Tag Archives: Silicon Valley

Business, Technica

Uber For…

google-search-uber

There’s an Uber for pet-sitters (Rover). There’s an Uber for dog walkers (Wag). There’s an Uber for private jets (JetMe). There are several Ubers for alcohol (Minibar, Saucey, Drizly, Thirstie). In fact, enter the keywords “Uber for…” into Google and the search engine will return “Uber for kids, Uber for icecream, Uber for news, Uber for seniors, Uber for trucks, Uber for haircuts, Uber for iPads (?), Uber for food, Uber for undertakers (??)…” and thousands of other results.

The list of Uber-like copycats, startups and ideas is seemingly endless — a sign, without doubt, that we have indeed reached peak-Uber. Perhaps VCs in the valley should move on to some more meaningful investments, before the Uber bubble bursts.

From Wired:

“Uber for X” has been the headline of more than four hundred news articles. Thousands of would-be entrepreneurs used the phrase to describe their companies in their pitch decks. On one site alone—AngelList, where startups can court angel investors and employees—526 companies included “Uber for” in their listings. As a judge for various emerging technology startup competitions, I saw “Uber for” so many times that at some point, I developed perceptual blindness.

Nearly all the organizations I advised at that time wanted to know about the “Uber for” of their respective industries. A university wanted to develop an “Uber for tutoring”; a government agency was hoping to solve an impending transit issue with an “Uber for parking.” I knew that “Uber for” had reached critical mass when one large media organization, in need of a sustainable profit center, pitched me their “Uber for news strategy.”

“We’re going to be the Uber for news,” the news exec told me. Confused, I asked what, exactly, he meant by that.

“Three years from now, we’ll have an on-demand news platform for Millennials. They tap a button on their phones and they get the news delivered right to them, wherever they are,” the editor said enthusiastically. “This is the future of news!”

“Is it an app?” I asked, trying to understand.

“Maybe. The point is that you get the news right away, when you want it, wherever you are,” the exec said.

“So you mean an app,” I pressed. “Yes!” he said. “But more like Uber.”

The mass “Uber for X” excitement is a good example of what happens when we don’t stop to investigate a trend, asking difficult questions and challenging our cherished beliefs. We need to first understand what, exactly, Uber is and what led to entrepreneurs coining that catchphrase.

Read the entire story here.

Image courtesy of Google Search.

Environs, Sustainability, Technica

Peak Tech Bubble

Nelsons-Column-Great-Smog-London-1952The following story is surely a sign of the impending implosion of the next tech bubble — too much easy money flowing to too many bad and lazy ideas.

While an increasing number of people dream of a future built on renewable, clean energy, some entrepreneurs are defining ways to make gasoline (petrol) consumption even more convenient for consumers. Welcome to Uber-style, gas delivery on-demand.

This casts my mind back to the mid-1960s, recalling the deliveries of black, sooty coal to our cellar (basement) coal bunker. Thankfully, the UK’s Clean Air Acts of the 1950s and 60s finally paved the way for cleaner fuel and cleared the skies of unhealthy, mid-century London smog.

Surely, these modern day counterparts are heading in the wrong direction just to make a quick buck.

From the Guardian:

It is hard to imagine a less hospitable niche for a startup to enter than gasoline – a combustible commodity that is (one hopes) being innovated into obsolescence.

And yet, over the past 18 months, at least six startups have launched some variation on the theme of “Uber for gas” – your car’s tank gets refilled while it is parked somewhere.

The gas delivery startup founders all share similar stories of discovering the wannabe entrepreneur’s holy grail: a point of friction that can be translated into an app.

“David, one of the co-founders, basically said, ‘I hate going to the gas station’,” said Nick Alexander, the other co-founder of Yoshi, of their company’s origins. “I think he had run out of gas recently, so he said, ‘What about an idea where someone comes and fills your car up?’”

For Ale Donzis, co-founder of WeFuel, the moment came when he was trying to get gas in the middle of winter in upstate New York and realized he had forgotten his gloves. For Frank Mycroft, founder and CEO of Booster Fuels, it was during his wife’s pregnancy when he started refueling her car as well as his own.

“It wore on me,” Mycroft said. “I didn’t like doing it.”

The tales of gas station woe are the kind of first-world problems that have inspired a thousand parodies of startup culture. (A customer testimonial on the website of Purple, another gas delivery service, reads: “I live across the street from a gas station, but I don’t always have time to make the stop.”)

But delivering large quantities of a toxic and flammable liquid is significantly more complicated – and regulated – than delivering sandwiches. The companies generally source their gasoline from the same distributors that supply 10,000-gallon tankers to retail gas stations. But the app companies put the fuel into the back of pickup trucks or specially designed mini-tankers. Booster Fuels only services cars in open air, corporate parking lots on private property, but other companies offer to refill your car wherever it’s parked.

Read the entire story here.

Image: Nelson’s Column during the Great Smog of London, 1952. Courtesy: By N T Stobbs, CC BY-SA 2.0.

Technica

Venture Capital and (Ping-Pong) Balls

Google-search-ping-pong-balls

If you’re even slightly interested in protecting your retirement savings from the bursting of the next tech bubble and subsequent stock market crash look no further than sales of ping-pong tables and Pot-A-Shot indoor basketball. It turns out that there is a direct correlation between the sale of indoor recreational gear and the flow of venture capital to Silicon Valley’s next trillion dollar babies (ie., those saving humanity or building the next cool dating app).

From WSJ:

Twitter ’s gloomy quarterly report last week unsettled investors. They might have anticipated trouble more than a year ago had they noticed one key indicator.

Until late 2014, Twitter was regularly ordering ping-pong tables from Billiard Wholesale, a store in San Jose, Calif. Then, suddenly, it wasn’t.

The store’s owner, Simon Ng, figured it either ran out of space “or they’re having company problems.”

Twitter Inc.’s slowing user growth has been unsettling analysts, and the company’s revenue growth was unexpectedly weak in last week’s report. Asked why Twitter stopped buying tables, spokesman Jim Prosser says: “I guess we bought really sturdy ones.” Twitter spokeswoman Natalie Miyake says: “Honestly, we’re more of a Pop-A-Shot company now,” referring to an indoor basketball game.

Is the tech bubble popping? Ping pong offers an answer, and the tables are turning.

“Last year, the first quarter was hot” for tables, says Mr. Ng, who thinks sales track the tech economy. Now “there’s a general slowdown.”

In the first quarter of 2016, his table sales to companies fell 50% from the prior quarter. In that period, U.S. startup funding dropped 25%, says Dow Jones VentureSource, which tracks venture financing.

The table-tennis indicator is a peek into Silicon Valley culture, in which the right to play ping pong on the job is sacrosanct.

“If you don’t have a ping-pong table, you’re not a tech company,” says Sunil Rajasekar, chief technology officer at Lithium Technologies, a San Francisco software startup.

Read the entire story here.

Image courtesy of Google Search.

Computer Science

Meet the Chatbot Speech Artist

While speech recognition technology has been in the public sphere for several decades, Silicon Valley has re-discovered it with a renewed fervor. Companies from the tech giants, such as Facebook and Amazon, down to dozens of start-ups and their VC handlers have declared the next few years those of the chatbot; natural language-based messaging is the next big thing.

Thanks to Apple the most widespread incarnation of the chatbot is of course Siri — a personalized digital assistant capable of interacting with a user through a natural language conversation (well, almost). But while the parsing and understanding of human conversation, and the construction of chatbot responses, is all done via software — the vocalizations themselves are human. As a result, a new career field is opening up for enterprising speech artists.

From Washington Post:

Until recently, Robyn Ewing was a writer in Hollywood, developing TV scripts and pitching pilots to film studios.

Now she’s applying her creative talents toward building the personality of a different type of character — a virtual assistant, animated by artifical intelligence, that interacts with sick patients.

Ewing works with engineers on the software program, called Sophie, which can be downloaded to a smartphone. The virtual nurse gently reminds users to check their medication, asks them how they are feeling or if they are in pain, and then sends the data to a real doctor.

As tech behemoths and a wave of start-ups double down on virtual assistants that can chat with human beings, writing for AI is becoming a hot job in Silicon Valley. Behind Apple’s Siri, Amazon’s Alexa and Microsoft’s Cortana are not just software engineers. Increasingly, there are poets, comedians, fiction writers, and other artistic types charged with engineering the personalities for a fast-growing crop of artificial intelligence tools.

“Maybe this will help pay back all the student loans,” joked Ewing, who has master’s degrees from the Iowa Writer’s Workshop and film school.

Unlike the fictional characters that Ewing developed in Hollywood, who are put through adventures, personal trials and plot twists, most virtual assistants today are designed to perform largely prosaic tasks, such as reading through email, sending meetings reminders or turning off the lights as you shout across the room.

But a new crop of virtual assistant start-ups, whose products will soon flood the market, have in mind more ambitious bots that can interact seamlessly with human beings.

Because this wave of technology is distinguished by the ability to chat, writers for AI must focus on making the conversation feel natural. Designers for Amazon’s Alexa have built humanizing “hmms” and “ums” into her responses to questions. Apple’s Siri assistant is known for her wry jokes, as well as her ability to beatbox upon request.

As in fiction, the AI writers for virtual assistants dream up a life story for their bots. Writers for medical and productivity apps make character decisions such as whether bots should be workaholics, eager beavers or self-effacing. “You have to develop an entire backstory — even if you never use it,” Ewing said.

Even mundane tasks demand creative effort, as writers try to build personality quirks into the most rote activities. At the start-up x.ai, a Harvard theater graduate is tasked with deciding whether its scheduling bots, Amy and Andrew, should use emojis or address people by first names. “We don’t want people saying, ‘Your assistant is too casual — or too much,’?” said Anna Kelsey, whose title is AI interaction designer. “We don’t want her to be one of those crazy people who uses 15 million exclamation points.”

Virtual assistant start-ups garnered at least $35 million in investment over the past year, according to CBInsights and Washington Post research (This figure doesn’t count the many millions spent by tech giants Google, Amazon, Apple, Facebook, and Microsoft).

The surge of investor interest in virtual assistants that can converse has been fueled in part by the popularity of messaging apps, such as WeChat, WhatsApp, and Facebook’s Messenger, which are among the most widely downloaded smartphone applications. Investors see that users are increasingly drawn to conversational platforms, and hope to build additional features into them.

Read the entire story here.

Climate Science, Environs

Earth Day 2016: Silicon Swamp Edition

NOAA-Silicon-Valley-seal-level-rise-map

How better to mark this year’s Earth Day than to remind ourselves of the existential perils of climate change. As the Earth warms, polar ice melts, sea-levels rise. As sea-levels rise, low lying coastal lands submerge. Much of coastal Florida would disappear under a sea-level rise of a mere 6 feet.

Our tech innovation hub in Silicon Valley wouldn’t fare well either. Many of our tech giants, including Google, Facebook, Oracle, Cisco and Salesforce, have planted their roots on the bay-side of Silicon Valley. Much of this area is only a handful of feet above sea-level. Oh, and kiss goodbye to San Francisco International Airport as well — though perhaps the local VCs could re-purpose it into a sea-plane terminal.

The map above, courtesy of National Oceanic and Atmospheric Administration (NOAA), highlights the flood prone areas in shades of blue.

From the Guardian:

Technology giants including Facebook and Google face the prospect of their prestigious Silicon Valley headquarters becoming swamped by water as rising sea levels threaten to submerge much of the property development boom gripping San Francisco and the Bay Area.

Sea level forecasts by a coalition of scientists show that the Silicon Valley bases for Facebook, Google and Cisco are at risk of being cut off or even flooded, even under optimistic scenarios where rapid cuts in greenhouse gas emissions avoid the most severe sea level increases.

Without significant adaptation, Facebook’s new campus appears most at risk. The 430,000 sq ft complex – topped with a nine-acre garden rooftop – is an extension of its Menlo Park base and was crafted by architect Frank Gehry. Located near the San Francisco Bay shoreline, the offices are designed to house 2,800 staff.

“Facebook is very vulnerable,” said Lindy Lowe, a senior planner at California’s Bay Conservation and Development Commission. “They built on a very low site – I don’t know why they chose to build there. Facebook thinks they can pay enough to protect themselves.

“The temporary flooding within the campus can probably be addressed, but the temporary flooding onto the roadway can’t be addressed by them. I think they realize that is the weakest link for them. We’ll see how dedicated they are to that facility.”

Facebook has elevated its office to spare it from flooding, but even with a 1.6ft rise in sea levels by the end of the century – which is towards the lower end of projections – the area around it will be inundated. Much sooner, within the coming decades, the roads leading into the complex will flood so regularly that major adaptions will be required to keep the site viable. Facebook didn’t respond to repeated requests to comment on the issue.

The situation is a little better for Google, located in Mountain View and also unwilling to discuss sea level rise, and Cisco, headquartered in San Jose. But should the Antarctic ice sheet disintegrate, as outlined in a recent scientific paper, seas will be pushed up beyond 6ft and swamp both businesses.

The situation is similarly stark for Salesforce, which would see its San Francisco base submerged under the worst sea level rise scenario. Meanwhile, Airbnb, located near the vulnerable Mission Bay area, will have its headquarters gain a much closer bayside view simply by staying put.

Read the entire store here.

Image: Sea-level rise and coastal flooding impacts, San Francisco / Bay Area map. Courtesy of NOAA.

Idea Soup, tD

The Pivot and the Money

Once upon a time the word “pivot” usually referred to an object’s point of rotation. Then, corporate America got its sticky hands all over it. The word even found its way in to Microsoft Excel — as in Pivot Table. But, the best euphemistic example comes from one of my favorite places for invention and euphemism — Silicon Valley. In this region of the world pivot has come to mean a complete change in business direction.

Now, let’s imagine you’re part of start-up company. At the outset, your company has a singularly great, world-changing idea. You believe it’s the best idea, since, well, the last greatest world-changing idea. It’s unique. You are totally committed. You secure funding from some big name VCs anxious to capitalize and make the next $100 billion. You and your team work countless hours on realizing your big idea — it’s your dream, your passion. Then, suddenly you realize that your idea is utterly worthless — the product looks good but nobody, absolutely nobody, will consider it, let alone buy it; in fact, a hundred other companies before you had the same great, unique idea and all failed.

What are you and your company to do? Well, you pivot.

The entrepreneurial side of me would cheer an opportunistic company for “pivoting”, abandoning that original, great idea, and seeking another. Better than packing one’s bags and enrolling in corporate serfdom, right? But, there’s another part of me that thinks this is an ethical sell-out: it’s disingenuous to the financial backers, and it shows lack of integrity. That said, the example is of course set in Silicon Valley.

From Medium:

It was about a month after graduating from Techstars that my co-founder, Lianne, and I had our “oh shit” moment.

This is a special moment for founders; it’s not when you find a fixable bug in your app, when you realize you have been poorly optimizing your conversion funnel, or when you get a “no” from an investor. An “oh shit” moment is when you realize there is something fundamentally wrong with your business.

In our case, we realized that the product that we wanted to create was irreconcilable with a viable business model. So who were we going to tell? Techstars, who just accepted us into their highly prestigious accelerator on the basis that we could make it work? Our investors, who we just closed a round with?

It turns out, our Techstars family, our friends, and the angels (literally) who invested in us became our greatest allies, supporters, and advocates as we navigated the treacherous, terrifying, uncertain, and ultimately wildly liberating waters of a pivot. So let’s start at the beginning…

In February of 2014, Lianne and I were completing our undergrad CS degrees at the University of Colorado. As we were reflecting on the past four years of school, we realized that the most valuable experiences that we had happened outside the classroom in the incredible communities that we became involved in. Being techies, we wanted to build a product which helped other students make these “serendipitous” connections around their campus?—?to make the most of their time in college as well. We wanted to help our friends explore their world around them.
We called it Varsity. The app was basically a replacement for the unreadable kiosks full of posters found on college campuses. Students could submit events and activities happening around their campus that others could discover and indicate they were attending. We also built in a personalization mechanism, which proactively suggested things to do around you based upon your interests.
A few months later, the MVP of the Varsity and a well-practiced pitch won us the New Venture Challenge at CU, which came with a $13k award and garnered the attention of Techstars Boulder.
The next couple of months were a whirlwind of change; Lianne and I graduated, we transitioned to our first full-time job (working for ourselves), and I spent a month in Israel with my sister before she left for college in Florida. We spent a good amount of our time networking our way around Techstars?—?feeling a little like the high school kids at a college party?—?but loving it at the same time. We met some incredible people (Sue Heilbronner, Brad Berenthal, Zach Nies, and Howard Diamond, to name a few) who taught us so much about our nascent business in a very short time.
We took as many meetings as we could with whomever would talk with us, and we funneled all of our learnings into our Techstars application. Through some combination of luck, sweat, and my uncanny ability to say the right things when standing in front of a large group of people, we were accepted into Techstars.
Techstars was incredibly challenging for us. The 3-month program was also equally rewarding. Lianne and I learned more about ourselves, our company, and our relationship with each other than we had in 4 years of undergraduate education together. About half-way through the program we rebranded Varsity to Native and started exploring ways to monitize the platform. The product had come along way?—?we had done some incredible engineering and design work that we were happy with.
Unfortunately, the problem with Varsity was absolutely zero alignment between the product that we wanted to build and the way that would bring it to market. One option was to spend the next 3 years grinding through the 8-month sales-cycles of universities across the country, which felt challenging (in the wrong ways) and bureaucratic. Alternatively, we could monetize the student attention we garnered, which we feared would cause discordance between the content students wanted to see and the content that advertisers wanted to show them.
Soon after graduating from Techstars, someone showed us Simon Sinek’s famous TED talk about how great leaders inspire action. Sinek describes how famous brands like Apple engage their customers starting with their “why” for doing business, which takes precedence over “how” they do business, and even over “what” their business does. At Native, we knew our “why” was something about helping people discover the world around them, and we now knew that the “how” and “what” of our current business wouldn’t get us there.
So, we decided to pivot.
Around this time I grabbed coffee with my friend Fletcher Richman. I explained to him the situation and asked for his advice. He offered the perspective that startups are designed to solve problems in the most efficient way possible. Basically, startups should be created to fill voids in the market that weren’t being solved by an existing company. The main issue was we had no problem to solve.
Shit.
250k in funding, but nothing to fund? Do we give up, give the money back, and go get real jobs? Lianne and I weren’t done yet, so we went in search of problems worth solving.

Read the entire story here.

Idea Soup

Chief Happiness Officer?

When I first read this story I thought it was a mistimed April Fool’s joke. But, I was wrong. The Chief Happiness Officer (CHO) is a growing trend within the halls of corporate America. And, of course, it is brought to you by those happy yet earnest gurus in Silicon Valley.

One wonders where this is likely to take us 10, 20 years from now. But, one thing is reasonably clear — for most, corporate happiness may be an unattainable or undeliverable paradox.

[tube]y6Sxv-sUYtM[/tube]

From the New Republic:

Happiness isn’t something you find, or work toward—it’s something you buy and have delivered. Or at least that’s the premise of one of the newest jobs over in the C-suite. Now, alongside the CEO, CFO, and their ilk, we have the CHO, or chief happiness officer. As the name clearly suggests, the CHO is responsible for the contentment of individual employees, sort of like an h.r. manager, but on steroids; the theory goes that happy workers are productive workers, so happiness turns out to be in the company’s best interest. Perhaps unsurprisingly, many CHOs reside in Silicon Valley—both at start-ups and more blue chip tech companies. But it’s starting to spread: Southern restaurant company Hopjacks created the position in 2012 and the Quality of Life Foundation, an education nonprofit, created one in 2010.

On a day-to-day basis, CHOs busy themselves with diagnosing the emotional wellbeing of their workers, as well as adjusting workplace policy and culture in order to create the conditions for happiness. This can involve distributing surveys that measure contentment, leading workshops on everything from communication skills to mindfulness meditation, and generally diagnosing the office atmosphere. The job can also mean out-of-office activities—or, in the case of Hopjacks, a “Serial Killer Secret-Santa Weapon-Exchange” (an event, according to CHO Jarod Kelly, “where all of us blindly ordered each other [weapons] gifts from www.budk.com.”).

The CHO’s rise may have begun with Chade-Meng Tan. Meng is Google’s chief happiness officer equivalent, officially known as the Jolly Good Fellow. According to his self-made job description, his goal is to “enlighten minds, open hearts, create world peace.” He began at Google soon after the company was born, and spent eight years in the engineering department, before switching to the company’s “People Development Team” in the mid-2000s. Meng was inspired to work happiness into Google after encountering studies on the 65-year-old brain of a Buddhist monk named Mathieu Ricard. Ricard, after earning a Ph.D. in molecular genetics, turned his back on science and became a Buddhist monk in 1972, with the aim of exploring happiness through meditation.

In a 2010 TED talk, Meng explains that Ricard “is the happiest man in the world,” based on brain activity in the left prefrontal cortex. Whether or not measuring happiness in an MRI machine holds water is beside the point—Meng liked what he saw, and aimed to spread Ricard’s cognitive tendencies throughout the Google community.

Google’s involvement in worker happiness set off something of a trend, with Zappos CEO Tony Hsieh releasing a book in 2010 called Delivering Happiness. The book, which covers strategies to increase happiness in corporate culture, was a New York Times best seller and spawned a consulting firm of the same name, devoted to, well, delivering happiness to companies around the world.

Delivering Happiness, according to CEO and CHO Jenn Lim, devotes its time to measuring the contentment of clients and to laboring to improve their working conditions. So how exactly does one create joy? “We take a snapshot of all the employees, and basically identify their happiness levels,” Lim says. “And using [the Happy Business Index], we can see, what are the key points of unhappiness?” (The Happy Business Index is a survey based off of “well-being researcher” Nic Marks’s Happy Planet Index, and scores how motivated and engaged employees feel in their workplace.) In an interview, Lim also explained that they look out for “how empowered employees feel, how much progress they feel they’re making, how connected and aligned they feel with the company.”

“Basically we’re able to derive actionable things that we recommend companies work on. I think of us as kind of a heart monitor,” Lim noted. CHOs not only monitor, but also calculate. Beyond the Happiness Business Index, the company uses a “happiness calculator” which is featured on its website and does little except tabulate how much money you stand to earn if you carry out a “happiness at work survey” (created by Delivering Happiness, of course).

Read the entire article here.

Video: Pharrell Williams – Happy (Official Music Video). Courtesy of I am Other.

Idea Soup, Technica

Myth Busting Silicon(e) Valley

map-Silicon-Valley

Question: what do silicone implants and Silicon Valley have in common?  Answer: they are both instruments of a grandiose illusion. The first, on a mostly personal level, promises eternal youth and vigor; the second, on a much grander scale, promises eternal wealth and greatness for humanity.

So, let’s leave aside the human cosmetic question for another time and concentrate on the broad deception that is current Silicon Valley. It’s a deception at many different levels —  self-deception of Silicon Valley’s young geeks and code jockeys, and the wider delusion that promises us all a glittering future underwritten by rapturous tech.

And, how best to debunk the myths that envelop the Valley like San Francisco’s fog, than to turn to Sam Biddle, former editor of Valleywag. He offers a scathing critique, which happens to be spot on. Quite rightly he asks if we need yet another urban, on-demand laundry app and what on earth is the value to society of “Yo”? But more importantly, he asks us to reconsider our misplaced awe and to knock Silicon Valley from its perch of self-fulfilling self-satisfaction. Yo and Facebook and Uber and Clinkle and Ringly and DogVacay and WhatsApp and the thousands of other trivial start-ups — despite astronomical valuations — will not be humanity’s savior. We need better ideas and deeper answers.

From GQ:

I think my life is better because of my iPhone. Yours probably is, too. I’m grateful to live in a time when I can see my baby cousins or experience any album ever without getting out of bed. I’m grateful that I will literally never be lost again, so long as my phone has battery. And I’m grateful that there are so many people so much smarter than I am who devise things like this, which are magical for the first week they show up, then a given in my life a week later.

We live in an era of technical ability that would have nauseated our ancestors with wonder, and so much of it comes from one very small place in California. But all these unimpeachable humanoid upgrades—the smartphones, the Google-gifted knowledge—are increasingly the exception, rather than the rule, of Silicon Valley’s output. What was once a land of upstarts and rebels is now being led by the money-hungry and the unspirited. Which is why we have a start-up that mails your dog curated treats and an app that says “Yo.” The brightest minds in tech just lately seem more concerned with silly business ideas and innocuous “disruption,” all for the shot at an immense payday. And when our country’s smartest people are working on the dumbest things, we all lose out.

That gap between the Silicon Valley that enriches the world and the Silicon Valley that wastes itself on the trivial is widening daily. And one of the biggest contributing factors is that the Valley has lost touch with reality by subscribing to its own self-congratulatory mythmaking. That these beliefs are mostly baseless, or at least egotistically distorted, is a problem—not just for Silicon Valley but for the rest of us. Which is why we’re here to help the Valley tear down its own myths—these seven in particular.

Myth #1: Silicon Valley Is the Universe’s Only True Meritocracy

 Everyone in Silicon Valley has convinced himself he’s helped create a free-market paradise, the software successor to Jefferson’s brotherhood of noble yeomen. “Silicon Valley has this way of finding greatness and supporting it,” said a member of Greylock Partners, a major venture-capital firm with over $2 billion under management. “It values meritocracy more than anyplace else.” After complaints of the start-up economy’s profound whiteness reached mainstream discussion just last year, companies like Apple, Facebook, and Twitter reluctantly released internal diversity reports. The results were as homogenized as expected: At Twitter, 79 percent of the leadership is male and 72 percent of it is white. At Facebook, senior positions are 77 percent male and 74 percent white. Twitter—a company whose early success can be directly attributed to the pioneering downloads of black smartphone users—hosts an entirely white board of directors. It’s a pounding indictment of Silicon Valley’s corporate psyche that Mark Zuckerberg—a bourgeois white kid from suburban New York who attended Harvard—is considered the Horatio Alger 2.0 paragon. When Paul Graham, the then head of the massive start-up incubator Y Combinator, told The New York Times that he could “be tricked by anyone who looks like Mark Zuckerberg,” he wasn’t just talking about Zuck’s youth.

If there’s any reassuring news, it’s not that tech’s diversity crisis is getting better, but that in the face of so much dismal news, people are becoming angry enough and brave enough to admit that the state of things is not good. Silicon Valley loves data, after all, and with data readily demonstrating tech’s overwhelming white-guy problem, even the true believers in meritocracy see the circumstances as they actually are.

Earlier this year, Ellen Pao became the most mentioned name in Silicon Valley as her gender-discrimination suit against her former employer, Kleiner Perkins Caufield & Byers, played out in court. Although the jury sided with the legendary VC firm, the Pao case was a watershed moment, bringing sunlight and national scrutiny to the issue of unchecked Valley sexism. For every defeated Ellen Pao, we can hope there are a hundred other female technology workers who feel new courage to speak up against wrongdoing, and a thousand male co-workers and employers who’ll reconsider their boys’-club bullshit. But they’ve got their work cut out for them.

…

Myth #4: School Is for Suckers, Just Drop Out

 Every year PayPal co-founder, investor-guru, and rabid libertarian Peter Thiel awards a small group of college-age students the Thiel Fellowship, a paid offer to either drop out or forgo college entirely. In exchange, the students receive money, mentorship, and networking opportunities from Thiel as they pursue a start-up of their choice. We’re frequently reminded of the tech titans of industry who never got a degree—Steve Jobs, Bill Gates, and Mark Zuckerberg are the most cited, though the fact that they’re statistical exceptions is an aside at best. To be young in Silicon Valley is great; to be a young dropout is golden.

The virtuous dropout hasn’t just made college seem optional for many aspiring barons—formal education is now excoriated in Silicon Valley as an obsolete system dreamed up by people who’d never heard of photo filters or Snapchat. Mix this cynicism with the libertarian streak many tech entrepreneurs carry already and you’ve got yourself a legit anti-education movement.

And for what? There’s no evidence that avoiding a conventional education today grants business success tomorrow. The gifted few who end up dropping out and changing tech history would have probably changed tech history anyway—you can’t learn start-up greatness by refusing to learn in a college classroom. And given that most start-ups fail, do we want an appreciable segment of bright young people gambling so heavily on being the next Zuck? More important, do we want an economy of CEOs who never had to learn to get along with their dorm-mates? Who never had the opportunity to grow up and figure out how to be a human being functioning in society? Who went straight from a bedroom in their parents’ house to an incubator that paid for their meals? It’s no wonder tech has an antisocial rep.

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Myth #7: Silicon Valley Is Saving the World

Two years ago an online list of “57 start-up lessons” made its way through the coder community, bolstered by a co-sign from Paul Graham. “Wow, is this list good,” he commented. “It has the kind of resonance you only get when you’re writing from a lot of hard experience.” Among the platitudinous menagerie was this gem: “If it doesn’t augment the human condition for a huge number of people in a meaningful way, it’s not worth doing.” In a mission statement published on Andreessen Horowitz’s website, Marc Andreessen claimed he was “looking for the companies who are going to be the big winners because they are going to cause a fundamental change in the world.” The firm’s portfolio includes Ringly (maker of rings that light up when your phone does something), Teespring (custom T-shirts), DogVacay (pet-sitters on demand), and Hem (the zombified corpse of the furniture store Fab.com). Last year, wealthy Facebook alum Justin Rosenstein told a packed audience at TechCrunch Disrupt, “We in this room, we in technology, have a greater capacity to change the world than the kings and presidents of even a hundred years ago.” No one laughed, even though Rosenstein’s company, Asana, sells instant-messaging software.

 This isn’t just a matter of preening guys in fleece vests building giant companies predicated on their own personal annoyances. It’s wasteful and genuinely harmful to have so many people working on such trivial projects (Clinkle and fucking Yo) under the auspices of world-historical greatness. At one point recently, there were four separate on-demand laundry services operating in San Francisco, each no doubt staffed by smart young people who thought they were carving out a place of small software greatness. And yet for every laundry app, there are smart people doing smart, valuable things: Among the most recent batch of Y Combinator start-ups featured during March’s “Demo Day” were Diassess (twenty-minute HIV tests), Standard Cyborg (3D-printed limbs), and Atomwise (using supercomputing to develop new medical compounds). Those start-ups just happen to be sharing desk space at the incubator with “world changers” like Lumi (easy logo printing) and Underground Cellar (“curated, limited-edition wines with a twist”).

Read the entire article here.

Map: Silicon Valley, CA. Courtesy of Google.

 

BigBang, tD

A New Mobile App or Genomic Understanding?

Eyjafjallajökull

Silicon Valley has been a tremendous incubator for some of most our recent inventions: the first integrated transistor chip, which led to Intel; the first true personal computer, which led to Apple. Yet, this esteemed venture capital (VC) community now seems to need a self-medication of innovation. Aren’t we all getting a little jaded from yet another “new, great mobile app” — worth in the tens of billions (but having no revenue model) — courtesy of a bright and young group of 20-somethings?

It is indeed gratifying to see innovators, young and old, rewarded for their creativity and perseverance. Yet, we should be encouraging more of our pioneers to look beyond the next cool smartphone invention. Perhaps our technological and industrial luminaries and their retinues of futurists could do us all a favor if they channeled more of their speculative funds at longer-term and more significant endeavors: cost-effective desalination; cheaper medications; understanding and curing our insidious diseases; antibiotic replacements; more effective recycling; cleaner power; cheaper and stronger infrastructure; more effective education. These are all difficult problems. But therein lies the reward.

Clearly some pioneering businesses are investing in these areas. But isn’t it time we insisted that the majority of our private and public intellectual capital (and financial) should be invested in truly meaningful ways. Here’s an example from Iceland — with their national human genome project.

From ars technica:

An Icelandic genetics firm has sequenced the genomes of 2,636 of its countrymen and women, finding genetic markers for a variety of diseases, as well as a new timeline for the paternal ancestor of all humans.

Iceland is, in many ways, perfectly suited to being a genetic case study. It has a small population with limited genetic diversity, a result of the population descending from a small number of settlers—between 8 and 20 thousand, who arrived just 1100 years ago. It also has an unusually well-documented genealogical history, with information sometimes stretching all the way back to the initial settlement of the country. Combined with excellent medical records, it’s a veritable treasure trove for genetic researchers.

The researchers at genetics firm deCODE compared the complete genomes of participants with historical and medical records, publishing their findings in a series of four papers in Nature Genetics last Wednesday. The wealth of data allowed them to track down genetic mutations that are related to a number of diseases, some of them rare. Although few diseases are caused by a single genetic mutation, a combination of mutations can increase the risk for certain diseases. Having access to a large genetic sample with corresponding medical data can help to pinpoint certain risk-increasing mutations.

Among their headline findings was the identification of the gene ABCA7 as a risk factor for Alzheimer’s disease. Although previous research had established that a gene in this region was involved in Alzheimer’s, this result delivers a new level of precision. The researchers replicated their results in further groups in Europe and the United States.

Also identified was a genetic mutation that causes early-onset atrial fibrillation, a heart condition causing an irregular and often very fast heart rate. It’s the most common cardiac arrhythmia condition, and it’s considered early-onset if it’s diagnosed before the age of 60. The researchers found eight Icelanders diagnosed with the condition, all carrying a mutation in the same gene, MYL4.

The studies also turned up a gene with an unusual pattern of inheritance. It causes increased levels of thyroid stimulation when it’s passed down from the mother, but decreased levels when inherited from the father.

Genetic research in mice often involves “knocking out” or switching off a particular gene to explore the effects. However, mouse genetics aren’t a perfect approximation of human genetics. Obviously, doing this in humans presents all sorts of ethical problems, but a population such as Iceland provides the perfect natural laboratory to explore how knockouts affect human health.

The data showed that eight percent of people in Iceland have the equivalent of a knockout, one gene that isn’t working. This provides an opportunity to look at the data in a different way: rather than only looking for people with a particular diagnosis and finding out what they have in common genetically, the researchers can look for people who have genetic knockouts, and then examine their medical records to see how their missing genes affect their health. It’s then possible to start piecing together the story of how certain genes affect physiology.

Finally, the researchers used the data to explore human history, using Y chromosome data from 753 Icelandic males. Based on knowledge about mutation rates, Y chromosomes can be used to trace the male lineage of human groups, establishing dates of events like migrations. This technique has also been used to work out when the common ancestor of all humans was alive. The maternal ancestor, known as “Mitochondrial Eve,” is thought to have lived 170,000 to 180,000 years ago, while the paternal ancestor had previously been estimated to have lived around 338,000 years ago.

The Icelandic data allowed the researchers to calculate what they suggest is a more accurate mutation rate, placing the father of all humans at around 239,000 years ago. This is the estimate with the greatest likelihood, but the full range falls between 174,000 and 321,000 years ago. This estimate places the paternal ancestor closer in time to the maternal ancestor.

Read the entire story here.

Image: Gígjökull, an outlet glacier extending from Eyjafjallajökull, Iceland. Courtesy of Andreas Tille / Wikipedia.

BigBang, Technica

A Higher Purpose

In a fascinating essay, excerpted below, Michael Malone wonders if the tech gurus of Silicon Valley should be solving bigger problems. We see venture capitalists scrambling over one another to find the next viral, mobile app — perhaps one that automatically writes your tweets, or one that vibrates your smartphone if you say too many bad words. Should our capital markets — now with an attention span of 15 seconds — reward the so-called innovators of these so-called essential apps with millions or even billions in company valuations?

Shouldn’t Silicon Valley be tackling the hard problems? Wouldn’t humanity be better served, not from a new killer SnapChat replacement app, but from more efficient reverse osmosis; mitigation for Alzheimer’s (and all sundry of other chronic ailments); progress with alternative energy sources and more efficient energy sinks; next generation antibiotics; ridding the world of land-mines; growing and delivering nutritious food to those who need it most? Admittedly, these are some hard problems. But, isn’t that the point!

From Technology Review:

The view from Mike Steep’s office on Palo Alto’s Coyote Hill is one of the greatest in Silicon Valley.

Beyond the black and rosewood office furniture, the two large computer monitors, and three Indonesian artifacts to ward off evil spirits, Steep looks out onto a panorama stretching from Redwood City to Santa Clara. This is the historic Silicon Valley, the birthplace of Hewlett-Packard and Fairchild Semiconductor, Intel and Atari, Netscape and Google. This is the home of innovations that have shaped the modern world. So is Steep’s employer: Xerox’s Palo Alto Research Center, or PARC, where personal computing and key computer-­networking technologies were invented, and where he is senior vice president of global business operations.

And yet Mike Steep is disappointed at what he sees out the windows.

“I see a community that acts like it knows where it’s going, but that seems to have its head in the sand,” he says. He gestures towards the Hewlett-Packard headquarters a few blocks away and Hoover Tower at Stanford University. “This town used to think big—the integrated circuit, personal computers, the Internet. Are we really leveraging all that intellectual power and creativity creating Instagram and dating apps? Is this truly going to change the world?”

After spending years at Microsoft, HP, and Apple, Steep joined PARC in 2013 to help the legendary ideas factory better capitalize on its work. As part of the job, he travels around the world visiting R&D executives in dozens of big companies, and increasingly he worries that the Valley will become irrelevant to them. Steep is one of 22 tech executives on a board the mayor of London set up to promote a “smart city”; they advise officials on how to allocate hundreds of millions of pounds for projects that would combine physical infrastructure such as new high-speed rail with sensors, databases, and analytics. “I know for a fact that China and an array of other countries are chasing this project, which will be the template for scores of similar big-city infrastructure projects around the world in years to come,” Steep says. “From the U.S.? IBM. From Silicon Valley? Many in England ask if anyone here has even heard of the London subway project. That’s unbelievable. Why don’t we leverage opportunities like this here in the Valley?”

Steep isn’t alone in asking whether Silicon Valley is devoting far too many resources to easy opportunities in mobile apps and social media at the expense of attacking bigger problems in energy, medicine, and transportation (see Q&A: Peter Thiel). But if you put that argument to many investors and technologists here, you get a reasonable comeback: has Silicon Valley really ever set out to directly address big problems? In fact, the classic Valley approach has been to size up which technologies it can quickly and ambitiously advance, and then let the world make of them what it will. That is how we got Facebook and Google, and it’s why the Valley’s clean-tech affair was a short-lived mismatch. And as many people point out with classic Silicon Valley confidence, the kind of work that made the area great is still going on in abundance.

The next wave

A small group of executives, surrounded by hundreds of bottles of wine, sits in the private dining room at Bella Vita, an Italian restaurant in Los Altos’s picturesque downtown of expensive tiny shops. Within a few miles, one can find the site of the original Fairchild Semiconductor, Steve Jobs’s house, and the saloon where Nolan Bushnell set up the first Atari game. The host of this gathering is Carl Guardino, CEO of the Silicon Valley Leadership Group, an industry association dedicated to the economic health of the Valley. The 400 organizations that belong to the group are mostly companies that were founded long before the mobile-app craze; only 10 percent are startups. That is evident at this dinner, to which Guardino has invited three of his board members: Steve Berglund, CEO of Trimble, a maker of GPS equipment; Tom Werner, CEO of the solar provider SunPower; and Greg Becker, CEO of Silicon Valley Bank.

These are people who, like Steep, spend much of their time meeting with people in governments and other companies. Asked whether the Valley is falling out of touch with what the world really needs, each disagrees, vehemently. They are almost surprised by the question. “This is the most adaptive and flexible business community on the planet,” says Becker. “It is always about innovation—and going where the opportunity leads next. If you’re worried that the Valley is overpursuing one market or another, then just wait a while and it will change direction again. That’s what we are all about.”

“This is the center of world capitalism, and capitalism is always in flux,” Werner adds. “Are there too many social-­networking and app companies out there right now? Probably. But what makes you think it’s going to stay that way for long? We have always undergone corrections. It’s the nature of who we are … But we’ll come out stronger than ever, and in a whole different set of markets and new technologies. This will still be the best place on the planet for innovation.”

Berglund contends that a generational change already under way will reduce the emphasis on apps. “Young people don’t seem to care as much about code as their generational elders,” he says. “They want to build things—stuff like robots and drones. Just go to the Maker Faire and watch them. They’re going to take this valley in a whole different direction.”

Berglund could be right. In the first half of 2014, according to CB Insights, Internet startups were the leading recipient of venture investment in San Francisco and Silicon Valley (the area got half of the U.S. total; New York was second at 10 percent). But investment in the Internet sector accounted for 59 percent of the total, down from a peak of 68 percent in 2011.

Doug Henton, who heads the consulting firm Collaborative Economics and oversaw an upcoming research report on the state of the Valley, argues that since 1950 the area has experienced five technological waves. Each has lasted about 10 to 20 years and encompassed a frenzy followed by a crash and shakeout and then a mature “deployment period.” Henton has identified these waves as defense (1950s and 1960s), integrated circuits (1960s and 1970s), personal computers (1970s and 1980s), Internet (1990s), and social media (2000s and 2010s). By these lights, the social-media wave, however dominant it is in the public eye, soon may be replaced by another wave. Henton suggests that it’s likely to involve the combination of software, hardware, and sensors in wearable devices and the “Internet of things.”

Read the entire essay here.

Idea Soup, Technica

Silicon Death Valley

boo-com

Have you ever wondered what happens to the 99 percent of Silicon Valley startups that don’t make billionaires (or even millionaires) of their founders? It’s not all milk and honey in the land of sunshine. After all, for every Google or Facebook there are hundreds of humiliating failures — think: Webvan, Boo.com, Pets.com. Beautyjungle.com, Boxman, Flooz, eToys.

The valley’s venture capitalists tend to bury their business failures rather quietly, careful not to taint their reputations as omnipotent, infallible futurists. From the ashes of these failures some employees move on to well-established corporate serfdom and others find fresh challenges at new startups. But there is a fascinating middle-ground, between success and failure — an entrepreneurial twilight zone populated by zombie businesses.

From the Guardian:

It is probably Silicon Valley’s most striking mantra: “Fail fast, fail often.” It is recited at technology conferences, pinned to company walls, bandied in conversation.

Failure is not only invoked but celebrated. Entrepreneurs give speeches detailing their misfires. Academics laud the virtue of making mistakes. FailCon, a conference about “embracing failure”, launched in San Francisco in 2009 and is now an annual event, with technology hubs in Barcelona, Tokyo, Porto Alegre and elsewhere hosting their own versions.

While the rest of the world recoils at failure, in other words, technology’s dynamic innovators enshrine it as a rite of passage en route to success.

But what about those tech entrepreneurs who lose – and keep on losing? What about those who start one company after another, refine pitches, tweak products, pivot strategies, reinvent themselves … and never succeed? What about the angst masked behind upbeat facades?

Silicon Valley is increasingly asking such questions, even as the tech boom rewards some startups with billion-dollar valuations, sprinkling stardust on founders who talk of changing the world.

“It’s frustrating if you’re trying and trying and all you read about is how much money Airbnb and Uber are making,” said Johnny Chin, 28, who endured three startup flops but is hopeful for his fourth attempt. “The way startups are portrayed, everything seems an overnight success, but that’s a disconnect from reality. There can be a psychic toll.”

It has never been easier or cheaper to launch a company in the hothouse of ambition, money and software that stretches from San Francisco to Cupertino, Mountain View, Menlo Park and San Jose.

In 2012 the number of seed investment deals in US tech reportedly more than tripled, to 1,700, from three years earlier. Investment bankers are quitting Wall Street for Silicon Valley, lured by hopes of a cooler and more creative way to get rich.

Most startups fail. However many entrepreneurs still overestimate the chances of success – and the cost of failure.

Some estimates put the failure rate at 90% – on a par with small businesses in other sectors. A similar proportion of alumni from Y Combinator, a legendary incubator which mentors bright prospects, are said to also struggle.

Companies typically die around 20 months after their last financing round and after having raised $1.3m, according to a study by the analytics firms CB Insights titled The RIP Report – startup death trends.

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Failure is difficult to quantify because it does not necessarily mean liquidation. Many startups limp on for years, ignored by the market but sustained by founders’ savings or investors.

“We call them the walking dead,” said one manager at a tech behemoth, who requested anonymity. “They don’t necessarily die. They putter along.”

Software engineers employed by such zombies face a choice. Stay in hope the company will take off, turning stock options into gold. Or quit and take one of the plentiful jobs at other startups or giants like Apple and Google.

Founders face a more agonising dilemma. Continue working 100-hour weeks and telling employees and investors their dream is alive, that the metrics are improving, and hope it’s true, or pull the plug.

The loss aversion principle – the human tendency to strongly prefer avoiding losses to acquiring gains – tilts many towards the former, said Bruno Bowden, a former engineering manager at Google who is now a venture investor and entrepreneur.

“People will do a lot of irrational things to avoid losing even if it’s to their detriment. You push and push and exhaust yourself.”

Silicon Valley wannabes tell origin fables of startup founders who maxed out credit cards before dazzling Wall Street, the same way Hollywood’s struggling actors find solace in the fact Brad Pitt dressed as a chicken for El Pollo Loco before his breakthrough.

“It’s painful to be one of the walking dead. You lie to yourself and mask what’s not working. You amplify little wins,” said Chin, who eventually abandoned startups which offered micro, specialised versions of Amazon and Yelp.

That startup founders were Silicon Valley’s “cool kids”, glamorous buccaneers compared to engineers and corporate drones, could make failure tricky to recognise, let alone accept, he said. “People are very encouraging. Everything is amazing, cool, awesome. But then they go home and don’t use your product.”

Chin is bullish about his new company, Bannerman, an Uber-type service for event security and bodyguards, and has no regrets about rolling the tech dice. “I love what I do. I couldn’t do anything else.”

Read the entire story here.

Image: Boo.com, 1999. Courtesy of the WayBackMachine, Internet Archive.

Technica

To Hype or To Over-Hype, That is the Question

The perennial optimists who form the backbone of many tech start-ups and venture capital firms, which populate California’s Silicon Valley, have only one question on their minds: should they hype the future, or over-hype it?

From the NYT:

These are fabulous times in Silicon Valley.

Mere youths, who in another era would just be graduating from college or perhaps wondering what to make of their lives, are turning down deals that would make them and their great-grandchildren wealthy beyond imagining. They are confident that even better deals await.

“Man, it feels more and more like 1999 every day,” tweeted Bill Gurley, one of the valley’s leading venture capitalists. “Risk is being discounted tremendously.”

That was in May, shortly after his firm, Benchmark, led a $13.5 million investment in Snapchat, the disappearing-photo site that has millions of adolescent users but no revenue.

Snapchat, all of two years old, just turned down a multibillion-dollar deal from Facebook and, perhaps, an even bigger deal from Google. On paper, that would mean a fortyfold return on Benchmark’s investment in less than a year.

Benchmark is the venture capital darling of the moment, a backer not only of Snapchat but the photo-sharing app Instagram (sold for $1 billion to Facebook), the ride-sharing service Uber (valued at $3.5 billion) and Twitter ($22 billion), among many others. Ten of its companies have gone public in the last two years, with another half-dozen on the way. Benchmark seems to have a golden touch.

That is generating a huge amount of attention and an undercurrent of concern. In Silicon Valley, it may not be 1999 yet, but that fateful year — a moment when no one thought there was any risk to the wildest idea — can be seen on the horizon, drifting closer.

No one here would really mind another 1999, of course. As a legendary Silicon Valley bumper sticker has it, “Please God, just one more bubble.” But booms are inevitably followed by busts.

“All business activity is driven by either fear or greed, and in Silicon Valley we’re in a cycle where greed may be on the rise,” said Josh Green, a venture capitalist who is chairman of the National Venture Capital Association.

For Benchmark, that means walking a narrow line between hyping the future — second nature to everyone in Silicon Valley — and overhyping it.

Opinions differ here about exactly what stage of exuberance the valley is in. “Everyone feels like the valley has been in a boom cycle for quite some time,” said Jeremy Stoppelman, the chief executive of Yelp. “That makes people nervous.”

John Backus, a founding partner with New Atlantic Ventures, says he believes it is more like 1996: Things are just ramping up.

The numbers back him up. In 2000, just as the dot-com party was ending, a record number of venture capitalists invested a record amount of money in a record number of deals. Entrepreneurs received over $100 billion, a tenfold rise in dollars deployed in just four years.

Much of the money disappeared. So, eventually, did many of the entrepreneurs and most of the venture capitalists.

Recovery was fitful. Even with the stock market soaring since the recession, venture money invested fell in 2012 from 2011, and then fell again in the first half of this year. Predictions of the death of venture capital have been plentiful.

For one thing, it takes a lot less money to start a company now than it did in 1999. When apps like Instagram and Snapchat catch on, they do so in a matter of months. V.C.’s are no longer quite as essential, and they know it. Just last week, Tim Draper, a third-generation venture capitalist with Draper Fisher Jurvetson, said he was skipping the next fund to devote his time to his academy for young entrepreneurs.

But there are signs of life. Funding in the third quarter suddenly popped, up 17 percent from 2012. “I think this is the best time we’ve seen since 1999 to be a venture capitalist,” Mr. Backus said. He expects the returns on venture capital, which have been miserable since the bust, to greatly improve this year.

“Everyone talks about the mega win — who was in Facebook, Twitter, Pinterest,” he said. “But the bread and butter of venture firms is not those multibillion exits but the $200 million deals, and there are a lot of those.” As an example he pointed to GlobalLogic, which operates design and engineering centers. It was acquired in October in a deal that returned $75 million on New Atlantic’s $5 million investment.

Better returns would influence pension firms and other big investors to give more money to the V.C.’s, which would in term increase the number of deals.

Read the entire article here.