America: The Startup Nation

Mitchell Hynes

Mrs. Smith

English 3201

October 27th, 2017

America: The Startup Nation

Situated between the busy ports of Oakland and the mountainous Santa Cruz, Silicon Valley is one of the most influential and fastest moving machines of the modern world. Home to the headquarters of giants such as Google, Apple, and Intel, its industries influence the global modern world much more than some might think. With the smartphone revolution, PC vs Mac brawl, and the more recent online service and cloud boom, the Valley has had a lot of history and significance in its lifetime. Since its post-war economic boom, the region has seen a lot of success in innovation, but stagnation plagues the bay as inflation rises to bubble levels and women are classically opressed under seemingly every opportunity while companies grow to the largest valuations in the world but continue to lose money quarter to quarter. I enjoy watching Silicon Valley, not because I would like to work there or that I enjoy the concept. Instead, I love the technology that is created by these modern monks and gurus, as well as the dynamics of the place it’s made in. Much of the valley’s companies exists as they are rapidly created then liquidated for the founders to cash out on half-fulfilled ideas. To begin, how can you talk about a place without introducing what it makes? New York makes jazz, Europe makes classical music, and the valley makes computer software, which is much more exciting than you may think.

Software as I Know It

Computer software is an art in many ways. Similar to literature, it has theme and function, but without the abstract ideas. It can be considered as ultra didactic, where the message is clearly transmitted from brain to computer through language. Jonathan Wallace of bway.net wrote for his website spectacle.org questioning if software is engineering or art:

Art frequently involves a communication directly from the writer’s unconscious to the medium in which the art is expressed: a theme springs to mind and is put down on paper, with nuances, twists and detours which the artist does not ‘plan’ but which close a loop for (them), often creating a sense of physical satisfaction and well-being. By contrast, a didactic novel whose intellectual theme is chosen, then planned to include particular incidents illustrating philosophical ideas, may be said to be ‘engineered’ (Wallace).

This is why I think computer code is unique. It conveys message, function, and theme while being entirely literal, without always being too engineered because the concepts become so intuitively understood by coders, the formation of solutions and ideas in code is artistic expression. It also can be said that software’s paint is the canvas itself. In many cases there are billions of dollars allocated to making tools in software – no other art has such luxury tools as website developers today. Software also fulfills the Anti-Mimesis theory, that “Life imitates art far more than Art imitates life” (Wilde). For example, before social media arrived, people hardly had the incentive to do outlandish things to prove themselves worthy of friends – simply playing one’s role in real life was enough. Today the way many young adults choose stand out is to express themselves through social media, which can be seen as a digitally indexed database of people and how influential they are. The people they spend time with are different from who they want to be taken photos with, because when it’s online it matters to them more as the world can see it. Why show off to your few friends when you have millions online? Plus it’s there forever! People imitate art all the time in fashion, language, and in this case imitating software by systematically choosing one’s friends by snooping Facebook profile. Software has also taken a global influence as countries such as India rule the software outsourcing scene with outsource2india.com, who provide the world with a mass of professional labour, and India with an IT industry with “aggregate revenues crossing US$ 100 billion” (Bhattacharjeea) in 2012. India relies on Software in their quarterly life as much as we do day-to-day. This is why I believe Silicon Valley is one of the most influential places in the world, as it controls the global tech network similar to a puppet master with strings. The valley makes software and other organizations often make money while adapting to it. As the world gets more automated almost like science-fiction prophecy, the valley will take over and become the strongest influence on the modern world without people even realising it. But let’s go back to the ancient times of the early 2000’s, a time when two ugly giants were fighting for market share, and the valley turned hot red burning with gunfire from two sides.

The Valley: a Battleground

The Valley is known across America for its open competition, spread of ideas, and its push for work space diversity; however, it wasn’t always a safe place for shared marketplaces. Lindsay Kolowich writes for HubSpot and dives into the timeline of Macintosh versus PC. Her article begins in 2006, when Apple, a core valley company headed by Steve Jobs at the time, broadcasted their ads called “Get a Mac!” comparing Macs and PCs, to portray PCs as simply for doing taxes and spreadsheets: no fun. Later, Microsoft’s Bill Gates threw a greater punch with their tv spot in 2008 “Not Alone” showing the global influence of PCs and how standard to the world they were, promoting themselves as the best option for the casual consumer just looking to get the job done (Kolowich). This “PC vs. Mac” brawl was a hot topic in the early 2000’s and still is. People of the valley will get hot headed if you mention either as the better option, almost similar to Americans on the Confederates versus Unions. Gates and Jobs were neck and neck for market share ever since. The companies have since grown to be some of the largest in the world making Gates the second richest man owning “$90.1 billion” (Vinton).

The Valley: a Bastion for Creativity

The Valley has changed from its ultra competitive ways since 2006 and some familiar figures are trying to stop it – in fact, one of the largest changes is the switch to Open-Source technology. What this means is developers share the method behind their computer programs, revealing every secret code sauce to the world. This avoids reinventing the wheel and they do this while still being worth billions in many ways, often offering services like hosting or consulting. A real world example would be Red Hat, a company whose software is entirely Open-Source while still pulling “$93.6 billion in revenue” (Darrow) for 2015. How do they do this? They exclusively offer certificates in their software, providing training and testing for those willing to learn or pursue a career in the Red Hat linux suite, all while their software is entirely free and download servers are reliably offered 24/7. But not everyone is comfortable with this idea of truly Open-Source software just yet. In fact Bill Gates famously once stated in an interview with News.com in 2007 about the rise in the Open-Source community, and how it constitutes a dangerous “new form of communism” (Garaud). Even with Gate’s enormous worth he couldn’t stop Open-Source from dominating the valley due to how easily accessible, buildable, and how secure it is by nature, where nearly anyone with a keyboard, internet connection, and brain could contribute and solve issues in the software world from zero-day security patches to an app not showing your family photo. Open-Source software is all over the valley and it deeply ingrained into global and valley culture. Technically Open-Source licenses like Apache and GNU can be used for anything. People often mention Open-Source as a means of releasing documents, patents, and recently the human genome. This is one of the most fascinating parts about the valley culture, as many terms in computer and software design fit into the real world so effortlessly.

The Valley: a Playground

Without the influence on trends like Open-Source, the billionaires treat the valley like their playground. Jeff Bezos is one who recently shot up to the richest man in the world in October at a “$90.6 billion” (Vinton) net worth . Another valley billionaire Larry Ellison from the Oracle Corporation threw shots at Bezos’s Amazon Web Storage, similar to kids in a schoolyard. Listen to this dialog between Ellison and an Amazon spokesperson from Mercury News, characterizing how bored these men are:

Ellison promised that customers who use it (A new web service platform) would pay less than half of what they would pay for similar technology from Amazon’s Web Services. Ellison even said that the computers of Oracle and Amazon were now engaged in ‘cyberwarfare.’

‘Most people know already that this sounds like Larry being Larry,’ said an Amazon spokesman, according to Business Insider. ‘No facts, wild claims, and lots of bluster.’ (Crum).

Ellison used to be a young ambitious programmer, behind some of the most imaginative software in 2009: Java. He was a great coder as well. One former Oracle employee said in a Quora answer, “I recall him arguing about locking strategy in the dbms kernel at one point” (Nimish). However past his prime all he can do is leave the younger generation to innovate while sitting on his huge fortune and spitting at men much richer than him, just to get back with a spokesperson. The valley’s culture allows for a bastion of creativity, while still holding room for old rich men to complain and bicker how their thrones are too short. This bit of culture is something I find entertaining about the valley, for people with comical amounts of money these people sure act like clowns, while the new generation sets the trends and the actual company strategies. But why does valley culture involve a lot of men? How can these companies afford to do so much? Most importantly, where is all of this money coming from?

California knows how to Discriminate

The valley has seen enormous success and made some of the richest men in the world. But with all of the amazing openness of the valley from the Open-Source design to the rapid outsourcing to countries like India you’d think the offices would be accepting of women in leadership or engineering positions, but really it’s the opposite. Time and time again women are rejected from these fields by outrageous prejudice. Susan Fowler is a prime example of this prejudice and her article Reflecting On One Very, Very Strange Year At Uber caused the CEO Travis Kalanick to step down, effectively ending his career in the valley and a started a mass rotation of management out of the company. I highly recommend a read of Susan’s post as it gives a peek into how a silicon valley career can be built, then easily crumble due to a bro-culture. Susan Fowler writes describing her experience with a manager for example:

After the first couple of weeks of training, I chose to join the team that worked on my area of expertise, and this is where things started getting weird. On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn’t. He was trying to stay out of trouble at work, he said, but he couldn’t help getting in trouble, because he was looking for women to have sex with. It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR. (Fowler)

Human resources of course reacted to this, but instead of talking to the manager they instead gave her two options: “(i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that” (Fowler). Susan left the company after they essentially ruined her academic career and robbed her of a spotless performance review, she now works at Stripe’s new quarterly publication aimed at engineers. Another instance of blatant sexism recently was a 10-page Anti-Diversity screed written by an as of now unknown and fired engineer titled Google’s Ideological Echo Chamber. Google has tried its hardest to detach itself from this document, and rightfully so. Just read this excerpt from Kate Conger’s exclusive GIZMODO article and you’ll understand why:

We all have biases and use motivated reasoning to dismiss ideas that run counter to our internal values. Just as some on the Right deny science that runs counter to the “God > humans > environment” hierarchy (e.g., evolution and climate change) the Left tends to deny science concerning biological differences between people (e.g., IQ[8] and sex differences). Thankfully, climate scientists and evolutionary biologists generally aren’t on the right. Unfortunately, the overwhelming majority of humanities and social scientists lean left (about 95%), which creates enormous confirmation bias, changes what’s being studied, and maintains myths like social constructionism and the gender wage gap[9]. Google’s left leaning makes us blind to this bias and uncritical of its results, which we’re using to justify highly politicized programs. (Conger)

The entire document chocks up the gender wage cap to women having a “Openness directed towards feelings and aesthetics rather than ideas. Women generally also have a stronger interest in people rather than things, relative to men (also interpreted as empathizing vs. systemizing)” (Conger). I find this incredibly distasteful and disagree with most of what that employee says, but these two articles show how the valley reacts to women in the workplace and why diversity is so important as it is a huge issue facing the valley. Aside from all this blatant sexism, another issue plagues the valley and often goes under everyone’s nose, and that is the valley is inflating.

How to be a Millionaire

This enormous success comes at a price literally, remember Uber? The company has seen great success but still cannot make money. Seth Fiegerman reports at CNN about the losses at Uber “Call it the current Silicon Valley mindset. Losing billions of dollars each year isn’t necessarily a bad thing…” (Fiegerman) In fact, the valley is known for its money-losing capability, recently Stefan Weitz in a CNBC article by Lauren Thomas said about Bezos’ retail and service company Amazon “No other retailer can come close to this kind of [profit] loss without a catastrophic result. … Amazon’s earnings report underlines why the company is accelerating — they’re investing more money directly back into their business than any other retailer can afford,” (Thomas). These giant investments at regular intervals into possibly profitable companies grow them into huge numbers while materialistically not being worth half its valuation. All this money flows to employees who stockpile it for their shot at being the next Steve Jobs by starting a company in their garage. This makes a high demand for housing in the valley and is a real issue as houses closer to the city are skyrocketing in value, I would say this growth is similar to the buildup to the housing crisis, but far worse. John McNellis from Business Insider does a deep dive into the housing situation in her article “Silicon Valley has a ‘full-fledged housing crisis’” and says, “according to the brokerage firm of Alain Pinel, a lot in North Palo Alto–the cool part of town–goes for around $2.5 million all by itself, that is, $2.5 million before you build your dream house on it … before ever turning a shovel in the ground, before counting the land, architecture, engineering, banking and construction costs, the units were already $30,000 more expensive than a median-value house almost anywhere else in the country.” (McNellis). I believe the valley is facing many issues, but the financial situation is escalating to near bubble levels as houses are only bought by people making high-income six figures annually and the bay area cities don’t want to deal with it as they’re making so much money off construction and land ownership, similar to the housing crisis.

Absolute Freedom, so Close!

The valley is a cradle of innovation, ideas, and possibility but with some research you’ll find it’s also a dark place without respect for women, and an inflation problem haunting the region like a ghost. The software will always continue to improve as the world converges on an automated future, and businesses find it is easier to accept computers as replacements for workers. In the future I see people not having to work and instead contributing most of their time to arts, culture and leisure while the few who do work want to be there solely for the freedom of choice. Universal basic income, a socialist idea will dominate western culture as everyone is given wages regardless of work because computer science will have evolved to a point where demanding labour is meaningless, and only jobs that require a human touch are left. This unique opportunity for humans to truly do whatever they wish and have absolute freedom has never been so close to our grasp and it’s all thanks to the computers and computer software of this small American valley. That is why I love this place, not for the culture or money but for the limitless potential its technology offers to mankind.

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