People have been claiming this for years — hell, I did a podcast about it recently too — but this new article on Harvard Business Review lists four main factors for the potential demise of Silicon Valley:
- The biggest companies there have become overbearingly big.
- There hasn’t been a good IPO in a minute, and there have been some real fumbles, like Uber and WeWork.
- People and regulators are more aware of the downsides of these platforms.
- The public is becoming disgusted with the valuations and the actions of the execs, i.e. do we really need trillion-dollar companies?
Plus: San Francisco-area rents and the COVID fleeing of California if “We all live/work in Zoom” (gag) now. So … is the game ending? Or no?
Some ideas.
Did Steve Jobs actually predict the demise of Silicon Valley?
Follow this bouncing ball:
- Look at some of the experiences in Jobs’ own life — and what they potentially led to:
- Now think about today’s tech world: it’s quite insular. Look at LinkedIn job stats, or read this article. (Or this one.)
- Think about Mark Zuckerberg, one of the “tech titans” to come in the wave after Jobs. He basically created Facebook at 22 or so. So even if he pulls a Bill Gates and walks away sometime in his 50s to pursue other things, still essentially all he’s known is the Silicon Valley tech world, that culture, those types of jobs, those types of experiences.
- There are more and more people probably thinking that way — despite the cost of living in SF, there’s a population boom. Those people are (likely) predominantly entering the tech industry, and doing so young.
- There’s no “living on an apple orchard” or “taking a calligraphy class” for these people.
- Without an experiential base, topics like “curiosity” and “synthesis” become harder to pursue.
- Without diverse experience / curiosity / synthesis — essentially, in a world made insular — the creativity and the functionality of the product will decline. As it declines, other nations and other industries can rush in to fill the tech industry void.
- A doomsday scenario? Of course. Would this take years to play out? Naturally. But Steve Jobs, way back in 1995, may have pinpointed the exact thing that will bring down the industry where he made his fortune.
Maybe we need to just stop deifying these companies
People love to breathlessly analyze what is happening in these companies in terms of thought process, new products, the next wave of tech, etc. Entire Substack newsletter ecosystems exist to wonder what Tim Cook and Zuck are considering on a weekly basis.
But maybe we need to stop deifying Silicon Valley. To wit:
First up: Chamath Palihapitiya, the founder of Social Capital (former exec-level dude at some tech firms). Try this one as he speaks to Stanford Business School students:
“Fail fast” has become the conventional wisdom of Silicon Valley. And when it comes to consumer businesses and apps, that makes sense, says Palihapitiya. Consumer internet businesses like Facebook are about exploiting psychology, and businesses need to fail fast to keep pace with the shifting tastes and desires of consumers. But that formula doesn’t work for “anything that really matters,” he says. “It is not how you solve diabetes. It is not how you use precision medicine to cure cancer. It is not how you educate broad swaths of the world’s population.”
Yep. Let’s do one more while we’re here:
“When you unpack it, what you realize is that fast money returns can completely decay long-term thinking and sound judgment. Moderate growth, moderate compounding, that is the key. That is gold.”
Could you imagine an executive having to present to a group and talk about “moderate growth?” Some of those guys would probably commit suicide before doing that. I’m not kidding.
The growth focus
Except for Apple and a host of companies, none of the money in Silicon Valley is real. It’s valuations and growth metrics. It’s what could be there, essentially. That “growth culture” — 10x! — is very associated with Silicon Valley. That’s not necessarily a good thing:
It’s hard to think about the human consequences of technology as a founder of a startup racing to prove itself or as a chief executive who is worried about achieving the incessant growth that keeps investors happy. Against the immediate numerical pressures of increasing users and sales, and the corporate pressures of hiring the right (but not too expensive) employees to execute your vision, the displacement of people you don’t know can get lost.
Also yes.
The jobs issue
Let me try to make this as clear as possible.
The culture of Silicon Valley is driven by engineers and people who generally seek efficiency in doing things.
That’s good.
But here’s what is bad: trying to create “friction-less” experiences usually involves removing humans.
That costs jobs.
The states that put Trump over the top? All states with high job loss. He spoke of jobs often.
The correlation is there.
Automation is going to cripple us because it occurs at this intersection:
- Decision-makers will see it as a “cost play” and eliminate jobs
- It will make us admit that most of our jobs are just box-checking bullshit anyway, which will terrify us
Much of this “friction-less efficiency” is, in fact, driven by Silicon Valley (and other tech hubs).
I guffaw anytime I see someone say “Automation will create more value-add roles for humans.” No it won’t. Executives don’t think that way. If they did, wouldn’t we have more value-add roles now?
But tech is unavoidable, right?
For sure. You can go live in a cave if you want. Probably not wise.
But instead of deifying tech, we should think about tech.
- What is this doing to us?
- What’s the value here?
- Is this the right model or path?
- What are the repercussions?
- Where is this taking us?
- What does it mean for our people?
No one really seems to think this way.
Every job I’ve had, the whole deal is:
- “People are complaining so I think this is a problem we need to address.”
- “Let’s hear from some vendors but never let the people who do the work speak with the vendors.”
- “We’ll now buy a solution.”
- “Oh, no one wants to use it and it doesn’t fit with our systems? Oh well. Got some KPIs to focus on, can’t worry about that now!”
This is software becoming shelfware. It happens because we deify tech. We just assume tech will solve our problems. It’s not always true. You could actually argue it reversed some industries, i.e. recruiting.
Your take? Could Silicon Valley 2020 begin the process of its demise into 1985 Detroit?
