Join

Enter Details

Comment on stories, receive email newsletters & alerts.

@
This is your permanent identity for Business Insider Australia
Your email must be valid for account activation
Minimum of 8 standard keyboard characters

Subscribe

Email newsletters but will contain a brief summary of our top stories and news alerts.

Forgotten Password

Enter Details


Back to log in

Silicon Valley has turned into the place it hates the most

Silicon Valley EclipseHBOFrom HBO’s ‘Silicon Valley’
  • There is a growing sense that America’s tech entrepreneurs are no longer making useful things that solve difficult problems. 
  • Worse than that, Silicon Valley is exhibiting some of Wall Street’s amoral behaviours.
  • Ankur Jain, of Kairos Ventures, is raising a fund to counter that. Its aim to solve big problems that are particularly tough on middle-class Americans.

At some point in between coming up with the tagline “Don’t be evil,” and bringing Soylent into this world; between building the cloud and cheerleading the disaster that is Theranos, Silicon Valley became a place it hates.

Silicon Valley became Wall Street.  

Now I don’t cover Silicon Valley. But I do cover Wall Street. I know Wall Street.

And it takes one to know one. I also know that in private and not-so-private conversations, the two centres of capitalism see themselves as symbiotic rivals.

Over the last few years, the Ivy League graduates who used to pour into Wall Street have started opting for Silicon Valley instead. So have some of the Wall Streeter’s themselves. Stanford has outshone Harvard, and America’s business hero has become Amazon’s Jeff Bezos, not JP Morgan’s Jamie Dimon. It’s not hard to see why. Like Silicon Valley’s technology, Bezos has managed to reach his business into almost every facet of daily American life.

All this said, what’s most important for this story is that throughout that process the purported ethos’ of the two places couldn’t be more different. Wall Street stands practically naked in its acknowledgment that greed is the main driver for a great number of its dealings.

Silicon Valley, on the other hand, has always sold itself as a place that made things  — good things that help the world and solve problems.

And this is where it has now run into problems.

At the moment it is not difficult to argue that Silicon Valley is not living up to its own ideals — that its former ethos is just a veneer over what has become a bubble of tone-deaf ideas and money chasing money for money’s sake. At dinners with venture capitalists, investments are measured not by the brilliance of the idea behind them or the scope of the problem they solve, but by how much money they have managed to raise. 

Every guy wearing Louis Vuitton sneakers at The Battery — a members-only San Francisco club for the Valley’s elite — wants to interrupt your conversation to talk about the growth metrics he’s seeing on his Bitcoin sticker company. 

Let me tell you something. It sounds a lot like a guy in Gucci loafers at the Hunt and Fish Club in New York City bragging about how much money his hedge fund raised.

Meanwhile, since the 2016 Presidential election, Facebook, Google and Twitter have managed to anger just about every single American with a smartphone. 

“Silicon Valley has gotten out of touch in a time when it’s more powerful than ever and the work that it does affects more people than ever,” said Ankur Jain, the 27 year-old founder of venture capital fund Kairos Ventures. “Ninety per cent of VC funds say they want to change the world and they don’t.”

In that sense, Wall Street has Silicon Valley beat. At least Wall Street is doing what it set out to.

What good is a maker?

It’s not just making something that matters. It’s what you make.

Perhaps you took a look at the Forbes 30 Under 30 list for startups. If you didn’t, let me tell you about some things you’ll find there. On the list you’ll find a company that’s like AirBnB but for pets, a glorified catering service for Silicon Valley startups, an app that helps you decorate, and a point of sale platform that can help you finance that jet ski you’ve always had your eye on.

America has so many big problems, and part of Silicon Valley’s pride was helping us solve them.

Of course, there’s nothing wrong with getting an AirBnB for your labradoodle. But this isn’t just about startups.

Apple is a tax avoider, and Google, Facebook and Twitter — where to even start with them? We’ll call them the big three. Last month at a Senate hearing on how Russian bots used social media to spread misinformation during the 2016 election, Senator Al Franken (D-MN) couldn’t get any of the lawyers representing the big three to say they wouldn’t accept payment for US political ads in foreign currency.

Al FrankenGettySenator Al Franken.

And by the way, shout out to the big three CEOs for sending their lawyers and not answering questions about a hostile foreign power on their platforms themselves. That beats Wall Street too, actually. Every major US Wall Street bank head has had a turn in the hot seat in Congress — but I guess the seat’s too hot for Mark Zuckerberg. 

Slowly, the big three have been trickling out troubling data about the number of people who’ve seen misinformation on their platforms. First Facebook was throwing around numbers like 10 million, then it hiked that up to 126 million.

It’s like when JP Morgan Jaime Dimon says “open kimono” and every journalist on Wall Street shudders knowing that whatever ugly thing is under there, the reality is probably ten times worse.

Google, Facebook, and Twitter never wanted the responsibility of patrolling their platforms. They just wanted to sell your data. The problem with that, of course, is that they run spaces that need to be filled with something — anything good or whatever. That has consequences. The opposite of good isn’t nothing, it’s evil. And in the absence of good, that is what will often fill the void.

Put more simply: “Don’t be evil” is no longer enough. (Google, incidentally, dropped it a few years ago as a motto.)

How to get back to good

Ankur jainSarah Jacobs/Business InsiderAnkur Jain, founder of Kairos Ventures

What has happened, it seems quite clear, is that instead of innovating for America or the world, Silicon Valley is innovating for itself. Instead of asking the question, “what does the world need?” — a big, bold question if there ever was one — more often it’s asking the question, “what do I want?”

And “I” — a wealthy, tech-savvy urban dweller — would like an app that delivers a burrito to me on command, or a $US400 dollar juicer

Enter Jain, who has decided that all of this is enough. At a time when middle-class America — a massive market as he pointed out to me, is hurting more than ever — it’s time for Silicon Valley to be bold. It’s time for it to be useful. It’s time for it to be what it says it is.

“The everyday person is getting squeezed at every phase of their life,” he told me. And not just middle class people.

“The decision-makers [in Silicon Valley] assume their engineers are just fine, but when rent is 50% of your after-tax income, you’re struggling.” 

On Thursday, Jain announced that he will raise a fund dedicated to fixing the following big problems in America, which — as he reminded me more than once — serve massive markets.

  • Student debt
  • Sky high rent in urban centres
  • Childcare
  • The cost of unemployment (for you, the unemployed) and retraining
  • Retirement income

The fund’s board includes former President and First Lady of Mexico, Vicente and Marta Fox; Mark Thompson, the CEO of The New York Times; Bobbi Brown, founder of Bobbi Brown Cosmetics; Roger Goodell, Commissioner of the National Football League and more. There are, however, no venture capitalists.

“We’re going to feel deal flow FOMO  by passing up deals everyone is working on, but we’re going to have to do that to stay focused,” Jain said.

Now a place where money likes to follow money, Silicon Valley has become risk averse and cowardly. On Wall Street we call this a herd.

And like I said: Silicon Valley, welcome to Wall Street.

Get the latest Google stock price here.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.