promotional activity is not generally acceptable in the social world, seeming crass and selfish, but it is widely accepted in the commercial world in the form of branding and marketing activities. As Alice Marwick writes, ideas of personal branding and investment in self-­promotion have taken off in a big way in Silicon Valley; part of the region’s belief in the value of entrepreneurship,11 so now Sharing Economy companies have coined a word for “people as companies.” Airbnb hosts, Lyft drivers, and TaskRabbit errand-runners are “micro-entrepreneurs”: the self as corporation, and one’s reputation as personal brand. If investment in “reputation as an asset” gains ground, then reputation may become a measure of how well we conform to the prejudices and expectations of Silicon Valley culture. RATINGS DO NOT DISCRIMINATE Start by looking at ratings on Netflix: the ratings of movies and TV shows by Netflix customers. There is every reason to believe that most Netflix ratings are independent and honest.

Three years on, Rosenberg was an advisor to Google management, and found himself in “a world that has outstripped even his wildest expectations.” 11 Drawing on stories from books like Wikinomics,12 on the Government of Canada’s Open Government Declaration, on the non-profit Khan Academy’s video lectures, on PatientsLikeMe in healthcare and Google’s mapping tools, as well as Google’s own success with Android smartphones and the Chrome browser, Rosenberg believes that openness needs to go even further: “We must aim beyond even an open internet. Institutions in general must continue to embrace this ethos.” Here is the ambition of Silicon Valley: to reshape the world in the Internet’s image. Open institutions, open government, open access. It’s the ambition that the Sharing Economy seeks to realize: to take the philosophy of openness and to reshape whole industries, and their relationship to government, but to keep something for themselves. Rosenberg’s ability to hold contradictory beliefs is symptomatic of Silicon Valley culture. He believes thoroughly in openness, congratulating himself and his industry on discovering a viewpoint that is “counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle.”


pages: 253 words: 65,834

Mastering the VC Game: A Venture Capital Insider Reveals How to Get From Start-Up to IPO on Your Terms by Jeffrey Bussgang

business process, carried interest, digital map, discounted cash flows, hiring and firing, Jeff Bezos, Marc Andreessen, Mark Zuckerberg, Menlo Park, moveable type in China, pattern recognition, Paul Graham, performance metric, Peter Thiel, pets.com, risk tolerance, rolodex, Ronald Reagan, Sand Hill Road, selection bias, shareholder value, Silicon Valley, Skype, software as a service, sovereign wealth fund, Steve Jobs, technology bubble, The Wisdom of Crowds

The venture capital industry is also highly concentrated geographically. Silicon Valley is the epicenter of the VC world and of everyone who aspires to enter it. My hometown of Boston, Massachusetts, is a strong number two, in large part because Harvard and MIT serve as a training ground for great entrepreneurial and technical talent, and VCs follow the talent. The statistics suggest that the capital is concentrated. According to the NVCA, approximately $84 billion of the $200 billion of total VC capital under management resides in California. Thirty-six billion dollars is managed in Massachusetts and $18 billion in New York. Those three states alone represent 70 percent of all capital under VC management. Thus, imagine the fewer than one thousand senior VCs spending their time shuttling back and forth between Silicon Valley, Boston, and New York City, all tightly interconnected through their college and business school alumni networks, interlocking business and personal relationships, and all connected by no more than one degree of separation using social networking tools like Reid Hoffman’s LinkedIn, Jack Dorsey’s Twitter, or Mark Zuckerberg’s Facebook.

Decisions at larger firms can get delegated to more junior investment professionals and not as much cross-partnership scrutiny is given to each decision. Some entrepreneurs view geographical dispersion as a negative as compared to geographical focus. When VCs are not physically located close to you, they are less likely to be as helpful or in touch with the ups and downs of your start-up. That is why Silicon Valley-based VCs typically fund Silicon Valley-based firms and Boston-based VCs typically fund East Coast start-ups. There are plenty of exceptions (e.g., Jack Dorsey’s Twitter chose Fred Wilson, a New York City-based VC, to be his lead investor), but being close by for a quick chat about strategy, recruiting, product positioning, and financing is beneficial to a productive VC-entrepreneur relationship. Entrepreneurs can easily research whether firms make investments out of their office geographies or only make local investments by examining the geographic location of a firm’s portfolio companies.

Find a local management team, provide them with a brand and back-office support (accounting, fund management, and the like), and create a global network of venture capitalists that are tied together by economic and social bonds, share deals and analysis, yet make investment decisions and control the bulk of their own economics locally. Sitting down together over cocktails during an industry conference in New York City, I asked Tim—why the drive to expand globally? “I love entrepreneurs,” he explained. “I want to find them everywhere. I knew they wouldn’t all be in Silicon Valley. Microsoft was in Redmond, Washington; it didn’t come from the Silicon Valley or Route 128 outside of Boston. I thought, Where else are deals going to come from? It was a huge step to go international. People looked at me as if I were out of my mind. I partly am. But it worked out really well. I’ve been to sixty-five different countries and probably funded businesses in thirty of them. It was sort of a risk. But it’s made my life much more interesting.”


pages: 207 words: 63,071

My Start-Up Life: What A by Ben Casnocha, Marc Benioff

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affirmative action, Albert Einstein, barriers to entry, Bonfire of the Vanities, business process, call centre, creative destruction, David Brooks, don't be evil, fear of failure, hiring and firing, index fund, informal economy, Jeff Bezos, Lao Tzu, Menlo Park, Paul Graham, place-making, Ralph Waldo Emerson, Sand Hill Road, side project, Silicon Valley, Steve Jobs, Steven Pinker, technology bubble, traffic fines

“Entrepreneurs Are Optimists” contains ideas from Learned Optimism, by Martin Seligman (New York: Vintage Books, 2006). The Author Ben Casnocha (pronounced kas-NO-ka) is a Silicon Valley–based entrepreneur and writer. Currently nineteen years old, he serves on the board of Comcate, (pronounced KOM-kate) Inc., the leading e-government technology firm he founded six years ago. He has received various accolades. In 2006 BusinessWeek named him one of America’s best young entrepreneurs. In 2004 PoliticsOnline ranked him among the “twenty-five most influential people in the world of internet and politics.” The Silicon Valley Business Journal named his blog one of the “Top 25 in Silicon Valley.” His work has been featured in hundreds of media around the world, including CNN and USA Today. He is a seasoned speaker on entrepreneurship and leadership, and he cofounded an intellectual discussion society for business and technology executives.

My Start-Up Life What a (Very) Young CEO Learned on His Journey Through Silicon Valley Ben Casnocha Foreword by Marc Benioff John Wiley & Sons, Inc. My Start-Up Life My Start-Up Life What a (Very) Young CEO Learned on His Journey Through Silicon Valley Ben Casnocha Foreword by Marc Benioff John Wiley & Sons, Inc. Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved. Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web at www.copyright.com.

I realized that while the singular focus on starting a company is exciting in its own ways, diversifying your energies can be equally (if not more) stimulating. >> Despite additional school commitments I still kept a hand in broader Silicon Valley life. I met people of all backgrounds, even 121 122 MY START-UP LIFE if they knew nothing about local government. I went to events on education, science, technology, and journalism. What I was really doing, it seems to me, in this broad engagement with the local community, was creating and projecting a personal brand. I started living my life out loud. Many in the industry knew me for founding Comcate. But I wanted to be known for who I was more than for what I had done. My activities in Silicon Valley life fell into three categories: networking, philanthropy, and media. Networking As an entrepreneur flipped through some PowerPoint slides during a presentation to a group of angel investors at the Keiretsu Forum in San Francisco, my friend Carl Johnston—a sixty-something successful real estate investor—leaned over and whispered in my ear, “Give me one of your business cards.”


pages: 239 words: 64,812

Geek Sublime: The Beauty of Code, the Code of Beauty by Vikram Chandra

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Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Apple II, barriers to entry, Berlin Wall, British Empire, business process, conceptual framework, create, read, update, delete, crowdsourcing, don't repeat yourself, Donald Knuth, East Village, European colonialism, finite state, Firefox, Flash crash, glass ceiling, Grace Hopper, haute couture, iterative process, Jaron Lanier, John von Neumann, land reform, London Whale, Norman Mailer, Paul Graham, pink-collar, revision control, Silicon Valley, Silicon Valley ideology, Skype, Steve Jobs, Steve Wozniak, supercomputer in your pocket, theory of mind, Therac-25, Turing machine, wikimedia commons, women in the workforce

CBS Money Watch, July 13, 2012. http://www.cbsnews.com/8301-505123_162-57471697/jpmorgan-chase-earnings-london-whale-cost-$5.8-billion/. Scott, Alec. “Lessons from Canada’s Silicon Valley Diaspora.” The Globe and Mail, February 23, 2012. http://www.theglobeandmail.com/report-on-business/rob-magazine/lessons-from-canadas-silicon-valley-diaspora/article535544/?service=print. Shulman, David. “The Buzz of God and the Click of Delight.” In Aesthetics in Performance: Formations of Symbolic Construction and Experience, edited by Angela Hobart and Bruce Kapferer, 43–63. New York: Berghahn Books, 2005. Silver, Nate. “In Silicon Valley, Technology Talent Gap Threatens G.O.P. Campaigns.” New York Times, November 28, 2012. “Similarities between Sanskrit and Programming Languages.” uttiSTha bhArata. Accessed August 16, 2013. http://uttishthabharata.wordpress.com/2011/05/30/sanskrit-programming/.

“Exposure, Training, and Environment: Women’s Participation in Computing Education in the United States and India.” Journal of Women and Minorities in Science and Engineering 15, no. 3 (2009): 205–22. Wadhwa, Vivek. “The Face of Success, Part I: How the Indians Conquered Silicon Valley.” Inc.com, January 13, 2012. http://www.inc.com/vivek-wadhwa/how-the-indians-succeeded-in-silicon-valley.html. Wallis, Christopher. “The Descent of Power: Possession, Mysticism, and Initiation in the Śaiva Theology of Abhinavagupta.” Journal of Indian Philosophy 36, no. 2 (2008): 247–95. Warner, Melanie. “The Indians of Silicon Valley.” Money.cnn.com, May 15, 2000. http://money.cnn.com/magazines/fortune/fortune_archive/2000/05/15/279748/. West, James L. III, ed. Conversations with William Styron. Limited ed. Jackson: University Press of Mississippi, 1985.

This famous “brain drain,” which once so irritated some IIT faculty that they refused to write recommendation letters to American universities for their students, has been reimagined as “brain circulation” with attendant flows of remittances and expertise back to the home country. As Indian geeks have gained prominence and power abroad—especially in Silicon Valley—they have been instrumental in driving and facilitating investments by international companies in India. In the American computer industry, the presence of Indians is impossible to miss—by 2005, Indians had created 26 percent of all immigrant-founded tech start-ups in the US. By 2012, this percentage had increased to 33.2 percent, more than the next eight ethnic groups combined (immigrants from China, the United Kingdom, Canada, Germany, Israel, Russia, Korea, and Australia).57 In a 2013 interview, the executive chairman of Google, Eric Schmidt, said, “Forty percent of the startups in Silicon Valley are headed by India-based entrepreneurs.”58 And, according to Vinod Khosla, IIT graduate and co-founder of Sun Microsystems, “Microsoft, Intel, PCs, Sun Microsystems—you name it, I can’t imagine a major area where Indian IIT engineers haven’t played a leading role.”59 The ubiquity of the Indian geek has been recognized even by popular American media in the figure of Raj Koothrappali, a character on the television show The Big Bang Theory.


pages: 455 words: 133,322

The Facebook Effect by David Kirkpatrick

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Andy Kessler, Burning Man, delayed gratification, demand response, don't be evil, global village, happiness index / gross national happiness, Howard Rheingold, Jeff Bezos, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Network effects, Peter Thiel, rolodex, Sand Hill Road, sharing economy, Silicon Valley, Silicon Valley startup, Skype, social graph, social software, social web, Startup school, Steve Ballmer, Steve Jobs, Stewart Brand, the payments system, The Wealth of Nations by Adam Smith, Whole Earth Review, winner-take-all economy, Y Combinator

Anything like that would be phenomenal for a year-old company led by a twenty-year-old with seven employees and annualized revenues of less than $1 million. But Parker was wrong. He got more. As soon as word got out that Thefacebook was contemplating an investment, the Silicon Valley greed machine kicked into high gear. Inquiries started pouring in. Cell phones at Thefacebook rang incessantly. Ron Conway, one of the most connected men in Silicon Valley and a veteran angel investor, was giving Parker advice about who to talk to and what to say. He was also making email introductions to established Silicon Valley companies and key venture capital firms. (Zuckerberg now says he didn’t know about most of this activity at the time.) Investor interest was further heightened when the Los Angeles Times wrote a front-page story about Thefacebook on January 23, the first big story ever about the company in a major media publication.

The investors didn’t much appreciate Parker’s rock-and-roll lifestyle, either. He would work weeks on end to accomplish some company objective, sleeping in the office, then not come in at all for days. Finally they booted him out. In the end they even hired a private investigator to document his alleged misbehavior. Parker was among the growing number of Silicon Valley executives who were becoming convinced that social networking would become a very big business. In the fall of 2003, Silicon Valley venture investors had put a total of $36 million into four high-profile social networking start-ups—Friendster, LinkedIn, Spoke, and Tribe. In late March, not long after Thefacebook took over the Stanford campus in mere days, Parker sent Zuckerberg an email out of the blue. He played up his Napster bona fides and offered to introduce Zuckerberg to savvy San Francisco investors who understood social networking.

Thefacebook made explicit efforts to be a cool place to work, almost to the point of caricature. Appearance mattered. When Jeff Rothschild started at Thefacebook he dressed like a typical middle-aged, nerdy Silicon Valley engineer—clunky running shoes and a shirt tucked into khaki pants or loose jeans. About a month later a friend ran into him at the airport. He was wearing designer jeans with his shirttail untucked in the hipster manner. “Jeff, what happened?” his friend asked. “They said I was making them look bad,” Rothschild replied. “They weren’t going to let me back into the office.” The other employees started calling Rothschild “J-Ro.” “Part of our company mission was to be the coolest company in Silicon Valley,” says Parker. “I played up the idea that this should be a fun, rock-’n’-roll place to work.” That’s why he hired graffiti artist David Choe to paint the office and had his girlfriend add a little special something in the ladies’ room.


pages: 398 words: 108,889

The Paypal Wars: Battles With Ebay, the Media, the Mafia, and the Rest of Planet Earth by Eric M. Jackson

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bank run, business process, call centre, creative destruction, disintermediation, Elon Musk, index fund, Internet Archive, iterative process, Joseph Schumpeter, market design, Menlo Park, Metcalfe’s law, money market fund, moral hazard, Network effects, new economy, offshore financial centre, Peter Thiel, Robert Metcalfe, Sand Hill Road, shareholder value, Silicon Valley, Silicon Valley startup, telemarketer, The Chicago School, the new new thing, Turing test

Gross, a trustee at Cal Tech, opened an Idealab office in Silicon Valley and drew up plans to take his own company public. Even though Idealab proper never provided Confinity with managerial guidance or support, Peter had welcomed its subsidiary’s participation in our second venture round because of the credibility and name recognition it brought to the table. But from our perspective it now looked as if our investment partner liked what it saw during its due diligence so much that it decided to double down with another payments startup. Like X.com two months before, PayMe launched with a media splash. Founder Dan Grigsby trumpeted his service as a technological breakthrough that solved “the awkward situation of collecting money from friends,” and Idealab proudly hailed PayMe as the first company launched by its Silicon Valley office.17 Responding to what he viewed as an act of corporate betrayal, Peter vehemently pushed Gross either to shutter his new venture or to sell back Idealab’s stake in Confinity.

In late July the company assembled at a winery nestled in the foothills of the Santa Cruz Mountains for PayPal’s annual offsite retreat. The executive team chose this site in the rolling, golden hills that form the western edge of Silicon Valley to review major business issues in a relaxing setting away from the busy office. In some ways this perch—looking down on the Valley—was an appropriate setting for a dot-com that had accomplished as much as ours. PayPal survived the NASDAQ crash, outmaneuvered its myriad competitors, slugged its way to profitability, signed up millions of customers, became the first dot-com to IPO following September 11, and had just negotiated a blockbuster sale to an established company. By all accounts, PayPal had reached the pinnacle of Silicon Valley success, and now it was time to reflect on the company’s next steps while also pausing to celebrate its accomplishments. Following a series of presentations on the state of the business by Max, Roelof, and Sacks, employees were dismissed to an outdoor terrace for wine, hors d’oeuvres, and sumo wrestling.

Not conflict with guns or tanks, but a mighty business struggle waged with ingenuity, determination, and plenty of midnight oil. When PayPal’s online payment service debuted toward the end of the dot-com boom, it set in motion a chain of events that would ultimately pit the company’s talented entrepreneurs, revolutionary technology, and bold vision for global currency change against one of the fiercest series of challenges ever endured by a Silicon Valley startup. At the risk of giving away the ending, PayPal managed to survive the onslaught—but just barely. After several years of erratic ups and downs, the venture reached profitability, registered 40 million users, became the first Internet company to stage an IPO following the 9/11 terrorist attacks, and eventually sold out to a much bigger firm. While this is an impressive track record by most standards, it’s far short of what our group initially hoped to accomplish.


pages: 304 words: 88,495

The Powerhouse: Inside the Invention of a Battery to Save the World by Steve Levine

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colonial rule, Elon Musk, energy security, oil shale / tar sands, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, Yom Kippur War

• • • Kumar arrived on the cusp of a powerful surge of Asian immigrants into Silicon Valley and throughout the American technology industry. Asians already held a third of the technology jobs in the Valley and were half of the software developers.1 More than a quarter of American doctoral degree recipients as a whole were foreign born and half of those from Asia.2 In engineering and computer science, about 40 percent of the Ph.D.s were born abroad.3 These demographics created racial tension. A black leader in Silicon Valley said the Asian employment bulge was not incidental—technology companies, she said, “do not want to employ Americans. They import labor from overseas, pushing for H-1B visas,” residency permits allotted annually to specially skilled foreigners. It was true that there were relatively few blacks in Silicon Valley technology. But there was no evidence that any particular racial group was favored or excluded.

In the view of both Chamberlain and Amine, the powerful combination of the two could win the long game against the Asian giants. Both men were also contemplating the personal payoffs to come. Chamberlain was already superlatively ambitious, but the Hub offered another dimension of opportunity. A battery guy in the Bay Area had remarked that if he managed to oversee the big leap in batteries, he would be made in Silicon Valley—everyone would know his name. That notion—that he might “stand out in Silicon Valley”—fixed Chamberlain’s attention. He had failed to do so when he was raising money for his start-ups, but his Bay Area friend might be correct that the Hub could finally attest that he had done it before. 23 Team Argonne Scientists had been working for two centuries on the battery. It was a hard problem. If you did not believe success possible—if you would not sit down with your colleagues and work it out in the open—a super-battery would never happen.

Musk’s bet was that a pure engineering play—a sizzling concentration of high-tech luxury on wheels—could win the market before anyone created a super battery, perhaps long before. It was a brave, clever, and altogether unpredictable maneuver. Musk, a doyen of Silicon Valley with a bachelor’s degree in physics, was thumbing his nose at scientists: his senior team seemed old school, with a former Toyota executive in charge of manufacturing and a Mazda man as chief designer; only JB Straubel, his chief technical officer, was a standard product of Silicon Valley, with a master’s degree from Stanford and a string of technology jobs. And though they invented no new battery materials, their cars were unlike anyone else’s. They were propelled by “18650s,” cylindrical nickel-cobalt-aluminum batteries with the same general appearance as AAs made for cameras, only larger.


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

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accounting loophole / creative accounting, Albert Einstein, Alvin Roth, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, corporate raider, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, information asymmetry, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, Kenneth Arrow, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, ought to be enough for anybody, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

Getting the balancing act right is difficult, but through a fortuitous confluence of circumstances, Silicon Valley did it by evolving a novel structure for the labor market for computer engineers. Why Silicon Valley? What made it such a fertile marketplace of ideas? Most industry experts in the 1970s would have predicted that the center of the computer industry would not be Silicon Valley but Route 128 near Boston, Massachusetts. Route 128 was already home to a thriving computer industry. Its firms were the most dynamic in the world. Close to Massachusetts Institute of Technology, it could tap many of the best brains in computer science. But it faded from the scene as Silicon Valley charged ahead. What was the difference? Silicon Valley’s success traces back to a variety of factors. The proximity to and help from Stanford University’s engineering school got Silicon Valley started, and Stanford continued to supply it with a flow of highly trained engineers and managers.

The lifestyle in California attracted educated young people to stay or move there. The propensity of the leading Silicon Valley firms to subcontract most manufacturing tasks made for flexibility. The ready availability of venture capital made it easy to start new firms, though this is as much a symptom of Silicon Valley’s success as a cause of it. Luck also undoubtedly played a role. The main reason for Silicon Valley’s success, argued Annalee Saxenian in Regional Advantage, her influential book on what makes Silicon Valley tick, is its culture of mobility and sharing. The labor market for engineers operated differently in Silicon Valley than in Route 128. Unencumbered by tradition, Silicon Valley developed a culture of open relationships between employees of competing firms. Ideas were freely exchanged.

Loyalty to the company and long-term employment were valued. Ideas were tightly held within firms. The job-hopping in Silicon Valley is frenetic. Engineers average a short eleven months in any one job (compared with the three years’ job tenure of the average American). “The mobility among people strikes me as radically different from the world I came from out East,” remarked a Silicon Valley manager. “There is far more mobility and far less real risk in people’s careers.” The job mobility has two consequences, one direct and one indirect. Engineers moving to new jobs take with them what they learned in their old jobs. New ideas are in this way spread through the industry. “Here in Silicon Valley there’s far greater loyalty to one’s craft than to one’s company,” said a manager. “If you are a circuit designer, it’s important for you to do excellent work.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

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activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

“I think it has a lot to do with the way Silicon Valley was formed and the university culture. The egalitarian culture. The liberal culture there. People are often surprised by that. . . . And I always try to explain to people that people actually came to Google not to get wealthy, but to change the world. And I genuinely believe that.” Another way to believe our plutocrats are heroes battling for the collective good is to think of capitalism as a liberation theology—free markets equal free people, as the editorial page of the Wall Street Journal asserts. One of the most convincing settings for this vision is Moscow, where in October 2010 you could hear it ringingly delivered by Pitch Johnson, one of the founders of the venture capital business in Silicon Valley, in a public lecture to business school students about capitalism and innovation.

His first step was the classic developing market technique of copying what was working elsewhere: he bought and invested in Mail.ru, the Russian equivalent of Hotmail, and Odnoklassniki, Russia’s Facebook. The Cyrillic alphabet, which had sometimes been a barrier to Russia’s success in the global economy, turned out to be a boon for Milner, making it harder for Silicon Valley to conquer his domestic market. But winning in the Russian technology market wasn’t enough for Milner. He decided that his failure in Russia had taught him to be faster and hungrier than the Americans he had met at Wharton. Now that he understood how to respond to revolution, he would take that talent to the place where the biggest transformation in the world was happening: Silicon Valley. Milner was the first major outside investor in Facebook, a coup he pulled off in May 2009 by agreeing to terms that seemed ridiculous to the Valley: $200 million for a 1.96 percent stake, valuing the five-year-old company at more than $1 billion, and with no board seats.

Google, they believed, was the ship, and the social networking revolution was the wave: Google would either learn to ride it—or drown. Even for Google, a company whose insurgent founders are still in their thirties, responding to revolution is hard. One reason Google may have a chance is that the business leaders of Silicon Valley, like those in the emerging markets, made their first fortunes by responding to revolution. For them, constant change is the status quo. Indeed, responding to revolution is so central to Silicon Valley culture that the most successful entrepreneurs have developed a culture of continuous revolution. Caroline O’Connor and Perry Klebahn, at Stanford’s design school, call this the ability to “pivot.” Groupon, which began as a platform for collective political action; PayPal, which started as a way of “beaming” money between mobile phones, and then pivoted to become eBay’s banking network; and Twitter, which was a later iteration of a failed podcasting start-up, are all, according to O’Connor and Klebahn, examples of successful pivots.


pages: 222 words: 54,506

One Click: Jeff Bezos and the Rise of Amazon.com by Richard L. Brandt

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Amazon Web Services, automated trading system, big-box store, call centre, cloud computing, Dynabook, Elon Musk, inventory management, Jeff Bezos, Kevin Kelly, Marc Andreessen, new economy, science of happiness, search inside the book, Silicon Valley, Silicon Valley startup, skunkworks, software patent, Steve Jobs, Stewart Brand, Tony Hsieh, Whole Earth Catalog, Y2K

“Shel” Kaphan, a well-known engineer who had been bouncing from start-up to start-up in Silicon Valley in search of one that would become the next Apple Computer. It was early 1994. Kaphan had a B.A. in mathematics from the University of California in Santa Cruz, the laid-back university and surfer town where he grew up. But by the mid-1990s, Santa Cruz, seventy miles down the coast from San Francisco and thirty-five miles southwest of San Jose, had become something of a Silicon Valley suburb. Several technology companies had moved or grown up there, and people (like Kaphan) who preferred the coastal, hippie-ish culture of Santa Cruz commuted to Silicon Valley. Kaphan’s reputation as a superb programmer had spread throughout Silicon Valley over the twenty years he had worked there, but he had not yet ended up at a successful start-up where he could make his fortune.

Another came in 1991, when the Internet was opened up to commercial use for the first time. It took several more years before these changes caught on and spread to popular awareness. In 1993, a government-funded group at the University of Illinois at Urbana-Champaign created a new generation of Web browser called Mosaic, a wonderful, graphics-based browser. The following year, a very astute Silicon Valley venture capitalist named John Doerr decided to recruit a bright young man, Marc Andreessen, from the Mosaic team in Illinois to move to Silicon Valley and start a Web browser company. That same year the company, called Netscape, launched its browser, Navigator. Shaw decided the Internet had a future, and gave Bezos the task of finding the opportunities there. In the spring of 1994, he began researching the Internet, and was impressed with what he found. Primarily, he says, he came across an important statistic: The Internet was growing at 2,300 percent a year!

While most entrepreneurs were moving to Silicon Valley as the obvious place to become an entrepreneur, Jeff took a different approach: Yes, he would create another deal flow list to help decide. He came up with three criteria: It had to be a place with an established population of entrepreneurs and software programmers. He wanted to locate the business in a state with a relatively low population because only residents of that state would have to pay sales tax on the products he sold. He wanted a city near a warehouse run by one of the major book distributors so he could get supplies quickly. But the city also had to be a major metropolitan hub with an airport offering a lot of daily flights so he could deliver books to his customers quickly. The city that best suited the criteria was not in Silicon Valley. Bezos found that Seattle, Washington—the birthplace of Microsoft—best fit the bill.


pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

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affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

It was no coincidence that the main corporate heroes of the period all hailed from a place famous for small, agile firms—the thin sliver of land between San Jose and San Francisco that had once been known as the Valley of Heart’s Delight. SILICON VALLEY In 1996, with the Internet revolution gathering pace, John Perry Barlow, a Grateful Dead songwriter and cyber guru, issued the following warning: “Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of the Mind. I ask you of the past to leave us alone. You are not welcome among us.” Silicon Valley’s penchant for hyperbole can be grating. All the same, the business ideas that the Valley pioneered, combined with the technology it invented, helped unbundle the company still further. Silicon Valley’s story actually dates back to 1938, when David Packard and a fellow Stanford engineering student, Bill Hewlett, set up shop in a garage in Palo Alto.

To its shame, the Valley turned to the American government for protection, but it also successfully changed shape, outsourcing its manufacturing and diversifying from chips into computer software. This metamorphosis underlined what set the Valley apart.20 America’s other high-tech center, Boston’s Route 128, boasted just as much venture capital, and just as many universities. Yet, when both clusters fell from grace in the mid-1980s, Silicon Valley proved far more resilient. The reason was structural. Big East Coast firms such as Digital Equipment and Data General were self-contained empires that focused on one product, mini-computers. Silicon Valley’s network of small firms endlessly spawned new ones. It was for much the same reason that the Internet business found a natural home in northern California. The late 1990s saw an unprecedented number of young Valley firms going public. In 2000 alone, some $20 billion of venture capital was pumped into the region.

In 2000 alone, some $20 billion of venture capital was pumped into the region. By then, the Internet bubble was already bursting. Even allowing for that (and all the Valley’s other drawbacks, such as high house prices, terrible traffic, and unrelenting ugliness), the region still counted as the most dynamic industry cluster in the world. By 2001, Silicon Valley provided jobs for 1.35 million people, roughly three times the figure for 1975, its productivity and income levels were roughly double the national averages, and it collected one in twelve new patents in America.21 Silicon Valley changed companies in two ways. The first was through the products it made. At the heart of nearly all of them was the principle of miniaturization. In the last three decades of the twentieth century, the cost of computing processing power tumbled by 99.99 percent—or 35 percent a year.22 Computers thrust ever more power down the corporate hierarchy—to local area networks, to the desktop, and increasingly to outside the office altogether.


pages: 226 words: 69,893

The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius and Betrayal by Ben Mezrich

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Mark Zuckerberg, old-boy network, Peter Thiel, rolodex, side project, Silicon Valley, social web

Somewhere in the past few weeks, Mark had explained, in his dorm room over a six-pack of Beck’s, he had come to the conclusion that for the next few months, California seemed like the place he should be. He wanted to work on Wirehog and thefacebook in Silicon Valley—a place of legend, to computer programmers like Mark, the land of all of his heroes. Coincidentally, Andrew McCollum had landed a job at Silicon Valley-based EA sports, and Adam D’Angelo was going as well. Mark and his computer friends had even found a cheap sublet on a street called La Jennifer Way in Palo Alto, right near the Stanford campus. To Mark, it seemed like a perfect plan. He’d bring Dustin along, they’d set up shop in the rental house, and thefacebook and Wirehog would be right where they belonged. California. Silicon Valley. The epicenter of the online world. Even a day later, Eduardo still hadn’t come to terms with Mark’s second bombshell. In truth, he didn’t like the sound of it all; not only was California as far away from New York as you could get—but it was also, to him, a dangerous and seductive place.

Like any kid his age—with the fame he’d acquired through Napster and Plaxo—Sean liked to party. He liked girls. He certainly wasn’t a saint. He was in his early twenties, a kind of Silicon Valley rock star; and he talked really fast, thought really fast. There was a certain jerky, frenetic quality to him—a quality that could be easily misinterpreted. So maybe they had something on him—maybe they didn’t. In any event, in Sean’s view Moritz locked him out. Made him resign from his own company. Made him hand over the keys to his own fucking creation. At the same time, Sean believed he had lost both a company and his two former best friends. It had been ugly, and it had been pathetic, and in Sean’s view it had been unfair. But, well, it had happened. Not just to him—in Silicon Valley, it happened all the time. That was the thing about VC money. It was awesome—until it wasn’t. Plaxo had ended badly, but that hadn’t meant it was over for Sean Parker.

Watching him program at four, five in the morning—every morning—Sean had no doubt that Mark had the makings of one of the truly great success stories in the modern, revitalized Silicon Valley. But where was Eduardo Saverin? Or more accurately—was Eduardo Saverin even part of the equation anymore? Eduardo had seemed like a perfectly nice kid. And of course, he’d been there in the beginning. He’d put up a thousand dollars, according to Mark, to pay for the first servers. And it was his money, at the moment, that was financing the current operation. That gave him some weight, sure, like any investor in a start-up. But beyond that? Eduardo saw himself as a businessman—but what did that mean, exactly? Silicon Valley wasn’t about business—it was an ongoing war. You had to do things out here to survive that weren’t taught in any business class.


pages: 239 words: 70,206

Data-Ism: The Revolution Transforming Decision Making, Consumer Behavior, and Almost Everything Else by Steve Lohr

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23andMe, Affordable Care Act / Obamacare, Albert Einstein, big data - Walmart - Pop Tarts, bioinformatics, business intelligence, call centre, cloud computing, computer age, conceptual framework, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, Danny Hillis, data is the new oil, David Brooks, East Village, Edward Snowden, Emanuel Derman, Erik Brynjolfsson, everywhere but in the productivity statistics, Frederick Winslow Taylor, Google Glasses, impulse control, income inequality, indoor plumbing, industrial robot, informal economy, Internet of things, invention of writing, John Markoff, John von Neumann, lifelogging, Mark Zuckerberg, market bubble, meta analysis, meta-analysis, money market fund, natural language processing, obamacare, pattern recognition, payday loans, personalized medicine, precision agriculture, pre–internet, Productivity paradox, RAND corporation, rising living standards, Robert Gordon, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, speech recognition, statistical model, Steve Jobs, Steven Levy, The Design of Experiments, the scientific method, Thomas Kuhn: the structure of scientific revolutions, unbanked and underbanked, underbanked, Von Neumann architecture, Watson beat the top human players on Jeopardy!

“We’re working on it,” Botts says. 5 THE RISE OF THE DATA SCIENTIST The San Francisco office of Cloudera resides on the eleventh floor of a modern office building on California Street in the city’s financial district. In recent years, a San Francisco office for fast-growing technology companies headquartered in Silicon Valley has become a popular amenity—and one that reflects the shifting topography of entrepreneurialism, talent, and taste in northern California’s Bay Area. Not so long ago, the boundaries were clear-cut. Silicon Valley had all of the start-ups and the engineering wizardry. San Francisco had trendy culture, fine dining, and old money. But the Valley’s monopoly on entrepreneurial vigor has been broken decisively by the rise of San Francisco–based technology companies ranging from Twitter to Salesforce.com, a supplier of Internet software for companies.

The other cofounder was Matt Rogers, a younger Apple alumnus. They recruited an impressive team of Silicon Valley talent in hardware, software, design, and data analysis. They won the backing of blue-chip venture capital firms including Kleiner Perkins Caufield & Byers and the investment arm of Google, as well as Generation Investment Management, cofounded by Al Gore and dedicated to environmentally responsible investments. The founders’ pitch was that Nest had a historic opportunity to transform the conventional thermostat from a dumb switch into a clever digital assistant that would save home owners money, reduce energy consumption, and curb pollution. A few industrial companies sold programmable thermostats, but they proved to be so hard to program that few people did. The Silicon Valley start-up would make a digital device that didn’t ask users to program it.

“Think about mental disorders,” he urged the audience, “as one of the most critical and most challenging data problems for us out there.” When Hammerbacher gave that Silicon Valley talk, he was already moving toward medicine as his next act. By then, he had become a director of Sage Bionetworks, the nonprofit organization to promote the sharing of medical data. In the fall of 2011, one of the nonprofit’s founders, Eric Schadt, had moved to New York, taking a job at Mount Sinai. Shortly thereafter, Hammerbacher was on a business trip to the East Coast and dropped by Mount Sinai. A renowned researcher in genomics and biomathematics, Schadt had shuttled between the research labs of a couple of big pharmaceutical companies and biotech start-ups. Before Mount Sinai, he was the chief science officer at Pacific Biosciences, a gene sequencing company in Silicon Valley. Schadt did not move east for an ordinary job.


pages: 317 words: 84,400

Automate This: How Algorithms Came to Rule Our World by Christopher Steiner

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23andMe, Ada Lovelace, airport security, Al Roth, algorithmic trading, backtesting, big-box store, Black-Scholes formula, call centre, cloud computing, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, Donald Trump, Douglas Hofstadter, dumpster diving, Flash crash, Gödel, Escher, Bach, High speed trading, Howard Rheingold, index fund, Isaac Newton, John Markoff, John Maynard Keynes: technological unemployment, knowledge economy, late fees, Marc Andreessen, Mark Zuckerberg, market bubble, medical residency, money market fund, Myron Scholes, Narrative Science, PageRank, pattern recognition, Paul Graham, Pierre-Simon Laplace, prediction markets, quantitative hedge fund, Renaissance Technologies, ride hailing / ride sharing, risk tolerance, Sergey Aleynikov, side project, Silicon Valley, Skype, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, transaction costs, upwardly mobile, Watson beat the top human players on Jeopardy!, Y Combinator

A TALE OF TWO COASTS Jeffrey Hammerbacher is one of the linchpins in the tale of quant talent drifting away from the steady riches of Wall Street for the unpredictable and meritocratic zone of Silicon Valley. He’s a symbol of all that’s different between the two worlds. One side uses bots and algorithms to chop up subprime mortgages and peddle them to unsuspecting German banks that end up eating the debt for pennies on the dollar—sorry about that!—and to trade stocks at fast speeds that do in fact benefit the public in lower transaction costs, but also cost them in the way of higher volatilities and the possibility of epic chaos. The other side, Silicon Valley, uses similar brains and technology to create a game that may keep you entertained for fifteen minutes a day. The best products from the Silicon Valley help you keep in touch with relatives, trace your family’s origins, teach your daughter calculus, or smooth your relationship with your health insurer.

Hammerbacher wants his platform to be as applicable for a cancer researcher as it is for a game company determining how to serve users with just the right amount of “buy” buttons. The Valley thinks he’s on to something; Hammerbacher and the rest of the Cloudera founders have raised $76 million in venture capital, an outsized number for a software company so young. Hammerbacher is one of a troupe that has shifted from lower Manhattan to Silicon Valley to help inject Wall Street–style data mashing into our everyday lives. Investment banks and trading houses learned to build their data mines into ramparts that can ward off competition, and now these kinds of defenses are being erected in Silicon Valley. “Facebook has more information about your clickstream than it does of photos of your friends,” says Glenn Kelman, Redfin’s CEO. “Web sites that have built scale are learning to dominate all others because they’re the ones with the data to optimize.” Zynga, which makes the ubiquitous FarmVille game, was founded in 2007 by Mark Pincus.

The Medallion Fund employs algorithms trading millions of shares of, as founder Jim Simons puts it, “anything that moves.” At its historical pace the Medallion Fund would turn $100,000 into more than $20 million in just twenty years. When exceedingly smart, calculating people begin turning down Renaissance riches for undetermined outcomes in Silicon Valley, the pendulum has officially swung 100 percent away from Wall Street. “It used to be if you went to Harvard or Yale, you wanted to be a finance titan,” Kelman says. “But now everybody wants to be a Zuckerberg.” THE DAMAGE WROUGHT BY WALL STREET Where would our economy be without Silicon Valley and its software bots? As bad as the economy looked in 2008–2011, it would be far worse without the string of innovation that the Valley has continually dished out. We could likely even be better off had Wall Street not been sucking up so much of our country’s technical talent—and the algorithms they built—for so long.


pages: 292 words: 85,151

Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It) by Salim Ismail, Yuri van Geest

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23andMe, 3D printing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, bioinformatics, bitcoin, Black Swan, blockchain, Burning Man, business intelligence, business process, call centre, chief data officer, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, cognitive bias, collaborative consumption, collaborative economy, commoditize, corporate social responsibility, cross-subsidies, crowdsourcing, cryptocurrency, dark matter, Dean Kamen, dematerialisation, discounted cash flows, distributed ledger, Edward Snowden, Elon Musk, en.wikipedia.org, ethereum blockchain, Galaxy Zoo, game design, Google Glasses, Google Hangouts, Google X / Alphabet X, gravity well, hiring and firing, Hyperloop, industrial robot, Innovator's Dilemma, intangible asset, Internet of things, Iridium satellite, Isaac Newton, Jeff Bezos, Kevin Kelly, Kickstarter, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, lifelogging, loose coupling, loss aversion, Lyft, Marc Andreessen, Mark Zuckerberg, market design, means of production, minimum viable product, natural language processing, Netflix Prize, Network effects, new economy, Oculus Rift, offshore financial centre, p-value, PageRank, pattern recognition, Paul Graham, peer-to-peer, peer-to-peer model, Peter H. Diamandis: Planetary Resources, Peter Thiel, prediction markets, profit motive, publish or perish, Ray Kurzweil, recommendation engine, RFID, ride hailing / ride sharing, risk tolerance, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Silicon Valley, skunkworks, Skype, smart contracts, Snapchat, social software, software is eating the world, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, subscription business, supply-chain management, TaskRabbit, telepresence, telepresence robot, Tony Hsieh, transaction costs, Tyler Cowen: Great Stagnation, urban planning, WikiLeaks, winner-take-all economy, X Prize, Y Combinator, zero-sum game

Meanwhile, other traditional industries, including real estate and automotive, are already succumbing to this new zeitgeist. The automobile industry in particular has had its cage rattled by the emergence of the all-electric Tesla. While the Tesla is a high-performance luxury car, it’s much more than just that. In fact, in Silicon Valley, it is common to describe it is as a computer that happens to move—and move very well. Who would ever have predicted that in just three years a Silicon Valley team of (mostly) electrical engineers would have created the safest car ever built? For one thing, they weren’t dragging 120 years of Iron-Age automotive history behind them like an anchor, as Chevrolet was when it designed the Volt, a plug-in that relies on a traditional gas engine to power a generator that charges the battery.

We believe, however, that it’s better to start with a passion to solve a particular problem, rather than to start with an idea or a technology. There are two reasons for this. First, by focusing on the problem space, you are not tied to one particular idea or solution, and thus don’t end up shoehorning a technology into a problem space where it might not be a good fit. Silicon Valley is littered with the carcasses of companies with great technologies searching for a problem to solve. Second, there is no shortage of either ideas or new technologies. After all, everybody in a place like Silicon Valley has an idea for a new tech business. Instead, the key to success is relentless execution, hence the need for passion and the MTP. To demonstrate, consider the number of times the founders of the following companies pitched investors before finally succeeding: Company Number of Investor Pitches Skype 40 Cisco 76 Pandora 300 Google 350 What if Larry Page and Sergey Brin had stopped pitching after 340 attempts?

Yotopoulos and Yates start by leveraging the corporation’s crowd in an incentive competition to see which internal entrepreneurs propose the most compelling business opportunities. The winning teams get all-expense-paid trips to mach49’s Silicon Valley facility. There, they are paired with non-competitive teams from other industries. All the groups are then immersed in Lean startup-style entrepreneurship and design thinking. The goal is to validate business opportunities through prototypes and in-market tests. After working alongside the mach49 team and network, these small, multi-disciplinary teams of corporate intrapreneurs leave with defined, validated opportunities and a clear execution plan. They can then stay on in Silicon Valley to accelerate, be spun back into (or out of) the mother ship, or serve as pilots to pave the way to larger acquisitions or partnerships. While it’s early days yet, we think the model holds extraordinary promise.


pages: 290 words: 87,549

The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions...and Created Plenty of Controversy by Leigh Gallagher

Airbnb, Amazon Web Services, barriers to entry, Bernie Sanders, cloud computing, crowdsourcing, don't be evil, Donald Trump, East Village, Elon Musk, housing crisis, iterative process, Jeff Bezos, Jony Ive, Justin.tv, Lyft, Marc Andreessen, Mark Zuckerberg, medical residency, Menlo Park, Network effects, Paul Buchheit, Paul Graham, performance metric, Peter Thiel, RFID, Sand Hill Road, Saturday Night Live, sharing economy, side project, Silicon Valley, Silicon Valley startup, South of Market, San Francisco, Startup school, Steve Jobs, TaskRabbit, the payments system, Tony Hsieh, Y Combinator, yield management

While they had come very close, they hadn’t died; they had not had to part ways and each return to their own projects. Airbnb had found an audience, and it had started to grow; they had liftoff. In Silicon Valley start-up terms, Chesky, Gebbia, and Blecharczyk had achieved what’s known as “product/market fit,” a holy grail, proof-of-life milestone that a start-up hits when its concept has both found a good market—one with lots of real, potential customers—and demonstrated that it has created a product that can satisfy that market. Popularization of the term is often credited to Marc Andreessen, the celebrated technology entrepreneur–turned–venture capitalist–turned–philosopher-guru to legions of start-up founders in Silicon Valley. Thousands of start-ups fail trying to get to this point. Product/market fit is a key first achievement; without it, there is no company.

“If you pick the right source, you can fast-forward,” he says. He’d already begun this process with Airbnb’s earliest advisers: first, the weekly office-hours sessions with Michael Seibel and Y Combinator’s Paul Graham; then, breakfasts at Rocco’s with Sequoia’s Greg McAdoo. Airbnb’s next investment rounds unlocked access to Silicon Valley icons like Reid Hoffman, Marc Andreessen, and Ben Horowitz, all seen as gurus when it came to the art of building tech companies in Silicon Valley. The more successful Airbnb became, the more top people the founders had access to, and as it began to get bigger, Chesky started seeking out sources for specific areas of study: Apple’s Jony Ive on design, LinkedIn’s Jeff Weiner and Disney’s Bob Iger on management, Facebook’s Mark Zuckerberg on product, and Sheryl Sandberg on international expansion and on the importance of empowering women leaders.

I didn’t give it more than a passing thought. Over the next year or two, though, the company started to gain buzz, edging onto the radar of our tech-reporting team. Someone brought it up internally as a company to watch. Wait a minute, I thought. Those guys? I was not involved with Fortune’s tech coverage, which meant that I didn’t always know what I was talking about when it came to the companies coming out of Silicon Valley. But I also felt that distance gave me a healthy arms’-length perspective on the self-important euphoria that seemed to waft out of the region. As the keeper of Fortune’s “40 under 40” list, I was also used to breathless pitches from companies claiming they would change the world in one year’s time, only to be significantly humbled the next. I sometimes took a certain amount of pleasure in pointing out when I thought certain ideas were overblown and overhyped.


pages: 224 words: 64,156

You Are Not a Gadget by Jaron Lanier

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1960s counterculture, accounting loophole / creative accounting, additive manufacturing, Albert Einstein, call centre, cloud computing, commoditize, crowdsourcing, death of newspapers, digital Maoism, Douglas Hofstadter, Extropian, follow your passion, hive mind, Internet Archive, Jaron Lanier, jimmy wales, John Conway, John von Neumann, Kevin Kelly, Long Term Capital Management, Network effects, new economy, packet switching, PageRank, pattern recognition, Ponzi scheme, Ray Kurzweil, Richard Stallman, Silicon Valley, Silicon Valley startup, slashdot, social graph, stem cell, Steve Jobs, Stewart Brand, Ted Nelson, telemarketer, telepresence, The Wisdom of Crowds, trickle-down economics, Turing test, Vernor Vinge, Whole Earth Catalog

There was a discernible ambient disgust with advertising in an earlier, more hippie like phase of Silicon Valley, before the outlandish rise of Google. Advertising was often maligned back then as a core sin of the bad old-media world we were overthrowing. Ads were at the very heart of the worst of the devils we would destroy, commercial television. Ironically, advertising is now singled out as the only form of expression meriting genuine commercial protection in the new world to come. Any other form of expression is to be remashed, anonymized, and decontextualized to the point of meaninglessness. Ads, however, are to be made ever more contextual, and the content of the ad is absolutely sacrosanct. No one—and I mean no one—dares to mash up ads served in the margins of their website by Google. When Google started to rise, a common conversation in Silicon Valley would go like this: “Wait, don’t we hate advertising?”

Making money in the cloud doesn’t necessarily bring rain to the ground. The Big N Here we come to one way that the ideal of “free” music and the corruption of the financial world are connected. Silicon Valley has actively proselytized Wall Street to buy into the doctrines of open/free culture and crowdsourcing. According to Chris Anderson, for instance, Bear Stearns issued a report in 2007 “to address pushback and other objections from media industry heavyweights who make up a big part of Bear Stearns’s client base.” What the heavyweights were pushing back against was the Silicon Valley assertion that “content” from identifiable humans would no longer matter, and that the chattering of the crowd with itself was a better business bet than paying people to make movies, books, and music.

The winning subculture doesn’t have a formal name, but I’ve sometimes called the members “cybernetic totalists” or “digital Maoists.” The ascendant tribe is composed of the folks from the open culture/Creative Commons world, the Linux community, folks associated with the artificial intelligence approach to computer science, the web 2.0 people, the anticontext file sharers and remashers, and a variety of others. Their capital is Silicon Valley, but they have power bases all over the world, wherever digital culture is being created. Their favorite blogs include Boing Boing, TechCrunch, and Slashdot, and their embassy in the old country is Wired. Obviously, I’m painting with a broad brush; not every member of the groups I mentioned subscribes to every belief I’m criticizing. In fact, the groupthink problem I’m worried about isn’t so much in the minds of the technologists themselves, but in the minds of the users of the tools the cybernetic totalists are promoting.


pages: 283 words: 85,824

The People's Platform: Taking Back Power and Culture in the Digital Age by Astra Taylor

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A Declaration of the Independence of Cyberspace, American Legislative Exchange Council, Andrew Keen, barriers to entry, Berlin Wall, big-box store, Brewster Kahle, citizen journalism, cloud computing, collateralized debt obligation, Community Supported Agriculture, conceptual framework, corporate social responsibility, creative destruction, cross-subsidies, crowdsourcing, David Brooks, digital Maoism, disintermediation, don't be evil, Donald Trump, Edward Snowden, Fall of the Berlin Wall, Filter Bubble, future of journalism, George Gilder, Google Chrome, Google Glasses, hive mind, income inequality, informal economy, Internet Archive, Internet of things, invisible hand, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Julian Assange, Kevin Kelly, Kickstarter, knowledge worker, Mark Zuckerberg, means of production, Metcalfe’s law, Naomi Klein, Narrative Science, Network effects, new economy, New Journalism, New Urbanism, Nicholas Carr, oil rush, peer-to-peer, Peter Thiel, Plutocrats, plutocrats, pre–internet, profit motive, recommendation engine, Richard Florida, Richard Stallman, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley ideology, slashdot, Slavoj Žižek, Snapchat, social graph, Steve Jobs, Stewart Brand, technoutopianism, trade route, Whole Earth Catalog, WikiLeaks, winner-take-all economy, Works Progress Administration, young professional

And there is no guarantee that the lucky few who find success in the winner-take-all economy online are more diverse, authentic, or compelling than those who succeeded under the old system. Despite the exciting opportunities the Internet offers, we are witnessing not a leveling of the cultural playing field, but a rearrangement, with new winners and losers. In the place of Hollywood moguls, for example, we now have Silicon Valley tycoons (or, more precisely, we have Hollywood moguls and Silicon Valley tycoons). The pressure to be quick, to appeal to the broadest possible public, to be sensational, to seek easy celebrity, to be attractive to corporate sponsors—these forces multiply online where every click can be measured, every piece of data mined, every view marketed against. Originality and depth eat away at profits online, where faster fortunes are made by aggregating work done by others, attracting eyeballs and ad revenue as a result.

While the percentage of computer and information sciences degrees women earned rose from 14 percent to 37 percent between 1970 and 1985, that share declined to 18 percent by 2008.15 An article in the New York Times about gender and tech reported on the barriers women face in Silicon Valley: Facebook’s Sheryl Sandberg and Yahoo!’s Marissa Mayer excepted, the notion of the boy genius prevails. Over 85 percent of venture capitalists are men looking to invest in other men, and women make forty-nine cents for every dollar their male counterparts rake in. Though 40 percent of private businesses are women-owned nationwide, only 8 percent of the venture-backed tech start-ups are. Established companies are equally segregated. The National Center for Women and Information Technology reports that of the top one hundred tech companies, only 6 percent of chief executives are women.16 The numbers for Asians who ascend to the top are comparable despite the fact that they make up a third of all Silicon Valley software engineers.17 In 2010, not even 1 percent of the founders of Silicon Valley companies were black.18 Data on gender within online communities, routinely held up as exemplars of a new, open culture, are especially damning.

There have been revelations about the existence of a sprawling international surveillance infrastructure, uncompetitive business and exploitative labor practices, and shady political lobbying initiatives, all of which have made major technology firms the subjects of increasing scrutiny from academics, commentators, activists, and even government officials in the United States and abroad.3 People are beginning to recognize that Silicon Valley platitudes about “changing the world” and maxims like “don’t be evil” are not enough to ensure that some of the biggest corporations on Earth will behave well. The risk, however, is that we will respond to troubling disclosures and other disappointments with cynicism and resignation when what we need is clearheaded and rigorous inquiry into the obstacles that have stalled some of the positive changes the Internet was supposed to usher in.


pages: 320 words: 87,853

The Black Box Society: The Secret Algorithms That Control Money and Information by Frank Pasquale

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Affordable Care Act / Obamacare, algorithmic trading, Amazon Mechanical Turk, American Legislative Exchange Council, asset-backed security, Atul Gawande, bank run, barriers to entry, basic income, Berlin Wall, Bernie Madoff, Black Swan, bonus culture, Brian Krebs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chelsea Manning, Chuck Templeton: OpenTable, cloud computing, collateralized debt obligation, computerized markets, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, Debian, don't be evil, drone strike, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, financial innovation, financial thriller, fixed income, Flash crash, full employment, Goldman Sachs: Vampire Squid, Google Earth, Hernando de Soto, High speed trading, hiring and firing, housing crisis, informal economy, information asymmetry, information retrieval, interest rate swap, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, Julian Assange, Kevin Kelly, knowledge worker, Kodak vs Instagram, kremlinology, late fees, London Interbank Offered Rate, London Whale, Marc Andreessen, Mark Zuckerberg, mobile money, moral hazard, new economy, Nicholas Carr, offshore financial centre, PageRank, pattern recognition, Philip Mirowski, precariat, profit maximization, profit motive, quantitative easing, race to the bottom, recommendation engine, regulatory arbitrage, risk-adjusted returns, Satyajit Das, search engine result page, shareholder value, Silicon Valley, Snapchat, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, the scientific method, too big to fail, transaction costs, two-sided market, universal basic income, Upton Sinclair, value at risk, WikiLeaks, zero-sum game

If so, how and when should citizens get to learn what’s going on? 6 THE BLACK BOX SOCIETY • Should the hundreds of thousands of American citizens placed on secret “watch lists” be so informed, and should they be given the chance to clear their names? The leading firms of Wall Street and Silicon Valley are not alone in the secretiveness of their operations, but I will be focusing primarily on them because of their unique roles in society. While accounting for “less than 10% of the value added” in the U.S. economy in the fourth quarter of 2010, the finance sector took 29 percent— $57.7 billion— of profits.14 Silicon Valley firms are also remarkably profitable, and powerful.15 What finance firms do with money, leading Internet companies do with attention. They direct it toward some ideas, goods, and ser vices, and away from others. They organize the world for us, and we have been quick to welcome this data-driven convenience.

Competitive striving can do as much to trample privacy as to protect it.133 In an era where Big Data is the key to maximizing profit, every business has an incentive to be nosy.134 What the search industry blandly calls “competition” for users and “consent” to data collection looks increasingly like monopoly and coercion. Silicon Valley is no longer a wide-open realm of opportunity. The start-ups of today may be able to sell their bright ideas to the existing web giants. They may get rich doing so. But they’re not likely to become web giants themselves. Silicon Valley promulgates a myth of constant “disruption”; it presents itself as a seething cauldron of creative chaos that leaves even the top-seeded players always at risk. But the truth of the great Internet firms is closer to the oligopolistic dominance of AT&T, Verizon, and Comcast. In 2008, I testified before a congressional committee about Google’s market power.

This latter requirement is worthy of note. I was at a conference dinner talking about some basic principles of search neutrality when a Silicon Valley consultant said abruptly, “We can’t code for neutrality.” He meant that decisions about fair treatment of ordered sites could not be reduced to the algorithms that drive most sites’ operations. When I offered some of the proposals I’ve made in this book, he simply repeated, with a touch of condescension: “Yes, but we can’t code for it, so it can’t be done.” For him, not only the technology, but even the social practices of current operations are unalterable givens of all future policy interventions. Reform will proceed on the Silicon Valley giants’ terms, or not at all. He assumed that if decisions couldn’t be made at the speed of current searches, they oughtn’t happen.


pages: 339 words: 57,031

From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism by Fred Turner

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1960s counterculture, A Declaration of the Independence of Cyberspace, Apple's 1984 Super Bowl advert, back-to-the-land, bioinformatics, Buckminster Fuller, Claude Shannon: information theory, complexity theory, computer age, conceptual framework, Danny Hillis, dematerialisation, distributed generation, Douglas Engelbart, Douglas Engelbart, Dynabook, Electric Kool-Aid Acid Test, From Mathematics to the Technologies of Life and Death, future of work, game design, George Gilder, global village, Golden Gate Park, Hacker Ethic, Haight Ashbury, hive mind, Howard Rheingold, informal economy, invisible hand, Jaron Lanier, John Markoff, John von Neumann, Kevin Kelly, knowledge economy, knowledge worker, market bubble, Marshall McLuhan, mass immigration, means of production, Menlo Park, Mother of all demos, new economy, Norbert Wiener, peer-to-peer, post-industrial society, postindustrial economy, Productivity paradox, QWERTY keyboard, Ralph Waldo Emerson, RAND corporation, Richard Stallman, Robert Shiller, Robert Shiller, Ronald Reagan, Shoshana Zuboff, Silicon Valley, Silicon Valley ideology, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, technoutopianism, Ted Nelson, Telecommunications Act of 1996, theory of mind, urban renewal, Vannevar Bush, Whole Earth Catalog, Whole Earth Review, Yom Kippur War

Jobs are being replaced by projects and fields of work, giving rise to a society that is increasingly ‘jobless but not workless.’”21 This situation was particularly true for the early users of the WELL. As Manuel Castells has pointed out, the electronics industry and its geographical hubs, including the San Francisco Bay area, were among the industries and regions most dependent on network patterns of organization.22 In Silicon Valley, these networks had been coming together for decades. It is tempting to ascribe the rise of network organizations to the rise of networked communication technologies, but in the case of Silicon Valley, at least, it would be inaccurate to do so: there, the increase in networked forms of doing business preceded and in fact helped drive the development of the technologies on which systems like the WELL depended.23 The Valley had been a center for electronics research since the early twentieth century.

Over the next decade, as the personal-computer industry grew and the role of military sponsorship of electronics declined, those networks became increasingly important. By 1984 Silicon Valley’s economy had become the fastest-growing and wealthiest in the United States. Between 1986 and 1990, the region saw the value of its electronics firms grow by $25 billion; by contrast, the Route 128 area of Massachusetts, a region endowed with similar industries but more hierarchical patterns of social and professional life, saw growth of just $1 billion.26 Within the Bay area’s computer industries, the rapid growth, coupled with the constantly changing demands of technical work in this period, helped drive extraordinary professional mobility. Job tenure for Silicon Valley engineers and managers in the early 1980s averaged two to three years; turnover among manual laborers was even more rapid.

In such a fluid employment environment, individuals cultivated professional and V i r t u a l i t y an d C o m m u n i t y o n t h e W E L L [ 151 ] interpersonal networks as key sources of future employment. “A company is just a vehicle which allows you to work,” explained one engineer. Even though individual employers came and went, strong networks allowed the engineers and managers of Silicon Valley to keep working steadily over time.27 Throughout its early years, the WELL population included large numbers of users from the growing computer industry. Most of its members hailed from the San Francisco Bay and Silicon Valley areas. Moreover, its contributors included a substantial number of professionals from other industries that had long depended on networks, including academe, journalism, and consulting. For these users, the WELL offered an electronic forum in which they could meet, exchange information, build reputations, and collaborate.


pages: 289 words: 99,936

Digital Dead End: Fighting for Social Justice in the Information Age by Virginia Eubanks

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affirmative action, Berlin Wall, call centre, cognitive dissonance, creative destruction, desegregation, Fall of the Berlin Wall, future of work, game design, global village, index card, informal economy, invisible hand, Kevin Kelly, knowledge economy, labor-force participation, labour market flexibility, low-wage service sector, microcredit, new economy, post-industrial society, race to the bottom, rent control, Shoshana Zuboff, Silicon Valley, South of Market, San Francisco, telemarketer, Thomas L Friedman, trickle-down economics, union organizing, urban planning, web application, white flight, women in the workforce, working poor

Clean Up after Yourselves Despite its clean image, the high-tech economy, particularly high-tech manufacturing, has proved extremely toxic to the natural environment and dangerous to human health. Municipal and business strategies that aggressively court high-tech industries often result in regional “ecocide.”7 According to the Silicon Valley Toxics Coalition, Superfund sites in Silicon Valley are disproportionately located in communities of color, immigrant communities, and poor communities, which continue to suffer the costs of high-tech legacy pollution after manufacturing moves to areas with less citizen resistance, weaker environmental regulations, and fewer labor protections. Low-paid service workers in high-tech areas like Silicon Valley or Silicon Gulch have little choice but to live in the most environmentally degraded neighborhoods, travel extremely long distances for work, crowd too many people into substandard living spaces, or a combination of all three.

The Discipline of Teams: The Control of Team-Based Industrial Work Through Electronic and Peer Surveillance. Administrative Science Quarterly 43:397–428. 254 References Sewell, Graham, and Barry Wilkinson. 1992. “Someone to Watch Over Me”: Surveillance, Discipline, and the Just-in-Time Labor Process. Sociology: The Journal of the British Sociological Association 26:271–289. Silicon Valley Toxics Coalition. 1997. Silicon Valley Toxic Tour. <http://www.svtc. org/site/PageServer?pagename=svtc_silicon_valley_toxic_tour> (accessed May 17, 2010). Silliman, Jael, Marlene Gerber Fried, Loretta Ross, and Elena Gutierrez. 2004. Undivided Rights: Women of Color Organize for Reproductive Justice. Cambridge, MA: South End Press. Smith, Angela. 2003. Myles Horton, Highlander Folk School and the Wilder Coal Strike of 1932. http://mtsu.academia.edu/AngelaSmith/Papers/87740/Myles-Horton --Highlander-Folk-School--and-the-Wilder-Coal-Strike-of-1932 (accessed May 17, 2010).

Straightforward greed was not what was tying my brain in knots. What I had trouble wrapping my head around was Silicon Valley’s unique way of combining utopian fervor with blatant dissociation from reality, a cognitive dissonance that led me to a personal crisis of conscience and eventually drove me out of the Bay Area. People around me seemed to believe that the high-tech economy was going to lift all boats—lead to better outcomes for everyone—but they were ignoring the obvious evidence of increasing economic inequality that I saw around me every day. How could people simultaneously think they were all going to get filthy rich and make the world a better place for everyone? The people commending the economic miracle in Silicon Valley seemed to be suffering from a kind of collective, consensual blindness, blocking out the gentrification, the skyrocketing rents, and the toxic environmental toll of high-tech industry.


pages: 391 words: 105,382

Utopia Is Creepy: And Other Provocations by Nicholas Carr

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Air France Flight 447, Airbnb, Airbus A320, AltaVista, Amazon Mechanical Turk, augmented reality, autonomous vehicles, Bernie Sanders, book scanning, Brewster Kahle, Buckminster Fuller, Burning Man, Captain Sullenberger Hudson, centralized clearinghouse, cloud computing, cognitive bias, collaborative consumption, computer age, corporate governance, crowdsourcing, Danny Hillis, deskilling, digital map, Donald Trump, Electric Kool-Aid Acid Test, Elon Musk, factory automation, failed state, feminist movement, Frederick Winslow Taylor, friendly fire, game design, global village, Google bus, Google Glasses, Google X / Alphabet X, Googley, hive mind, impulse control, indoor plumbing, interchangeable parts, Internet Archive, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, Jeff Bezos, jimmy wales, job automation, Kevin Kelly, lifelogging, low skilled workers, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, Menlo Park, mental accounting, natural language processing, Network effects, new economy, Nicholas Carr, Norman Mailer, off grid, oil shale / tar sands, Peter Thiel, Plutocrats, plutocrats, profit motive, Ralph Waldo Emerson, Ray Kurzweil, recommendation engine, Republic of Letters, robot derives from the Czech word robota Czech, meaning slave, Ronald Reagan, self-driving car, SETI@home, side project, Silicon Valley, Silicon Valley ideology, Singularitarianism, Snapchat, social graph, social web, speech recognition, Startup school, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, technoutopianism, the medium is the message, theory of mind, Turing test, Whole Earth Catalog, Y Combinator

Such prophesies might be dismissed as the prattle of overindulged rich guys, but for one thing: They’ve shaped public opinion. By spreading a utopian view of technology, a view that defines progress as essentially technological, they’ve encouraged people to switch off their critical faculties and give Silicon Valley entrepreneurs and financiers free rein in remaking culture to fit their commercial interests. If, after all, the technologists are creating a world of superabundance, a world without work or want, their interests must be indistinguishable from society’s. To stand in their way, or even to question their motives and tactics, would be self-defeating. It would serve only to delay the wonderful inevitable. The Silicon Valley line has been given an academic imprimatur by theorists from universities and think tanks. Intellectuals spanning the political spectrum, from Randian right to Marxian left, have portrayed the computer network as a technology of emancipation.

“If you can start a new business, why can you not start a new country?” he asks. In a speech last fall at the Y Combinator Startup School, venture capitalist Balaji Srinivasan channeled Leary when he called for “Silicon Valley’s Ultimate Exit”—the establishment of a new country beyond the reach of the U.S. government and other allegedly failed states. “You know, they fled religious persecution, the American Revolutionaries which left England’s orbit,” Srinivasan said, referring to the Pilgrims. “Then we started moving west, leaving the East Coast bureaucracy.” Now, the time has come for innovators to start up their own society: What do I mean by Silicon Valley’s Ultimate Exit? It basically means: build an opt-in society, ultimately outside the U.S., run by technology. And this is actually where the Valley is going. This is where we’re going over the next ten years. . . .

To Nora and Henry CONTENTS Introduction: SILICON VALLEY DAYS UTOPIA IS CREEPY: THE BEST OF ROUGH TYPE THE AMORALITY OF WEB 2.0 MYSPACE’S VACANCY THE SERENDIPITY MACHINE CALIFORNIA KINGS THE WIKIPEDIAN CRACKUP EXCUSE ME WHILE I BLOG THE METABOLIC THING BIG TROUBLE IN SECOND LIFE LOOK AT YOU! DIGITAL SHARECROPPING STEVE’S DEVICES TWITTER DOT DASH GHOSTS IN THE CODE GO ASK ALICE’S AVATAR LONG PLAYER SHOULD THE NET FORGET? THE MEANS OF CREATIVITY VAMPIRES BEHIND THE HEDGEROW, EATING GARBAGE THE SOCIAL GRAFT SEXBOT ACES TURING TEST LOOKING INTO A SEE-THROUGH WORLD GILLIGAN’S WEB COMPLETE CONTROL EVERYTHING THAT DIGITIZES MUST CONVERGE RESURRECTION ROCK-BY-NUMBER RAISING THE VIRTUAL CHILD THE IPAD LUDDITES NOWNESS CHARLIE BIT MY COGNITIVE SURPLUS MAKING SHARING SAFE FOR CAPITALISTS THE QUALITY OF ALLUSION IS NOT GOOGLE SITUATIONAL OVERLOAD AND AMBIENT OVERLOAD GRAND THEFT ATTENTION MEMORY IS THE GRAVITY OF MIND THE MEDIUM IS McLUHAN FACEBOOK’S BUSINESS MODEL UTOPIA IS CREEPY SPINELESSNESS FUTURE GOTHIC THE HIERARCHY OF INNOVATION RIP.


Britannia Unchained: Global Lessons for Growth and Prosperity by Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore, Elizabeth Truss

Airbnb, banking crisis, Carmen Reinhart, central bank independence, clockwatching, creative destruction, Credit Default Swap, demographic dividend, Edward Glaeser, eurozone crisis, fear of failure, glass ceiling, informal economy, James Dyson, Kenneth Rogoff, knowledge economy, long peace, margin call, Mark Zuckerberg, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, Neil Kinnock, new economy, North Sea oil, oil shock, open economy, pension reform, price stability, profit motive, Ronald Reagan, Sand Hill Road, Silicon Valley, Steve Jobs, Walter Mischel, wealth creators, Winter of Discontent, working-age population, Yom Kippur War

While it cannot be calculated for sure how many of these companies traded before being dissolved, the statistics do suggest that failure is an elemental part of business. Buccaneers 93 Number of companies 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Within first year Between 1 and 5 Between 5 and 10 More than 10 Figure 5.1 Silicon Valley Silicon Valley in California is the centre of the IT universe, It is where innovative tech start-ups vie for venture capital, and where technological titans such as Twitter, Google and PayPal were all born. It is without a doubt the most visible modern manifestation of the pioneering, entrepreneurial American spirit. There are a number of elements to Silicon Valley’s success – which explains the difficulty that other countries have had in trying to emulate it. Firstly, the proximity of Stanford University, a world leader in science and technology, offered a steady stream of highly skilled graduates in the decades following the Second World War, closely backed by local businesses such as Hewlett Packard.

It is impressive enough that eight of the ten most inventive towns in the US are in California – predominantly in Silicon Valley. But when you consider that the UK has twice the population of California, this really begins to illustrate the gulf that presently exists. Unsurprisingly, there also appears to be a strong correlation between innovation, employment and turnover. Table 5.3 provides estimates for the number of companies in each region, organised by turnover. We can see from this that where successful companies flourish, they do so always with innovation. Success breeds success. It is in areas where the record on innovation is poor that fostering an enterprise culture can have the most impact. The experience of Silicon Valley shows that the economic situation does not stifle innovation. Talent is easier to find, the competition is less fierce, and creative thinking is at a premium in difficult times.

Nor can the UK succumb to the quick and easy temptation of statism – that more government spending is the answer. Corporatism has little to recommend it. The malaise lies deeper than government policy alone can address. Reid Hoffman, founder of LinkedIn and one of the most famous Silicon Valley venture capitalists, argues that there is no reason why you couldn’t replicate the Valley’s success in Europe. One area in which Britain is already competitive with the US is the quality of its universities. If Silicon Valley was originated from and is sustained by graduates of Stanford University, Hoffman argues that London, Oxford and Cambridge could allow Britain to become the entrepreneurial centre of Europe. While Cambridge may never be able to overtake San Francisco, second place is still a position well worth having.


pages: 319 words: 89,477

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion by John Hagel Iii, John Seely Brown

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Albert Einstein, Andrew Keen, barriers to entry, Black Swan, business process, call centre, Clayton Christensen, cleantech, cloud computing, commoditize, corporate governance, creative destruction, Elon Musk, en.wikipedia.org, future of work, game design, George Gilder, intangible asset, Isaac Newton, job satisfaction, knowledge economy, knowledge worker, loose coupling, Louis Pasteur, Malcom McLean invented shipping containers, Maui Hawaii, medical residency, Network effects, old-boy network, packet switching, pattern recognition, peer-to-peer, pre–internet, profit motive, recommendation engine, Ronald Coase, shareholder value, Silicon Valley, Skype, smart transportation, software as a service, supply-chain management, The Nature of the Firm, the new new thing, too big to fail, trade liberalization, transaction costs

She had to choose between MIT and Stanford for her graduate studies, and one of the reasons she chose Stanford was that she had lived in Cambridge but had never lived in California. The unknown exerted a far greater pull than the known. It turned out to be a fortuitous choice. Ellen discovered Silicon Valley and a totally different way of doing business. She loved the way Silicon Valley entrepreneurs engaged in exploring interesting ideas with each other regardless of name, rank, or serial number. Ellen learned that these restless entrepreneurs were eagerly seeking out new connections in an effort to gain new perspectives on challenging business problems. It was not long before Ellen was building her own personal network in Silicon Valley. She had a passion for golf and ended up meeting some amazing people on the Stanford golf course during her hours of practice every day. One day at a golf tournament, she met a professor at Stanford Law School who became one of her many mentors.

She initially joined this effort because she was passionate about Stanford and wanted to help the university in a way that would make the most of her skills, even though she initially thought it would distract her from the network and the work she had been pursuing in Silicon Valley. In fact, the opposite occurred. Media X became a platform to deepen and broaden Ellen’s personal network while at the same time enhancing Stanford’s ability to connect more effectively with the Silicon Valley community and the broader business world. Now, as head of strategy at LinkedIn—and in her Silicon Valley Connect advisory business—Ellen is using pull to create value in and across networks of relationships. She’s practicing a form of brokerage, yes, but it’s not the old Machiavellian brokerage in which what you know and I don’t gives you the strategic advantage.

Note that what brings people together in a geographic spike is a shared passion. That’s the unifying force. Shared passion, however, does not imply uniformity. Spikes in fact consist of considerable cognitive diversity: different ways of seeing the world, solving problems, and so on.14 Take Silicon Valley, where we live, for example. Geeks and nerds abound, all drawn to the area by a shared passion for technology. Yet they came from different parts of the country, and even the world (over half of the entrepreneurs in Silicon Valley were born outside the United States). They went to many different schools. They are working on very different technology problems, ranging from how to fit more transistors on a silicon chip to user experiences in virtual environments. As a result, the bars and meeting rooms are marked by spirited arguments over the right approaches to difficult technology problems, but the friction remains largely productive because all the participants share a common passion for pushing the technology envelope.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

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3D printing, Airbnb, altcoin, bank run, banking crisis, bitcoin, blockchain, Bretton Woods, California gold rush, capital controls, carbon footprint, clean water, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cryptocurrency, David Graeber, disintermediation, Edward Snowden, Elon Musk, ethereum blockchain, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, hacker house, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, money: store of value / unit of account / medium of exchange, Network effects, new economy, new new economy, Nixon shock, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Robert Shiller, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen: Great Stagnation, Uber and Lyft, underbanked, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

Certainly, their all-encompassing power creates a far more negative impression than the romantic image of computer geeks making cool gadgets in garages. As new waves of highly disruptive technologies start to strip more Americans of their jobs—and as we’ll see later, cryptocurrencies could well be included in those—resentment toward the “wisdom” of the Silicon Valley establishment could grow further. On the other hand, the products that come out of the Valley have made positive contributions to society, such as the ones that emerged from the advent of the Internet. In fact, it’s their relatively recent experience with the Internet’s development that helps many Silicon Valley types get excited about cryptocurrencies. They don’t know what the future holds for bitcoin, but because of the unpredictable spin-off innovations that the Internet made way for, many sense that this new “platform” has similar, liberating prospects.

It occupies a spacious, modern space on the fourth floor of an office building that would be right at home in Silicon Valley, with lots of light, room for talks and presentations, couches and lounge space (including a foosball table), and a coffee bar. It also has work space for the people creating things, those who are driving the growth of Silicon Savannah. The place is wired, literally and figuratively, and filled with young, energetic, bright kids. They have meetups, and “fireside” chats, and attract heavy talent: Joi Ito, the director of the MIT Media Lab in Massachusetts, spoke at iHub in May 2014. Google’s Eric Schmidt also visited. The center’s goals are similar to those in Silicon Valley: to foster entrepreneurship, to build a network and get young people and young minds engaged and creating—one can almost hear Steve Jobs saying “magical”—things.

Profit and nonprofit organizations alike are now eschewing vertical hierarchies in favor of more horizontal, democratic lines of command. (For a visual representation of how this plays out, compare the open-planned office layouts in the contemporaneous TV show Silicon Valley with the closed offices of the sixties-era Mad Men.) Much like the open-source-software development teams that look after bitcoin and countless other computing projects, communities are being formed—mostly online—with no titular head and no central hub. They are held together by the commonly recognized convention that the consensus of the crowd trumps everything else. Is a clash building between these two movements, the corporate world’s concentration of wealth and power, and Silicon Valley’s reempowerment of the individual? Perhaps these trends can continue to coexist if the decentralizing movement remains limited to areas of the economy that don’t bleed into the larger sectors that Big Business dominates.


pages: 527 words: 147,690

Terms of Service: Social Media and the Price of Constant Connection by Jacob Silverman

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23andMe, 4chan, A Declaration of the Independence of Cyberspace, Airbnb, airport security, Amazon Mechanical Turk, augmented reality, basic income, Brian Krebs, California gold rush, call centre, cloud computing, cognitive dissonance, commoditize, correlation does not imply causation, Credit Default Swap, crowdsourcing, don't be evil, drone strike, Edward Snowden, feminist movement, Filter Bubble, Firefox, Flash crash, game design, global village, Google Chrome, Google Glasses, hive mind, income inequality, informal economy, information retrieval, Internet of things, Jaron Lanier, jimmy wales, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, license plate recognition, life extension, lifelogging, Lyft, Mark Zuckerberg, Mars Rover, Marshall McLuhan, mass incarceration, meta analysis, meta-analysis, Minecraft, move fast and break things, move fast and break things, national security letter, Network effects, new economy, Nicholas Carr, Occupy movement, optical character recognition, payday loans, Peter Thiel, postindustrial economy, prediction markets, pre–internet, price discrimination, price stability, profit motive, quantitative hedge fund, race to the bottom, Ray Kurzweil, recommendation engine, rent control, RFID, ride hailing / ride sharing, self-driving car, sentiment analysis, shareholder value, sharing economy, Silicon Valley, Silicon Valley ideology, Snapchat, social graph, social web, sorting algorithm, Steve Ballmer, Steve Jobs, Steven Levy, TaskRabbit, technoutopianism, telemarketer, transportation-network company, Turing test, Uber and Lyft, Uber for X, universal basic income, unpaid internship, women in the workforce, Y Combinator, Zipcar

The ODNI, the office that oversees the entire U.S. intelligence community, was so proud of this event that it even tweeted photos of the rocket and a separate one of the logo, which also served as a mission patch. It is a matter of pride to confess one’s informational avarice. No wonder, then, that the NSA and Silicon Valley have made such good partners. Both are in the data collection and targeting business, and Silicon Valley collects heaps of data which the NSA would love to have.* Silicon Valley is merely targeting consumers with ads and prompts and nudges that might get them to click or to buy something. They are bound together by common interests, philosophies, and methods. One of the main problems with Big Data is that it produces correlations but not causations. We learn that two things seem to be related—for example, that people with a specific set of personal characteristics are prone to depression or bad driving—but we don’t learn why.

And who would have suspected that as technology and freedom were worshipped more and more, it would become less and less possible to say anything sensible about the society in which they were applied? —Richard Barbrook and Andy Cameron, “The Californian Ideology” In 1995, two British media theorists, Richard Barbrook and Andy Cameron, launched an extraordinary broadside against Silicon Valley. In a work they titled “The Californian Ideology,” Barbrook and Cameron described a “new faith” emerging “from a bizarre fusion of the cultural bohemianism of San Francisco with the hi-tech industries of Silicon Valley.” Mixing “the freewheeling spirit of the hippies and the entrepreneurial zeal of the yuppies,” the Californian Ideology drew on the state’s history of countercultural rebellion, its role as a crucible of the New Left, the global village prophecies of media theorist Marshall McLuhan, and “a profound faith in the emancipatory potential of the new information technologies.”

If you work for Google or Facebook, whose luxury buses now park at municipal stops, and thus crowd out the city’s public transportation, you rarely have to set foot on anything not owned by the company. One would think that the dot-com crash of 2000 and the failure of Silicon Valley’s immense ambitions would have introduced some humility, along with some critical self-examination about the role of technology in human affairs. The opposite has been the case. The Californian Ideology chugs along, finding new forms for new times. Steve Jobs remains secure in his perch as an industry icon, his example now posthumous and unimpeachable. The industry’s triumphant individualism has been augmented by the introduction of Ayn Rand as Silicon Valley’s de facto house philosopher; her atavistic arguments for the virtues of selfishness and unfettered enterprise have found supporters from Wikipedia’s Jimmy Wales to Oracle’s Larry Ellison.


pages: 209 words: 63,649

The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World by Aaron Hurst

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3D printing, Airbnb, Atul Gawande, barriers to entry, big-box store, business process, call centre, carbon footprint, citizen journalism, commoditize, corporate social responsibility, crowdsourcing, disintermediation, Elon Musk, Firefox, glass ceiling, greed is good, housing crisis, informal economy, Jane Jacobs, jimmy wales, Khan Academy, Kickstarter, Lean Startup, means of production, new economy, pattern recognition, Peter Singer: altruism, Peter Thiel, QR code, Ray Oldenburg, remote working, Richard Feynman, Ronald Reagan, selection bias, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, TaskRabbit, Tony Hsieh, too big to fail, underbanked, women in the workforce, young professional, Zipcar

They also tend to have a financial and social cushion that can absorb the potential losses associated with trying something that doesn’t work. Elon Musk is one of these innovators, and he understood what it would take to get that group behind the wheel of an electric car. He would need to design a car that could be compelling enough to act as a status symbol for young professionals in the insular community of Silicon Valley. He knew his audience would be highly technologically literate and very social in both how they bought the car and how they talked about it. He needed a luxury car that would be the “it” car in Silicon Valley. But perhaps as importantly, he would need to find a solution for the incredibly expensive battery technology needed for the car to work. Just the battery for an electric car costs more than double the price of an entry-level car in the market. For this reason alone, Tesla would have to focus on the luxury end of the market.

Sandberg, Sheryl, and Nell Scovell. Lean In: Women, Work, and the Will to Lead. New York: Alfred A. Knopf, 2013. Print. Seligman, Martin E. P. Flourish: A Visionary New Understanding of Happiness and Well-being. New York: Free, 2011. Print. Stern, Lewis Richard. Executive Coaching: Building and Managing Your Professional Practice. Hoboken, NJ: John Wiley & Sons, 2008. Print. “Silicon Valley Strategies.” Silicon Valley Strategies. N.p., n.d. Web. TED talk: Amanda Palmer Tennant, Kyle. Unfriend Yourself: Three Days to Detox, Discern, and Decide about Social Media. Chicago: Moody, 2012. Print. “The MBA—some history.” The Economist. N.p., 17 Oct. 2013. Web. Thomas, D. A. “The truth about mentoring minorities: Race matters.” Harvard Business Review. 2001. Toffler, Alvin. The Third Wave. New York: Morrow, 1980.

The pitches coming into most venture capitalist offices now aren’t for new, groundbreaking ideas, but rather ideas for incremental improvements or niche versions of successful existing technology platforms, like social media, cloud services, e-commerce, “big data,” and gaming. At first glance, many of the hot new companies today, like local retail market maker Zaarly, look like Information Economy companies, but they are at their core part of this new economy. As I explore in Section Three, their DNA is different. A common refrain we hear from technologists and the media is that the Information Economy is just getting started. Silicon Valley and Silicon Alley are home to some of the world’s most successful companies, many of them start-ups. But I’m not suggesting that its evolution will stop, or that it won’t still be a major driving force in overall economic development. I’m suggesting that in terms of setting the course, the Purpose Economy will eventually edge it out. In fact, I believe the Purpose Economy—like the once-emerging Information Economy—already accounts for a much larger portion of the overall economy than may be readily apparent.

From Satori to Silicon Valley: San Francisco and the American Counterculture by Theodore Roszak

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Buckminster Fuller, germ theory of disease, global village, Haight Ashbury, Internet Archive, Marshall McLuhan, megastructure, Menlo Park, Norbert Wiener, Silicon Valley, Steven Levy, Stewart Brand, upwardly mobile, Whole Earth Catalog

FROM SATORI TO SILICON VALLEY o ® Theodore Roszak Digitized by the Internet Archive in 2012 http://archive.org/details/fromsatoritosiliOOrosz OTHER BOOKS BY THEODORE ROSZAK Nonfiction Person/Planet Unfinished Animal The Cult of Information Where the Wasteland The Making of Editor Ends a Counter Culture and contributor The Dissenting Academy Masculine/Feminine (with coeditor Betty Roszak) Sources Fiction Dreamwatcher Bugs Pontifex FROM SATORI TO SILICON VALLEY San Francisco and the American Counterculture Theodore Roszak Don't Call It Frisco Press Publisher & Distributor 4079 19th Avenue San Francisco California 94132 DON'T CALL FRISCO PRESS IT 4079 19th Avenue San Francisco, CA 94132 Copyright 1986 by Theodore Roszak. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without permission in writing from the publisher.

for Children of Prosperity by Hugh Gardner, The Times They Are A-Changing A shortened version of this essay was presented at San Francisco State University Alvin Fine Lecture. 1985 as the in April A few weeks before the event, student in the Public Affairs Office called arrange some campus publicity. He had me a to a question. "Where's Satori?" "What?" "It says plained. I asked. 'From Satori know where "I to Silicon Valley,'" Silicon Valley he ex- is. But where's Satori?" "The Zen state of enlightenment . . . you never heard of that?" "Oh. I never took any courses in Oriental religion." I started to explain the term, spelling out its . once obvious connection with the counterculture of the sixties. "Counterculture," he interrupted. 'That's ... hippies. All like that?" Suddenly I felt one hundred years old.

This found is ter) its where the Zen-Taoist impulse arose and example, (for be more fully unfolded to San Francisco Zen Cen- in the most studied expression America; in where the mendicant-communitarian urban and rural, found is where the announced its cal energies. hackers new its ecological this is who would both main public examples; presence and And this is lifestyle, first sensibility organized this first its politi- where the inspired young revolutionize Silicon Valley gathered in their greatest numbers. The truth is, if one probes just beneath the surface of the bucolic hippy image, one finds this puzzling infatuation with certain forms of outre technology reaching well back into the early I first became aware of its when I realized knew during that presence that the countercultural students period were almost exclusively, readers of science fiction.


pages: 398 words: 107,788

Coding Freedom: The Ethics and Aesthetics of Hacking by E. Gabriella Coleman

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Benjamin Mako Hill, commoditize, crowdsourcing, Debian, Donald Knuth, dumpster diving, en.wikipedia.org, financial independence, ghettoisation, Hacker Ethic, informal economy, Jacob Appelbaum, Jaron Lanier, Jason Scott: textfiles.com, Jean Tirole, knowledge economy, laissez-faire capitalism, Larry Wall, Louis Pasteur, means of production, Paul Graham, peer-to-peer, pirate software, popular electronics, RFC: Request For Comment, Richard Stallman, rolodex, Ronald Reagan, Silicon Valley, Silicon Valley startup, slashdot, software patent, software studies, Steve Ballmer, Steven Levy, Ted Nelson, the scientific method, The Structural Transformation of the Public Sphere, web application, web of trust

No one knew at the time that in a mere few years, the commercial sector would jubilantly embrace free software, even if a few things had to change, including its name. 1998–2004: Triumph of Open Source and Ominous DMCA By 1998, the Silicon Valley tech boom was truly booming. Technology entrepreneurs were amassing millions in stock options from inflated initial public offerings fueled in part by techno-utopic articles in Wired and the New York Times.18 Internet companies like DoubleClick, Star Media, and Ivillage, all fledgling star Silicon Valley firms, were awash in venture capital funding and feverish stock market investments. In the context of one of Silicon Valley’s most pronounced tech booms, geeks continued to install free software servers and other applications in universities and, more than ever, companies, including many Silicon Valley start-ups. Thus by 1997, the grassroots enthusiasm of free software had grown material roots in the corporate sphere.

The relationship between Silicon Valley and open source is substantial as well as complicated. Without a doubt, when it comes to computers, hackers, and F/OSS, this high-tech region matters, as I quickly came to learn within weeks of my arrival there. For the last thirty years, hackers have flocked to the Bay Area from around the world to make it one of their most cherished homelands, although it certainly is not the only region where hackers have settled and set deep roots. At the turn of this century, open source also became the object of Silicon Valley entrepreneurial energy, funding, and hype, even though today the fever for open source has diminished significantly, redirected toward other social media platforms. The book is thus not primarily about free software in Silicon Valley. In many respects my material tilts toward the North American and European region but, nevertheless, I have chosen to treat free software in more general than regional registers as well, so as to capture the reality of the legal transnational processes under investigation along with the experience of the thousands and thousands of developers across the world.

The abundant morning sun and deep blue skies deceptively concealed the reality of much cooler temperatures. I was attending a protest along with a group of about fifty programmers, system administrators, and free software enthusiasts who were demanding the release of a Russian programmer, Dmitry Sklyarov, arrested weeks earlier in Las Vegas by the Federal Bureau of Investigation (FBI) as he left Defcon, the largest hacker conference in the world. Arrested at the behest of the Silicon Valley software giant Adobe, Sklyarov was charged with violating the recently ratified and controversial Digital Millennium Copyright Act (DMCA). He had written a piece of software, the Advanced eBook Processor software, for his Russian employer. The application transforms the Adobe eBook format into the Portable Document Format (PDF). In order for the software to perform this conversion, it breaks and therefore circumvents the eBook’s copy control measures.


pages: 452 words: 134,502

Hacking Politics: How Geeks, Progressives, the Tea Party, Gamers, Anarchists and Suits Teamed Up to Defeat SOPA and Save the Internet by David Moon, Patrick Ruffini, David Segal, Aaron Swartz, Lawrence Lessig, Cory Doctorow, Zoe Lofgren, Jamie Laurie, Ron Paul, Mike Masnick, Kim Dotcom, Tiffiniy Cheng, Alexis Ohanian, Nicole Powers, Josh Levy

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4chan, Affordable Care Act / Obamacare, Airbnb, Bernie Sanders, Burning Man, call centre, Cass Sunstein, collective bargaining, creative destruction, crony capitalism, crowdsourcing, don't be evil, facts on the ground, Firefox, hive mind, immigration reform, informal economy, jimmy wales, Kickstarter, liquidity trap, Mark Zuckerberg, obamacare, Occupy movement, offshore financial centre, peer-to-peer, Plutocrats, plutocrats, prisoner's dilemma, QR code, rent-seeking, Silicon Valley, Skype, technoutopianism, WikiLeaks, Y Combinator

There were two distinct power nodes/monetary centers of gravity lined up on opposing sides of the legislation: Big Content (Hollywood, the recording industry, and the like) on one hand and Silicon Valley on the other. Many politicians—especially Democrats, but a few powerful Republicans like Lamar Smith—have traditionally been caught in Hollywood’s gravitational field. Silicon Valley, because it’s younger and—for better or worse—has had a cultural antipathy towards engaging with Washington, D.C., claimed hooks in fewer politicians at the outset of the SOPA fight. But what it did have was the potential, and eventually concrete, support of something like 99% of the rankand-file Americans who would come to pay attention to the issue. Hollywood is always whining about its diminishing profits (which strikes me as a questionable lobbying strategy in our money-obsessed political system); meanwhile Silicon Valley is an ascendant power center that demonstrated a newfound 271 HACKING POLITICS willingness to engage in lobbying and politicking over the course of the SOPA effort.

There’s no reason to suspect that labor will do anything other than continue to support efforts to institute Net Neutrality regulation, and there are indications that the unions are making strides towards taking a more holistic, informed approach to Internet policy in general: several national-level activists have expressed remorse about the role that labor played during the SOPA/PIPA debacle, and the unions even proactively engaged us and other Internet freedom activists as they sought to work with us to combat attempts by the International Telecommunication Union (an agency of the United Nations, not a labor union) to assert greater, unaccountable control over the Internet this fall. As Republicans make plays for financial support from Silicon Valley and electoral support from Americans who care about Internet freedom, Democratic partisans among us might ask that labor perform a more public expression of its contrition. They also ought reach out to the Silicon Valley entrepreneurs— especially those of my generation and younger—who have had limited prior interactions with labor, might not have a complete understanding of so much good that unions have done, and, sadly, are now even more disposed to look at them skeptically. 98 TURNING THE TIDE ON SOPA JONNY 5 Jonny 5, nee Jamie Laurie, is the singer for and founder of the band the Flobots.

“It was like an inquisition court for the MPAA,” recalled a senior House staffer, who was appalled at the damage this could do the public’s perception of the institution. The notion that Congress wouldn’t even listen to technical concerns probably radicalized Silicon Valley to the point where something big, like a blackout, was seen as the only way to get a point across. Ahead of the hearing, ten House members—among them Ron Paul, Jared Polis, Issa, and Lofgren—sent a letter to Smith and ranking Democrat John Conyers warning that SOPA would target domestic websites and urging them to go slow. While Silicon Valley was heavily represented on the letter, the signatures also began to tell the story of the coalition’s broadening reach, with representatives from tech corridors in Austin, Boulder, and Pittsburgh signing on. The letter also meant that there would be a divided house on SOPA right off the blocks—the opposition numbered a dozen members, to the twenty-four who had signed on as SOPA co-sponsors as of November 15th.


pages: 559 words: 169,094

The Unwinding: An Inner History of the New America by George Packer

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Affordable Care Act / Obamacare, Apple's 1984 Super Bowl advert, bank run, big-box store, citizen journalism, cleantech, collateralized debt obligation, collective bargaining, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, diversified portfolio, East Village, El Camino Real, Elon Musk, family office, financial independence, financial innovation, fixed income, Flash crash, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, income inequality, informal economy, Jane Jacobs, life extension, Long Term Capital Management, low skilled workers, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, market fundamentalism, Maui Hawaii, Menlo Park, Neil Kinnock, new economy, New Journalism, obamacare, Occupy movement, oil shock, peak oil, Peter Thiel, Ponzi scheme, Richard Florida, Robert Bork, Ronald Reagan, Ronald Reagan: Tear down this wall, shareholder value, side project, Silicon Valley, Silicon Valley startup, single-payer health, smart grid, Steve Jobs, strikebreaker, The Death and Life of Great American Cities, the scientific method, too big to fail, union organizing, urban planning, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, white picket fence, zero-sum game

FOR LAURA, CHARLIE, AND JULIA CONTENTS Title Page Copyright Notice Dedication Prologue PART I 1978 Dean Price Total War: Newt Gingrich Jeff Connaughton 1984 Tammy Thomas Her Own: Oprah Winfrey Jeff Connaughton 1987 Craftsman: Raymond Carver Dean Price Tammy Thomas Mr. Sam: Sam Walton 1994 Jeff Connaughton Silicon Valley 1999 Dean Price Tammy Thomas 2003 Institution Man (1): Colin Powell Jeff Connaughton PART II Dean Price Radish Queen: Alice Waters Tampa Silicon Valley 2008 Institution Man (2): Robert Rubin Jeff Connaughton Tammy Thomas Dean Price Just Business: Jay-Z Tampa PART III Jeff Connaughton 2010 Citizen Journalist: Andrew Breitbart Tampa Dean Price Tammy Thomas Tampa Prairie Populist: Elizabeth Warren Wall Street 2012 Silicon Valley Jeff Connaughton Tampa Tammy Thomas Dean Price Note A Note on Sources Acknowledgments Also by George Packer A Note About the Author Copyright PROLOGUE No one can say when the unwinding began—when the coil that held Americans together in its secure and sometimes stifling grip first gave way.

That was when Thiel left New York and moved back to Silicon Valley for good. * * * The Valley was no longer the place Thiel had left four years earlier. What had happened in the meantime was the Internet. Between the midseventies and the early nineties, the personal computer had spawned countless hardware and software companies in Silicon Valley, and in other high-tech centers around the country; during the seventies and eighties the population of San Jose doubled, approaching a million, and by 1994 there were 315 public companies in the Valley. But none of the newer ones had been as important as Hewlett-Packard, Intel, or Apple. In the years since the Macintosh, the computer industry had seen more consolidation than innovation, and the undisputed winner was in Seattle. The most important Silicon Valley company to come along since Apple was originally called Mosaic, started in 1994 by Jim Clark, a former Stanford professor and founder of Silicon Graphics, and Marc Andreessen, a University of Illinois graduate who, at twenty-two, had just the year before developed the first graphical browser for the World Wide Web.

So, at the age of thirty-seven, he joined Arnold & Porter and launched a new career: as a lobbyist. SILICON VALLEY Peter Thiel was three years old when he found out that he was going to die. It was in 1971, and he was sitting on a rug in his family’s apartment in Cleveland. Peter asked his father, “Where did the rug come from?” “It came from a cow,” his father said. They were speaking German, Peter’s first language—the Thiels were from Germany, Peter had been born in Frankfurt. “What happened to the cow?” “The cow died.” “What does that mean?” “It means that the cow is no longer alive. Death happens to all animals. All people. It will happen to me one day. It will happen to you one day.” As he said these things, Peter’s father seemed sad. Peter became sad as well. That day was a very disturbing day, and Peter never got over it. Well after he became a Silicon Valley billionaire he would remain radically disturbed by the prospect of dying.


pages: 532 words: 139,706

Googled: The End of the World as We Know It by Ken Auletta

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23andMe, AltaVista, Anne Wojcicki, Apple's 1984 Super Bowl advert, bioinformatics, Burning Man, carbon footprint, citizen journalism, Clayton Christensen, cloud computing, Colonization of Mars, commoditize, corporate social responsibility, creative destruction, death of newspapers, disintermediation, don't be evil, facts on the ground, Firefox, Frank Gehry, Google Earth, hypertext link, Innovator's Dilemma, Internet Archive, invention of the telephone, Jeff Bezos, jimmy wales, John Markoff, Kevin Kelly, knowledge worker, Long Term Capital Management, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Network effects, new economy, Nicholas Carr, PageRank, Paul Buchheit, Peter Thiel, Ralph Waldo Emerson, Richard Feynman, Richard Feynman, Sand Hill Road, Saturday Night Live, semantic web, sharing economy, Silicon Valley, Skype, slashdot, social graph, spectrum auction, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, strikebreaker, telemarketer, the scientific method, The Wisdom of Crowds, Upton Sinclair, X Prize, yield management, zero-sum game

Page and Brin had solved a problem for Internet users, said Motwani, who thought: “This is going to change the way the Internet is used!” The word of mouth was electric. Motwani was certain Internet companies would jockey to purchase the technology, and soon after, Brin said, the two partners began speaking to various Silicon Valley companies. Yet all passed on possibly acquiring Google. Even new media companies, it appears, were slow to peer over the horizon. IN 1998, the year Google was incorporated, utopianism radiated from Silicon Valley and across the Web. Nicholas Negroponte, the founding director of MIT’s Media Lab, published a book, Being Digital, proclaiming that the Web would usher in a new generation “free of many of the old prejudices.... Digital technology can be a natural force drawing people into greater world harmony.”

Schmidt needed help to lower the emotional temperature, and to upgrade Google’s management. That help came in the form of Bill Campbell, then sixty-one, a barrel-chested man known throughout Silicon Valley as “the coach.” At one time Columbia University’s head football coach, Campbell had also been a senior executive at Apple and a CEO of several Valley companies, including the Go Corporation and Intuit, the now-thriving online software company that provides financial services to individuals and small businesses and where he worked side by side with the founder. John Doerr knew that Campbell felt an obligation to give back to a Silicon Valley that had made him rich enough to own his own Gulfstream IV His discretion is legendary, and part of his allure. Aside from a profile in the magazine of his alma mater, the only other time he has ever been profiled was in a superb 2008 Fortune magazine piece by Jennifer Reingold titled, “The Secret Coach.”

Because we were not here to define it, it was being defined by our enemies.” He paused a moment, and added, “Enemy is a strong word. It was being defined by our competitors.” Gigi Sohn, the president and cofounder of Public Knowledge, a nonprofit organization that lobbies for both an open Internet and more balanced copyright laws, said that like many Silicon Valley companies, Google chose to have a smaller presence in the nation’s capital. But Google was more extreme, she said. “They were almost alone among Silicon Valley companies in failing to recognize that you have to play in the sandbox. If you want progressive spectrum policies, the free market does not ensure that.” Google’s one-man operation in Washington expanded in 2007 to include twenty-two staffers. Among them were Jane Horvath, a former senior privacy attorney in the Bush administration’s Justice Department; Johanna Shelton, former senior counsel to Democrat John Dingell, then chairman of the House Energy and Commerce Committee; Robert Boorstin, a former speechwriter for President Bill Clinton; and Pablo Chavez, former chief counsel to Republican senator John McCain.


pages: 431 words: 129,071

Selfie: How We Became So Self-Obsessed and What It's Doing to Us by Will Storr

Albert Einstein, autonomous vehicles, banking crisis, bitcoin, book scanning, computer age, correlation does not imply causation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Elon Musk, en.wikipedia.org, gig economy, greed is good, invisible hand, job automation, John Markoff, Lyft, Menlo Park, meta analysis, meta-analysis, Mont Pelerin Society, mortgage debt, Mother of all demos, Nixon shock, Peter Thiel, QWERTY keyboard, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Silicon Valley startup, Steve Jobs, Steven Levy, Stewart Brand, The Future of Employment, Tim Cook: Apple, Uber and Lyft, War on Poverty, Whole Earth Catalog

Connected to this ‘you are not our responsibility’ corporate mindset is our age of perfectionism’s distinctive ‘no-service’ consumer culture, in which we’re increasingly stuck in byzantine call trees, thrown towards volunteer online forums for technical support and checking ourselves into flights and our shopping out of supermarkets – the constant, tedious drip-drip-drips of the market, adding more and more stress and responsibility onto the teetering ‘I’. One place this hyper-individualist model of the corporate self is dominant is Silicon Valley. As veteran tech reporter Dan Lyons has observed, employees there are often reminded that the company they serve is not their ‘family’ but their ‘team’. This definition was introduced by Netflix in 2009 and has since spread rapidly throughout the sector. ‘The Netflix code inspired a generation of tech start-ups and “may well be the most important document ever to come out of the Valley,” Facebook COO Sheryl Sandberg once said,’ writes Lyons. ‘The result, according to countless articles in publications like Fortune, the New Republic, Bloomberg and New York Magazine, is that Silicon Valley has become a place where people live in fear. As soon as someone better or cheaper comes along, your company will get rid of you.

Not only had Engelbart introduced the world to the notion of the computer as a personal assistant controlled by a mouse, keyboard and cursor, he’d shown them a graphical user interface which formed the basis of the ‘windows’ he’d been manipulating, hyperlinks and the concept of the networked online realm we know today as the Web. It would become known, in Silicon Valley, as ‘the mother of all demos’. Up on that screen, Engelbart the crackpot had, in the memorable phrase of one observer, been ‘dealing lightning with both hands’. It wasn’t just that the technology was new, the foundational concept behind it was revolutionary. Here, for the first time, was computing that had been designed to be personal. It wasn’t a machine for repression and coercion. It all worked in service of the I. Eighteen years earlier Doug had found himself driving to work in a state of crisis. A wartime naval technician, he’d been recruited by the forerunner of NASA to work at Silicon Valley’s Ames Research Center. He was twenty-five and content in work and love. What more was there do to?

‘Gays and lesbians are great consumers. So it’s not all bad, is what I’m saying.’ * As we were finishing our burgers, I asked Jeremy if he had any idea why conspicuous shows of wealth seemed to be so unfashionable in Silicon Valley. This felt like an interesting cultural quirk and I wasn’t sure what to make of it. ‘Well, it’s because it’s very easy to get a huge amount of money very, very fast and people are not impressed by it,’ he said. ‘It’s much more important to be known for what you’ve made.’ ‘But why?’ ‘It’s another facet of power, to have something you created affect the lives of millions of people. In Silicon Valley, we’re all trying to change the world. There are people who say that and there are people who believe it. In my experience, if you’re running solely on one aspect, you’re going to have trouble.


pages: 528 words: 146,459

Computer: A History of the Information Machine by Martin Campbell-Kelly, William Aspray, Nathan L. Ensmenger, Jeffrey R. Yost

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Ada Lovelace, air freight, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Apple's 1984 Super Bowl advert, barriers to entry, Bill Gates: Altair 8800, borderless world, Buckminster Fuller, Build a better mousetrap, Byte Shop, card file, cashless society, cloud computing, combinatorial explosion, computer age, deskilling, don't be evil, Donald Davies, Douglas Engelbart, Douglas Engelbart, Dynabook, fault tolerance, Fellow of the Royal Society, financial independence, Frederick Winslow Taylor, game design, garden city movement, Grace Hopper, informal economy, interchangeable parts, invention of the wheel, Jacquard loom, Jacquard loom, Jeff Bezos, jimmy wales, John Markoff, John von Neumann, light touch regulation, linked data, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, natural language processing, Network effects, New Journalism, Norbert Wiener, Occupy movement, optical character recognition, packet switching, PageRank, pattern recognition, Pierre-Simon Laplace, pirate software, popular electronics, prediction markets, pre–internet, QWERTY keyboard, RAND corporation, Robert X Cringely, Silicon Valley, Silicon Valley startup, Steve Jobs, Steven Levy, Stewart Brand, Ted Nelson, the market place, Turing machine, Vannevar Bush, Von Neumann architecture, Whole Earth Catalog, William Shockley: the traitorous eight, women in the workforce, young professional

Morris’s A History of the World Semiconductor Industry (1990), and Andrew Goldstein and William Aspray’s edited volume Facets: New Perspectives on the History of Semiconductors (1997). Also worth reading is Michael Malone’s The Microprocessor: A Biography (1995). Leslie Berlin’s The Man Behind the Microchip (2005) is a fine biography of Robert Noyce. The Silicon Valley phenomenon is explored in AnnaLee Saxenian’s Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (1994), Martin Kenney’s edited volume Understanding Silicon Valley (2000), and Christophe Lécuyer’s Making Silicon Valley (2006). There is no monographic study of the calculator industry, although An Wang’s Lessons (1986) and Edwin Darby’s It All Adds Up (1968) give useful insights into the decline of the US industry. The most analytical account of the early US video game industry is Ralph Watkins’s Department of Commerce report A Competitive Assessment of the U.S.

By 1970 it was the world’s third-largest computer manufacturer, after IBM and the UNIVAC Division of Sperry Rand. When the aging General Doriot retired from ARD in 1972, its original stake in DEC was worth $350 million. SEMICONDUCTORS AND SILICON VALLEY For the first several decades of its existence, the geographical center of the computer industry was the East Coast of the United States, concentrated around well-established information-technology firms such as IBM and Bell Labs and elite universities such as MIT, Princeton, and the University of Pennsylvania. Beginning in the mid-1950s, however, a remarkable shift westward occurred, and by the end of the 1960s it was the Silicon Valley region of northern California that had become the place where innovation in the computer industry occurred. This thriving technological ecosystem, a productive collaboration of scientists, industry entrepreneurs, venture capitalists, military contractors, and university administrators, would become the model that other regions and countries would thereafter emulate.

More than any other company, it was Fairchild Semiconductor that spawned the phenomenon we now know as Silicon Valley. To begin with, unlike Shockley Semiconductor, Fairchild focused on products that had immediate profit potential, and quickly landed large corporate and military clients. In 1959 Fairchild co-founder Jean Hoerni developed a novel method for manufacturing transistors called the planar process, which allowed for multiple transistors to be deposited on a single wafer of silicon using photographic and chemical techniques. Noyce, then head of research at Fairchild Semiconductor, extended the planar process to allow for the connection of these transistors into complete circuits. It was these wafers of silicon that would give Silicon Valley its name, and their transformation into “integrated circuits” or “chips” that would consolidate the region’s status as the birthplace of the revolution in miniature (as well as its central role in subsequent developments in personal computing and the Internet).

The Future of Technology by Tom Standage

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air freight, barriers to entry, business process, business process outsourcing, call centre, Clayton Christensen, computer vision, connected car, corporate governance, creative destruction, disintermediation, distributed generation, double helix, experimental economics, full employment, hydrogen economy, industrial robot, informal economy, information asymmetry, interchangeable parts, job satisfaction, labour market flexibility, Marc Andreessen, market design, Menlo Park, millennium bug, moral hazard, natural language processing, Network effects, new economy, Nicholas Carr, optical character recognition, railway mania, rent-seeking, RFID, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, smart grid, software as a service, spectrum auction, speech recognition, stem cell, Steve Ballmer, technology bubble, telemarketer, transcontinental railway, Y2K

And that is only one of the reasons why the it industry is becoming more involved in Washington, dc. 31 THE FUTURE OF TECHNOLOGY Regulating rebels Despite its libertarian ideology, the IT industry is becoming increasingly involved in the machinery of government ven among the generally libertarian Silicon Valley crowd, T.J. Rodgers stands out. In early 2000, when everybody else was piling into the next red-hot initial public offering, the chief executive of Cypress Semiconductor, a chipmaker, declared that it would not be appropriate for the high-tech industry to normalise its relations with government. “The political scene in Washington is antithetical to the core values that drive our success in the international marketplace and risks converting entrepreneurs into statist businessmen,” he wrote in a manifesto published by the Cato Institute, a think-tank. A laudable sentiment, but in real life things are more complicated than that. In a sense, Silicon Valley is a creation of government. Without all the money from the military establishment, the region around San Jose would probably still be covered with fruit orchards.

Vendors have also made their top engineers and researchers available as advisers, and are adapting their plans to reflect the fact that security has become the main priority. Some in Silicon Valley now liken the climate to that of the late 1970s, when government and military contractors employed more than 20% of the region’s workforce. Will the it industry ever become as intertwined with government as, say, the car or media sectors? Nobody knows; but if it does, says Google’s Eric Schmidt, high-tech will lose its innovative spark and, just like other sectors, turn to rent-seeking. 35 THE FUTURE OF TECHNOLOGY Déjà vu all over again If history is any guide, the IT industry’s future will be about services and customer power ou would expect eric schmidt, one of Silicon Valley’s leading lights, to have an oversized inner geek. But these days, he sounds more like a closet historian.

Whether “Biotech Beach” will trip off the tongue as easily as “Silicon Valley” remains to be seen, though the promoters of San Diego certainly hope so. According to a report published in 2001 by the Brookings Institute, a think-tank based in Washington, dc, 94 biotechnology companies were then located in that city. It wants to beat its northerly neighbour, Biotech Bay (ie, San Francisco and its neighbours, which between them have 152), in the competition to become the principal “cluster” of the new industry. That is, if that honour does not fall to Massachusetts, where 141 firms are found clinging to the skirts of mit and Harvard. All this sounds faintly familiar, until the realisation dawns: Biotech Bay is simply Silicon Valley by another name. Massachusetts is route 128. The “me-too” clusterettes in Europe – around Cambridge, England, for example, or Uppsala, Sweden – are also in the same places as concentrations of electronics and software companies.


pages: 327 words: 102,322

Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Jacquie McNish, Sean Silcoff

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Albert Einstein, Clayton Christensen, corporate governance, diversified portfolio, indoor plumbing, Iridium satellite, patent troll, QWERTY keyboard, rolodex, Silicon Valley, Silicon Valley startup, skunkworks, Skype, Stephen Hawking, Steve Ballmer, Steve Jobs, the new new thing

Apple was also given carte blanche and unlimited bandwidth to develop services BlackBerry was denied by carriers—video downloads, map searches, and full Internet browsing. This was market disruption Silicon Valley style: Apple aimed to win by ignoring the established rules. In exchange for the unusual freedoms, Apple granted Cingular a multiyear contract to sell iPhones exclusively in the United States. “Ours is a unique relationship that lets Apple be Apple and Cingular be Cingular,” Sigman said. Jobs finished his presentation by making one more announcement. From now on, Apple Computer, Inc. would be Apple Inc. Gesturing to an overhead chart, he pointed out that in 2006 almost 200 million personal computers were sold globally. One billion mobile phones were sold during the same period. Silicon Valley could no longer afford to ignore the smartphone market that BlackBerry had created. Apple, Jobs boasted, would grab 1 percent of the mobile phone market by selling 10 million iPhones in the following year.

RIM had thrived in the high-stakes wireless market in its early days because it was more innovative and nimbler than industry leaders such as Motorola, Nokia, and Palm. Now two of Silicon Valley’s most visionary powerhouses, Apple and Google, had moved onto the field. They had shifted the smartphone market away from Lazaridis’s vision of a simple mobile e-mail device to a handheld mini-computer that was loaded like a modern Swiss Army knife with practical and whimsical add-ons. For years Lazaridis and Balsillie had bravely battled everyone from the Topper to Steve Jobs. Now, it seemed, all they had left to fight was each other. RIM’s internal challenges were the talk of Silicon Valley. “They’ve been caught flat-footed,” Jean-Louis Gassée, a Palo Alto venture capitalist and former Apple executive told the New York Times in April 2011.

Alluding to the company’s uncertain fate, the letters were a play on the Latin phrase Dextera Domini—the right hand of God. The South Lawn of the White House was dotted with colorful tents that sagged under a heavy midday sun. It was July 22, 1993. Representatives from technology companies were gathered to show off the latest in mobile communications. President Bill Clinton led an entourage through the tents. Stopping at one, he examined a thick glass tablet and black electronic pen created by Eo Inc., a Silicon Valley start-up. Push the stylus across the surface of the EO Personal Communicator, Clinton was urged, your handwriting will automatically convert into a digital text message, poised to fly across radio waves to the person of your choice. Reflecting on dozens of American victims claimed by recent flooding in Illinois and nearby states, the president moved the stylus across the tablet: “Al, stop the rain in the Midwest.


pages: 496 words: 154,363

I'm Feeling Lucky: The Confessions of Google Employee Number 59 by Douglas Edwards

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Albert Einstein, AltaVista, Any sufficiently advanced technology is indistinguishable from magic, barriers to entry, book scanning, Build a better mousetrap, Burning Man, business intelligence, call centre, commoditize, crowdsourcing, don't be evil, Elon Musk, fault tolerance, Googley, gravity well, invisible hand, Jeff Bezos, job-hopping, John Markoff, Marc Andreessen, Menlo Park, microcredit, music of the spheres, Network effects, P = NP, PageRank, performance metric, pets.com, Ralph Nader, risk tolerance, second-price auction, side project, Silicon Valley, Silicon Valley startup, slashdot, stem cell, Superbowl ad, Y2K

Larry and Sergey knew that some of the firms they were pitching already had investments in competing search engines, and they had no intention of giving away their good ideas. "That made the presentation kind of dry," Salar went on, "so Sergey's solution was to annotate it with clip art the night before our first meeting." I tried to picture the power brokers of Silicon Valley intently pondering an investment of ten million dollars as cheesy money trees and sparkling dollar signs sprouted around Google's potential revenue streams (sales of technology and targeted advertising). Then I imagined their reaction to Google's aggressive traffic projections, which showed the company conducting fifty percent of all Internet searches within two years. Even in Silicon Valley, nobody grew that fast. In 1999, you would have needed uncanny foresight or powerful pharmaceuticals to envision Google's future success. Or maybe just money to burn. Kleiner Perkins and Sequoia must have had something, because the two VC firms invested twelve and a half million dollars each, leading cynics in the Valley to define "Googling" as "getting funding without a business plan

What was I thinking? Why would I volunteer to take a twenty-five-thousand-dollar salary cut and a less impressive title to be with a bunch of college kids playacting at creating a company? It seemed logical at the time, but only because logic at the time was warped and twisted by the expanding dot-com bubble. Managing marketing and then online product development at the Merc ("The Newspaper of Silicon Valley") had given me a great view of the Internet explosion taking place outside our walls. Jerry Ceppos, the paper's executive editor, called it "the equivalent of the Italian Renaissance, happening right in our backyard." The region was rife with emerging e-Medicis and dot-Botticellis crafting new businesses from nothing but bits and big ideas. The Merc wanted desperately to join them and so launched a raft of new-media initiatives, including a tech news hub called Siliconvalley.com for which I'd written the business plan.

Even AltaVista, which I viewed as the best search engine available, had never found a trace of her, so my expectations were low when I hit the enter key. And there she was. Google listed her current contact information as the first result. I tried more searches. They all worked better than they had on AltaVista. I no longer begrudged Google the stationery and the stamp. Other signs pointed to something out of the ordinary. Sequoia Capital and Kleiner Perkins were the Montagues and Capulets of Silicon Valley venture capital (VC) firms. They had enviable success records individually—Yahoo, Amazon, Apple, Cisco Systems, Sun Microsystems—and an intense rivalry that usually kept them from investing in the same startup. Yet together they had poured twenty-five million dollars into the fledgling company. What did Google possess that induced them to set aside their ancient grudge? I looked for clues in the bios of Google's founders and management team.


pages: 242 words: 68,019

Why Information Grows: The Evolution of Order, From Atoms to Economies by Cesar Hidalgo

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Ada Lovelace, Albert Einstein, Arthur Eddington, assortative mating, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, Everything should be made as simple as possible, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, industrial cluster, information asymmetry, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, New Economic Geography, Norbert Wiener, p-value, Paul Samuelson, phenotype, price mechanism, Richard Florida, Ronald Coase, Rubik’s Cube, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population

This lack of adaptability, in turn, translated into a difference in size, since over the long run the less adaptable Route 128 cluster shrank with respect to Silicon Valley. So social institutions affect not only the size of the networks that people form but also their adaptability, and this helped Silicon Valley leave Route 128 in the dust.15 Silicon Valley’s porous boundaries and adaptability are exemplified in Steve Jobs’ famous visit to Xerox’s Palo Alto Research Center (Xerox PARC) in late 1979. It was there that Jobs learned about graphical user interfaces (GUIs) and object-oriented programming. Ultimately Apple, not Xerox, was the company that succeeded in commercializing these technologies. Intellectual property purists might complain about Apple and not Xerox profiting from these ideas, but a more pragmatic view holds that it was better for the long-term sustainability of Silicon Valley to have Apple (or anyone, for that matter) develop and commercialize ideas that otherwise could have died in the inboxes of Xerox’s managers or, worse, might have been commercialized by a company in a competing cluster.

This is true in an international context, but it also works within countries, which often are not culturally homogeneous. A famous example of within-country variation in social institutions, with consequences for the performance of economic networks, is represented by the contrast between Silicon Valley and Boston’s Route 128. Route 128 was a technology cluster that competed with Silicon Valley until it began to wane in the 1980s. According to AnnaLee Saxenian, a regional economic development expert who has written extensively on these two clusters, social institutions are among the factors that help explain the difference between these two clusters: [Silicon Valley’s] dense social networks and open labor markets encourage entrepreneurship and experimentation. Companies compete intensely while at the same time learning from one another about changing markets and technologies through informal communication and collaborative practices.

For interactive color versions of this figure visit the Observatory of Economic Complexity (atlas.media.mit.edu) or http://atlas.media.mit.edu/explore/network/sitc/export/mys/all/show/1980/ for the 1980 figure and http://atlas.media.mit.edu/explore/network/sitc/export/mys/all/show/1990/ for the 1990 figure. Figure 11. Industry space for Nova Lima in 2002 and 2012. (Source: dataviva.info) Consider Silicon Valley, a place that packs many personbytes of knowledge and knowhow relevant for making software, hardware, and websites. Silicon Valley’s knowledge and knowhow are not contained in a collection of perennially unemployed experts but rather in the experts working in firms that participate in the design and development of software and hardware. In fact, the histories of most firms in Silicon Valley are highly interwoven. Steve Jobs worked at Atari and Steve Wozniak worked at HP before starting Apple. As mentioned previously, Steve Jobs is also famously known for “borrowing” the ideas of a graphical user interface and object-oriented programming from Xerox PARC.


pages: 271 words: 62,538

The Best Interface Is No Interface: The Simple Path to Brilliant Technology (Voices That Matter) by Golden Krishna

Airbnb, computer vision, crossover SUV, en.wikipedia.org, fear of failure, impulse control, Inbox Zero, Internet Archive, Internet of things, Jeff Bezos, Jony Ive, Kickstarter, Mark Zuckerberg, new economy, Oculus Rift, pattern recognition, QR code, RFID, self-driving car, Silicon Valley, Skype, Snapchat, Steve Jobs, technoutopianism, Tim Cook: Apple, Y Combinator, Y2K

Silicon Swamp, 66. Silicon Taiga, 67. Silicon Valley, 68. Silicon Valley of China, 69. Silicon Valley of India, 70. Silicon Valley of Indonesia, 71. Silicon Valley of South Korea, 72. Silicon Valley of Taiwan, 73. Silicon Valley North, 74. Silicon Vineyard, 75. Silicon Wadi, 76. Silicon Walk, 77. Silicon Welly, 78. Silicon Woods, 79. Silicotton Valley, 80. Solar Valley, 81. Ticino Valley Area, 82. Wyoming Silicon Prairie (also called the Silicon Range) “Innovation” centers around the world. (Sources: Wired magazine, Inc. magazine, CNBC, Wikipedia) Oh, the unoriginal places you’ll go. Guy Kawasaki, formerly an advisor for Google and Apple, once gave these words of advice: “There’s one more thing you need to do: Aim higher than merely trying to recreate Silicon Valley. You should try to kick our butt instead.”1 Many brilliant thinkers, dreamers, designers, engineers, developers, and entrepreneurs have made and will continue to make great strides enriching the human experience through technology in many of these locations.

As an industry, we’ve gotten caught up in a globally evident technological impotence of me-too thinking that is taking us away from real innovation. 1. BioCon Valley, 2. Bit Valley, 3. Brazilian Silicon Valley, 4. CFK Valley, 5. Cwm Silicon, 6. Cyber District, 7. Cyberabad, 8. Dallas-Fort Worth Silicon Prairie, 9. Dubai Silicon Oasis, 10. Etna Valley, 11. Food Valley, 12. Health Valley, 13. Illinois Silicon Prairie, 14. Isar Valley, 15. Lima Valley, 16. Measurement Valley, 17. Medical Valley, 18. Mexican Silicon Valley/Silicon Valley South, 19. Midwest Silicon Prairie, 20. Philicon Valley, 21. Russian Silicon Valley, 22. Silicon Allee, 23. Silicon Alley, 24. Silicon Anchor, 25. Silicon Beach, 26. Silicon Border, 27. Silicon Bridge, 28. Silicon Canal, 29. Silicon Canal, 30. Silicon Cape, 31. Silicon Coast, 32.

*Ring, ring.* Ellis Hamburger was a reporter for the technology news and culture website The Verge from 2012–2015. Now he’s working in marketing at Snapchat. Contents Welcome 1 Introduction Why did you buy this book? Um, why did you buy this book again? 2 Screen-based Thinking Let’s make an app! Tackle a global issue? Improve our lives? No, no. When smart people get together in Silicon Valley they often brainstorm, “What app can we make?” The Problem 3 Slap an Interface on It! Slimmer TVs! Faster computers! And an overlooked epidemic of awful. We’ve seen huge leaps in consumer technology, like high resolution displays and multi-core processors. But there’s an awful trend that is taking us away from what really matters. 4 UX ≠ UI I make interfaces because that’s my job, bro UX is about making great experiences.


pages: 314 words: 83,631

Tubes: A Journey to the Center of the Internet by Andrew Blum

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air freight, cable laying ship, call centre, Donald Davies, global village, Hibernia Atlantic: Project Express, if you build it, they will come, inflight wifi, invisible hand, John Markoff, Kevin Kelly, Leonard Kleinrock, Marc Andreessen, Mark Zuckerberg, Menlo Park, Mercator projection, Network effects, New Urbanism, packet switching, Ralph Waldo Emerson, RAND corporation, side project, Silicon Valley, Skype, South of Market, San Francisco, Steve Crocker, Steve Jobs, Steven Levy, urban planning, WikiLeaks, zero-sum game

Some of the needed pieces were obvious: there had to be new high-capacity long-distance lines between cities; software tools that would enable “e-commerce” and online videos; and new devices that could connect to the Internet faster and more flexibly. But beneath all that was an unmet mechanical need, an unbuilt room in the Internet’s basement: Where could all the networks connect? They came up with the answer down the road, in the heart of Silicon Valley—in a basement, in fact. Only Connect For a couple of years at the beginning of the millennium—during the quiet time after the Internet bubble burst but before it inflated again—I lived in Menlo Park, California, a supremely tidy suburb in the heart of Silicon Valley. Menlo Park is a place rich in a lot of things, Internet history among them. When Leonard Kleinrock recorded his first “host-to-host” communication—what he likes to call “the first breath of the Internet’s life”—the computer on the other end of the line was at the Stanford Research Institute, barely a mile from our apartment.

It wasn’t big news at the time—the only person I knew on Facebook then was my sister-in-law, still in college—but it was clear that it made perfect sense. As E. B. White said of New York, this was the place you came if you were willing to be lucky. Just as Wall Street, Broadway, or Sunset Boulevard each contain a dream, so too does this corner of Silicon Valley. Most often, that dream is to build a new piece of the Internet, preferably one worth a billion dollars. (Facebook, by the way, recently moved into a fifty-seven-acre campus, back in Menlo Park.) An economic geographer would describe all this as a “a business cluster.” Silicon Valley’s unique combination of talent, expertise, and money has created an atmosphere of astounding innovation—as well as what the local venture capitalist John Doerr once described as the “greatest legal accumulation of wealth in human history.” Indeed, this place, perhaps more than anywhere else in the world, oozes with a collective belief in the limitless potential of technology, and that technology’s potential to turn into limitless money.

He had been using his post-Digg sabbatical to take guitar lessons, move into a new $3 million house, spend time with his three kids, and weigh his options for the future—mulling a third act in what had already been a very successful Silicon Valley career. It was the first act that interested me: when he helped solve the problem of MAE-East, and in the process raised the Equinix flag above what are today the Internet’s most important choke points. “You want to hear the whole story?” Adelson said, already gearing up, digging into a chicken Caesar salad. “It was an interesting period, a real transitional point for the Internet.” It all happened fast, at the height of the dot-com boom. At the end of 1996, Adelson had a job at Netcom, one of Silicon Valley’s first commercial Internet providers. In contrast to the Virginia-based companies focused on big corporate clients, Netcom’s bread and butter was “nerds in withdrawal,” recent castoffs from university computer science departments desperate to “extend their addiction” to the Internet.


pages: 382 words: 92,138

The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

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Apple II, banking crisis, barriers to entry, Bretton Woods, California gold rush, call centre, carbon footprint, Carmen Reinhart, cleantech, computer age, creative destruction, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, endogenous growth, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Financial Instability Hypothesis, full employment, G4S, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, intangible asset, invisible hand, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, natural language processing, new economy, offshore financial centre, Philip Mirowski, popular electronics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, total factor productivity, trickle-down economics, Washington Consensus, William Shockley: the traitorous eight

Abbate’s (1999) extensive research shows how the Internet grew out of the small Defense Department network project (ARPANET) of connecting a dozen research sites in the US into a network linking millions of computers and billions of people. Leslie (2000) argues that while Silicon Valley has been an attractive and influential model for regional development, it has been also difficult to copy it, because almost every advocate of the Silicon Valley model tells a story of ‘freewheeling entrepreneurs and visionary venture capitalists’ and yet misses the crucial factor: the military’s role in creating and sustaining it. Leslie shows that ‘Silicon Valley owes its present configuration to patterns of federal spending, corporate strategies, industry–university relationships, and technological innovation shaped by the assumptions and priorities of Cold War defense policy’ (Leslie 2000, 49). Notwithstanding, the Silicon Valley model still lingers in the collective imagination of policymakers as a place where VC created a revolution.

Anyone who possessed a superior design for a new microchip could have the chips fabricated at this laboratory, thus expanding the pool of participants designing faster and better microchips. The personal computer emerged during this time with Apple introducing the first one in 1976. Following this, the computer industry’s boom in Silicon Valley and the key role of DARPA in the massive growth of personal computing received significant attention, but has since been forgotten by those who claim Silicon Valley is an example of ‘free market’ capitalism. In a recent documentary, Something Ventured, Something Gained, for example, the role of the State is not mentioned once in the 85 minutes spent describing the development of Silicon Valley (Geller and Goldfine 2012). Also, during the 1970s, the significant developments taking place in biotechnology illustrated to policymakers that the role of DARPA in the computer industry was not a unique or isolated case of success.

Available online at http://www.alternet.org/newsandviews/article/877674/ralph_nader_to_apple_ceo_using_texas’_tax_dollars%3A_’stand_on_your_own_two_$100_billion_feet’/ (accessed 22 January 2013). Lent A. and M. Lockwood. 2010. ‘Creative Destruction: Placing Innovation at the Heart of Progressive Economics’. IPPR discussion paper, December. Lerner, J. 1999. ‘The Government as Venture Capitalist: The Long Run Impact of the SBIR Program’. Journal of Business 72, no. 3: 285–318. Leslie, S. W. 2000. ‘The Biggest “Angel” of Them All: The Military and the Making of Silicon Valley’. In Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region, edited by M. Kenney, 44–67. Stanford, CA: Stanford University Press. Levine, S. 2009. ‘Can the Military Find the Answer to Alternative Energy?’ Businessweek.com, 23 July. Available online at http://www.businessweek.com/magazine/content/09_31/b4141032537895.htm (accessed 28 January 2013). Lewis, J. 2007. ‘Technology Acquisition and Innovation in the Developing World: Wind Turbine Development in China and India’.


The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy by Bruce Katz, Jennifer Bradley

3D printing, additive manufacturing, Affordable Care Act / Obamacare, British Empire, business climate, carbon footprint, clean water, cleantech, collapse of Lehman Brothers, deindustrialization, demographic transition, desegregation, double entry bookkeeping, edge city, Edward Glaeser, global supply chain, immigration reform, income inequality, industrial cluster, intermodal, Jane Jacobs, jitney, Kickstarter, knowledge economy, lone genius, Mark Zuckerberg, Masdar, megacity, Menlo Park, Moneyball by Michael Lewis explains big data, Network effects, new economy, New Urbanism, Occupy movement, place-making, postindustrial economy, purchasing power parity, race to the bottom, Richard Florida, Shenzhen was a fishing village, Silicon Valley, smart cities, smart grid, sovereign wealth fund, the built environment, The Death and Life of Great American Cities, the market place, The Spirit Level, Tony Hsieh, too big to fail, trade route, transit-oriented development, urban planning, white flight

The rest of the country has been slow to realize it, but there are many areas in which San Francisco is not that relevant, and New York dominates.” As the Applied Sciences competition was building, comparisons to Silicon Valley were ubiquitous in statements from city officials and in news coverage. “We can’t just sit here and let Silicon Valley beat us,” Mayor Bloomberg told a gathering of tech entrepreneurs in October 2011, as the responses to the request for proposals were coming in.60 But New York was not, in fact, seeking to transplant an entire industry or create a Silicon Valley East. The NYCEDC and the mayor’s office were clear that Applied Sciences NYC would be connected to the particular existing and emerging strengths of the city. As Enrico Moretti points out in The New Geography of Jobs, “Universities are most effective at shaping a local economy when they are part of a larger ecosystem of innovative activity.”61 Before launching a major economic development initiative like this, places need a sense of what that ecosystem is.

There is, of course, a deep irony in the fact that technology, which was supposed to cut the ties between people and places and allow people everywhere to work from almost anywhere, turns out to flourish in fairly compact geographic concentrations. “Innovations cluster in places like Silicon Valley because ideas cross corridors and streets more easily than continents and seas,” as the Harvard economist Edward L. Glaeser puts it.16 In that respect, technology is no different from the garment industry that flourished in New York City in the nineteenth and early twentieth centuries, film production in Hollywood, music recording in Nashville, computer chip making in Portland, or scores of other examples from around the world and across centuries. All of these industries benefit from—even depend on—the effects of clustering. Clusters are geographic concentrations of interconnected firms and supporting or coordinating organizations.17 Silicon Valley has a cluster of professors, researchers, entrepreneurs, venture capitalists, intellectual property attorneys, and engineers who learn from one another, trade ideas, and hop between companies, bringing innovations with them and creating new ones that then spread out to other companies.

Between 2003 and 2010, Portland increased its export volume by 109.3 percent, making it the second-fastestgrowing export market among the major metros.52 Weird and crunchy Portland, it turns out, is also the home of Silicon Forest, a robust cluster of computer and electronics firms. Silicon Forest was initially planted in 1946, when four returning war veterans started Tektronix to invent and manufacture oscilloscopes.53 Tektronix grew to be one of the top manufacturers of test and measurement instruments and, over time, spun off dozens of start-up companies. In 1976 the semiconductor maker Intel started up in Silicon Valley. Portland was conveniently close to Silicon Valley, with a lower cost of living and inexpensive raw materials for manufacturing (like water and electricity). Soon thereafter, Intel moved a cadre of engineers to Portland, and a Portland-based team developed the company’s signature Pentium chip. Intel did not spur as many spin-offs in the region as Tektronix had, but it did attract a group of specialized suppliers, who sought to be near a major customer.


pages: 380 words: 118,675

The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

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3D printing, airport security, AltaVista, Amazon Mechanical Turk, Amazon Web Services, bank run, Bernie Madoff, big-box store, Black Swan, book scanning, Brewster Kahle, call centre, centre right, Chuck Templeton: OpenTable, Clayton Christensen, cloud computing, collapse of Lehman Brothers, crowdsourcing, cuban missile crisis, Danny Hillis, Douglas Hofstadter, Elon Musk, facts on the ground, game design, housing crisis, invention of movable type, inventory management, James Dyson, Jeff Bezos, John Markoff, Kevin Kelly, Kodak vs Instagram, late fees, loose coupling, low skilled workers, Maui Hawaii, Menlo Park, Network effects, new economy, optical character recognition, pets.com, Ponzi scheme, quantitative hedge fund, recommendation engine, Renaissance Technologies, RFID, Rodney Brooks, search inside the book, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, Skype, statistical arbitrage, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Thomas L Friedman, Tony Hsieh, Whole Earth Catalog, why are manhole covers round?, zero-sum game

John Doerr quietly phoned many of the company’s senior executives to get their take on the boiling tensions in the management team. To adjudicate the matter, he turned to a Silicon Valley legend, a former Columbia University football coach named Bill Campbell. An amiable former Apple exec and the chief executive of Intuit in the mid-1990s, Campbell had a reputation for being an astute listener who could parachute into difficult corporate situations and get executives to confront their own shortcomings. Steve Jobs considered him a confidant and got him to join the Apple board when Jobs returned to the helm of that company in 1997. At Amazon, Campbell’s stated mission was to help Galli play nicely with others. He commuted between Silicon Valley and Seattle for a few weeks, sitting quietly in executive meetings and talking privately with Amazon managers about the metastasizing leadership problems.

Marketing vice president Kathy Savitt had persuaded Bezos to splurge on the historic moment, and, characteristically, they organized everything in such a way that it had a benefit for customers: the concert was streamed live on Amazon.com and watched by a million people. Despite how far Amazon.com had come, it was still often a media afterthought. It was now officially the age of Google, the search-engine star from Silicon Valley. Google cofounders Larry Page and Sergey Brin were rewriting the story of the Internet. Their high-profile ascent, which included an IPO in 2004, was universally watched. Suddenly, clever online business models and experienced CEOs from traditional companies were passé in Silicon Valley, replaced by executives with deep technical competence. This, it seemed, was to be the era of Stanford computer science PhDs, not Harvard MBAs or hedge-fund whiz kids from Wall Street, and the outside world did not believe Amazon would fare well in this profound shift.

He later famously admitted to thinking about how to increase his “women flow,”2 a Wall Street corollary to deal flow, the number of new opportunities a banker can access. Jeff Holden, who worked for Bezos first at D. E. Shaw & Co. and later at Amazon, says he was “the most introspective guy I ever met. He was very methodical about everything in his life.” D. E. Shaw had none of the gratuitous formalities of other Wall Street firms; in outward temperament, at least, it was closer to a Silicon Valley startup. Employees wore jeans or khakis, not suits and ties, and the hierarchy was flat (though key information about trading formulas was tightly held). Bezos seemed to love the idea of the nonstop workday; he kept a rolled-up sleeping bag in his office and some egg-crate foam on his windowsill in case he needed to bunk down for the night. Nicholas Lovejoy, a colleague who would later join him at Amazon, believes the sleeping bag “was as much a prop as it was actually useful.”


pages: 233 words: 64,479

The Big Shift: Navigating the New Stage Beyond Midlife by Marc Freedman

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airport security, Berlin Wall, David Brooks, follow your passion, illegal immigration, Isaac Newton, McMansion, RAND corporation, Silicon Valley, Steve Jobs, transcontinental railway, working poor, working-age population

Toward the end of my year, HP called me and said, “Hey, we’ve got this new Encore Fellowships program with Civic Ventures and the Packard Foundation, and we thought you might be interested in helping us to pilot it.” And I said, “Huh? You’ve got a program that places recent retirees in nonprofits in Silicon Valley where we take on significant, part-time, yearlong assignments; help the nonprofit advance; and learn something about the nonprofit sector? Wow! That sounds good. Count me in!” I chose to work with the Silicon Valley Education Foundation. They wanted to focus on human resource issues initially, and then they needed some help in finance and board governance. I thought that was a good match and said, “Let’s make a go of it.” And so that’s what happened. My first assignment was with HR, which I thought was going to take the full year, but in three weeks, I’d worked with the process, written a whole analysis and report to the board, and outsourced HR.

We focus on the underserved women and children of Kenya and Sudan—providing financial support, building schools, whatever it takes. And on top of that, I’m the chair of the board of Palo Alto University and serve on the board of the Children’s Health Council and the Child Advocates of Silicon Valley, where we train volunteers to work with kids in the foster-care system. I have no moments of doubt, no regrets. Even though I seem to be doing quite a bit now, it’s nowhere close to what I was doing before. Well, I do have one regret—I still don’t have enough time. James Otieno was one of ten people to take part in the first pilot of the Silicon Valley Encore Fellows program. Holly Thibodeaux Ontario, California I’m the oldest of seven children, and neither of my parents went to college. When I was fifteen, I started working as a maid. I tell people that I was an assistant maid to the assistant maid at a retirement hotel.

Indeed, at Civic Ventures we talk a lot about the new demographics producing a potential “experience dividend,” the payoff from tapping into the vast stores of human capital accumulating in so many individuals in their fifties, sixties, seventies, and beyond. That capital represents a huge investment by the country, and by these individuals themselves, over many years. Yet in our society the value of experience is often disregarded. Seen as dead weight. Tossed away. “Finished at forty” is a slogan that floats around Silicon Valley, near where I live. But I’ve seen much that challenges this assumption. Take Gary Maxworthy. Forty years ago, Maxworthy was an idealistic young man who wanted to join the Peace Corps in the wake of JFK’s call to service. But he already had a family to support. Instead of joining up, he launched a career working in the food distribution business, where he ended up spending decades accumulating considerable expertise.


pages: 791 words: 85,159

Social Life of Information by John Seely Brown, Paul Duguid

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AltaVista, business process, Claude Shannon: information theory, computer age, cross-subsidies, disintermediation, double entry bookkeeping, Frank Gehry, frictionless, frictionless market, future of work, George Gilder, George Santayana, global village, Howard Rheingold, informal economy, information retrieval, invisible hand, Isaac Newton, John Markoff, Just-in-time delivery, Kenneth Arrow, Kevin Kelly, knowledge economy, knowledge worker, loose coupling, Marshall McLuhan, medical malpractice, moral hazard, Network effects, new economy, Productivity paradox, Robert Metcalfe, rolodex, Ronald Coase, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, Superbowl ad, Ted Nelson, telepresence, the medium is the message, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, Turing test, Vannevar Bush, Y2K

Relations between the PARC scientists and the Dallas engineers were in every sense far more distant. Page 164 In Silicon Valley the parallel vertical strands (represented by the lettered lines) might represent Hewlett-Packard, Apple, Sun, Oracle, Xerox PARC, Intel, Cypress, Netscape, Yahoo!, and so on. The numbered lines could represent R&D, software engineers, chip designers, financial managers, accounting, librarians, legal services, and catering. Such links become specially interesting where several, similar firms group tightly together. Then the lines between them are relatively short and the links dense. Clustered Ecologies Clusters like the one that makes up Silicon Valley have a long history. The great economist Alfred Marshall studied them in industrial England. He noted how industries might cluster for geographical reasons.

Informal ties can form rapidly, running directly along networks of practice, speeding well ahead of the slow pace of formal contacts and negotiations between organizations. Marshall pointed out how in clusters, "[s]ocial forces cooperate with economic ones." And in a similar vein, Saxenian draws attention to the importance of social forces to the development of Silicon Valley, contrasting its "culture" to that of Route 128.31 In explaining the success of the former, she notes such things as the remarkably permissive attitude in Silicon Valley that both encourages and is encouraged by the networks of practice that run between companies. By contrast, the companies of Page 167 Route 128 discouraged fraternization between firms. This insularity not only cut firms off from their ecology but also prevented the ecology as a whole from developing.

Death of Distance Despite our various mixed metaphors, when we talk about the region and related notions of place and locality, we mean these terms quite literally. Even for information technology firms, neighborhoods and regions remain significant. The namesnot only Silicon Valley, but less-familiar names from the Silicon family ("Silicon Glen" (Scotland), "Silicon Alley" (New York), "Silicon Forest" (Oregon), and many more) as well as others such as "Multimedia Gulch" and "Audio Alley''suggest the continuing formation (and imitation) of clusters. Like firms, ecologies need a range of overlapping but also complementary practices and organizations. From its origins in semiconductors, Silicon Valley has developed rich related expertise in disk drives (IBM), networking (3Com, Cisco Systems), operating systems (Apple, Bee, NeXt), high-end workstations Page 168 (Sun, HP, Silicon Graphics), and database management (Oracle).


pages: 468 words: 124,573

How to Build a Billion Dollar App: Discover the Secrets of the Most Successful Entrepreneurs of Our Time by George Berkowski

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Airbnb, Amazon Web Services, barriers to entry, Black Swan, business intelligence, call centre, crowdsourcing, en.wikipedia.org, game design, Google Glasses, Google Hangouts, Google X / Alphabet X, iterative process, Jeff Bezos, Jony Ive, Kickstarter, knowledge worker, Lean Startup, loose coupling, Marc Andreessen, Mark Zuckerberg, minimum viable product, move fast and break things, move fast and break things, Network effects, Oculus Rift, Paul Graham, QR code, Ruby on Rails, self-driving car, Silicon Valley, Silicon Valley startup, Skype, Snapchat, social graph, software as a service, software is eating the world, Steve Jobs, Steven Levy, Y Combinator

Instagram Instagram was the first billion-dollar app – and one with a fascinating journey. I admire Kevin Systrom, Instagram’s CEO, for possessing such a clear vision and such an ability to build a singularly brilliant app on a single platform. The final twist to the story – doubling Instagram’s valuation in a mere four days – is the stuff of Silicon Valley legend. Instagram marked a turning point in Internet history: it was the first billion-dollar acquisition of an app. It led to speculation that Mark Zuckerberg had lost his mind and that Silicon Valley crazy-think was back in full force. Were people deluded into thinking it was 1999 all over again? On the surface, Instagram was just a group of 16 developers hacking some software in a poky office above a pizza shop in Palo Alto. They hadn’t made a cent in revenues. But they had attracted more than 30 million users in record time.

Instagram had well over 150 million active users12 by the end of 2013 and the momentum hasn’t stopped. It launched an advertising product for brands on 1 November 2013.13 So let’s take a moment to dive into the details of Instagram’s famous journey and understand a bit more about how Silicon Valley thinks, and why the billion-dollar acquisition of the company by Facebook actually does make sense. The face of Instagram Instagram has two cofounders. The first is Kevin Systrom, who is the app’s best-known public face.14 Systrom grew up in a rather nice Boston suburb called Holliston. He was a pretty smart kid, fascinated by computers and photography, which led him to enrol at Stanford – but Silicon Valley had always been on his mind. While at Stanford he snagged a summer internship at Odeo, the company that would later evolve into Twitter. It’s there he made friends with Jack Dorsey, who sat at the neighbouring desk.

mg= reno64-wsj. 17 ‘Small Retailers Reap the Benefits of Selling on Amazon, but Challenges Remain’, article on InternetRetailer.com, 14 February 2014, www.internetretailer.com/mobile500/. 18 Bill Siwicki, ‘It’s Official: Mobile Devices Surpass PCs in Online Retail’, article on InternetRetailer.com, 1 October 2013, www.internetretailer.com/2013/10/01/its-official-mobile-devices-surpass-pcs-online-retail. 19 ‘Mobile Commerce Comes of Age’, article on InternetRetailer.com, 24 September 2013, www.internetretailer.com/2013/09/24/mobile-commerce-comes-age. 20 ‘Gartner Says Worldwide PC Shipments Declined 6.9 Percent in Fourth Quarter of 2013’, article on Gartner.com, 9 January 2014, www.gartner.com/newsroom/id/2647517. 21 Mary Meeker and Liang Wu, May 2013, slide 31, op. cit. 21 In-Soo Nam, ‘A Rising Addiction Among Youths: Smartphones’, article on WSJ.com, 23 July 2013, online.wsj.com/article/SB10001424127887324263404578615162292157222.html. 23 ‘Americans Can’t Put Down Their SmartPhones, Even During Sex’, article on Jumio.com, 11 July 2013, www.jumio.com/2013/07/americans-cant-put-down-their-smartphones-even-during-sex/. 24 Drew Olanoff, ‘Mark Zuckerberg: Our Biggest Mistake was Betting Too Much on HTML5’, article on TechCrunch.com, 11 September 2012, TechCrunch.com/2012/09/11/mark-zuckerberg-our-biggest-mistake-with-mobile-was-betting-too-much-on-html5/. 25 Walter Isaacson, Steve Jobs, Little, Brown: London, 2012, p. 501. 26 ‘Standish Newsroom – Open Source’, press release, Boston, April 2008, blog.standishgroup.com/pmresearch. 27 Richard Rothwell, ‘Creating Wealth with Free Software’, article on FreeSoftwareMagazine.com, 8 May 2012, www.freesoftwaremagazine.com/articles/creating_wealth_free_software. 28 ‘Samsung Elec Says Gear Smartwatch Sales Hit 800,000 in 2 Months’, article on Reuters.com, 19 November 2013, www.reuters.com/article/2013/11/19/samsung-gear-idUSL4N0J41VR20131119. 29 Jay Yarow, ‘Meet the Team of Experts Apple Assembled To Create The iWatch, Its Next Industry-Defining Product’, article on BusinessInsider.com. 18 July 2013, www.BusinessInsider.com/iwatch-sensors-2013-7. 30 Macelo Ballve, ‘Wearable Gadgets Are Still Not Getting The Attention They Deserve – Here’s Why They Will Create A Massive New Market’, article on BusinessInsider.com, 29 August 2013, www.BusinessInsider.com/wearable-devices-create-a-new-market-2013-8. Chapter 3: A Billion-Dollar Idea 1 Eric Jackson, ‘Why Silicon Valley Tech Wunderkids Will Only Ever Have 1 Good Business Idea During Their Entire Lives’, article on Forbes.com, 18 June 2012, www.forbes.com/sites/ericjackson/2012/06/18/why-silicon-valley-tech-wunderkids-overestimate-their-own-smarts-and-abilities/. 2 Kevin Rose, ‘Foundation: Evan Williams on Hatching Big Ideas’, article on TechCrunch.com, 28 June 2013, TechCrunch.com/2013/06/28/ foundation-evan-williams-on-hatching-big-ideas/. 3 Evelyn M. Rusli and Douglas MacMillan, ‘Snapchat Spurned $3 Billion Acquisitions Offer from Facebook’, blog post on WSJ.com, 13 November 2013, blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/. 4 ‘Human Universals’, entry on Wikipedia.org, en.wikipedia.org/wiki/Human_Universals. 5 Find out more about the app at www.bible.com. 6 Alyson Shontell, ‘With 100 Million Downloads, YouVersion Bible Is A Massive App That No VC Can Touch’, article on BusinessInsider.com, 29 July 2013, www.BusinessInsider.com/youversion-bible-app-has-100-million-downloads-2013-7. 7 Tomi Ahonen, ‘The Annual Industry Numbers and Stats Blog – Yep, this year we will hit the mobile moment’, blog post on Communities Dominate.blogs.com, 6 March 2013, communitiesdominate.blogs.com/brands/2013/03/the-annual-mobile-industry-numbers-and-stats-blogyep-this-year-we-will-hit-the-mobile-moment.html. 8 Mayumi Negishi, ‘Rakuten to Buy Voice-Call App Maker Viber’, article on WSJ.com, 14 February 2014, online.wsj.com/news/articles/SB10001424052702304315004579382014046629596. 9 Sven Grundberg and Juhana Rossi, ‘Earnings Soar at Finnish Game Maker Supercell’, article on WSJ.com, 12 February 2014, online.wsj.com/news/articles/sb10001424052702304703804579378272705325260?


pages: 666 words: 181,495

In the Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy

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23andMe, AltaVista, Anne Wojcicki, Apple's 1984 Super Bowl advert, autonomous vehicles, book scanning, Brewster Kahle, Burning Man, business process, clean water, cloud computing, crowdsourcing, Dean Kamen, discounted cash flows, don't be evil, Donald Knuth, Douglas Engelbart, Douglas Engelbart, El Camino Real, fault tolerance, Firefox, Gerard Salton, Gerard Salton, Google bus, Google Chrome, Google Earth, Googley, HyperCard, hypertext link, IBM and the Holocaust, informal economy, information retrieval, Internet Archive, Jeff Bezos, John Markoff, Kevin Kelly, Mark Zuckerberg, Menlo Park, one-China policy, optical character recognition, PageRank, Paul Buchheit, Potemkin village, prediction markets, recommendation engine, risk tolerance, Rubik’s Cube, Sand Hill Road, Saturday Night Live, search inside the book, second-price auction, selection bias, Silicon Valley, skunkworks, Skype, slashdot, social graph, social software, social web, spectrum auction, speech recognition, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Ted Nelson, telemarketer, trade route, traveling salesman, turn-by-turn navigation, Vannevar Bush, web application, WikiLeaks, Y Combinator

Page earned a degree in computer science like his father did. But his destiny was in California, specifically in the Silicon Valley. In a way, Page’s arrival at Stanford was a homecoming. He’d lived there briefly in 1979 when his dad had spent a sabbatical at Stanford; some faculty members still remembered him as an insatiably curious seven-year-old. In 1995, Stanford was not only the best place to pursue cutting-edge computer science but, because of the Internet boom, was also the world capital of ambition. Fortunately, Page’s visions extended to the commercial: “Probably from when I was twelve, I knew I was going to start a company eventually,” he’d later say. Page’s brother, nine years older, was already in Silicon Valley, working for an Internet start-up. Page chose to work in the department’s Human-Computer Interaction Group.

Isn’t this bad?” But Larry and Sergey had complete confidence. They’d tell Salar that the VCs didn’t need to know the figures unless they were going to commit the money. Page was working the “hiding strategy” even before he had something to hide. The elite of the elite venture capital firms in Silicon Valley was Kleiner Perkins Caufield & Byers. The head was John Doerr, a bony blond man with oversize spectacles who looked a bit like Sherman in the Mr. Peabody cartoons but loomed over Silicon Valley like Bill Russell in the Boston Celtics’ glory years. Originally an engineer at Intel, he joined KPCB in 1980 and rose to the top of the VC heap during the Internet craze, funding Amazon.com and Netscape, among others. At industry conferences, Doerr would speak so rhapsodically of technology’s potential to save the world that one might assume his work had been solely in nonprofits.

It was an unprecedented invitation from a company that usually limits contact between journalists and its employees. The APM program, I learned, was a highly valued initiative. To quote the pitch one of the participants made in 2006 to recent and upcoming college graduates: “We invest more into our APMs than any other company has ever invested into young employees…. We envision a world where everyone is awed by the fact that Google’s executives, the best CEOs in the Silicon Valley, and the most respected leaders of global non-profits all came through the Google APM program.” Eric Schmidt, Google’s CEO, told me, “One of these people will probably be our CEO one day—we just don’t know which one.” The eighteen APMs on the trip worked all over Google: in search, advertising, applications, and even stealth projects such as Google’s attempt to capture the rights to include magazines in its index.


pages: 336 words: 88,320

Being Geek: The Software Developer's Career Handbook by Michael Lopp

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finite state, game design, job satisfaction, John Gruber, knowledge worker, remote working, rolodex, Silicon Valley, Silicon Valley startup, Skype, sorting algorithm, web application

Does it represent an opportunity you've never seen? At the end of this analysis is an unfortunate truth: you're not going to know what you're getting until you're there. The only guarantee is that it will be different than where you are now, and that means you're going to learn...something. Good. The more you know, the fewer the surprises. Chapter 36. The Curse of the Silicon Valley In 20 years of engineering life in the Silicon Valley, I have never heard an engineering manager tell me, "My degree in engineering management sure came in handy there." In fact, outside of company-sponsored management training, I've never heard of training specifically in engineering management. I'm certain it exists, but the fact that no coworker I've ever worked with has showered praise on an external engineering management class is intriguing.

No drama, dealing with in management, You Will Be a Multilingual Translator Dreamweaver, My Tools Do Only What I've Told Them to Do Dropbox, My Tools Do Not Care Where My Work Is E editing presentations, The Disaster email and remote workers, Do You Mean It? Enemy, The Enemy engagement at work, Early Warning Signs of Doom engineers, That Damned Triangle, That Damned Triangle, The Reveal, The Curse of the Silicon Valley bits, features, and truth exercise, That Damned Triangle constructing a demo, The Reveal management, where they come from, The Curse of the Silicon Valley established companies vs. startups, Three Choices Evening Scrub of the to-do list, Practice Productivity Minimalism, The Trickle Process excuses, On Excuses exodus from the company, This Sucks experience, The Issue with the Doof, Established, Established, Bad News About Your Bright Future acquiring, at established companies, Established value of, The Issue with the Doof vs. confidence, Bad News About Your Bright Future F failure, Delivery, Do You Mean It?

See also bosses, Technical Direction, Is There a 1:1?, Are There Status Reports?, Up, Up, Partial Information, Partial Information, The Enemy, The Illuminator, Bits, Features, and Truth, Bits, The Curse of the Silicon Valley doofs, Partial Information managing up, Up micromanagers, Technical Direction, The Illuminator organic vs. mechanic, Is There a 1:1? program managers, Bits, Features, and Truth, Bits responses to fuckups, The Enemy status reports and communication, Are There Status Reports? when to bring issues to, Up where they are coming from, The Curse of the Silicon Valley measures vs. content in the yearly review, Show Me the Money mechanic managers, Is There a 1:1? meetings, Managing Managers, Are There Status Reports?, Sigh, This Isn't Role Playing; This Is Life or Death, Bits, Features, and Truth, The Reveal, The Screw-Me Scenario, A Disclosure, You Go to a Lot of Meetings 1:1 and staff, Managing Managers alignment and creation, You Go to a Lot of Meetings cross-functional, Bits, Features, and Truth cross-pollination clusterfuck, The Screw-Me Scenario during times of crisis, Sigh presenting a demo, The Reveal scenarios of, in game play, This Isn't Role Playing; This Is Life or Death technical and alignment, Are There Status Reports?


pages: 193 words: 98,671

The Inmates Are Running the Asylum by Alan Cooper

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Albert Einstein, delayed gratification, Donald Trump, Howard Rheingold, informal economy, iterative process, Jeff Bezos, Menlo Park, natural language processing, new economy, pets.com, Robert X Cringely, Silicon Valley, Silicon Valley startup, skunkworks, Steve Jobs, Steven Pinker, telemarketer, urban planning

The stranger—without hesitation—will reply, "Great! I've just restructured the second act to tighten up the action!" The same joke is now true in Silicon Valley. You can buttonhole a stranger in line at Starbucks and ask how her Web site is doing. The stranger—without skipping a beat— will reply, "Great! I've just restructured the frames to tighten up the navigation!" Here in Silicon Valley, we forget how skewed our population is, and we should frequently remind ourselves how abnormal we really are. The average person who uses a software-based product around here isn't really very average. Programmers generally work in high-tech environments, surrounded by their technical peers in enclaves such as Silicon Valley; Route 128 outside Boston; Research Triangle in North Carolina; Redmond, Washington; and Austin, Texas. Software engineers constantly encounter their peers when they shop, dine out, take their kids to school, and relax, and their contact with frustrated computer users is limited.

Each extra line of code must be tested, debugged, and supported. Let Them Eat Cake I live and work in Silicon Valley, California. Virtually everybody I know is involved in the high-tech industry. We are all affluent, highly educated, and geographically and socially mobile, and we are all very comfortable with computers, cell phones, DVDs, ATMs, and every other software-based product in the middle-class menagerie. When I eat lunch at the Crescent Park Grill or Spago, the people at the next table are always discussing "client/server this" and "Web-based that." It's an exciting place to live, but it isn't representative of the majority of people in this country, let alone around the world. Here in Silicon Valley, it is easy for our estimation of the suitability of high-tech products to be terribly skewed.

She ran Windows 95 on her desktop PC, using Microsoft Word to write memos and contracts. The core of Windows 95 is the hierarchical file system. All of Jane's documents were stored in little folders, which were stored in other little folders. Jane didn't understand this or see the advantage to storing things that way. Actually, Jane didn't give it a lot of thought but merely took the path of least resistance. Jane had just finished drafting the new PR contract for a Silicon Valley startup company. She selected Close from the File menu. Instead of simply doing as she directed and closing the document, Word popped up a dialog box. It was, of course, the all-too-familiar Do You Want to Save the Changes? confirmation box. She responded—as always—by pressing the Enter key. She responded this way so consistently and often that she no longer even looked at the dialog box. The first dialog box was followed immediately by another one, the equally familiar Save As box.


pages: 270 words: 75,803

Wall Street Meat by Andy Kessler

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accounting loophole / creative accounting, Andy Kessler, automated trading system, banking crisis, Bob Noyce, George Gilder, index fund, Jeff Bezos, market bubble, Menlo Park, pets.com, Robert Metcalfe, rolodex, Sand Hill Road, Silicon Valley, Small Order Execution System, Steve Jobs, technology bubble, Y2K

His web site called TheStreet.com, looked useful, so I contacted him to see if he’d be interested in a diatribe from Silicon Valley every once in a while. He jumped into action, putting me in touch with Dave Kansas, an ex-Wall Street Journal writer who was now editor of the site. I told Dave I would be willing to write a column every once in a while. “Don’t you write a column for Forbes?” “I do, in sort of a pitching rotation, once every four issues.” “What do they pay you?” “They pay me a dollar a word. I send them columns of 20,000 words, but they always seem to cut them back to 750 words.” “Well, we can’t pay you that much.” “I’ll do it for options.” “What do you mean?” “You’re a private company. Don’t pay me a penny. Do it the Silicon Valley way, pay me 750 options per column. I’m willing 182 Price Targets as a Marketing Tool to take the risk that they will be worth something someday.

In his view, Morgan Stanley, having no tradition of pleasing investors, and no ability to do so, designed its investment bank without the investor in mind. Meeker and her bosses didn’t know enough to have a guilty conscience when they sold out investors to please corporations. In a game like this, that’s a huge advantage. viii Introduction M y partner Fred and I are standing outside of Il Fornaio Restaurant in Palo Alto, the epicenter of Silicon Valley. It’s July 1999, and although it’s only eight in the morning, we have already been scrambling at the office for an hour and a half. It’s a busy day, way too busy to be loitering around. Things are hopping. Internet and telecom names are jumping off the charts, so all my old friends are busy too. Jack Grubman keeps riding Worldcom to new highs—I think I saw it crack $65 this morning. Deals galore flow from Frank Quattrone at CS First Boston.

He told me that I had felt familiar, and that he saw a lot of him in me (without the deep booming voice, I suppose.) Wall Street, especially research, was a game, and he would teach me what he could about how to win it. I asked a few questions, but mostly about where we were headed. Los Angeles was just a quick stop to see a company from Bob’s PA (personal account), and then off to San Francisco and Silicon Valley for several analyst meetings. · · · After a quick lunch at an El Pollo Loco, I was about to visit my first company as an analyst. Oddly, it was a milk company, Foremost-Knudsen. Bob explained that we were about to enter a company with sales in the multi-billions, but whose stock was trading for less than $100 million in value. “We don’t get a lot of visitors from Wall Street,” the CEO muttered from behind a fake smile.


pages: 525 words: 142,027

CIOs at Work by Ed Yourdon

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8-hour work day, Apple's 1984 Super Bowl advert, business intelligence, business process, call centre, cloud computing, crowdsourcing, distributed generation, Donald Knuth, Flash crash, Googley, Grace Hopper, Infrastructure as a Service, Innovator's Dilemma, inventory management, Julian Assange, knowledge worker, Mark Zuckerberg, Nicholas Carr, rolodex, shareholder value, Silicon Valley, six sigma, Skype, smart grid, smart meter, software as a service, Steve Ballmer, Steve Jobs, Steven Levy, the new new thing, the scientific method, WikiLeaks, Y2K, Zipcar

Scott: Well, what happened was after two years, I figured out that this was pretty much not going to happen. If anything, the result of all this technology is that people are not likely to reduce their work week; they are likely to just take on more work. That was my conclusion, so I changed fields kind of by accident. I had moved, by this point, from the University of Illinois in Champaign to Silicon Valley. And I began to work in Silicon Valley—still working for the Parks and Recreation Department, but I began to see and meet people in technology. People who work for HP, people who worked for some of the chip companies, Texas Instruments, and various others. So my general awareness of technology started to ramp up pretty significantly. And finally the critical event was that I decided to get married and my wife-to-be also worked in the Parks and Recreation Department.

But I think I can help get people to where they need to be. Yourdon: It’s a future path that I’ve not heard other CIOs mention. And as it turns out, I’ve been on a couple of public boards also, so I completely agree with you that obviously in places like Silicon Valley, maybe everybody on the board is a technology person. But not in the typical Fortune 500 companies. You’ve got strong marketing people and financial people and so on, but, you know, having a real strong voice for technology—what a great career. Ford: And I’m a very strong believer in all kinds of diversity, and I think some of those Silicon Valley companies would be a lot better off if they didn’t have just technologists on the board. Yourdon: Oh, absolutely. Yeah. Ford: Think about it. Not a lot of them have CIOs on the board. Yourdon: You know, I’ve been surprised how infrequently the CIO has been on the board of all the companies I’ve been trying to track down.

And for probably the first two thirds of my career, umm, I didn’t know very many women executives, and if I did, they were at a very large distance, so there was no model. Yourdon: Now that is very interesting. Now you spent an early part of your career out in Silicon Valley, didn’t you? Ellyn: I did, I did. Yourdon: And there were no women out there? Ellyn: Just to recap, the first five years were in hospitals, and I did a lot of medical computing. Yourdon: Right. Ellyn: The next ten were at Chrysler Corporation. Yourdon: Oh right. Ellyn: Where I was in advanced technology software planning and managed the artificial intelligence group. Then I went to Xerox and from Xerox went to Netscape. Yourdon: Ahh, okay. What about out in Silicon Valley? Was there also an absence of female, you know, really strong IT managers? Ellyn: Absolutely. There were . . . like at Netscape, the chief counsel was a woman, the head of HR, which isn’t too uncommon, was a woman.


pages: 144 words: 43,356

Surviving AI: The Promise and Peril of Artificial Intelligence by Calum Chace

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3D printing, Ada Lovelace, AI winter, Airbnb, artificial general intelligence, augmented reality, barriers to entry, basic income, bitcoin, blockchain, brain emulation, Buckminster Fuller, cloud computing, computer age, computer vision, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, dematerialisation, discovery of the americas, disintermediation, don't be evil, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, everywhere but in the productivity statistics, Flash crash, friendly AI, Google Glasses, industrial robot, Internet of things, invention of agriculture, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, life extension, low skilled workers, Mahatma Gandhi, means of production, mutually assured destruction, Nicholas Carr, pattern recognition, peer-to-peer, peer-to-peer model, Peter Thiel, Ray Kurzweil, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley ideology, Skype, South Sea Bubble, speech recognition, Stanislav Petrov, Stephen Hawking, Steve Jobs, strong AI, technological singularity, The Future of Employment, theory of mind, Turing machine, Turing test, universal basic income, Vernor Vinge, wage slave, Wall-E, zero-sum game

“The rapture of the nerds” has become a term of derision, denoting that the speaker scorns the idea that AGI is possible in the near term, or thinks that it may turn out to be an unfortunate event. Silicon Valley, ground zero for the Singularity Silicon Valley is a wonderful place. It is blessed with one of the best climates on the planet, and neighbouring San Francisco is one of the world’s most attractive and exciting cities. (It is a peculiar irony that this wonderful city is located in the one place for thousands of miles around that has a damp, foggy micro-climate.) Silicon Valley is the technological and entrepreneurial crucible of the world. Of course it doesn’t have a global monopoly on innovation: there are brilliant scientists and engineers all over the planet, and clever new business models are being developed in Kolkata, Chongqing and Cambridge. But for various historical reasons including military funding, Silicon Valley has assembled a uniquely successful blend of academics, venture capitalists, programmers and entrepreneurs.

It is home to more high technology giants (Google, Apple, Facebook, Intel, for instance) than any other area and it receives nearly half of all the venture funding invested in the US. (43) Silicon Valley takes this leadership position very seriously, and an ideology has grown up to go along with it. If you work there you don’t have to believe that technological progress is leading us towards a world of radical abundance which will be a much better place than the world today – but it certainly helps. Probably nowhere else in the world takes the ideas of the singularity as seriously as Silicon Valley. And after all, Silicon Valley is a leading contender to be the location where the first AGI is created. The controversial inventor and author Ray Kurzweil is the leading proponent of the claim that a positive singularity is almost inevitable, and it is no coincidence that he is now a director of engineering at Google.

Non-Americans reading this may by now be wondering where the European and Asian players are. The bald fact is that the technology giants which are major players in AI are almost all US companies. A notable exception is Baidu, founded in 2000 and often referred to as China’s Google. It is the leading search engine in China, and in May 2014 it hired Stanford Professor Andrew Ng to head up its new AI lab in Silicon Valley, with a claimed budget of $300m over five years. Ng had been a leading figure in the development of Google Brain and then went on to help found Coursera, Stanford’s online education venture. Big Data Big Data was the hot topic in business circles in the early 2010s. Businesses and other organisations (especially governments) have massively more data at their disposal than just a few years ago, and it takes considerable effort and ingenuity to figure out what to do with it – if anything.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, Plutocrats, plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

The leading-edge high-tech companies of the 1970s, 1980s, and 1990s, and even the early 2000s—like Intel, Apple, and Google—were all housed in corporate campuses in Silicon Valley. Microsoft had its headquarters in suburban Redmond, Washington, and other high-tech companies clustered along the Route 128 suburbs outside of Boston, in the suburbs of Austin, or the office parks of North Carolina’s Research Triangle. Back in the late 1980s, when I conducted my early studies of the geography of venture capital and high-tech industry with Martin Kenney, the lion’s share of venture capital–backed startups were in these suburban areas.13 That geography has changed dramatically, with venture capital investment and startup companies becoming much more urban. With nearly $6.5 billion in venture capital investment, San Francisco topped the $4.2 billion that the San Jose metro (which encompasses Silicon Valley) received in 2012, ranking as the world’s number one location for venture capital investment that year.

In fact, my research shows empirically that artistic and cultural creativity acts alongside the high-tech industry and business and finance to power economic growth. The current urban trend in high tech is not so much a startling reversal as a correction of a historical aberration. The venture capital icon Paul Graham saw the writing on the wall in 2006. For all its advantages and power, he wrote, Silicon Valley had a great weakness. This high-tech “paradise,” with its roots in the 1950s and 1960s, had become “one giant parking lot,” he observed. “San Francisco and Berkeley are great, but they’re 40 miles away. Silicon Valley proper is soul-crushing suburban sprawl. It has fabulous weather, which makes it significantly better than the soul-crushing sprawl of most other American cities. But a competitor that managed to avoid sprawl would have real leverage.”20 He was right—and that’s exactly what’s happening today.

Thanks to its world-class universities, medical centers, and corporate research and development units, as well as its major philanthropies, the city was able to stave off the worst. Its leaders were working hard to change its trajectory, and as a professor of economic development I was involved in the thick of it. Yet, for all its leading-edge research and innovation potential, the talent at Pittsburgh’s universities was not staying in the region; my computer science and engineering colleagues and my own students were leaving in droves for high-tech hubs like Silicon Valley, Seattle, and Austin. When the Internet pioneer Lycos, which had its roots at CMU, abruptly announced that it was moving from Pittsburgh to Boston, all at once a lightbulb seemed to go off in my head. The traditional thinking that people followed companies and jobs, it seemed to me, was not working. Following the established economic development wisdom, Pittsburgh’s leaders had attempted to lure companies by offering them tax breaks and similar incentives; they’d poured money into subsidized industrial and office parks; they’d built a state-of-the-art convention center and two gleaming stadiums.

From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry by Martin Campbell-Kelly

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Apple II, Apple's 1984 Super Bowl advert, barriers to entry, Bill Gates: Altair 8800, business process, card file, computer age, computer vision, continuous integration, deskilling, Donald Knuth, Grace Hopper, information asymmetry, inventory management, John Markoff, John von Neumann, linear programming, Menlo Park, Network effects, popular electronics, RAND corporation, Robert X Cringely, Ronald Reagan, Silicon Valley, software patent, Steve Jobs, Steve Wozniak, Steven Levy, Thomas Kuhn: the structure of scientific revolutions

In the last 20 or 30 years, in Europe and many other parts of the world, planners have attempted to reproduce the success of Silicon Valley in their local economies. Great Britain, for example, has a Silicon Fen (in the lowlands around Cambridge), a Silicon Ditch (in the Thames Valley corridor to the west of London), and a Silicon Glen (in Scotland). When planners attempt to clone Silicon Valley, they generally do so by trying to establish an economic and physical environment similar to that which enabled the original Silicon Valley to flourish. Such attempts are always deeply informed by history. For example, it is widely understood that Silicon Valley did not happen overnight. Though it was first called “Silicon Valley” in the mid 1970s, it was the culmination of a process that had begun at least 40 years earlier with the appointment of Frederick Terman as a professor at Stanford University.

Though it was first called “Silicon Valley” in the mid 1970s, it was the culmination of a process that had begun at least 40 years earlier with the appointment of Frederick Terman as a professor at Stanford University. Its symbolic birth was the formation of Hewlett-Packard in a garage in 1939.1 Usually, a Silicon Valley clone has a technological university as a source of innovation, venture capital is available, and an attempt is made to foster certain cultural factors, such as ease of transfer between academe and commerce and forgiveness of entrepreneurial failure. The cultural factors are usually the hardest to reproduce. Not all Silicon Valley clones have been successful, but the results are encouraging enough to have spawned dozens of attempts, some of which have been successful indeed. Silicon Valley clones have mainly fostered firms in the computer hardware, 304 Chapter 10 networking, and telecommunications industries. They do not appear to be especially good Petri dishes for software firms.

For example, by 1985 there were more than 200 books on the use of spreadsheets in business, nearly every one of them tied to one of the top US products. Europe has never since been able to wrest the market for desktop productivity software from US firms. Information Asymmetry and Clustering Effects The clustering of firms was a major factor in the success of Silicon Valley. A cluster is a group of companies (usually small ones) that produce the subassemblies and components of a complex product (say, a personal computer or a network switch). The firms are coordinated entirely through market mechanisms. In a ruthlessly Darwinian process, the fittest firms survive. It was this business environment that most distinguished Silicon Valley from the other nexus of electronics and telecommunications in the United States: Route 128 in Massachusetts, where large vertically integrated firms such as DEC and RCA predominated.6 It is now accepted that a cluster of firms is much more dynamic and responsive than a giant corporation.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour mobility, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

“I actually think that there was always an unsustainable feel about what had happened on Wall Street over the last 10, 15 years,” President Barack Obama told the New York Times in the spring of 2009, “and it’s not that different from the unsustainable nature of what was happening during the dot-com boom, where people in Silicon Valley could make enormous sums of money, even though what they were peddling never really had any signs it would ever make a profit. That doesn’t mean, though, that Silicon Valley is still not a huge, critical, important part of our economy, and Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s.” He added, “We don’t want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.”1 We’d all have to agree with the president on that.

The geography of innovation has shifted significantly in the past couple of decades. Innovation is up considerably in established high-tech centers from Silicon Valley and Seattle to Austin and North Carolina’s Research Triangle. But it is way, way down in America’s industrial cities such as Pittsburgh and Detroit, in Sunbelt cities such as Dallas and Houston, and even in big centers such as New York and Chicago. At the same time, foreign inventors have become key players in American innovation. Foreign-born scientists currently make up 17 percent of all bachelor’s degree holders, 29 percent of master’s degree holders, 38 percent of PhDs, and nearly a quarter of all scientists and engineers in the United States. Anywhere between a third and half of all Silicon Valley start-ups during the 1990s had a foreign-born entrepreneur or scientist on their core founding team.11 In the past decade, foreign inventors have come to account for almost half of all newly patented innovations.

Later, I visited the much larger Googleplex, the company’s main campus across the country in Silicon Valley. The digs were even more impressive. I walked across the campus through scads of people eating at outdoor tables and playing soccer and Frisbee. The lunchroom served free food from all over the world—Indian, Chinese, Mexican, reflecting the diversity of Google’s employees—at a dozen different food stations. It was packed with not just employees but their spouses, kids, and extended families. The diversity was astonishing—I saw hijabs, robes, ripped jeans, and kippahs. During my speech I asked the same question I had posed to the Googlers in New York: where do they live, and how do they get to work? I learned that Google runs a shuttle bus complete with wireless Internet access that takes employees who live in downtown San Francisco to its Silicon Valley headquarters.


pages: 345 words: 92,849

Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

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3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, corporate governance, correlation does not imply causation, creative destruction, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, wealth creators, women in the workforce, working poor, zero-sum game

Probably the freest industries in America today are found in the high-tech arena, epitomized by Silicon Valley, home to companies such as Hewlett Packard, Facebook, Google, Cisco, Oracle, and Intel. If you’ve visited the Valley and experienced its entrepreneurial culture, you’ll be struck by how similar it is to the way America was described during the nineteenth and early twentieth centuries: the energy, the optimism, the fearless pursuit of success and achievement. In her book Secrets of Silicon Valley, author and entrepreneur Deborah Perry Piscione describes how, after living in the Valley for several months, she “started to appreciate how much people are in the driver’s seat here. This culture of mavericks is more interested in moving the needle forward than following the path of tradition.”34 Silicon Valley is in many ways a land of opportunity within the land of opportunity.

This culture of mavericks is more interested in moving the needle forward than following the path of tradition.”34 Silicon Valley is in many ways a land of opportunity within the land of opportunity. Unsurprisingly, nearly 35 percent of Silicon Valley residents are immigrants (for the U.S. as a whole, it’s only about 13 percent). Many of these immigrants notes Perry Piscione, “came with no English language skills, no family or friends, varying degrees of education, but a common drive to seek out better opportunities. If you are motivated in Silicon Valley, [then] you can make it, period.”35 What matters in the Valley is not where you were born or where (or even whether) you went to college. What matters is your ability. Talent is the currency of Silicon Valley, and individuals there use their talent to move us forward, pioneering revolutionary achievements in social media, big data, personalized health care, biotechnology, smartphones, mobile commerce, cloud technology, and 3D printing, to name just a few.

Talent is the currency of Silicon Valley, and individuals there use their talent to move us forward, pioneering revolutionary achievements in social media, big data, personalized health care, biotechnology, smartphones, mobile commerce, cloud technology, and 3D printing, to name just a few. Silicon Valley is the place creators like Elon Musk, Steve Jobs, and Peter Thiel go to make a fortune by inventing the future. What made it all possible? No doubt there are many forces at work, but one enormous factor is the extent to which the government has kept its hands off the Valley. Perry Piscione points out the benefits of “the lack of heavy government regulation that would typically favor the interests of established banks, companies, and labor unions” over young upstarts.36 People are free to act on their ideas and compete on ability, without having to wade through a minefield of government permissions before launching their ventures. It is, as Bill Gates once put it, business at the speed of thought. But even Silicon Valley is not immune from the threat of government control, most notably from antitrust laws.


pages: 202 words: 66,742

The Payoff by Jeff Connaughton

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algorithmic trading, bank run, banking crisis, Bernie Madoff, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, desegregation, Flash crash, locking in a profit, London Interbank Offered Rate, London Whale, Long Term Capital Management, naked short selling, Neil Kinnock, Plutocrats, plutocrats, Ponzi scheme, risk tolerance, Robert Bork, short selling, Silicon Valley, too big to fail, two-sided market, young professional

The Swiss and Japanese were already selling sophisticated encryption beyond the levels permitted by U.S. export controls, and so the U.S. government (the argument went) was needlessly hamstringing the leadership of U.S. information technology industries and products. I told Jack I believed this was the leading issue for Silicon Valley, and that we should go to Northern California and target Silicon Valley companies as clients, to help them devise a strategy for addressing the legitimate national security concerns at issue. Our timing was perfect, as the normally fierce Silicon Valley competitors (Microsoft, Oracle, Intel, Sun Microsystems, and others) were for the first time talking amongst themselves about organizing an encryption-export reform coalition to lobby Washington and shape the media debate. Jack and I did a round of meetings with all of these companies and were close to being hired.

The White House was under tremendous pressure. Just the day before, White House Deputy Chief of Staff Erskine Bowles, after getting an earful from a number of CEOs, had taken the West Wing stairs two at a time on his way to Mikva’s office. From my desk outside the office, I heard Bowles practically yell, “What the hell are y’all doing to make Silicon Valley so upset about this bill?” Wall Street, seeking to hide the blue stock-trader jackets of high finance behind the white lab coats of high tech, had wisely pushed Silicon Valley in the vanguard of lobbying the White House. What we’re doing is standing up for a fair outcome, I thought to myself, as Mikva closed the door behind Bowles. Afterwards, I begged Mikva to ask to see the president again. I was determined that the White House not undercut Arthur Levitt, the chairman of the Securities and Exchange Commission, who was standing up to the bill’s authors to force modifications.

It’s the analogous reason companies hire the most prestigious law firms: Regardless of what advice one gets, if things turn out badly, the company executive can always say “We hired the best firm in DC.” At Covington & Burling, I had drifted into the realm of issues involving Silicon Valley. I had worked on a brief arguing that the export controls on encryption (which scrambles data and turns it into unintelligible code) raised First Amendment issues, as encryption essentially is commercial speech. Furthermore, as a former math minor in college, I innately grasped the Silicon Valley argument that encryption is mathematics—even if sophisticated math used to write computer code—and that any attempt to stop math from spreading beyond our national borders was futile. The Swiss and Japanese were already selling sophisticated encryption beyond the levels permitted by U.S. export controls, and so the U.S. government (the argument went) was needlessly hamstringing the leadership of U.S. information technology industries and products.


pages: 607 words: 133,452

Against Intellectual Monopoly by Michele Boldrin, David K. Levine

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accounting loophole / creative accounting, agricultural Revolution, barriers to entry, cognitive bias, creative destruction, David Ricardo: comparative advantage, Dean Kamen, Donald Trump, double entry bookkeeping, en.wikipedia.org, endogenous growth, Ernest Rutherford, experimental economics, financial innovation, informal economy, interchangeable parts, invention of radio, invention of the printing press, invisible hand, James Watt: steam engine, Jean Tirole, John Harrison: Longitude, Joseph Schumpeter, Kenneth Arrow, linear programming, market bubble, market design, mutually assured destruction, Nash equilibrium, new economy, open economy, peer-to-peer, pirate software, placebo effect, price discrimination, profit maximization, rent-seeking, Richard Stallman, Silicon Valley, Skype, slashdot, software patent, the market place, total factor productivity, trade liberalization, transaction costs, Y2K

You have probably heard of Silicon Valley. Perhaps you have not heard of Route 128. Yet Route 128 in Boston has been a high-technology district since the 1940s, long before farmers were displaced from Santa Clara Valley, as P1: PDX head margin: 1/2 gutter margin: 7/8 CUUS245-08 cuus245 978 0 521 87928 6 April 29, 2008 15:42 Does Intellectual Monopoly Increase Innovation? 199 Silicon Valley was then known, to make space for computer firms. In 1965, both Silicon Valley and Route 128 were centers of technology employment of equal importance, and with similar potentials and aspirations for further growth: Route 128 began the race well ahead. In 1965, total technology employment in the Route 128 area was roughly triple that of Silicon Valley. By 1975, Silicon Valley employment had increased fivefold, but it had not quite doubled in Route 128, putting Silicon Valley about fifteen percent ahead in total technology employment.

By 1975, Silicon Valley employment had increased fivefold, but it had not quite doubled in Route 128, putting Silicon Valley about fifteen percent ahead in total technology employment. Between 1975 and 1990, the gap substantially widened. Over this period, Silicon Valley created three times the number of new technology-related jobs as Route 128. By 1990, Silicon Valley exported twice the amount of electronic products as Route 128, a comparison that excludes fields like software and multimedia, in which Silicon Valley’s growth has been strongest. In 1995, Silicon Valley reported the highest gains in export sales of any metropolitan area in the United States, an increase of thirty-five percent over 1994; the Boston area, which includes Route 128, was not in the top five.27 What explains this radical difference in growth of the two areas?

Even if the employment agreement which contains a postemployment covenant not to compete explicitly designates the law of another state, under which the covenant would be enforceable, as controlling, and even if that state has contacts with the contract, California courts nonetheless will apply section 16600 on behalf of California residents to invalidate the covenant.30 Contrary to many business pundits, the reader of this book will perhaps not be surprised at the beneficial consequences of the Silicon Valley competitive environment. However, Saxenian, in her otherwise-informative book, remarks, “The paradox of Silicon Valley was that competition demanded continuous innovation, which in turn required cooperation among firms.”31 We know that there are good economic reasons why it must be so: competition is the mechanism that breeds innovation, and sustained competitive innovation, paradoxical as that may sound to those that do not understand it, often is best implemented via cooperation among competing firms. While Route 128 companies spent resources to keep knowledge secret – inhibiting and preventing the growth of the high-tech industry – in California this was not possible. And so, Silicon Valley – freed of the millstone of monopolization – grew by leaps and bounds as employees left to start new firms, rejoined old firms, and generally spread socially useful knowledge far and wide.

Social Capital and Civil Society by Francis Fukuyama

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Berlin Wall, blue-collar work, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, George Akerlof, German hyperinflation, Jane Jacobs, Joseph Schumpeter, Kevin Kelly, labor-force participation, low skilled workers, p-value, Pareto efficiency, postindustrial economy, principal–agent problem, RAND corporation, Silicon Valley, The Death and Life of Great American Cities, transaction costs, World Values Survey

The relatively unregulated nature of the information-technology industry, combined with well-developed venture capital markets, permits a high degree of entrepreneurial individualism. This picture of unbridled competitive individualism is belied, however, by any number of more detailed sociological studies of the actual nature of technological development in Silicon Valley, such as Annalee Saxenian’s Regional Advantage. 17 In assessing the role of social capital in a modern economy, it is important to note that it does not have to manifest itself within the boundaries of individual companies or be embodied in practices like lifetime employment.18 Saxenian contrasts the performance of Silicon Valley with Boston’s Route 1 2 8 and notes that one important reason for the former's success had to do with the different culture of the Valley. She makes clear that beneath the surface of apparently unbridled individualistic competition were a wide array of social networks linking individuals in different companies in the semiconductor and computer businesses.

The likelihood that a given bit of proprietary intellectual property shared with a potential competitor will lead to direct losses is relatively small. The social capital produced by such informal social networks permits Silicon Valley to achieve scale economies in R &D not pos20 Ibid., p . 3 3 . 2 1 Thomas A . Stewart and Victoria Brown, “The Invisible Key to Success,” For tu ne ( A u g . 5, 1996): 173-74. 452 Tanner Lectures on Human Values sible in large, vertically integrated firms. Much has been written about the cooperative character of Japanese firms and the way in which technology is shared among members of a keiretsu network. In a certain sense, the whole of Silicon Valley can be seen as a single large network organization that can tap expertise and specialized skills unavailable to even the largest vertically integrated Japanese electronics firms and their keiretsu networks. 22 The importance of social capital to technology development has some paradoxical results.

The reason is that information is processed much closer to its source: if a door panel from a subcontractor doesn’t fit properly, the worker assigned to bolt it to the chassis has both the authority and the incentive to see that the problem is fixed, rather than letting the information get lost while traveling up and down a long managerial hierarchy. I will provide one further example of where social capital is critical to implementing a flat or networked form of organization, which is the American information technology industry. Silicon Valley might at first glance seem to be a low-trust, low-social-capital 16 See James P. Womack and D . Jones, T h e Machine That Changed the World: T h e Story of Lean Production (New York: Harper Perennial, 1991). [FUKUYAMA] Social Capital 449 part of the American economy where competition rather than cooperation is the norm and where efficiency arises out of the workings of rational utility-maximizers meeting in impersonal markets as described by the neoclassical model.


pages: 538 words: 141,822

The Net Delusion: The Dark Side of Internet Freedom by Evgeny Morozov

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A Declaration of the Independence of Cyberspace, Ayatollah Khomeini, Berlin Wall, borderless world, Buckminster Fuller, Cass Sunstein, citizen journalism, cloud computing, cognitive dissonance, Columbine, computer age, conceptual framework, crowdsourcing, Dissolution of the Soviet Union, don't be evil, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global village, Google Earth, illegal immigration, invention of radio, invention of the printing press, invisible hand, John Markoff, John von Neumann, Marshall McLuhan, Naomi Klein, Network effects, new economy, New Urbanism, peer-to-peer, pirate software, pre–internet, Productivity paradox, RAND corporation, Ronald Reagan, Ronald Reagan: Tear down this wall, Silicon Valley, Silicon Valley startup, Sinatra Doctrine, Skype, Slavoj Žižek, social graph, Steve Jobs, technoutopianism, The Wisdom of Crowds, urban planning, Washington Consensus, WikiLeaks, women in the workforce

The regime has also created a soccer league after years without any organized matches and increased the number of FM radio stations, allowing them to play Western-style music. There even appeared something of a local MTV channel. As a Western-educated Burmese businessman told the New York Times in early 2010, “The government is trying to distract people from politics. There’s not enough bread, but there’s a lot of circus.” Once Burma is fully wired—and the junta is supportive of technology, having set up its own Silicon Valley in 2002 that goes by the very un-Silicon Valley name of Myanmar Information and Communication Technology Park—the government won’t have to try hard anymore; their citizens will get distracted on their own. Today’s battle is not between David and Goliath; it’s between David and David Letterman. While we thought the Internet might give us a generation of “digital renegades,” it may have given us a generation of “digital captives,” who know how to find comfort online, whatever the political realities of the physical world.

It’s deeply symbolic that the only major speech about freedom given by a senior member of the Obama administration was Hillary Clinton’s speech on Internet freedom in January 2010. It looks like a safe bet: Even if the Internet won’t bring democracy to China or Iran, it can still make the Obama administration appear to have the most technologically savvy foreign policy team in history. The best and the brightest are now also the geekiest. The Google Doctrine—the enthusiastic belief in the liberating power of technology accompanied by the irresistible urge to enlist Silicon Valley start-ups in the global fight for freedom—is of growing appeal to many policymakers. In fact, many of them are as upbeat about the revolutionary potential of the Internet as their colleagues in the corporate sector were in the late 1990s. What could possibly go wrong here? As it turns out, quite a lot. Once burst, stock bubbles have few lethal consequences; democracy bubbles, on the other hand, could easily lead to carnage.

Contrary to Marc Ambinder’s prediction, when future historians look at what happened in those few hot weeks in June 2009, that email correspondence—which the State Department chose to widely publicize to bolster its own new media credentials—is likely to be of far greater importance that anything the Green Movement actually did on the Internet. Regardless of the immediate fate of democracy in Iran, the world is poised to feel the impact of that symbolic communication for years to come. For the Iranian authorities, such contact between its sworn enemies in the U.S. government and a Silicon Valley firm providing online services that, at least as the Western media described it, were beloved by their citizens quickly gave rise to suspicions that the Internet is an instrument of Western power and that its ultimate end is to foster regime change in Iran. Suddenly, the Iranian authorities no longer saw the Internet as an engine of economic growth or as a way to spread the word of the prophet.


pages: 446 words: 138,827

What Should I Do With My Life? by Po Bronson

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back-to-the-land, Berlin Wall, clean water, double entry bookkeeping, Exxon Valdez, financial independence, high net worth, job satisfaction, Menlo Park, microcredit, new economy, Shoshana Zuboff, Silicon Valley, South of Market, San Francisco, special economic zone, telemarketer, traffic fines, young professional

My ex-wife had these skills, so I never had to learn them myself. I’d been assigned articles about Silicon Valley—a big topic in those years—so I used these assignments as means to retrain myself. I got on the phone, I went to see people, and I stopped fictionalizing events to serve my ends. I wrote only what I saw, and I dug to find where reality was weirder than fiction. I fought hard for access to events that had always been shrouded in secrecy. Not even the people who knew me best were aware that this was what was driving me. I only talked about it with my therapist. I was not trying to wrestle Silicon Valley, I was trying to heal. I was trying to learn the skills I had relied on my ex-wife for. The book that came of those three years, The Nudist on the Late Shift and Other True Tales of Silicon Valley, put me on the cover of magazines. I was interviewed hundreds of times, and I was held up as one of the foremost experts on the Valley.

It took me a while to get him to stop calling me “sir.” When ladies meet him, they ask if he’s somebody famous, or maybe a politician. His accent is pure Kentucky. He never forgets that his parents were barely high school grads. Dad grew up in a place called Hoodoo Holler, which just about suggests it all: outhouses, bare feet, scant pavement. “What the heck is a hick like me doing in Silicon Valley, huh?” he said when we met. I told him Silicon Valley was full of people from all over the world. I didn’t know anyone here from Kentucky, but I knew a few from Tennessee. He heard me, but he was convinced he was an outcast, the subject of an invisible prejudice against his funny accent and non–Ivy League credentials. That was the first sign of many to indicate Tim had a huge chip on his shoulder, rooted in something unclear.

When he begged me for my honest opinion, I gave him the part I had strong feelings about, but after that I condoned his compromises. I just wanted him to be happy—even as I believed his compromises were a root of his misery. Was I too easy on Tim? Not everyone can adopt Janelle’s motto, Dream job or die. I wanted to be encouraging, but I was afraid of offering false encouragement. Since my book about Silicon Valley, The Nudist on the Late Shift, was published, I had struggled with my culpability in the migration of young people here: 400,000 people had moved to Silicon Valley in the previous four years, most of them young, and most here to chase the dream. During 1999 and 2000, I couldn’t go to a party without some stranger recognizing me and saying he’d moved here because of what I had written. I’d saved hundreds of e-mails that echoed this: words I’d written had motivated them to reroute their life, and—in the words of one, though meant as a joke—“it is all your fault.”


pages: 239 words: 45,926

As the Future Catches You: How Genomics & Other Forces Are Changing Your Work, Health & Wealth by Juan Enriquez

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Albert Einstein, Berlin Wall, bioinformatics, borderless world, British Empire, Buckminster Fuller, creative destruction, double helix, global village, half of the world's population has never made a phone call, Howard Rheingold, Jeff Bezos, Joseph Schumpeter, Kevin Kelly, knowledge economy, more computing power than Apollo, new economy, personalized medicine, purchasing power parity, Ray Kurzweil, Richard Feynman, Richard Feynman, Robert Metcalfe, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, spice trade, stem cell, the new new thing

(If astronauts leave for Mars on May 6, 2018, the next feasible orbital alignment, it will be because a plasma rocket can get someone to the red planet in 115 days instead of nine months … And if the United States gets there first, it will be due to the work of Franklin Ramon Chang-Diaz, a Costa Rican national born to Chinese-Spanish parents, who lived in Venezuela before becoming a U.S. citizen … flying the space shuttle … and designing a plasma rocket.)10 Over 40 percent of all H1–B visas are awarded to Indian nationals … So, in Silicon Valley high-tech, in 1990 … 55 percent of Indians had Ph.D.s or master’s degrees … 40 percent of Chinese … 18 percent of whites. And so by 1998 … 2,775 of Silicon Valley’s CEOs (one-third of the total) were Indian or Chinese … These folks were generating about half as many sales as the billion people in India export over the course of a year.11 (Perhaps this is why San Jose is now one of the few U.S. cities with English-speaking cab drivers.) The United States is not only “borrowing” brains from the rest of the world … It is also running record debt levels.12 People focus on the federal budget surplus … (Yeah!

in Foreign Policy, fall 1999, which is part of a forthcoming book, Flags, Borders, Anthems, and Other Myths: The Impulse Toward Secession and the Americas. 7. Curious? Read Katie Hafner and Matthew Lyon’s Where Wizards Stay Up Late: The Origins of the Internet. (New York: Simon & Schuster, 1996). 8. Professor AnnaLee Saxenian wrote Silicon Valley’s New Immigrant Entrepreneurs (Public Policy Institute of California, 1999) as well as a breakthrough book, Regional Advantage: Culture and Competitiveness in Silicon Valley and Route 128 (Cambridge: Harvard University Press, 1994) … Please read it—it’s great. 9. Commodities allow rebels to finance their mayhem without producing anything. Past conflict increases your chance of further war 40 percent, with the probability falling 1 percent for each year of peace. But if there is a substantial population abroad, in rich countries, conflict is more likely.

The United States’ neighbors are not benefiting or growing at the same rate as the U.S. is … And, at some point, their interests and outlook may shift drastically … Away from an economic model that leaves them ever further behind. Because if you tear down borders and fences … And bring coyotes and hens together … The only way the hens survive … Is if they are very smart hens … And there are ever fewer such creatures running around Latin America, Quebec, and Africa. Because more and more of them now live in Silicon Valley. There are challenges within the United States as well. Knowledge also concentrates regionally … Five states … California, New York, Texas, New Jersey, and Illinois … Generate 43 percent of all U.S. patents. So even inside the United States research was concentrated … Within a very few ZIP codes. (33 percent of all U.S. patents came from ten cities: San Jose, greater Boston, Chicago, Los Angeles, Minneapolis, Detroit, Philadelphia, New York, Rochester, San Francisco … 52 percent from twenty cities … And actually it was very specific research clusters within these cities … Perhaps that is why they call 02138, Harvard-Cambridge, the most opinionated ZIP code in the world?)


pages: 285 words: 81,743

Start-Up Nation: The Story of Israel's Economic Miracle by Dan Senor; Saul Singer

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agricultural Revolution, Albert Einstein, back-to-the-land, banking crisis, Boycotts of Israel, call centre, Celtic Tiger, cleantech, Dissolution of the Soviet Union, friendly fire, immigration reform, labor-force participation, mass immigration, new economy, pez dispenser, post scarcity, profit motive, Silicon Valley, smart grid, social graph, sovereign wealth fund, Steve Ballmer, web application, women in the workforce, Yom Kippur War

Learning how to deal with anybody—wherever they come from—is something that I leverage today in business when dealing with my suppliers and customers.” If all this sounds similar to our description of the IDF’s role in fostering Israel’s entrepreneurial culture, it should. While a majority of Israeli entrepreneurs were profoundly influenced by their stint in the IDF, a military background is hardly common in Silicon Valley or widespread in the senior echelons of corporate America. As Israeli entrepreneur Jon Medved—who has sold several start-ups to large American companies—told us, “When it comes to U.S. military résumés, Silicon Valley is illiterate. It’s a shame. What a waste of the kick-ass leadership talent coming out of Iraq and Afghanistan. The American business world doesn’t quite know what to do with them.”11 This gulf between business and the military is symptomatic of a wider divide between America’s military and civilian communities, which was identified by the leadership of West Point over a decade ago.

“Like the Greeks who sailed with Jason in search of the Golden Fleece,” Saxenian writes, “the new Argonauts [are] foreign-born, technically skilled entrepreneurs who travel back and forth between Silicon Valley and their home countries.” She points out that the growing tech sectors in China, India, Taiwan, and Israel—particularly the last two countries—have emerged as “important global centers of innovation” whose output “exceeded that of larger and wealthier nations like Germany and France.” She contends that the pioneers of these profound transformations are people who “marinated in the Silicon Valley culture and learned it. This really began in the late ’80s for the Israelis and Taiwanese, and not until the late ’90s or even the beginning of the ’00s for the Indians and Chinese.”8 Michael Laor at Cisco and Dov Frohman at Intel were classic new Argonauts.

Cisco alone has acquired nine Israeli companies and is looking to buy more.14 “In two days in Israel, I saw more opportunities than in a year in the rest of the world,” said Paul Smith, senior vice president of Philips Medical.15 Gary Shainberg, British Telecom’s VP for technology and innovation, told us, “There are more new innovative ideas, as opposed to recycled ideas—or old ideas repackaged in a new box—coming out of Israel than there are out in [Silicon] Valley now. And it doesn’t slow during global economic downturns.”16 Though Israel’s technology story is becoming more widely known, those exposed to it for the first time are invariably baffled. As an NBC Universal vice president sent to scout for Israeli digital media companies wondered, “Why is all this happening in Israel? I’ve never seen so much chaos and so much innovation all in one tiny place.”17 That is the mystery this book aims to solve.


pages: 287 words: 82,576

The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

affirmative action, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, assortative mating, Bernie Sanders, Black Swan, business climate, circulation of elites, clean water, David Graeber, declining real wages, deindustrialization, desegregation, Donald Trump, drone strike, East Village, Elon Musk, Ferguson, Missouri, Francis Fukuyama: the end of history, gig economy, Google Glasses, Hyman Minsky, Hyperloop, income inequality, intangible asset, Internet of things, inventory management, knowledge worker, labor-force participation, labour mobility, low skilled workers, Marc Andreessen, Mark Zuckerberg, medical residency, meta analysis, meta-analysis, obamacare, offshore financial centre, Paul Samuelson, Peter Thiel, purchasing power parity, Richard Florida, security theater, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, South China Sea, Steven Pinker, Stuxnet, The Great Moderation, total factor productivity, Tyler Cowen: Great Stagnation, upwardly mobile, Vilfredo Pareto, working-age population, World Values Survey

He claims that new ideas are coming at a “scarily fast pace.”1 Or on Twitter, until recently, Marc Andreessen (@pmarca), Netscape founder and successful venture capitalist, would tweet up a storm at least once a week about the benefits of modernity, the progress of the American economy, and most of all the wonders of tech and Silicon Valley. If the point is simply that today life is pretty good for many (but not all) of us, Gates and Andreessen are right. But still, by most metrics, as we’ll see, economic opportunity is down and living standards, although they have advanced, are growing more slowly than in the past. For the most part, the American economy is more static than it was several decades ago, and that remains one of the most underreported stories of our time. To look at one simple measure of both social and economic stasis, the rate at which business start-ups are forming has been declining since the 1980s. By one estimate, start-ups were 12 to 13 percent of the firms in the economy in the 1980s, but today they are only about 7 to 8 percent. That’s right; for all the talk about Silicon Valley, we are less a start-up nation than before.

When it comes to transportation, mostly we are hoping to avoid greater suffering, such as worse traffic, cuts in bus service, or the rather dramatic declines in service quality experienced in the Washington, DC, Metro system. I argue that the physical world matters no less today, but we are in denial about its power and relevance. We seek to control it, to hold it steady, and to marginalize it ideologically by worshipping Silicon Valley and elevating the value and power of information. We’re much more comfortable with the world of information, which is more static, can be controlled at our fingertips, and can be set to our own speed. That’s very good for some people—most of all the privileged class, which is very much at home in this world—and very bad for others. The final form of stasis has to do with how and where we place our individual bodies.

During some of America’s worst times, such as the Great Depression, this extreme geographic mobility kept the unemployment rate from rising even higher than it did.3 If California ended up as the place where “the future happens first,” this was in part because the state was settled by restless migrants who wanted yet more migration on top of their earlier decision, or the earlier decisions of their ancestors, to move to the United States. This minination of migrants within a nation of migrants birthed Hollywood, a lot of the best of American popular music, the environmental movement, the social revolutions of the 1960s, and of course Silicon Valley and the personal computer, not to mention the revolutionary contemporary view that nerdiness is fundamentally cool. If you have a new idea and want to work and realize it, California probably is still the very best place in the world, a fact that shows the long-standing American connection between geographic mobility and innovation. All that moving around gave America an active, dynamic ethos.


pages: 278 words: 83,468

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries

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3D printing, barriers to entry, call centre, Clayton Christensen, clean water, cloud computing, commoditize, Computer Numeric Control, continuous integration, corporate governance, experimental subject, Frederick Winslow Taylor, Lean Startup, Marc Andreessen, Mark Zuckerberg, Metcalfe’s law, minimum viable product, Network effects, payday loans, Peter Thiel, pets.com, Ponzi scheme, pull request, risk tolerance, selection bias, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, stealth mode startup, Steve Jobs, the scientific method, Toyota Production System, transaction costs

But like many entrepreneurs with ambition, Farb didn’t build his MVP just to make a living. He had a vision of a more collaborative, more effective kind of teaching for students everywhere. With his initial traction, he was able to raise money from some of the most prestigious investors in Silicon Valley. When I first met Farb, his company was already on the fast track to success. They had raised venture capital from well-regarded investors, had built an awesome team, and were fresh off an impressive debut at one of Silicon Valley’s famous startup competitions. They were extremely process-oriented and disciplined. Their product development followed a rigorous version of the agile development methodology known as Extreme Programming (described below), thanks to their partnership with a San Francisco–based company called Pivotal Labs.

Throughout my career, I kept having the experience of working incredibly hard on products that ultimately failed in the marketplace. At first, largely because of my background, I viewed these as technical problems that required technical solutions: better architecture, a better engineering process, better discipline, focus, or product vision. These supposed fixes led to still more failure. So I read everything I could get my hands on and was blessed to have had some of the top minds in Silicon Valley as my mentors. By the time I became a cofounder of IMVU, I was hungry for new ideas about how to build a company. I was fortunate to have cofounders who were willing to experiment with new approaches. They were fed up—as I was—by the failure of traditional thinking. Also, we were lucky to have Steve Blank as an investor and adviser. Back in 2004, Steve had just begun preaching a new idea: the business and marketing functions of a startup should be considered as important as engineering and product development and therefore deserve an equally rigorous methodology to guide them.

IMVU’s virtual goods catalog—which seemed so risky years ago—now has more than 6 million items in it; more than 7,000 are added every day, almost all created by customers. As a result of IMVU’s success, I began to be asked for advice by other startups and venture capitalists. When I would describe my experiences at IMVU, I was often met with blank stares or extreme skepticism. The most common reply was “That could never work!” My experience so flew in the face of conventional thinking that most people, even in the innovation hub of Silicon Valley, could not wrap their minds around it. Then I started to write, first on a blog called Startup Lessons Learned, and speak—at conferences and to companies, startups, and venture capitalists—to anyone who would listen. In the process of being called on to defend and explain my insights and with the collaboration of other writers, thinkers, and entrepreneurs, I had a chance to refine and develop the theory of the Lean Startup beyond its rudimentary beginnings.


pages: 385 words: 101,761

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire by Bruce Nussbaum

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3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, follow your passion, game design, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kickstarter, lone genius, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reshoring, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, Tim Cook: Apple, too big to fail, tulip mania, We are the 99%, Y Combinator, young professional, Zipcar

But few companies have enjoyed the success that Hewlett-Packard had in its heyday. From its founding in 1939 in a Silicon Valley garage, HP had the kind of culture that today’s start-up entrepreneurs would love to emulate. Managers gave their employees, especially the engineers in HP labs, the freedom to play, to mine knowledge from sources that interested them, and to frame ideas however they wanted. Just as important, HP provided a network of wandering general managers who moved from lab to lab, screening inventions and deciding where to invest. These wanderers helped lift new ideas off the drawing board and transform them into reality. That shouldn’t be a surprise to anyone who knows the history of Silicon Valley. The open, collaborative culture we associate with companies from Google to Facebook was modeled in large part on HP—or, rather, on the creative culture and organization built by HP’s founders William “Bill” Hewlett and David Packard.

And as we do so, the process of creation has often been reduced to a linear, mechanical process of funnels and inventories and inputs and outputs, all measured meticulously and continuously. The result, often, was incremental change—certainly good, but definitely not disruptive. Disruption comes most often from entrepreneurs and start-ups whose founders were themselves swept up in cultural change and social movement. What we’re witnessing in tech hubs like Silicon Valley or amid the growing start-up scene in New York isn’t all that different from what Csikszentmihalyi described in his writings about Renaissance Florence. Although many of today’s innovators are working on different canvases, the factors contributing to the explosion of creative output—a spirit of collaboration and competition, wealthy investors keen to be part of the next big thing—are similar.

Buxton’s favorite story about mining the past for inspiration involves a gadget in his collection called “Simon,” a 1993 IBM/Bell South smartphone, the first-ever of its kind. The only physical buttons on the Simon were the on/off and volume buttons. All the rest of the Simon’s functionality was accessed through a touch screen, one that covered the entire face of the phone. Most of us don’t remember Simon nor do we realize that touch screen technology existed two decades ago, but it was known in Silicon Valley when Ive began to work on Apple’s ill-fated Newton, one of the first PDAs. Buxton believes Simon to be a likely inspiration for both the Newton and the iPhone. Artists, dancers, and writers have long known the importance of mining the past. Vincent van Gogh was inspired by many artists, but perhaps none more so than Jean-François Millet. “I put the black and white by Delacroix or Millet . . . in front of me as a subject,” he said, describing his process of “copying” twenty-one of Millet’s works to his brother Theo.


pages: 416 words: 129,308

The One Device: The Secret History of the iPhone by Brian Merchant

Airbnb, Apple II, Apple's 1984 Super Bowl advert, citizen journalism, Claude Shannon: information theory, computer vision, conceptual framework, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, Ford paid five dollars a day, Frank Gehry, global supply chain, Google Earth, Google Hangouts, Internet of things, Jacquard loom, Jacquard loom, John Gruber, John Markoff, Jony Ive, Lyft, M-Pesa, more computing power than Apollo, Mother of all demos, natural language processing, new economy, New Journalism, Norbert Wiener, offshore financial centre, oil shock, pattern recognition, peak oil, pirate software, profit motive, QWERTY keyboard, ride hailing / ride sharing, rolodex, Silicon Valley, Silicon Valley startup, skunkworks, Skype, Snapchat, special economic zone, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Tim Cook: Apple, Turing test, Upton Sinclair, Vannevar Bush, zero day

“Yeah, you’ve won this one-million grant, but then what?” he says. “That’s where the inequality comes in: There’s no level playing field. If you don’t have the access to the networks, to the conferences, to the ones with the money, who are quite often not based here, that’s it.” Part of the problem, he says, was that investors and donors tried to import the Silicon Valley mentality to Nairobi. “Before then, it was expats lecturing guys. You know: ‘This is how it works in Silicon Valley, it should work for you.’” But Kenyans couldn’t simply make a killer app and expect investors to notice it and acquire it for millions like they would in San Francisco. “People just didn’t know what they were signing up for. Entrepreneurship here is more about survival. It’s really hard. Start-ups are hard. But it’s harder here. Because you’re fixing things that the government should be able to do.”

These chapters will start at Chapter 1, and proceed from examining the century-old origins of the idea of a “smartphone” to exploring the powerful technologies gathered under its hood, to investigating how all those parts are assembled in China, to visiting the black markets and e-waste pits where they ultimately wind up. With that, let’s make our first stop—Apple HQ in Cupertino, California, the heart of Silicon Valley. i: Exploring New Rich Interactions iPhone in embryo Apple’s user-testing lab at 2 Infinite Loop had been abandoned for years. Down the hall from the famed Industrial Design studio, the space was divided by a one-way mirror so hidden observers could see how ordinary people navigate new technologies. But Apple didn’t do user testing, not since Steve Jobs returned as CEO in 1997. Under Jobs, Apple would show consumers what they wanted, not solicit their feedback.

It would be ideal for a trackpad as well as a touchscreen tablet; an idea long pursued but never perfected in the consumer market—and one certainly interesting to the vets of the Newton (which had a resistive touch screen) who still hoped to see mobile computing take off. And it wouldn’t be the first time a merry band of Apple inventors plumbed another organization for UI inspiration. In fact, Silicon Valley’s premier Prometheus myth is rife with parallels: In 1979, a young squad of Apple engineers, led by Steve Jobs, visited the Xerox Palo Alto Research Center and laid eyes on its groundbreaking graphical user interface (GUI) boasting windows, icons, and menus. Jobs and his band of “pirates” borrowed some of those ideas for the embryonic Macintosh. When Bill Gates created Windows, Jobs screamed at him for stealing Apple’s work.


pages: 394 words: 118,929

Dreaming in Code: Two Dozen Programmers, Three Years, 4,732 Bugs, and One Quest for Transcendent Software by Scott Rosenberg

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A Pattern Language, Benevolent Dictator For Life (BDFL), Berlin Wall, c2.com, call centre, collaborative editing, conceptual framework, continuous integration, Donald Knuth, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dynabook, en.wikipedia.org, Firefox, Ford paid five dollars a day, Francis Fukuyama: the end of history, George Santayana, Grace Hopper, Guido van Rossum, Gödel, Escher, Bach, Howard Rheingold, index card, Internet Archive, inventory management, Jaron Lanier, John Markoff, John von Neumann, knowledge worker, Larry Wall, life extension, Loma Prieta earthquake, Menlo Park, Merlin Mann, new economy, Nicholas Carr, Norbert Wiener, pattern recognition, Paul Graham, Potemkin village, RAND corporation, Ray Kurzweil, Richard Stallman, Ronald Reagan, Ruby on Rails, semantic web, side project, Silicon Valley, Singularitarianism, slashdot, software studies, source of truth, South of Market, San Francisco, speech recognition, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Stewart Brand, Ted Nelson, Therac-25, thinkpad, Turing test, VA Linux, Vannevar Bush, Vernor Vinge, web application, Whole Earth Catalog, Y2K

As with so many software start-ups, OSAF’s first digs were funky, informal, improvised. Kapor had found space in Belmont on the Peninsula fringe of Silicon Valley, in a nondescript low-slung office park just down the road from the glass-towered campus of Oracle, the giant producer of corporate databases. The building also housed “Oracle University.” An Extended Stay America motel was going up next door for migrant businesspeople stopping off at Oracle. But the office complex had plenty of vacancies in the spring of 2002 when Kapor first moved his fledgling company into a corner of the fourth floor, using space no longer needed by a software firm called Reactivity. That’s the way Silicon Valley replenishes itself, forest-like: The technology industry moves in a perennial cycle of growth and decomposition, and new companies have always germinated in the empty space created by the toppling of other companies from a previous wave of growth.

As a journalist, I would witness my share of the software world’s inexhaustible disaster stories—multinational corporations and government agencies and military-industrial behemoths, all foundering on the iceberg of code. And as a manager, I got to ride my very own desktop Titanic. This discouraging trajectory of twenty-five years of software history may not be a representative experience, but it was mine. Things were supposed to be headed in the opposite direction, according to Silicon Valley’s digital utopianism. In the months following our train wreck of a site launch at Salon, that discrepancy began to eat at me. Programming is no longer in its infancy. We now depend on unfathomably complex software to run our world. Why, after a half century of study and practice, is it still so difficult to produce computer software on time and under budget? To make it reliable and secure?

Kapor repeatedly told his programmers that the nonprofit OSAF was going to operate under different rules from the venture-capital-funded start-ups whose wreckage, in those post–Internet boom days, littered the San Francisco Bay area—leaving OSAF’s new neighborhood south of Market Street feeling like an urban dead zone. At a May meeting he reassured some of them who feared that their team was growing too big, too fast: “We’re not operating with the mythology of the Silicon Valley death march, with the deadline to ship a product and get revenue, where the product quality goes out the window. Everybody who’s been through that—and that pretty much includes everyone in this room—knows what that’s like. If we go down that route, we will have failed miserably.” Kapor kept this promise: OSAF’s growth was steady but careful, and indeed by summer’s end many programmers worried that hiring was too slow.


pages: 363 words: 94,139

Jony Ive: The Genius Behind Apple's Greatest Products by Leander Kahney

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Apple II, banking crisis, British Empire, Chuck Templeton: OpenTable, Computer Numeric Control, Dynabook, global supply chain, interchangeable parts, John Markoff, Jony Ive, race to the bottom, RFID, side project, Silicon Valley, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, the built environment, thinkpad, Tim Cook: Apple

When their stint at Pitney Bowes was finished, Jony and Tonge split up. Tonge traveled to the offices of Herman Miller, Knoll and a few other firms in the office furniture business, and Jony hopped a flight to California to make the rounds in Silicon Valley. He hired a car in San Francisco and drove down the Peninsula to visit a couple of studios, at one point going to ID Two (now IDEO), where Grinyer had worked, and then Lunar Design in downtown San Jose, which was run by Robert Brunner, a fast-rising design star. He and Brunner established an almost immediate connection. Brunner was born in 1958 and grew up in San Jose in Silicon Valley, the child of a mechanical engineer father and artist mother. His father, Russ, a longtime IBM-er, invented much of the guts of the first hard drive.1 Until he reached college, Brunner had no idea there was such a thing as product design.

While pursuing a degree in ID at San Jose State, he interned at what was then the biggest and fastest-growing design agency in Silicon Valley, GVO Inc. After graduating, in 1981, Brunner joined the firm but grew unhappy, feeling the company had little ambition or vision. “There was no editorial style at GVO,” he said. “They just wanted you to crank out the renderings and keep the clients happy.”2 In 1984, he tried another tack, teaming up with a couple of other GVO employees, Jeff Smith and Gerard Furbershaw, and another designer, Peter Lowe. The four pooled their money—about $5,000—and leased space in a former helicopter factory. They rented a photocopier and shared a single Apple IIc computer. They named their new firm Lunar Design, a moniker Brunner had been using for his moonlighting work while at GVO. The timing was perfect. In the mid-eighties, Silicon Valley was just starting to get into consumer products, resulting in a high demand for design agencies like Lunar.

GVO also came to the game with a difference—most of the firms in the Valley were run by engineers who had little expertise in design. “It wasn’t like we had a crystal ball or anything,” said Brunner, “but it turned out we had very good timing. It was at the launch of the golden age of Silicon Valley. We got started when Frog came over, and ID2 and Matrix came over, and David Kelley, which became IDEO. All that was happening when we started out. It was an amazing time to be working and starting your business in Silicon Valley.”3 By 1989, Lunar boasted a prestigious roster of clients and was flying high. The clients included Apple, which had Brunner working on several special projects, including an attempt to design a successor to Steve Jobs’s original Macintosh, now dated after four years on the market without major changes.


pages: 304 words: 93,494

Hatching Twitter by Nick Bilton

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4chan, Airbus A320, Burning Man, friendly fire, index card, Jeff Bezos, John Markoff, Kevin Kelly, Mahatma Gandhi, Mark Zuckerberg, pets.com, rolodex, Ruby on Rails, Saturday Night Live, side project, Silicon Valley, Skype, social web, Steve Ballmer, Steve Jobs, Steven Levy, technology bubble, traveling salesman, US Airways Flight 1549, WikiLeaks

Dmitry Medvedev, the president of Russia, would be arriving at Twitter’s headquarters to take a tour of the office and, as he put it, to “see with his own eyes” the hottest start-up in Silicon Valley. He also planned to send his first tweet. It was a stark example of how the world’s stage was changing. On previous visits to the United States, leaders of other nations would meet with newspaper and magazine editors. Now, rather than fly into New York City and make the rounds at Esquire, Time, or Newsweek, officials were dropping in to Silicon Valley to see the companies that were changing the way the world communicated. Twitter would be the first part of a three-day trip to the United States by President Medvedev to bolster relations between America and Russia. He planned to stop by the Valley for a few meetings, including one with Steve Jobs. (Medvedev’s hope was that he could explore how to build a Silicon Valley equivalent in Russia.) Then, after meeting with the nerds, he would be off to Washington to meet the suits: first President Barack Obama, then Secretary of State Hillary Clinton, Vice President Joe Biden, and other high-level U.S. generals and economic advisers, to discuss national-security issues, counterterrorism efforts, nuclear treaties, and the global economic crisis.

One weekend Campbell set out on a fishing trip with some bigwig friends. Among the people on the boat was a friend’s technology-savvy son. And instead of reeling in trout, the friend’s boy spent the entire trip using Twitter. Campbell returned to Silicon Valley realizing that there was more to the Twitter story than he had first thought, and he told Fenton he would take Ev on. “Campbell is the real deal,” Fenton explained to Ev, trying to convince him to meet with the mentor. “He’s coached Eric Schmidt, Larry and Sergey, and Steve Jobs. He’s a fucking legend.” Ev finally agreed to the meeting. Campbell was an institution in Silicon Valley. A former Ivy League football player, he was nicknamed the Coach by those who knew him. Although he was in his late sixties, he still carried around a bulky physique. His hairstyle, which hadn’t changed in decades, parted on the left and drifted across his scalp like choppy white water.

In one instance, a coal-mining company in Scotland threatened to sue Blogger if it didn’t take down a union blog that was being used to show a coal mine’s wrongdoings. Ev always stood his ground, preferring to go out of business rather than to give in to corporate pressure. Eventually, the coal mine gave up. Blogging had an unintended side effect for Ev. As the company grew, along with other blogging services, Ev was written about in the technology trade press, and he started to grow slightly popular in Silicon Valley. Soon his endless nights on his couch alone with his computer started to change; his personal life started to grow. Just as in his early days with a car in high school, he was now being whisked off to the few tech parties that still existed in the area, hooking up with girls, and drinking beer out of red plastic cups. Outside the small enclave of the Valley, most people didn’t believe in the promise of this weird blogging thing.


pages: 374 words: 89,725

A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas by Warren Berger

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3D printing, Airbnb, carbon footprint, Clayton Christensen, clean water, fear of failure, Google X / Alphabet X, Isaac Newton, Jeff Bezos, jimmy wales, Kickstarter, late fees, Lean Startup, Mark Zuckerberg, minimum viable product, new economy, Paul Graham, Peter Thiel, Ray Kurzweil, self-driving car, sharing economy, side project, Silicon Valley, Silicon Valley startup, Stephen Hawking, Steve Jobs, Steven Levy, Thomas L Friedman, Toyota Production System, Watson beat the top human players on Jeopardy!, Y Combinator, Zipcar

Jobs’s interest in shoshin and other Zen principles has been chronicled in a number of places, including Walter Isaacson’s biography Steve Jobs (New York: Simon and Schuster, 2011); as well as Daniel Burke, “Steve Jobs’ Private Spirituality Now an Open Book,” USA Today, November 2, 2011; and my own article for Fast Company, “What Zen Taught Steve Jobs (and Silicon Valley) about Innovation,” April 9, 2012, http://www.fastcodesign.com/1669387/what-zen-taught-silicon-valley-and-steve-jobs-about-innovation. 8 a bit of ancient wisdom, brought to . . . As explained to me by Randy Komisar, in my interviews with him in the spring and fall of 2012. For more on Shunryu Suzuki, see his book Zen Mind, Beginner’s Mind: Informal Talks on Zen Meditation and Practice (Boston: Shambhala Publications, 2011). 9 Les Kaye is a Zen abbot . . .

What business are we in now—and is there still a job for me? One of the most important things questioning does is to enable people to think and act in the face of uncertainty. As Steve Quatrano of the Right Question Institute puts it, forming questions helps us “to organize our thinking around18 what we don’t know.” This may explain why questioning is so important in innovation hotbeds such as Silicon Valley, where entrepreneurs must figure out, seemingly daily, how to create new products and businesses from thin air, while navigating highly competitive, volatile market conditions. Sebastian Thrun, the engineer/inventor19 behind Google’s experimental self-driving X car and the founder of the online university Udacity, acknowledges the two-way relationship between technological change and questioning.

At one point in my talk with her, I mentioned that today’s business culture—with its ad messages promoting “break the rules” and “think different” messages—seems to embrace the same independent-thinking ethos that Meier tried to instill in the grade schoolers in Harlem several decades ago. But when I suggested to Meier that perhaps the establishment had caught up with her ideals—that, with our new hunger for innovation, we might be more willing today to tolerate, and possibly even teach, questioning—she had her doubts. She believes we continue to live in a society that wants questions to be asked by some, but not others. “Yes, we want a Silicon Valley,” she said, “but do we really want three hundred million people who actually think for themselves?” What is a flame?29 It seems such a simple question, but do you know the answer? Actor Alan Alda had been fascinated with that question as a child. Nearly seventy years later, Alda started the Alan Alda Center for Communicating Science at Stony Brook University in New York and he started off by organizing a contest to see who could best explain What is a flame?


pages: 237 words: 64,411

Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence by Jerry Kaplan

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Affordable Care Act / Obamacare, Amazon Web Services, asset allocation, autonomous vehicles, bank run, bitcoin, Bob Noyce, Brian Krebs, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, combinatorial explosion, computer vision, corporate governance, crowdsourcing, en.wikipedia.org, Erik Brynjolfsson, estate planning, Flash crash, Gini coefficient, Goldman Sachs: Vampire Squid, haute couture, hiring and firing, income inequality, index card, industrial robot, information asymmetry, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Loebner Prize, Mark Zuckerberg, mortgage debt, natural language processing, Own Your Own Home, pattern recognition, Satoshi Nakamoto, school choice, Schrödinger's Cat, Second Machine Age, self-driving car, sentiment analysis, Silicon Valley, Silicon Valley startup, Skype, software as a service, The Chicago School, The Future of Employment, Turing test, Watson beat the top human players on Jeopardy!, winner-take-all economy, women in the workforce, working poor, Works Progress Administration

Strange electronic music wafted through the halls at odd hours; robots occasionally moseyed aimlessly around the parking lot. Logicians debated with philosophers over whether machines could have minds. John McCarthy—founder of the lab, who coined the term artificial intelligence, or AI—haunted the halls stroking his pointed beard. A large clearing inside the semicircular structure seemed to await first contact with an advanced extraterrestrial civilization. But even in paradise, the natives can grow restless. Silicon Valley made its siren call—a chance to change the world and get rich at the same time. We had been scrounging around for research funds to build our projects; now a new class of financiers—venture capitalists—came calling with their bulging bankrolls. Several startup companies and thirty years later, I finally curbed my entrepreneurial enthusiasm and retired, only to find I wasn’t quite prepared to fade quietly into my dotage.

We can ignore the coming storm and eventually everything will work out fine, but “eventually” is a long time. Without some foresight and action now, we may condemn our descendants to half a century or more of poverty and inequality, except for a lucky chosen few. Everyone likes to play the lottery—until the losers are identified. We can’t wait to see who’s winning before we take action. The holy grail of Silicon Valley entrepreneurs is the disruption of entire industries—because that’s where the big money is to be made. Amazon dominates book retailing; Uber decimates taxi services; Pandora displaces radio. Little attention is paid to the resulting destruction of livelihoods and assets because there’s no incentive to do so. And what’s cooking in the research labs is quickening the hearts of investors everywhere.

Investors can no longer go to sleep secure in the knowledge that when they awake, their nest egg will still be intact and incubating. The sorry truth is that its fate is in the hands of the machines. These electronic wars aren’t confined to the financial sector. They are becoming a standard part of our commercial landscape in a wide variety of areas. But you don’t have to worry about them spilling over into your home. They already have, though in a more benign way. On an unseasonably cool winter afternoon in Silicon Valley, I visited a friend who works at a hot new company called Rocket Fuel. Flush with a fresh infusion of $300 million from a secondary offering, Mark Torrance, chief technology officer, took a break to meet with me and discuss his company’s business. His own customers have virtually no idea how he does what he does, but they certainly like the results. No, the company does not make fuel for rockets—it buys space on websites and display ads for household names like Toshiba, Buick, and Lord & Taylor.


pages: 184 words: 53,625

Future Perfect: The Case for Progress in a Networked Age by Steven Johnson

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Airbus A320, airport security, algorithmic trading, banking crisis, barriers to entry, Bernie Sanders, call centre, Captain Sullenberger Hudson, Cass Sunstein, cognitive dissonance, credit crunch, crowdsourcing, dark matter, Dava Sobel, David Brooks, Donald Davies, future of journalism, hive mind, Howard Rheingold, HyperCard, Jane Jacobs, John Gruber, John Harrison: Longitude, Kevin Kelly, Kickstarter, lone genius, Mark Zuckerberg, mega-rich, meta analysis, meta-analysis, Naomi Klein, Nate Silver, Occupy movement, packet switching, peer-to-peer, Peter Thiel, planetary scale, pre–internet, RAND corporation, risk tolerance, shareholder value, Silicon Valley, Silicon Valley startup, social graph, Steve Jobs, Steven Pinker, Stewart Brand, The Death and Life of Great American Cities, Tim Cook: Apple, urban planning, US Airways Flight 1549, WikiLeaks, William Langewiesche, working poor, X Prize, your tax dollars at work

Instead of slow decline, the tech industry skyrocketed: Apple, Netscape, Amazon, Google, Blogger, Wikipedia, Craigslist, TiVo, Netflix, eBay, the iPod, iPhone, iPad, Xbox, Facebook, Twitter. If you measure global innovation in terms of actual lifestyle-changing hit products, and not just grad students, the United States—and Silicon Valley in particular—has been lapping the field for the past twenty years. There are many potential explanations for that success, including the unique social chemistry of the Bay Area, with its strange cocktail of engineering geeks, world-class universities, and countercultural experimentation. But the organizational structure of most Silicon Valley firms also deserves a great deal of the credit. Early tech companies in the region—starting with Fairchild Semiconductor and its mammoth offspring, Intel—deliberately broke with the hierarchical social architecture of East Coast firms: in executive privileges, decision making, and compensation.

Stock options, for instance, were distributed sparingly for most of the twentieth century, until the more egalitarian operations in the Bay Area began using them as a standard part of an employee’s compensation package. The options structure meant that the entire organization had a vested interest in the company’s success—and when things went well, a larger slice of the Silicon Valley population was free to experiment with new start-up ideas thanks to the payday from the first IPO. In the early 1980s, Esquire magazine sent Tom Wolfe out to Silicon Valley to profile Intel founder Robert Noyce and document the emerging culture of the region. The shift from hierarchy to peer network was visible even then, in the days before computer networks became essential to the region’s businesses: Corporations in the East adopted a feudal approach to organization, without even being aware of it.

While most Americans are significantly healthier than they were a generation ago, childhood obesity has emerged as a meaningful problem, particularly in lower-income communities. An interesting divide separates these two macro-trends. On the one hand, there is a series of societal trends that are heavily dependent on non-market forces. The progress made in preventing drunk driving or teen pregnancy or juvenile crime isn’t coming from new gadgets or Silicon Valley start-ups or massive corporations; the progress, instead, is coming from a network of forces largely outside the marketplace: from government intervention, public service announcements, demographic changes, and the wisdom of life experience shared across generations. Capitalism didn’t reduce the number of teen smokers; in fact, certain corporations did just about everything they could to keep those kids smoking (remember Joe Camel?).


pages: 465 words: 109,653

Free Ride by Robert Levine

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A Declaration of the Independence of Cyberspace, Anne Wojcicki, book scanning, borderless world, Buckminster Fuller, citizen journalism, commoditize, correlation does not imply causation, creative destruction, crowdsourcing, death of newspapers, Edward Lloyd's coffeehouse, Electric Kool-Aid Acid Test, Firefox, future of journalism, Googley, Hacker Ethic, informal economy, Jaron Lanier, Julian Assange, Justin.tv, Kevin Kelly, linear programming, Marc Andreessen, moral panic, offshore financial centre, pets.com, publish or perish, race to the bottom, Saturday Night Live, Silicon Valley, Silicon Valley startup, Skype, spectrum auction, Steve Jobs, Steven Levy, Stewart Brand, subscription business, Telecommunications Act of 1996, Whole Earth Catalog, WikiLeaks

Reporters can access online databases and interview sources by Skype, but they still have to read documents and ask the right questions. In cases like this, “information wants to be expensive.” Therein lies the conflict. Most online companies that have built businesses based on giving away information or entertainment aren’t funding the content they’re distributing. In some cases, like blogs that summarize newspaper stories, this is legal; in others, it’s not. But the idea is the same: in Silicon Valley, the information that wants to be free is almost always the information that belongs to someone else. In economic terms, these businesses are getting a “free ride,” 23 profiting from the work of others. The fact that video can be distributed practically free on YouTube hasn’t really changed the amount of money it takes to make a television show. If shows are distributed for free, in a medium where advertising isn’t worth much, the companies that produce them won’t be able to make money.

Record labels were even more involved, and they pushed for legislation that would require “Webcasters” to pay for recordings they played online, even though traditional radio stations only paid songwriters.15 Lehman laid out his agenda for online copyright regulation in July 1994 with A Preliminary Draft of the Report of the Working Group on Intellectual Property Rights, unofficially known as the Green Paper. The proposed anticircumvention policy caused a stir in the Silicon Valley start-up scene, which reacted as though the new guy from the corporate office confused his computer’s CD-ROM tray with a cup holder: Don’t these guys know that information wants to be free? But the Green Paper got much more attention in Washington for the way it began to define what would legally count as a copy. In the normal course of data traffic management, Internet service providers often “cache” temporary copies of files to make their networks run faster.

I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us.20 The “Declaration” went on in that vein, mixing the wide-eyed utopianism of the New Left’s 1962 Port Huron Statement with the didactic tone of John Galt’s climactic speech from Atlas Shrugged. Since Barlow didn’t have any particular authority to represent the online world, his declaration had the same legal impact as a few college kids declaring their university a nuclear-free zone. But he tapped into a powerful strain of Silicon Valley libertarianism that rejects any form of Internet regulation—except, in most cases, when it happens to help the technology business itself. Whatever its logical flaws, Barlow’s thinking became influential in shaping the idea of “online rights” as somehow distinct from those in the physical world, a concept that lacks much real legal support. In 1990, Barlow had started the Electronic Frontier Foundation with the activist John Gilmore and Mitch Kapor, who had designed the early PC program Lotus 1-2-3 and founded the Lotus Development Corporation.


pages: 325 words: 110,330

Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmull, Amy Wallace

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Albert Einstein, business climate, buy low sell high, complexity theory, fear of failure, Golden Gate Park, iterative process, Menlo Park, rolodex, Rubik’s Cube, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, Wall-E

From the start, my professional life seemed destined to have one foot in Silicon Valley and the other in Hollywood. I first got into the film business in 1979 when, flush from the success of Star Wars, George Lucas hired me to help him bring high technology into the film industry. But he wasn’t based in Los Angeles. Instead, he’d founded his company, Lucasfilm, at the north end of the San Francisco Bay. Our offices were located in San Rafael, about an hour’s drive from Palo Alto, the heart of Silicon Valley—a moniker that was just gaining traction then, as the semiconductor and computer industries took off. That proximity gave me a front-row seat from which to observe the many emerging hardware and software companies—not to mention the growing venture capital industry—that, in the course of a few years, would come to dominate Silicon Valley from its perch on Sand Hill Road.

By the time I got to Lucasfilm in 1979, the momentum was swinging to workstation computers such as those made by Silicon Valley upstarts Sun Microsystems and Silicon Graphics, as well as IBM, but by that time, everyone could see that workstations were only another stop on the way to PCs and, eventually, personal desktop computers. The swiftness of this evolution created seemingly endless opportunities for those who were willing and able to innovate. The allure of getting rich was a magnet for bright, ambitious people, and the resulting competition was intense—as were the risks. The old business models were undergoing continual disruptive change. Lucasfilm was based in Marin County, one hour north of Silicon Valley by car and one hour from Hollywood by plane. This was no accident. George saw himself, first and foremost, as a filmmaker, so Silicon Valley wasn’t for him. But he also had no desire to be too close to Los Angeles, because he thought there was something a bit unseemly and inbred about it.

At Lucasfilm, then, I decided to hire managers to run the graphics, video, and audio groups; they would then report to me. I knew I had to put some sort of hierarchy in place, but I also worried that hierarchy would lead to problems. So I edged in slowly, feeling suspicious of it at first, yet knowing that some part of it was necessary. The Bay Area in 1979 could not have provided a more fertile environment for our work. In Silicon Valley, the number of computer companies was growing so fast that no one’s Rolodex (yes, we had Rolodexes back then) was ever up to date. Also growing exponentially were the number of tasks that computers were being assigned to tackle. Not long after I got to California, Microsoft’s Bill Gates agreed to create an operating system for the new IBM personal computer—which would, of course, go on to transform the way Americans worked.


pages: 49 words: 12,968

Industrial Internet by Jon Bruner

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autonomous vehicles, barriers to entry, commoditize, computer vision, data acquisition, demand response, en.wikipedia.org, factory automation, Google X / Alphabet X, industrial robot, Internet of things, job automation, loose coupling, natural language processing, performance metric, Silicon Valley, slashdot, smart grid, smart meter, statistical model, web application

We’ve been developing our framing of the industrial internet since the fall of 2012, and we will continue to cover this space with blog posts, interviews, and videos at http://oreil.ly/industrial-internet. — Jon Bruner Chapter 1. The industrial internet The barriers between software and the physical world are falling. It’s becoming easier to connect big machines to networks, to harvest data from them, and to control them remotely. The same changes in software and networks that brought about decades of Silicon Valley innovation are now reordering the machines around us. Since the 1970s, the principles of abstraction and modularity have made it possible for practically anyone to learn how to develop software. That radical accessibility, along with pervasive networks and cheap computing power, has made it easy to create software solutions to information problems. Innovators have responded, and have reshaped practically any task that involves gathering information, analyzing it, and communicating the result.

slide=6 [34] http://radar.oreilly.com/2013/02/masking-the-complexity-of-the-machine.html [35] http://en.wikipedia.org/wiki/Hypermiling [36] https://www.federalregister.gov/articles/2010/01/15/E9-31362/positive-train-control-systems#t-1 [37] http://www.sec.gov/Archives/edgar/data/100885/000119312513045658/d477110d10k.htm [38] A full description of the impact of data on health care is beyond the scope of this paper. For more information, see this primer: http://radar.oreilly.com/2012/08/data-health-care.html [39] http://hmi.ucsd.edu/pdf/HMI_Case_Neuroimaging.pdf [40] http://www.cdc.gov/nchs/data/databriefs/db111.pdf Chapter 4. The role of Silicon Valley in creating the industrial internet A new kind of hardware alpha-geek will approach those areas of the industrial internet where the challenges are principally software challenges. Cheap, easy-to-program microcontrollers; powerful open-source software; and the support of hardware collectives and innovation labs[41] make it possible for enthusiasts and minimally-funded entrepreneurs to create sophisticated projects of the sort that would have been available only to well-funded electrical engineers just a few years ago — anything from autonomous cars to small-scale industrial robots.

He foresees a worldwide system of fabrication labs that produce physical objects locally, but are linked globally by information networks, enabling expertise to quickly dissimilate. In complex, critical systems, clients will continue to demand the involvement of experienced industrial firms even while they ask for new, software-driven approaches to managing their physical systems. Industrial firms will need to cultivate technological pipelines that identify promising new ideas from Silicon Valley and package them alongside their trusted approaches. Large, trusted enterprise IT firms are starting to enter the industrial internet market as they recognize that many specialized mechanical functions can be replaced by software. But the job of these firms will increasingly be one of laying foundations — creating platforms on which others can build applications and connect nodes of intelligence.


pages: 264 words: 79,589

Kingpin: How One Hacker Took Over the Billion-Dollar Cybercrime Underground by Kevin Poulsen

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Apple II, Brian Krebs, Burning Man, corporate governance, dumpster diving, Exxon Valdez, Hacker Ethic, hive mind, index card, McMansion, Mercator projection, offshore financial centre, packet switching, pirate software, Ponzi scheme, Robert Hanssen: Double agent, Saturday Night Live, Silicon Valley, Steve Jobs, Steve Wozniak, Steven Levy, traffic fines, web application, WikiLeaks, zero day, Zipcar

He’d been coming to this apartment complex for months, doing his best to blend in with the exchange students drawn by short leases and reasonable rents. Nobody knew his name—not his real one anyway. And nobody knew his past. Here, he wasn’t Max Butler, the small-town troublemaker driven by obsession to a moment of life-changing violence, and he wasn’t Max Vision, the self-named computer security expert paid one hundred dollars an hour to harden the networks of Silicon Valley companies. As he rode up the apartment building elevator, Max became someone else: “Iceman”—a rising leader in a criminal economy responsible for billions of dollars in thefts from American companies and consumers. And Iceman was fed up. For months, he’d been popping merchants around the country, prying out piles of credit card numbers that should have been worth hundreds of thousands on the black market.

Max passed through the entranceway columns to the double front doors and entered the cavernous living room, where a curved wall of windows stretched from floor to ceiling. It was a year after his parole, and Max had come to San Francisco to start over. Tim and some of his friends from Idaho had been renting the house they called “Hungry Manor,” the name a reference to their first enterprise when they’d migrated to the Bay Area a year earlier. They’d planned to bootstrap into the Silicon Valley economy by forming a computer consulting business called the Hungry Programmers—will code for food. Instead, the valley quickly metabolized the geeks into full-time employment, and the Hungry Programmers morphed into an unofficial club for Tim’s friends from Meridian High and the University of Idaho, two dozen in all. Hungry Manor was the group’s party house and home to five of them. Max would be the sixth.

Max found an unprotected FTP file server at an ISP in Littleton, Colorado, and turned it into a cache for stolen software for himself and his new friends, stocked with bootlegged copies of programs like NetXray, Laplink, and Symantec’s pcAnywhere. It was a mistake. The ISP noticed the drain on its bandwidth and traced Max’s uploads to the corporate offices of CompuServe in Bellevue, where Max had just started working a new temp job. Max was fired. Barely a year after his release from prison, his name was mud. That was when Max decided to start over again in Silicon Valley, where the dot-com economy was swelling to ripeness and a talented computer genius could pick up work without a lot of questions about his past. He’d need a new name, unstained by his past folly. Max had been known by a nickname in the joint, one abbreviated from a cyberpunk-themed ’zine he’d published from the prison typewriter: Maximum Vision. It was a clean, optimistic name that exemplified everything he wanted to be and crystallized his clarity and hopefulness.


pages: 238 words: 73,824

Makers by Chris Anderson

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3D printing, Airbnb, Any sufficiently advanced technology is indistinguishable from magic, Apple II, autonomous vehicles, barriers to entry, Buckminster Fuller, Build a better mousetrap, business process, commoditize, Computer Numeric Control, crowdsourcing, dark matter, David Ricardo: comparative advantage, death of newspapers, dematerialisation, Elon Musk, factory automation, Firefox, future of work, global supply chain, global village, industrial robot, interchangeable parts, Internet of things, inventory management, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, Kickstarter, Lean Startup, manufacturing employment, Mark Zuckerberg, means of production, Menlo Park, Network effects, profit maximization, QR code, race to the bottom, Richard Feynman, Richard Feynman, Ronald Coase, Rubik’s Cube, self-driving car, side project, Silicon Valley, Silicon Valley startup, Skype, slashdot, South of Market, San Francisco, spinning jenny, Startup school, stem cell, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, transaction costs, trickle-down economics, Whole Earth Catalog, X Prize, Y Combinator

Projects, shared, become group projects and more ambitious than any one person would attempt alone. And those projects can become the seeds of products, movements, even industries. The simple act of “making in public” can become the engine of innovation, even if that was not the intent. It is simply what ideas do: spread when shared. We’ve seen this play out on the Web many times. The first generation of Silicon Valley giants got their start in a garage, but they took decades to get big. Now companies start in dorm rooms and get big before their founders can graduate. You know why. Computers amplify human potential: they not only give people the power to create but can also spread their ideas quickly, creating communities, markets, even movements. Now the same is happening with physical stuff. Despite our fascination with screens, we still live in the real world.

This nascent movement is less than seven years old, but it’s already accelerating as fast as the early days of the PC, where the garage tinkerers who were part of the Homebrew Computer Club in 1975 created the Apple II, the first consumer desktop computer, which led to desktop computing and the explosion of a new industry. Similarly, you can mark the beginnings of the Maker Movement with such signs as the 2005 launch of Make magazine, from O’Reilly, a legendary publisher of geek bibles, and the first Maker Faire gatherings in Silicon Valley. Another key milestone arrived with RepRap, the first open-source desktop 3-D printer, which was launched in 2007. That led to the MakerBot, a consumer-friendly 3-D printer that is inspiring a generation of Makers with a mind-blowing glimpse of the future of desktop manufacturing, just as the first personal computers did thirty years before. Makers united What exactly defines the Maker Movement?

“It gave a tremendous sense of self-confidence, that through exploration and learning one could understand seemingly very complex things in one’s environment,” he told [an] interviewer. Later, when Jobs and his Apple cofounder, Steve Wozniak, were members of the Homebrew Computer Club, they saw the potential of desktop tools—in this case the personal computer—to change not just people’s lives, but also the world. In this, they were inspired by Stewart Brand, who had emerged from the psychedelic culture of the 1960s to work with the early Silicon Valley visionaries to promote technology as a form of “computer liberation,” which would free both the minds and the talents of people in a way that drugs had not. In his biography of Steve Jobs, Walter Isaacson describes Brand’s role in the origins of what is today the Maker Movement: Brand ran the Whole Earth Truck Store, which began as a roving truck that sold useful tools and educational materials, and in 1968 he decided to extend its reach with The Whole Earth Catalog.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

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23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, Bob Noyce, British Empire, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, creative destruction, disintermediation, Douglas Engelbart, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, wealth creators, Yogi Berra

Pleasant fellow, I decide. Looks pretty young to have kids in college. His face is slightly tanned, but there’s not a hint of lines or wrinkles or aging. “You in Pacific Heights?” he asks. “Oh, no, I live down in the Peninsula, near Palo Alto.” “Been there tons. Epicenter of Silicon Valley. You in the tech business?” “Sort of. More of a writer now.” “Now?” “I do some investing, but now mostly write stuff.” “Oh, like what?” Jeez. The Laphroaig isn’t making me any friendlier. “I wrote a book on medicine . . . ” “Oh.” Pause. So I continue. “Silicon Valley and chips for early detection of cancer or heart disease that will destroy doctors. That’s the Cliffs-Notes version anyway.” “Oh, how neat. I’m sort of in the medical business myself. My company anyway. Prevention.” “Uh-huh.” “Yeah, it’s the strangest thing.

I heard Sergey Brin and Larry Page speak to a small group a few years before Google went public. They wanted to know what you were going to search for before you even knew yourself. I met Rupert Murdoch in the early nineties when he almost lost News Corporation under a siege of debt, and when he began transforming the entire media space, from newspapers to TV to film. I met Mark Cuban when he and his partner Todd Wagner were peddling AudioNet to anyone in Silicon Valley who would listen, before they sold the audio and video streaming company to Yahoo! for $5.7 billion. I met Mark Zuckerberg just as Facebook was crossing a few million users; he talked about lowering the cost of communications between groups of people. Today, a good chunk of the planet logs in to the site regularly to keep in touch with friends and family. I can go on. Meg Whitman when she was at eBay, Jeff Bezos at Amazon, even a few telecom folks who were billionaires for a moment in time.

But, I realized, no one has ever put down on paper how to get rich the right way, by helping society get rich as well. No one ever wrote a set of rules to find things with enormous upside and enormous potential to change the world. How to find, create, leverage, and ride the Next Big Thing. So I broke my own rule, took matters into my own hands, and wrote my own set of Rules for Free Radicals. Inspired by the 99%ers (kinda) and by Saul Alinsky (sorta), I dug deep into my time in Silicon Valley, on Wall Street, working with smart people, watching what works and what doesn’t, and thinking long and hard as to why, and I came up with a master list of 12 Rules (plus a baker’s dozen bonus rule). I’ll sum up the book you’re about to read as follows: You should be a scalable, wasteful, horizontal, edge-hugging, Tom Sawyer-ish, productive, human-adapting, people-eating, market-driven, exceptional, market-entrepreneuring, zero-marginal, virtual-pipecontrolling return maximizer.


pages: 326 words: 74,433

Do More Faster: TechStars Lessons to Accelerate Your Startup by Brad Feld, David Cohen

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augmented reality, computer vision, corporate governance, crowdsourcing, disintermediation, hiring and firing, Inbox Zero, Jeff Bezos, knowledge worker, Lean Startup, Ray Kurzweil, recommendation engine, risk tolerance, Silicon Valley, Skype, slashdot, social web, software as a service, Steve Jobs

Both Jive and Filtrbox shared similar technology platforms and visions of how this could work, and Jive had established itself as one of the market leaders in enterprise social computing. We watched as Ari evaluated his options thoughtfully and then decided to join forces with Jive. Six months later, the acquisition looks like it is working out great. The Filtrbox team in Boulder is expanding quickly and has been fully integrated into Jive, which has offices in Silicon Valley and Portland. Filtrbox's product has been rebranded as the Jive social media monitoring solution and all indications are that it's being well received by many new customers. It's Just Data Bill Warner Bill is the founder of Avid Technology (the pioneer in video editing software) and Wildfire Communications. He is also a co-founder of TechStars in Boston. Good advice is a good thing, right?

This focus on quality has generated other interesting opportunities for TechStars, some of which—such as the TechStars Global Affiliate program—are starting to roll out. By continuing to focus on quality, we say no to a lot of opportunities but when we decide to go after something, we are confident we can do it well. We think all startups should think this way. Have a Bias Toward Action Ben Casnocha Ben is an entrepreneur and author of the book My Startup Life: What a (Very) Young CEO Learned on His Journey Through Silicon Valley. He has been a TechStars mentor since 2007. Learning experts agree that learning by doing is the best way to learn something. When you do something—when you pick up the phone and talk to a potential customer, launch a prototype, send out the first brochure—you learn infinitely more than if you think about doing it in the abstract. The best way to test the validity of a business idea, for example, is to start the business and quickly gauge market feedback.

It is too easy to think there are nine things you should be doing as a company when you should really probably be doing only two or three. Always trim away what you don't need to be doing and ask yourself, “What is the thing that matters most to making progress right now?” Focus on these and let the other bright ideas sit on the sidelines until the company has proven that it's ready to tackle another opportunity. Obsess over Metrics Dave McClure Dave is an angel investor and has been geeking out in Silicon Valley for almost 20 years as a software developer, entrepreneur, startup advisor, blogger, and Internet marketing nerd. He's been a TechStars mentor since 2007. The ability to get real-time data and feedback is unique to the Internet. If you're smart, you can take advantage of that and build better products by collecting real-time usage metrics and by making decisions based on measured user data.


pages: 252 words: 73,131

The Inner Lives of Markets: How People Shape Them—And They Shape Us by Tim Sullivan

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Airbnb, airport security, Al Roth, Alvin Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, Brownian motion, centralized clearinghouse, Chuck Templeton: OpenTable, clean water, conceptual framework, constrained optimization, continuous double auction, creative destruction, deferred acceptance, Donald Trump, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, Gunnar Myrdal, helicopter parent, information asymmetry, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, Pareto efficiency, Paul Samuelson, Peter Thiel, pets.com, pez dispenser, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Ronald Coase, school choice, school vouchers, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uranium enrichment, Vickrey auction, Vilfredo Pareto, winner-take-all economy

They’re insights that are worth keeping in mind today, for internet commerce participants and entrepreneurs alike. But whatever problems eBay and others encountered initially, the tinkerers and innovators of Silicon Valley did prevail. While asymmetric information—when the seller knows more than the buyer—complicates the job of turning the economy into an internet bazaar, eBay and its e-commerce brethren have found many ways to get the market to work reasonably well. And as we’ll see, their successes have provided economists with yet more fodder for their model building and experiments—often from within the companies themselves. E-Commerce Comes of Age Skoll came to Silicon Valley just as Omidyar and others were trying to figure out how to transform the World Wide Web into something that could serve as a platform for transparent market exchange.

They preach the power of free markets—without ever appearing to consider any trade-offs, which is a little ironic, given that understanding trade-offs is at the center of economic analysis. Their arguments would be easy to dismiss but for two facts. First, many of them wield a surprising amount of power in the real world, in particular in politics or business (more than a few of those railing against big government can be found cozily holed up preaching cyberutopia in Silicon Valley). And why not? There’s something appealing about a clear story with a practical trajectory to solve the world’s ills, which is what the markets-as-salvation narrative provides. The market fundamentalists have another thing going for them: sometimes, they’re right—just ask a focus group of former POWs of camps in Germany and Japan. Markets are powerful tools for making sure that, all things considered, people end up with whatever they most value.

From Smith’s Wealth of Nations in 1776 to the worldly philosophers of the nineteenth century, economists went from reasoning with words about the state of the world; to using words and math to reason about the world, sometimes reasoning clearly, sometimes obfuscating their points; to a mathematical revolution in the mid-twentieth century that transformed economics and set the stage for economics to transform our existence.24 3 HOW ONE BAD LEMON RUINS THE MARKET THAT’S FOR ME TO KNOW AND FOR YOU TO FIND OUT (BUT ONLY WHEN IT’S TOO LATE) Joel Podolny is now the dean of Apple University, heading a group within the company devoted, according to one insider, to teaching people at the company to “think like Steve Jobs.” In an earlier chapter of his career, Podolny taught at the Stanford Graduate School of Business, where he shaped the thinking of other Silicon Valley entrepreneurs. Jeff Skoll, whose job as first president of eBay made him a multibillionaire, was one of them.1 As Podolny remembers it, the two ran into each other just before Skoll finished his MBA degree. Naturally, the question of what Skoll would be doing after graduation came up. Podolny recalls that Skoll had a number of options. He could return to the publishing company Knight-Ridder, where he’d worked as manager of internet initiatives before enrolling at Stanford.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, barriers to entry, Bayesian statistics, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, Donald Trump, family office, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, Gordon Gekko, hiring and firing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, Kenneth Arrow, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, new economy, obamacare, oil shock, pattern recognition, performance metric, Peter Thiel, Plutocrats, plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sand Hill Road, Saturday Night Live, shareholder value, Silicon Valley, Skype, Steve Jobs, survivorship bias, The Nature of the Firm, the scientific method, Thorstein Veblen, union organizing, urban renewal, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

The first is the conventional wisdom that HBS has been nothing but a peripheral player in Silicon Valley. The second is that the School has been less than spectacular at producing entrepreneurs. Neither of those criticisms is even remotely true. The two points are related. HBS graduates have played a pioneering—and continuing—role in the financing of technology-related startups since the earliest days of such, with a handful of them playing a part in the creation of what we think of as Silicon Valley itself. Entrepreneurial HBS graduates were both early players in and shapers of what we think of as the American venture capital community, not to mention founders of a variety of other successful, nontechnology companies from coast to coast. The list begins with Arthur Rock (’51), one of Silicon Valley’s most legendary investors. Working as an investment banker at Hayden, Stone & Company in New York after graduating, Rock was first bitten by the venture investing bug in 1957, when he funded a group of eight pioneering scientists working on silicon semiconductors when they bolted from their current employer, the Shockley Semiconductor Laboratory.

., 29, 30–41, 43, 78, 86, 301, 415; Bethlehem Steel and, 32–34; at HBS, 34–35, 37, 42 Taylor, Kenneth, 161 Taylorism, 29. 32–38, 81, 84, 212, 301 Teaching and the Case Method and Education for Judgment (Christensen), 279 “Teaching the Profession of Business at Harvard” (Baker), 49 technology: Clark and updating HBS’s infrastructure, 500; fast failure, 172; HBS and Silicon Valley, 319; MBAs in Silicon Valley, 10, 120, 514. See also Rock, Arthur; Silicon Valley Tedlow, Richard, 249, 263 Teele, Stanley (dean), 19, 139, 149–50, 162, 254, 255; admission of women and, 239–40; on business ethics, 434; case method and, 279; curriculum changes by, 215, 216; on faculty “inbreeding,” 195; on grading, 175–76, 180; pro-business views, 285; retirement as HBS dean, 286 Teradyne, 125, 341 Tercek, Mark, 561 Textron, 125, 127 Thain, John, 475–77, 548 theory of the firm, 4–5, 27, 57–58, 261, 366, 370, 412, 422–23, 562, 567 “Theory of the Firm” (Jensen and Meckling), 366 Thiel, Peter, 120, 121 Thompson, Clarence, 35 Thornton, Charles “Tex,” 192, 265–66, 270, 292 Thrift, Nigel, 490–91 Thunderbird School of Global Management, 551 Time Inc., 241; HBR editorships and, 302–3, 305, 306 Time magazine, 105, 135; business faculty and outside consulting, 401; Doriot profile, 126–27; MBAs at the DOD, 272; Nohria in, 569 Tocqueville, Alexis de, 12 Toyota, 450, 452 Trade Union Fellowship Program, 151, 160–66 Transnational Capitalist Class, The (Sklair), 388 Traub, Marvin, 169, 171 Trippe, Juan, 538 Tripsas, Mary, 404–5 True North (George), 315 Truman, Harry, 136, 467 Trump, Donald, 511, 575 Trumpbour, John, 432 Tuck School, Dartmouth, 11, 19, 38 Tufano, Peter, 235, 520 Turkish Institute of Business Administration, 30, 231 Turner, Ted, 430 Twain, Mark, 258 Tyco, 381, 491, 520 Universities (Flexner), 97 University of Chicago, 116, 260, 275, 378; free market tradition and, 366 University of London, School of Management, 311 USA (Dos Passos), 41 U.S.

Another reason is that having first presided over the decimation of America’s manufacturing supremacy and then the distortion of the economy by Wall Street, the MBAs of the world are now invading Silicon Valley. And they are bringing their ruthless culture of winning with them. Consider four of the technology world’s standout companies—Amazon, Apple, Facebook, and Google. Which do you think is most overrun with MBAs? Amazon, of course. A wildly successful company, to be sure, but it’s also not much more than the Wal-Mart of the Internet, and it’s the one that treats its employees most poorly. Amazon, in other words, is the one of those four companies that feels the most like yesterday and the least like tomorrow, a company driven more by cost control than quality creation. But it is also a sign of things to come: The horde of MBAs has turned its conformist gaze toward Silicon Valley, the last redoubt of innovation in America. Whether they crush it in their stampede for money and their desire for success only for the sake of it, only time will tell.


pages: 308 words: 84,713

The Glass Cage: Automation and Us by Nicholas Carr

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Airbnb, Airbus A320, Andy Kessler, Atul Gawande, autonomous vehicles, Bernard Ziegler, business process, call centre, Captain Sullenberger Hudson, Checklist Manifesto, cloud computing, computerized trading, David Brooks, deliberate practice, deskilling, digital map, Douglas Engelbart, drone strike, Elon Musk, Erik Brynjolfsson, Flash crash, Frank Gehry, Frank Levy and Richard Murnane: The New Division of Labor, Frederick Winslow Taylor, future of work, global supply chain, Google Glasses, Google Hangouts, High speed trading, indoor plumbing, industrial robot, Internet of things, Jacquard loom, Jacquard loom, James Watt: steam engine, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, knowledge worker, Lyft, Marc Andreessen, Mark Zuckerberg, means of production, natural language processing, new economy, Nicholas Carr, Norbert Wiener, Oculus Rift, pattern recognition, Peter Thiel, place-making, Plutocrats, plutocrats, profit motive, Ralph Waldo Emerson, RAND corporation, randomized controlled trial, Ray Kurzweil, recommendation engine, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley ideology, software is eating the world, Stephen Hawking, Steve Jobs, TaskRabbit, technoutopianism, The Wealth of Nations by Adam Smith, turn-by-turn navigation, US Airways Flight 1549, Watson beat the top human players on Jeopardy!, William Langewiesche

And by processing all the streams of incoming information instantaneously—in “real time”—its onboard computers are able to work the accelerator, the steering wheel, and the brakes with the speed and sensitivity required to drive on actual roads and respond fluidly to the unexpected events that drivers always encounter. Google’s fleet of self-driving cars has now racked up close to a million miles, and the vehicles have caused just one serious accident. That was a five-car pileup near the company’s Silicon Valley headquarters in 2011, and it doesn’t really count. It happened, as Google was quick to announce, “while a person was manually driving the car.”2 Autonomous automobiles have a ways to go before they start chauffeuring us to work or ferrying our kids to soccer games. Although Google has said it expects commercial versions of its car to be on sale by the end of the decade, that’s probably wishful thinking.

The people who have taken rides in Google’s car report that the thrill is almost otherworldly; their earth-bound brain has a tough time processing the experience. Today, we really do seem to be entering a brave new world, a Tomorrowland where computers and automatons will be at our service, relieving us of our burdens, granting our wishes, and sometimes just keeping us company. Very soon now, our Silicon Valley wizards assure us, we’ll have robot maids as well as robot chauffeurs. Sundries will be fabricated by 3-D printers and delivered to our doors by drones. The world of the Jetsons, or at least of Knight Rider, beckons. It’s hard not to feel awestruck. It’s also hard not to feel apprehensive. An automatic transmission may seem a paltry thing beside Google’s tricked-out, look-ma-no-humans Prius, but the former was a precursor to the latter, a small step along the path to total automation, and I can’t help but remember the letdown I felt after the gear stick was taken from my hand—or, to put responsibility where it belongs, after I begged to have the gear stick taken from my hand.

The demand for workers remains tied to the economic cycle, if not quite so tightly as in the past. The increasing use of computers and software has itself created some very attractive new jobs as well as plenty of entrepreneurial opportunities. By historical standards, though, the number of people employed in computing and related fields remains modest. We can’t all become software programmers or robotics engineers. We can’t all decamp to Silicon Valley and make a killing writing nifty smartphone apps.* With average wages stagnant and corporate profits continuing to surge, the economy’s bounties seem likely to go on flowing to the lucky few. And JFK’s reassuring words will sound more and more suspect. Why might this time be different? What exactly has changed that may be severing the old link between new technologies and new jobs? To answer that question we have to look back to that giant robot standing at the gate in Leslie Illingworth’s cartoon—the robot named Automation.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

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3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population

Between 2012 and 2014, employers in the San Francisco Bay Area added nearly 400,000 jobs, while the local housing stock grew by fewer than 100,000 units.29 Unsurprisingly, San Francisco housing prices rose by double-digit annual rates over that period.30 That was brilliant news for local homeowners, who captured an outsized share of the fruits of the local tech boom, but high housing costs shut off the region, and its jobs, to new workers. Firms might consider moving elsewhere, but they can only do so at great cost, because of the social nature of innovation in the digital era. Houses might be cheaper in Topeka than in Silicon Valley, but Topeka is a poor substitute for Silicon Valley; it lacks the Bay Area culture that translates the germ of an idea in a Stanford dorm room into a billion-dollar tech start-up. National borders create the starkest divide between the rich and the rest. No form of exclusion is as consequential. In America, a typical household of immigrants from the Philippines earns about $75,000 per year, or more than ten times what they’d earn in their home country.31 There is no anti-poverty programme in the world as effective as access to American society – to its institutions and economy and opportunities.

The big gains of the era flowed elsewhere; they were captured by participants in the boom in shorter supply than investors, or founders, or customers. The dot.com mania, as it turned out, was less entrepreneurial than one might have imagined: the rate of entrepreneurship in Silicon Valley was below that of the rest of the American economy between 1996 and 2000.1 Conditions for workers at big firms were simply too cosy at the time to make jumping ship and starting a new company all that attractive, because workers were in desperately short supply. The unemployment rate in the Bay Area fell to about 2.5 per cent during the peak of the tech boom. Average earnings rose faster in Silicon Valley than elsewhere in California, or America as a whole, and to a level well above that in most other metropolitan areas. On top of that, many salaried employees received part of their compensation in stock options, which were soaring in value at the time.

Young engineers fresh out of Stanford join fledgling start-ups and absorb experience and expertise. Some then partner with colleagues met along the way to found their own firms. Successful tech entrepreneurs participate in venture firms and sit on their boards, providing more advice and assistance. Silicon Valley supports patterns of behaviour – a culture – that cannot easily be replicated elsewhere in the world. At the same time, it supports the circulation of particular forms of know-how, to which outsiders cannot easily gain access. In 2013, a team of clever Silicon Valley programmers and entrepreneurs launched a product they called Slack. It was a platform for communication within firms, which they had developed for their own use, in the midst of a failed attempt to build an online game. As the team worked on the new product, they quickly discovered its enormous potential: to displace email and other clunky forms of office communication, to replace them with something far more natural and, indeed, fun.


pages: 407 words: 103,501

The Digital Divide: Arguments for and Against Facebook, Google, Texting, and the Age of Social Netwo Rking by Mark Bauerlein

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Amazon Mechanical Turk, Andrew Keen, centre right, citizen journalism, collaborative editing, computer age, computer vision, corporate governance, crowdsourcing, David Brooks, disintermediation, Frederick Winslow Taylor, Howard Rheingold, invention of movable type, invention of the steam engine, invention of the telephone, Jaron Lanier, Jeff Bezos, jimmy wales, Kevin Kelly, knowledge worker, late fees, Mark Zuckerberg, Marshall McLuhan, means of production, meta analysis, meta-analysis, moral panic, Network effects, new economy, Nicholas Carr, PageRank, peer-to-peer, pets.com, Results Only Work Environment, Saturday Night Live, search engine result page, semantic web, Silicon Valley, slashdot, social graph, social web, software as a service, speech recognition, Steve Jobs, Stewart Brand, technology bubble, Ted Nelson, The Wisdom of Crowds, Thorstein Veblen, web application

From the French and Russian revolutions to the countercultural upheavals of the ’60s and the digital revolution of the ’90s, we have been seduced, time after time and text after text, by the vision of a political or economic utopia. Rather than Paris, Moscow, or Berkeley, the grand utopian movement of our contemporary age is headquartered in Silicon Valley, whose great seduction is actually a fusion of two historical movements: the countercultural utopianism of the ’60s and the techno-economic utopianism of the ’90s. Here in Silicon Valley, this seduction has announced itself to the world as the “Web 2.0” movement. Last week, I was treated to lunch at a fashionable Japanese restaurant in Palo Alto by a serial Silicon Valley entrepreneur who, back in the dot-com boom, had invested in my start–up Audiocafe .com. The entrepreneur, like me a Silicon Valley veteran, was pitching me his latest start-up: a technology platform that creates easy-to-use software tools for online communities to publish weblogs, digital movies, and music.

Just as Marx seduced a generation of European idealists with his fantasy of self-realization in a communist utopia, so the Web 2.0 cult of creative self-realization has seduced everyone in Silicon Valley. The movement bridges countercultural radicals of the ’60s such as Steve Jobs with the contemporary geek culture of Google’s Larry Page. Between the bookends of Jobs and Page lies the rest of Silicon Valley, including radical communitarians like Craig Newmark (of Craigslist.com), intellectual property communists such as Stanford Law professor Larry Lessig, economic cornucopians like Wired magazine editor Chris “Long Tail” Anderson, and new media moguls Tim O’Reilly and John Battelle. The ideology of the Web 2.0 movement was perfectly summarized at the Technology Education and Design (TED) show in Monterey last year, when Kevin Kelly, Silicon Valley’s über-idealist and author of the Web 1.0 Internet utopia New Rules for the New Economy , said:Imagine Mozart before the technology of the piano.

Google personalizes searches so that all we see are advertisements for products and services we already use. Instead of Mozart, Van Gogh, or Hitchcock, all we get with the Web 2.0 revolution is more of ourselves. Still, the idea of inevitable technological progress has become so seductive that it has been transformed into “laws.” In Silicon Valley, the most quoted of these laws, Moore’s Law, states that the number of transistors on a chip doubles every two years, thus doubling the memory capacity of the personal computer every two years. On one level, of course, Moore’s Law is real and it has driven the Silicon Valley economy. But there is an unspoken ethical dimension to Moore’s Law. It presumes that each advance in technology is accompanied by an equivalent improvement in the condition of man. But as Max Weber so convincingly demonstrated, the only really reliable law of history is the Law of Unintended Consequences.