Following on the sex robot story here's TechCrunch, October 8:
Dear Silicon Valley: America’s fallen out of love with you
...MUCH MOREDear Silicon Valley,You used to be the envy of the world. Over the last decade I’ve seen countless cities try to become you, from the Silicon Savannah to the Silicon Bayou.At last year’s Global Entrepreneurship Summit on Stanford’s campus, hundreds of entrepreneurs from Mongolia to South Sudan came to listen to President Obama and Mark Zuckerberg and get a touch of your magic fairy dust. The American Dream — anyone with an idea, a garage and a good work ethic can build a great company — might as well have been born in your backyard. I admire your innovation, openness, creativity and all you stand for.In case you haven’t noticed, though, you’ve changed from hero to villain. You’re too expensive and exclusive for the rest of the world: The garages that gave us Hewlett-Packard and Google now cost millions of dollars. You’ve moved from icon to joke — the show that bears your name is a cringe-worthy, true-to-life satire.You’re churning out companies that are raising hundreds of millions of dollars, and going bankrupt in literal satires of themselves: a $700 million blood-testing company that never had any actual results; a $120 million juicer with packets that can actually be squeezed by hand.
Now Fast Company is declaring the end of the public’s “love affair” with the Silicon Valley ideal, and everyone from socialist Bernie Sanders to hard-right Steve Bannon is calling for your biggest companies to be heavily regulated, and your reputation is fast approaching that of Wall Street (which used to have a good reputation, too).Here are a few places that you went wrong — and what you can do to fix it.Your ideas are only as good as the people in the room. And your door is shut to most people.As evidenced by the major backlash over the recent launch of a company called Bodega — where the founders and investors genuinely didn’t understand why the name was problematic — you don’t always have the best handle on how your ideas will be received outside of the Silicon Valley bubble. You’ve got major blind spots.Why might this be? Face the facts: When Silicon Valley investors are considering new ideas, you don’t have very many different perspectives around the table. More than 90 percent of the decision-makers in the venture capital industry are white men.You’ve known this is a problem for a while, but haven’t done anything to fix it: Less than 5 percent of the new ideas that get funding are founded by women, and less than 1 percent of venture funding goes to Latinos and African-Americans.You’ve concentrated capital in the hands of a few people (nearly all white guys) who have huge power to determine which people, places and industries get funding. And your decision-makers are often (unintentionally) overlooking ideas that come from people who aren’t like them, which exacerbates gender, racial and geographic divides in our country. Much worse, this financial privilege creates power dynamics that lead to too-frequent cases of investors sexually harassing founders or tone-deaf ideas like Bodega.
Your rainforest of innovation has turned into a factory farm.Silicon Valley, perhaps your greatest achievement is that you’ve built a community where the little guy could build a great company to disrupt the establishment. Silicon Valley’s innovation engine has been driven by the creation of iconic companies — HP, Intel, Apple, Google, Facebook — that took on bigger competitors.But that’s changing. In his famous book Zero to One, Peter Thiel writes, “Competition is for losers. Be a monopoly.” And that philosophy has come to prevail — the average venture capitalist would say that in a portfolio of 20, they are OK with 19 losers and one grand slam. Follow that to its logical conclusion: for every billionaire Peter Thiel, Silicon Valley, you’re OK with 19 broke people. It’s no wonder that inequality is at a 100-year high, entrepreneurial activity is at a 40-year low and eight men control half the world’s wealth.Over the past 15 years, big has crushed little in Silicon Valley, to an increasing degree. The former giant-slayers like Apple and Google have become giants themselves, shutting out or buying up new entrants.The worst of it: you’re even controlling which ideas get out there — as we saw when Google chairman Eric Schmidt complained to the New America Foundation for criticizing the company’s monopolistic practices. The entire team got fired.In short, your present leaders are cannibalizing your future. If a startup is raising money today, one of the first questions they’ll be asked is, “What’s your exit strategy?” Specifically, that means, “Whom among Google, Facebook and a few other companies will acquire you?” A few tech giants are dictating which problems founders want to work on, and how we’ll solve them.The result? You haven’t produced a new firm that has cracked the world’s top 200 since Facebook’s founding in 2003.
For a more personal look at the Valley see last June's "Quitting the Silicon Valley Swamp" by Paul Carr at Pando.
I almost feel as though we're putting Silicon Valley on CreditWatch with negative implications.
So here's Melissa Moody's re-rating of the monoline insurers when they went from backwater muni-bond guarantors to whatever it was they thought they were doing in the recent unpleasantness. Last seen in 2013's "Why dating apps and institutional fixed income trading are heading in the same direction", this may provide a template for how to talk about the current iteration of Silicon Valley:
...I knew Melissa Moody was on to something with her 2008 revamp of ratings.
Here she is on the change in MBIA from a staid, almost boring monoline insurer of municipal debt to being the fashion-forward princess of Mortgage Backed Securities and other CDO's:
That's from the geniuses at Long or Short Capital....My ratings will be simple:
MBIA (NYSE: MBI)
- BFFAE (Best Friends Forever and Ever)
- BFFLAF (Best Friends For Like Almost Forever)
- BFFBAS (Best Friends Forever But Also a Slut)
- BFFBIHH (Best Friends Forever But I Hate Her)
Previous Rating: BFFAE
New Rating: BFFBASRatings Rationale: MBIA used to have a good little thing going. Yeah, like not everyone thought she was totally hot, but everyone was like “Wow she has a good little thing going”, she was funny and nice, and who doesn’t like funny and nice? Not Melissa, I’ll tell you that. And she was a go-to girl anytime a friend was jammed up with boy problems and needed ice cream.But then she changed, and we all saw it happening. She wanted to be totally hot and started hanging out with guys out of her league. Yeah she looked great, but the diet and the clothes and the whole lifestyle changed her. Rumors started about what she was doing behind the scenes at muni parties and at CDS keggers....MORE
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