Saturday, February 22, 2014

The Competing Narratives of Silicon Valley

In his New York Times column on Sunday (2/15), Thomas Friedman lavished praise on Silicon Valley.  He’d spent 48 hours visiting some of the region’s hottest companies, including Box, Airbnb, and Google.  This left Friedman gushing, “What they all have in common is they wake up every day and ask: ‘What are the biggest trends in the world, and how do I best invent/reinvent my business to thrive from them?’ They’re fixated on creating abundance, not redividing scarcity, and they respect no limits on imagination.”
It was American innovation boosterism at its finest, and while I’m a big fan of American innovation (and Friedman, for that matter), he still had me scratching my head just a little at the histrionics.
Two days later I chanced upon a Valleywag column by Sam Biddle in which he had the same impression I had, though more strongly felt.  (See Thomas Friedman Visited Silicon Valley and Is Wrong About Everything.)

“The first line in town idiot Thomas Friedman's latest column,” Biddle wrote, “is maybe the most stupid part: 'The most striking thing about visiting Silicon Valley these days is how many creative ideas you can hear in just 48 hours.’”  In fact, Biddle wrote, “one of the most striking things about tech today is the ear-popping dearth of creative, new ideas.”
If you can name one startup that is "fixated on creating abundance" in any meaningful sense of any of those words, you'll have come up with one more than I could. Startups of today are fixated on creating convenience, indulging impulsiveness, and constructing new amusements—but abundance? Abundance of what exactly?  Wheat fields?  Cars with pink mustaches on them?  Apps?  A generation of 20-something Stanford kids making toys for each other isn't the sort of abundance that would justify Friedman's headline—"Start-Up America: Our Best Hope."
I had to laugh.  Biddle is a very funny writer.  But even more interesting to me is that he and Thomas Friedman had laid out almost perfectly the two competing narratives of  Silicon Valley in 2014.  These conflicting narratives are closely tied to the Valley's two most visible companies, Facebook and Google.  And I think, depending on which direction you face and how munificent you’re feeling that day, there’s some truth to both.
The Facebook Narrative of American Innovation
I like Facebook, but I like it in the way I like television.  It’s fun to keep up with relatives, and fun to see The Goodwife.  Take away either Facebook or television at breakfast, however, and I’d be fully acclimated by lunch.
In a broader sense, if we try to use Facebook and its ecosystem as the narrative for American innovation, things end up just about where Biddle does.  Just about where you would if you tried to say that movies and television were the critical drivers of the Second Industrial Revolution.  They're just too frivolous.

I Love Lucy was beloved, but it hardly represented the best and brightest of its generation.  Farmville was wildly popular, but ditto.  And TV, like Facebook, takes almost as quickly as it gives, sucking huge amounts of constructive time out of our lives and the economy; the boob tube made us fat and stupid, while mindless social media makes us asocial, unproductive and self-absorbed.  (It's hard to leave Twitter, the crown prince of self-absorption and time-sink, out of this conversation, either.)

If the railroad and telegraph were symbols of the First Industrial Revolution, and the automobile and electrical grid symbols of the Second Industrial Revolution, how can cat videos, the selfie and Farmville possibly be inspiring symbols for the Information Revolution?
Facebook’s recent acquisition of WhatsApp for $19 billion will be argued for months in the press, but from the moment it was announced it cast the slightest scent of desperation, like a dress designer in danger of missing the Spring Fashion season and forced to overpay and rebrand the line of a competitor so it could remain relevant.  This is not the stuff of revolution, and not a compelling narrative for American innovation.  It feels, as Biddle says, like we’re making toys, and toys that won't last.
The Google Narrative of American Innovation
While Facebook was buying a messaging service, Google was out scooping up robotics companies.  Take Google Search away from me for a day and I’d have to crawl back to the library to get my research and writing done.  And we haven’t even talked about driverless cars, the Google Books Library Project, Earth, Street View, Goggles, Android, Nexus and dozens of other innovations, big and small, known and unknown.  (And, like Twitter in the first narrative, it's hard to leave Apple out of this narrative.)
While not quite there yet, I believe Google has the ability to become America’s next GM or GE, a juggernaut of innovation with at least some of it focused, in Thomas Friedman’s language, at the biggest trends in the world.  Yes, there are huge privacy issues to solve and new peccadilloes yet to come, but all fast-moving, complex companies have their black sheep and bad ideas.  (Remember Unsafe at Any Speed?  PCBs in the Hudson River?)  Despite that, Google is emerging as a compelling champion in our current American innovation narrative, and potential root stock for a Revolution. 
I am not an economist so I use these terms advisedly, but if Facebook can improve the quality of life, Google can improve the standard of living.  And we know, when it comes to supporting true economic growth, opportunity, democracy, diversity and dreams--our best and only defense is  a growing standard of living.
Want to become an entrepreneur?  Join the crowd.  But as you drive West in your used Tesla, be sure to take a good look at the prevailing narratives.  The one you choose really does matter.