The Code

by Margaret O'Mara

  PATTERN RECOGNITION

  In the early 1960s, when Draper and Johnson trolled the prune sheds in search of places to invest, the Valley was a remote, lightly settled place, where cul-de-sacs abruptly gave way to orchards and grazing land, striped with lightly traveled highways of raw concrete. Its electronics industry was niche, its brands mostly unknown, its wealth a fraction of what was to come.

  A half century later, the Valley was a pulsing sprawl of million-dollar bungalows and high-priced boutiques, with clusters of glass-sheathed office parks at every exit of its traffic-choked highways. San Francisco, once so remote from the Valley somnolence, now was a critical part of the Valley’s high-tech realm. Twitter and enterprise-software giant Salesforce had their headquarters in the city. Private buses launched by Google and Facebook rolled up and down Highway 101, easing the grueling commutes of their many San Francisco–based employees and sparking protest from city folk who saw the vehicles as rolling symbols of tech gluttony. Consumers across the globe used the platforms of Bay Area and Seattle tech giants every day; everyone knew about Sergey and Larry and Mark and Steve and Jeff.

  The tech industry had grown immensely large and powerful. Yet the networks of influence and investment were as tightly coiled and closely held as they had been in the days of “The Group’s” steak lunches, so many decades earlier. The massively lucrative deals around Google and Facebook, not to mention other post-2000 rocket ships, involved a tiny number of people: all men, all wealthy, all pretty confident in their conviction that the industry was a marvelous meritocracy.

  Some, like Peter Thiel and David Sacks, had translated their college networks into powerful instruments of wealth creation. Others, like Sean Parker and Ram Shriram, had parlayed early success with one company into enduring networks of influence and talent-spotting. Still others, like Marc Andreessen and Chamath Palihapitiya, followed the path from entrepreneurship to venture capital first laid by David Morgenthaler and Burt McMurtry. All thrived in a ferociously competitive environment of sharp elbows and unvarnished criticism, where working hard was matched by playing hard, and where business partners were like family.

  As wealth grew, so did the mythos around how Silicon Valley was able to generate one innovative company after another. It was about allowing risks and not penalizing failure, they’d say. It was about putting engineering first—finding the best technical talent, with no bias about origin or pedigree. It was about that “pattern recognition” so fatefully identified by John Doerr, looking for the next Stanford or Harvard dropout with a wild but brilliant idea.

  Of all those assertions, Doerr’s slip-up came closest to the heart of the Valley’s secret. “West Coast investors aren’t bolder because they’re irresponsible cowboys, or because the good weather makes them optimistic,” wrote Paul Graham, founder of the Valley’s most influential tech incubator, Y Combinator, in 2007. “They’re bolder because they know what they’re doing.” The Valley power players knew the tech, knew the people, and knew the formula that worked.

  They looked for “grade-A men” (who very occasionally were women) from the nation’s best engineering and computer science programs, or from the most promising young companies, and who had validation from someone else they already knew. They sought out those exhibiting the competitive fire of a Gates or a Zuckerberg, the focus and design ascetism of Kapor or Andreessen or Brin and Page. They funded those who were working on a slightly better version of something already being attempted—a better search engine, a better social network. They surrounded these lucky entrepreneurs with support and seasoned talent; they got their names in the media and their faces on the stage at premier tech conferences. They picked winners, and because of the accumulated experience and connections in the Valley, those they picked often won.24

  Keeping the networks tight and personal was a critical part of Silicon Valley’s ability to keep the flywheel turning, to move from chips to micros to dot-com to the next Web without dropping the pace. VC had always been a men’s world, but the post-2000 elite—with its overrepresentation from the overwhelmingly male worlds of Google, Facebook, and the enterprises founded by the PayPal Mafia—was even more so. The business of entrepreneurship and VC took place not only in boardrooms and cubicles but over beers and peanuts at Antonio’s Nut House, breakfast at Hobee’s or Buck’s, late-night coding sessions and poker games, on forty-mile bicycle rides along Skyline Drive. It was a wonderful world if you were in it, and a tough place to hack into if you didn’t have the time, the money, the poker skills, or the $10,000 bike.

  In the flurry of public shaming and self-examination that ensued after the Pao case, the venture capitalists promised to try to do better. Subsequent revelations of sexual harassment and abuse in the industry added to the pressure to rectify tech’s imbalances. The numbers started to budge, a little. It helped that some of those already inside the charmed circle were ready to point out its shortcomings. Because he once had been an outsider himself, Chamath Palihapitiya had come into the venture game determined to shake up its so-called meritocracy. The industry was filled with “rich douchebags,” he told journalist Kara Swisher. This wasn’t just bad for society, it was bad for innovation. “We’ve been overrun with too many people who don’t understand what the real goal is,” he said later. “Folks here have to reset some of that inequity,” even though “we’re not purpose built for that.”25

  The Chamath solution: take human bias out of the financing equation altogether, and let a computer algorithm make the investment decisions instead. Social Capital called the model “Capital as a Service,” and began inviting early-stage ventures to pass on the traditional pitch meeting and simply submit their data instead—revenues, user base, costs. After running the numbers, the firm would invest or take a pass. “No hoops, no $7 artisanal coffee chats, no designer pitch decks, no bias, no politics, no bullshit,” explained Palihapitiya’s business partner Ashley Carroll. It was a classic Silicon Valley answer to a distinctively Silicon Valley problem. They’d hack their way out of it.26

  Those who had been tackling tech’s diversity problem for years remained skeptical. “Ten years, same damn conversation,” reflected Trish Millines Dziko, as she looked back on the many times investors and executives had promised her that the industry would change its ways. The program she had started in 1996 had become wildly successful, a pathbreaking model that had inspired others to build similar schools for underrepresented kids. What had begun as a modest prep program for teenagers had grown to serve kindergarten through high school, bringing science and engineering education to more than 5,000 Seattle students and counting. But the faces inside those big tech companies looked much the same as they had when she started at Microsoft all those years ago. “Why are people of color not part of this movement, and why isn’t anyone doing anything about it? Why is everyone continuing to give more to people that already have more?” she wondered. “There is no incentive for leaders in tech to do anything, no incentive for them to explore other communities for brainpower.”27

  Nonetheless, the mid-2010s conversation about tech diversity was unlike anything the Valley had seen before. Private rumblings that had seethed under the surface for decades burst out in loud, sustained, and very public conversation. Under fire, the largest tech companies released employee demographics, confirming what was obvious to anyone who set foot upon the bustling campuses of Google, Facebook, or Apple, not to mention the scores of other firms across the Valley: especially in technical and executive roles, the workforce was overwhelmingly male, young, and either white or Asian. As the Valley’s biggest brands poured hundreds of millions into hiring efforts and launched slickly designed “diversity and inclusion” campaigns, the numbers began to bump up, but only slightly.

  It was not just the twenty-first-century brogrammers and the arrogant-jerk CEOs who were responsible for limited opportunities the Valley presented to women and minorities. It was something of much deeper origin, rooted in a
time when business was a man’s world, when the Valley was young and remote, when girls and electronics didn’t mix. With a culture this long in the making, meaningful change would take a while.

  CHANGE THE WORLD

  Although tech’s shortcomings attracted increasing attention, it was hard not to be dazzled by the grand visions coming out of Northern California and Seattle. Government was enfeebled and polarized. Tech had flash, ambition, and billions to spend. The CEO of Google’s advanced research laboratory was the Rollerblade-wearing grandson of H-bomb developer Edward Teller; his corporate title was “Captain of Moonshots.” Elon Musk’s Tesla produced roaringly fast roadsters that featured a button allowing drivers to enter “ludicrous mode.” When he wasn’t building cars or jokingly repurposing welding tools to sell as $500 flamethrowers to adoring fans, Musk was literally shooting the moon with his SpaceX commercial space venture, beating out Lockheed and others for prime contracts. Jeff Bezos joined the race, too, spending $1 billion a year on his space exploration company, Blue Origin. Its motto, emblazoned on a corporate crest, was Gradatim Ferociter: “Step by step, ferociously.”

  Beyond that, of course, was extraordinary philanthropy, led by Bill Gates, whose namesake foundation had a $40 billion endowment and had become the leading actor in global initiatives tackling public health and poverty. Gates, the enfant terrible turned elder statesman, became an inspiration to tech’s younger generation. Mark Zuckerberg pumped $100 million into public education in the beleaguered school system of Newark, New Jersey, became an advocate for immigration reform, and announced that he and his wife would, like Bill and Melinda Gates, give away all their wealth during their lifetimes.

  While the industry’s longstanding lobbying work was as active as ever, tech’s masters of the universe were becoming increasingly vocal about policy matters that went beyond the usual array of capital gains tax cuts or Internet sales taxes or net neutrality. Some came off as odd and self-serving: in 2014, third-generation Valley VC Tim Draper, son of Bill and grandson of William, spearheaded a campaign to break California into six states (one of which would be named, naturally, “Silicon Valley”). Others had a swagger only the Valley could bring: in 2016, Chamath Palihapitiya tried to persuade New York billionaire Michael Bloomberg to run as a third-party candidate for president, promising that he’d devote all of his firm’s resources to the effort. “The same team that helped build Facebook to one billion users would do our best to activate the entire United States to put him in the White House,” Palihapitiya promised. “I think we’d be successful.” Nervous that his run would hand the presidency to someone like Donald Trump, Bloomberg declined to enter the race.28

  That decision left the Valley’s power players solidly in Hillary Clinton’s corner, becoming a reliable source of campaign cash and policy advice. The singular exception to that trend was a highly visible one: Peter Thiel, who overcame his long disdain for the mess of electoral politics to come out publicly in favor of Trump’s renegade bid for the White House. Thiel spoke at the Republican Convention. He penned op-eds slamming governmental inefficiency while wistfully invoking the glories of the Manhattan Project. Ironically, Thiel’s version of making America great again involved a return to the big-spending era when the Valley first got its start. “When Americans lived in an engineering age rather than a financial one, they mastered far bigger tasks for far less money,” he wrote. “We can’t go back in time, but we can recover the common sense that guided our grandparents who accomplished so much.” After the election, Thiel became the liaison between Trump Tower and the bewildered, more than slightly horrified leaders of big tech, who could not believe what November 2016 had wrought.29

  And so very swiftly, sentiment swelled that the chief culprits in this electoral surprise were the big American tech platforms themselves. Their breezy confidence about connecting the world, their hubris about the power of engineering, their dazzlingly sophisticated thinking machines: all seemingly had opened the door for bad actors to come in, exploiting networks like Facebook and Twitter and YouTube and, really, the whole of the Internet, driving a divided America even further apart.

  American politicians who had for so long regarded tech with gee-whiz amazement started calling Mark Zuckerberg into Capitol Hill hearing rooms for hostile face-offs about Facebook’s business model. European lawmakers went one step further, forcing consumer Internet companies to adopt far stricter privacy rules. And with every week came a steady drip of revelation that the agents of all this social media mayhem came from overseas, orchestrated by the government of Vladimir Putin, the man who had pushed his protégé and placeholder Dmitry Medvedev aside only two short years after that earnest pilgrimage to Silicon Valley.

  Since the end of the Cold War, the Valley’s defense-centric origins had faded into the haze of collective memory. In the sun-dappled quads of Stanford and the polished-wood wine bars of University Avenue, the only history that seemed to matter was that of Sergey and Larry and Mark, or perhaps, if you wanted to get nostalgic, the two Steves in their Los Altos garage. The quiet land of Lockheed and Terman didn’t seem to have much to do with the gloriously rich, pulsing center of global capitalism, a place that represented the resounding triumph of the agile new market economy over the lumbering bureaucracies of old.

  The things the Valley now sold—their reach, their ubiquity, their intelligence—had an influence far greater than that of the hardware and software products that had originally put it on the map. Yet as the 2016 election showed, the social media platforms of the new era were some of the most powerful weapons the Valley had ever produced.

  This was the place that had rejected the old politics, where titans like Steve Jobs became billionaires before bothering to vote, where belief systems often cleaved into either techno-libertarian rejection of the system or an impatient, technocratic “there’s an app for that” belief that Silicon Valley could fix governmental failures. Heads down and engineering first, the boy wonders of the Valley had built extraordinary thinking machines without reckoning with how truly disruptive they might become. The Silicon Valley ethos was a product of the prosperous, rambunctious, and generally peaceful America of the late twentieth century, now gravely tested in the early twenty-first.

  Those who had been present at the creation of the extraordinary creative explosion of the online era looked on in dismay at what all this freedom had wrought. “We were astoundingly naïve,” Mitch Kapor remarked regretfully as he looked out at the upended political landscape. “We couldn’t imagine what is now obvious: if people have bad motives and bad intentions they will use the Internet to amplify them.”30

  DEPARTURE

  Into the Driverless Car

  The driverless cars slid silently through Mountain View’s eucalyptus-scented side streets, released into the wild during the quieter hiccup after the relentless morning rush. Compact and gleaming, all electric motor and spinning geo-locators sprouting from the roof, the cars were not actually without a driver: if you peered closely, you could see the outline of one or two heads inside, belonging to the young Googlers whose job it was to test and monitor and take notes and seize the wheel if anything went wrong.

  It wasn’t just Google that was getting into the driverless car in those wealth-dazzled and tech-saturated years of the late 2010s. It was Apple and Uber and Tesla, too, all in a race to turn the car into a computer, a Shaky the Robot updated for the twenty-first century. Even if the vehicles weren’t quite fully autonomous, they showed how far the American tech industry had come in its seventy-year pursuit of machines that think and computers that network—and how far its largest and richest companies intended to go.1

  Cars were just part of it. With the billions made in search and social and mobile, the Valley’s largest companies were plunging resources into AI and machine learning, as were its most far-seeing investors. “About every dozen years in the tech world there is a tsunami—a huge wave of disruption,” declared John Doerr. First
came the microchip and the PC, then the Internet, then mobile. AI was the next wave, and “it will be even larger.” Chamath Palihapitiya was betting big on AI as well, partnering with several ex-Googlers in a stealth start-up that was developing a wholly new microchip built for machine learning. The next big thing, it seemed, would involve a return to the Valley’s hardware roots.2

  Travel north into the golden gleam of Palo Alto, and you’d pass other signs of prosperity and hustle: the luxury-car dealerships, the Crossfit gyms, the coffee chain where people lined up to wait ten minutes for a rare-bean pour-over. Cast a glance over to the commuter train screaming past as you drove, and you’d be reminded of the dark anxiety lurking just beneath the sunny surface. Those tracks had been the site of a spate of high school suicides, young people crushed by the college-prep pressure of growing up in the shadow of the world’s most famously entrepreneurial university.

  Bay Area people had forever complained about the high cost of real estate, but the home prices had gotten so sky-high that the carping was fully justified. Those modest bungalows built in the first postwar boom now cost upwards of $3 million, and that was before you updated the kitchen. Already facing criticism for the pressure their growth had placed on the housing market, Facebook and Google announced that they would build apartments and town houses to house their employees nearby, company towns in the mold of Pullman and Ford, updated for the twenty-first century. As if in call-and-response to the new welfare capitalism, campaigns to organize tech workers gained momentum, pushing to expand white-collar tech’s perks and pay to its massive, contingent workforce, the shuttle-bus drivers and gig workers and coders for hire.

  Drive beyond the sandstone-and-tile shimmer of Stanford, the obelisk of the Hoover Tower (still pointing straight up!), and the Stanford Shopping Center, developed on university land back in the 1950s and now home to every designer brand imaginable. Across the street, through a shaded drive, you’d find the Vi, the commodious and luxe retirement destination of the men and women who’d been in the Valley from the very start.