It used to be different. Prior to the 1990s, venture capital actually did difficult things, like funding companies like Intel. And there was a history of doing super-ambitious, hard, high-capital things. But everyone got drunk and giddy building companies like Google, which were low capital, high profits.
You should be able to go to a venture capitalist and say, “I’m really smart. Here’s the math. You can check my homework. This will work.” That doesn’t get funded. No matter how much you hope it does.
Venture now funds you to expand your sales team. It doesn’t fund you to do anything that’s revolutionary anymore. Everyone wants to fund the Ubers and the Airbnbs, which really are not at all technological. They are leveraging government investments in technology to do economic and social disruption.
That will all be lost in the narrative of history, because Silicon Valley wants to have this libertarian idea that the government doesn’t know how to spend money to do research, which couldn’t be more contrary to the evidence. Search was first funded by DARPA. The internet was built by DARPA. GPS, accelerometers, they were funded by DARPA. Government funding did everything here, all the instruction, the training. The self-driving cars were a DARPA program twenty years ago. It wasn’t invented by Sebastian Thrun, who will be now known as the inventor of the autonomous car. He won the second DARPA Grand Challenge, not the first one. He didn’t even enter into the first one.
What enables Uber? The internet. GPS in every car, on every phone. A huge number of programming languages—the first thirteen layers of the software stack, all of that structure was written on government funds. They are driving on public roads. Half the innovations in cars were funded indirectly. So they are unbelievably subsidized.
Obama said at some speech—he phrased it very well—“You didn’t build that.” He was right, but it backfired. He got reamed. Still, it was astute and true. We give the government far too little credit for what it does. If you want to do anything interesting and important, by my definition, you pretty much end up at the government trough.
But then a whole bunch of libertarians want to think that it’s their genius. No. What they’ve done is a really clever socioeconomic hack. In fact, it’s not even that clever. It’s cynical. They are exploiting loopholes and taking infrastructure for granted.
These are robber barons in the traditional sense.
Because it’s this weird, extractive industry of eyeballs and attention. I do think Google tries to “do no evil” and all the rest, but merely trying not to do evil is not enough. So far they’ve really failed at doing anything except advertising. The organization has a personality, and, unfortunately, somehow the personality of that organism got away from them. I know very few assholes who work at Google. But the collective Google . . . is an asshole.
Google now spends about $9 billion on things that they call “research,” which is larger than the National Science Foundation and DARPA’s budget combined. And I would have to say it’s the most inefficient and poorly spent money in the history of research in the United States. They are not rigorous and they don’t listen to the external world. And their arrogance is profound.
Do the five companies currently supporting this bubble make anything that you would call a “staple”? They don’t make staples of food. They don’t make housing. They don’t make transportation. They don’t make water. They don’t make energy. So it’s kind of concerning. There was more sense to the world when Ford and GE were at the top of the US stock market.
Historically, at Otherlab, roughly half or more of our income has come from development research grants. And people at DARPA or ARPA-E have said to us, “You’re our best performer ever. You’re the only people who we give money to who do what they say they’re going to do.”‡ Because we do the analysis up front. We’re not trying to maximize the amount of government money we get. We’re trying to get the job done.
Sunfolding, natural gas, robotics, exoskeletons. We survived by becoming extremely good. I am capable of winning any junkyard-dog competition. I’ll build you a satellite out of parts. But we are also more rigorous than the great majority of academics at the world’s best universities. We could go toe-to-toe with any of them on physics and math.
This place is the union of rigor and fucking make-it-work. We have to be.
RON CONWAY (CONT’D)
Ed Lee was mayor of San Francisco for almost seven years, watching San Francisco transform during his two terms. He is widely criticized by many for accelerating the change, offering tax breaks to keep tech companies and their tax revenues in the city, but as a consequence injecting gentrification with a shot of adrenaline. He tried to find answers as the problems worsened—the housing crisis, rising homelessness, declining schools—but his tenure ended suddenly. On December 12, 2017, he died of a heart attack. In the weeks following, San Francisco began its search for another interim mayor.
I’ve been involved in San Francisco politics for about fifteen years, ever since we moved back to the city. I got very active in the years Gavin Newsom was mayor. And then, when he was elected lieutenant of California, they were looking for a caretaker, kind of like the controversy that is going on now. They reached into the bowels of the city bureaucracy and found Ed Lee. He was running a big piece of the city bureaucracy. But I had never met him or even heard his name.
When he was appointed, we were in the 2008 recession, and San Francisco had 10 percent unemployment. Ed had a commonsense approach: 10 percent unemployment, this is a disaster! I’m just going to go work on getting that number down. And if I fix unemployment, that will fix a lot of the other problems in the city.
So he called a meeting of tech leaders to come to City Hall. I was there. And he said, “What can I do to help you guys create more jobs in San Francisco?” We went through a litany of options, and he left with something like ten action items. Way too many!
I said, “With the approval of the other CEOs, I want you to leave with just two. Number one, we can’t let Twitter move out of the city. They’re already tech’s second-biggest employer behind Salesforce.” San Francisco was charging everyone payroll tax—whether you had revenue or not—and Twitter had revolted and threatened to move their headquarters. So what I said was, “You’ve got to create a payroll tax–free zone.”
And number two, Yelp and Zynga were about to leave, because the city charged its own stock-option tax. Only city in the country to do that. Meaning no tech company would ever go public in San Francisco. Companies would move out of the city so that they wouldn’t cost their employees the stock-option tax.
Ed Lee fixed those two issues in two months. He went to work. And I said, “Wow. This guy is something else.”
Now ultimately, we fixed it for everybody. We passed Prop E a few years later, which changed the payroll tax for every company in the city to be a revenue-based tax, so that start-ups would not have this onerous payroll tax.
I told Ed he better run for mayor: “You’re the best thing that ever happened to the city.”
And he said, “No, no, no. I can’t do that. I agreed to be just a caretaker.” He was just as humble and soft-spoken as you can imagine.
The Chinese community was drafting him as well. Rose Pak launched the “Run, Ed Lee, Run” program all over the city. The Chinese community saying, “Hey, you’re the first Chinese-American mayor. You’re doing a good job, and we want to keep you!” That was what really got him to run.
His campaign motto was “Get Things Done.”
And that’s all he did, he just got things done. He was a bureaucrat that knew how to wiggle through the system and accomplish things to help the city. That’s all he did twenty-four hours a day: find problems and go and solve them. He would know if somebody was bullshitting him, because he had done almost every job in the city!
He was a huge believer and promoter of public-private partnerships and would encourage those everywhere he possibly could.
Through the Navigation Centers, the city is slowly so
lving the homeless issue. They help people get off the street—no questions asked—bring all your stuff, bring your pet, bring a companion. Trying to get the edge cases, those hardest hit. Funny enough, the very first Navigation Center was funded by an anonymous tech donation of millions of dollars to test out the concept. There’s four now, and the plan is to keep building more.
On housing, he wanted to build thirty thousand housing units by 2020 and that’s going to happen.
The middle school program—he had a theory that kids get molded in middle school. He got Salesforce to donate $30 million—they adopted the schools—and now the program has expanded to Oakland. Ed Lee always said, “This is my legacy.”
He was frustrated by the criticism, but every year the unemployment rate went down, tax revenue went way up, and he was able to put together the city programs that he always dreamed about. And he had the money to do it, because he had full employment. And the progressives who don’t get that, they are never going to get it. But yes, that was a constant frustration.
Ed Lee’s whole mantra was, I’m just going to go do my job. I’m going to build more affordable housing. I’m going to go do what I know is right. Let them say what they want.
And you know, actions speak louder than words.
NAVIDA BUTLER
The 101 highway runs down the east side of the San Francisco peninsula and divides Palo Alto from East Palo Alto. On one side, Stanford University and all it radiates. On the other, a small working-class town, once the per-capita murder capital of the US. Nearly one-fifth of East Palo Alto lives below the poverty line. Navida has run the Ecumenical Hunger Project since it was just a few drawers in her desk at the Red Cross. It has since grown into one of the largest aid organizations serving East Palo Alto’s poor. She sits outside a warehouse of donated clothes and furniture, so she can personally welcome everyone who drops in.
I was a runaway mom with three kids. I was homeless when I came here. I had no furniture. I stayed with people, with friends. In a friend’s apartment, we slept on the floor. There were mice running everywhere. Two hours, I caught fourteen mice that got in the house. I set up traps—I’m from the South—they were popping everywhere.
I always wanted to come to California. You always think of gold when you think of California. And I was surprised by the poverty level here. Coming from the South and growing up in the country, there was always something to eat. You could always go get your wild animals, which Californians are so against. Here, you see a lot of poverty.
But I always will remember how I was treated by people. There was a lady over at the American Red Cross, Ruth Miles, took me under her wing. She gave me a job, trained me how to work with families. She used to tell me, “You can run this center over at the Red Cross.” And I thought, This lady has got to be crazy. I’m the only black that works here and the last to be hired, and I’m going to run this? Before I left, I was the service center coordinator—over people that was there when I started.
That’s part of why people come to California. I didn’t believe it then, but people will tell you all the time—the laws and things about employment in California are special. Texas is a good example—you look at people the wrong way and they can fire you, let you go at will. In California, rights are more protected than back in the South.
The ability to make something out of your life, here, it’s greater than any other place that I know. You’re accepted. I don’t think the color of your skin makes as much difference in California as it does in some of the other places. I really don’t. I love the diversity here.
But there’s a real breakdown. People are homeless. People are dying out there. And we need to see what we can do to help. I always felt, if you don’t care about people, this is not the place for you to work. Go on and work in a factory, work for a computer company. Here, you have lives. It has to touch your heart.
A lot of people call me Momma. I do a lot of listening and talking to people. Sometimes, they need bus fare. Lack of food. Formula is very expensive. Somebody needs something special and the word goes out, like a ripple in the water. Soon, we’ll just have to figure out how to get it from the donor to the person in need.
I’ll always remember this young guy, he had cancer. Somebody told him if anybody could help, I could help. This guy was in his forties and my heart just went out to him. Too young. I shared his story with our board and, don’t you know, they took up to help pay his rent.
Then, his landlord told him he was going to raise the rent because he was getting all of this help. Boy, did we chew that landlord out. He said, “Well, he was supposed to have been dead a long time ago.”
“Oh my God, you didn’t just say what I heard you say!” We shamed him into letting him stay there until he died. Each member of that board would go to the health-food store and buy some of the things that he needed.
I fuss at people. Even the young people. Sometimes, if they see me coming, they’re going to hide. They know I’m going to say, “Why are you out here? This is not the place to be!”
I had this guy on my fence one day getting some fruit down off the tree. He’s standing up on top of my fence, and I went out there and told him, “Get your behind off of that fence!”
My grandson is like, “Grandma, he’s a big-time drug dealer.”
“If he’s a big-time drug dealer, he shouldn’t be grabbing plums! Get your behind off of my fence!” That little piece of dirt out there, they can’t sell drugs in front of it.
But everybody don’t do that. When we help each other, we help everyone. It’ll help your child and mine too.
I see them drive by here, drag racing up and down the street, and that frightens me. You could be in the middle of it when they do the drive-bys. Anybody could. Not sure what the answer is. Unless we find other things for the kids to get involved in.
My daughters don’t want me to live here, but I don’t want to move. I have good neighbors, I know them. I love my neighborhood. I’ve had that house since 1979.
I’ve got four kids. They’re good kids. God was good to me, but I was hard on them. Couldn’t nobody come to the house at all hours of the night looking for them, I did not allow that. When they got out of school, they had to come straight home. You can’t stand on the corner somewhere. Come home or get involved. Then, they had to go and find a job. You cannot sit at home, and you cannot not go to school. If you don’t want to go to school, go get a job digging a ditch—whatever you want to do.
My husband never paid child support. To buy the home that I have now, I worked three jobs. There was times when I sewed my shoes up because I needed to buy things for them. Yes, darn right I was strict on them! You have to be.
I’m glad my kids went to school out of the area. I sent my son to Menlo Park, there’s a religious school. It wasn’t easy with the little money I had to pay, but I sent him over there. I wanted him to meet and be around other kids. I always worried, if all you see is crime and you don’t get to see how other people live, what do you have to live for? “Just because you live here in East Palo Alto,” I used to tell him, “you don’t have to do what other people do. You don’t have to do that.”
I’ll never forget, it was 1981, I had Stanford students doing something here in East Palo Alto. Some kids—and this was almost unbelievable—were three and four years old, they had never seen white people before. At that time, this community was primarily a black community, probably 95 percent black. But still, I was just shocked. Just the fact of how isolated a lot of people were here.
There’s been a change in this community: from blacks to Hispanics, a growing number of Pacific Islanders. Now you see a lot of the new homes are being bought by Asians. Three Middle Easterners came in the other day, their kids called me Grandma.
Over here in the clothes closet, sometimes, I have to stop people from fighting. Sometimes you’re in the middle of three different languages, and saying, “Look, we’re going to get along here. You guys can do whatever you want out there in tha
t community but in this community, we’re mainly women. We’re supposed to get along, we’re mothers. Let it start with us.”
MARIA GUERRERO
We meet in her favorite local coffee shop: coffee, pastries, a TV on in the background. She grew up a few blocks away. Her parents bought a house soon after they emigrated from Guadalajara, Mexico: “They wanted something different for their five daughters. So we are fortunate to own a house, especially right now.” She worked in the cafeteria at Intel, the semiconductor giant that remains an anchor of Silicon Valley today. There, she helped lead her coworkers to be among the first in the tech industry to unionize. She is coming from one labor rally and going to another after we meet.
I dropped out of high school. To make more money, help out my family, I started working weird odd jobs. I started at Walgreens. I worked for a store called Factory to You. I was a stocker at Michael’s. I did graveyard shift, from like two in the morning. But I got to put on my headphones. No one bothered me. It was kind of fun.
Then, I started working at Intel. At that point, I was working three jobs. I worked at Michael’s from two in the morning to eight. Then I would take a nap for thirty minutes in the parking lot at Intel, go to work for about eight hours. I would get off at five thirty, drive to Factory to You. At six thirty I would start, and end at nine thirty. And then I’d go all over.
At Intel, I went from a coffee attendant to a cashier to the espresso bar.
I liked the foam art. I learned how to make a heart; I learned how to make bears; I learned how to make a swan, which was super difficult. You do a couple of strokes, then you go down, wiggle up, and then do the face. I did it once where it was amazingly perfect. I still have a picture in my phone.
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