Technology has lost its “golden child” image, with piñatas of Google buses being beaten to shit in San Francisco, invasions of privacy making national headlines, and an overall sense in the country that our leadership’s exceptionalist reputation as the “good” nouveau riche is not deserved and must end. To put it bluntly, the rest of the country doesn’t like us– any of us– anymore. We’ve lost that good faith, in technology, that allowed us to be rich (well, a few of us) and not hated, even in the midst of a transformational, generation-eating recession. 2013 will be remembered as the year when popular opinion of “Silicon Valley” imploded. As much as I despise VC-istan, that is not a good thing, because popular opinion will not separate VC-istan’s upper crust from Silicon Valley or technology as a whole.
After decades of the kinds of mismanagement that only prosperity can support, we’ve developed an industry that, despite having the best individual contributors in the world– has the worst leadership out there.
Additionally, even within the Valley morale is challenged. The truth about the VC-funded ecosystem is that it’s no longer an alternative to the traditional corporate ladder, but merely a shitty corporate ladder (the transitions being worker to founder to investor) in which disposable companies allow executives to do things to peoples’ careers that they’d never get away with in larger companies. There’s a satirical song called “The Dream of the ’90s” about a resurgence of unambitious immaturity in Portland’s hipster culture. VC-istan is a similarly nostalgic 1990s-derived culture, except centered around ambitious immaturity. Perhaps it was more real in the 1990s, but the venture-funded world now is a Disney-fied caricature of entrepreneurship dominated by rich kids who take no real risks because their backers have already decided on a range of outcomes, and will provide “entrepreneur-in-residence” soft landings for their well-connected proteges, no matter what happens. It’s not about building things anymore; it’s about using Daddy’s contacts to play startup for a few years and relish telling older and much more talented people what to do.
People are waking up to this. VC-istan is under attack. I just hope it doesn’t take down the rest of technology with it.
The reputation of this ecosystem is falling to pieces. As it were, individual technology companies go to great lengths to defend their reputations, and only relinquish those when there’s enormous benefit (in the billions) to be made through the compromise. As technology firms see it, and they’re not wrong, their ability to execute and to attract talent is strongly determined by the company’s reputation. Why is reputation so much more important to a software firm than to, say, a steel or oil company? A few things come to mind. Obviously, internal reputation (morale) is extremely important in software. The difference between an unmotivated versus a motivated steel worker might be a factor of 2 or 3; in software, it’s at least 10. Second, and there are a variety of reasons for this, most talented people don’t care all that much about money, at least not in the classic economic sense. They don’t want to be poor, but they’d rather have smart co-workers, interesting work, and a supportive managerial environment and be comfortable than lose those things and make 25% more. (We also believe that we’ll make more money, in the long term, if we work is quality environments where we can succeed.) Most reflective people know that “rich” is relative and economic rewards lend themselves to hedonic adaptation quickly. As Don Draper said, this form of happiness is “a moment before you need more happiness”. So you can’t court the best software engineers with a 10- or even 50-percent advantage in salary; you have to convince them that your company will give them interesting work and benefit their careers. That’s hard to do when a company has a damaged reputation. From experience, we know not to trust even most of the companies with googd reputations, much less the ones whose images have already been tarnished.
Sadly for them, it’s probably 80 percent of the Fortune 500 where the top 5% of software engineers would simply refuse to work, unless given a salary that would put them above even most executives, or in desperate need of short-term employment. These companies don’t end up with minimal engineering power; they end up with zero, because they can’t attract talent from outside, they overlook the high-potential people within, and talented people who come in never form a critical mass that might give them any political immunity to the overwhelming mediocrity (that is a threat even in the prestigious companies). On the other hand, Google and Facebook have more top-5% engineers than they know what to do with. Talent is clustering and clumping like never before, both in terms of employer selection and geography. So not only are the stakes of reputation high, but most firms end up as losers, bereft of top talent and doomed to watch their IT organizations slide into inefficiency, if not failure. Sturgeon’s Law is painfully felt everywhere in technology. If you’re a programmer looking for work, you find out quickly that most engagements are low in quality. On the other hand, if you’re a hiring manager, you find most engineering applicants to be incompetent at worst and badly-taught (i.e. betrayed, and sometimes irreparably damaged, by years of shitty work experience) at best.
Despite its problems, there’s money in technology. There’s so much fucking money in it that it has tolerated abysmal leadership for a long time. The Valley is so rich that the points don’t matter. Fired unjustly? Another job awaits you. Moron promoted (or, better yet, externally hired) above you? Job hop. Unfortunately, that won’t last forever and not everyone is positioned to benefit from this fluidity. Besides, some of the volatility injected into technology by bad management is just unnecessary and counterproductive. We’ve set patterns in place that won’t survive the future, in which traditional corporate software’s place diminishes. (Software and technology themselves will live on; that’s another discussion.) There will still be money, but the patterns that earn it will be different, and old processes won’t work. After decades of the kinds of mismanagement that only prosperity can support, we’ve developed an industry that, despite having the best individual contributors in the world– has the worst leadership out there.
Now, we’re seeing the backlash. No one gives a shit about Google Glass when the people who’ve lived in The Mission for fifty years are being pushed out by spoiled white kids who would never deign even to learn Spanish because “there’ll be an app for that in 5 years”. It’s no longer cool to have “invites” to some goofy social experiment when everyone knows that their data’s being sold to shady third parties and that full profile access is often a workplace perk. Finally, technology startups have gone full-cycle from being a risky, conventionally denigrated career move (1980s) to a really great opportunity (1990s) to “cool” (2005-12) to somewhat less cool (post-2013). This is happening because we no longer have the carte blanche abundance of opportunity that allows us to be prosperous even with horrendous leadership. There’s still a ton of opportunity out there, but the easy wins are gone, and we can’t let “the business side” run on auto-pilot because the age in which bad leadership is acceptable is ending. We can’t put our heads down and expect the men in suits to do what’s right; they only did that when everyone could get rich because the victories were so facile, but that’s no longer true (if it ever really was) and we need to take more responsibility for our own direction and destiny. We can handle that stuff; trust me.
We’ll need to move our current executives and “hip” investors and tech press aside and let new players come in; but we can keep technology alive. And we owe it to future generations. Technology is just too important for us to let the people currently running this game continue to screw it up.
