Tag: silicon valley

I’m slowly making my way through Shoshana Zuboff’s The Age of Surveillance Capitalism and I thought I’d benefit from a quick recap of where I’d got to so far. In essence the first part of the book is an account of behavioural surplus: data about user behaviour  left over after narrowly technical requirements that can be leveraged for commercial benefit. Transactional data is produced as a by-product of activity mediated through digital systems, including firms and actors who existed prior to the nascent tech giants. But Google as one of the early firms which had no relationship to users other than through that digital system began to realise the commercial significance of transactional data. They were far from unique in seeing technological and engineering value in this data, even early stage Yahoo was interested in ‘click trails’ as a way of optimising their directory and finding ideas for new services.

What made Google unique, argues Zuboff, arose from their capacity to build a sustained business model around the insights into future behaviour which could be inferred from past data. This is something which has to be understood against the background of the dot com crash and the institutional pressure which a nascent firm like Google was subject to. The take away point from this is not only that it’s a matter of business model rather than technology but the contingency of how this business model came about in the first place. It’s a story about the institutionalisation of behavioural surplus much more than one about the technology which made that institutionalisation possible.

I’m enjoying Zucked by Roger McNamee more than I expected to. What’s useful about his account is the stress it places on the engineering capacity of startups. What makes cloud computing significant is not just enabling growth without major capital investment in infrastructure, but also “eliminating what had previously been a very costly and time-consuming process of upgrading individual PCs and servers“ (loc 674). What makes open source software significant is not just the reduced costs of free of the self components, but the time saved when everything can be built on open source stacks. I’d tended to see these things as a matter of reduced costs and increasing flexibility, without grasping their significance for how limited resources could be deployed within the firm.

Both mean that the engineer capacity of a startup can be directed mainly at the “the valuable functionality of their app, rather than building infrastructure from the ground up“ (loc 660). This led to the lean start up model and the capacity to go live then iterate in response to what happens. Without this modus operandi and the infrastructure supporting it, would the harvesting and use of what Zuboff calls behavioural surplus have even able to happen? A little earlier he frames this in terms of an epochal shift in the engineering constraints which tech startups had been subject to:

For the fifty years before 2000, Silicon Valley operated in a world of tight engineering constraints. Engineers never had enough processing power, memory, storage, or bandwidth to do what customers wanted, so they had to make trade-offs. Engineering and software programming in that era rewarded skill and experience. The best engineers and programmers were artists. Just as Facebook came along, however, processing power, memory, storage, and bandwidth went from being engineering limits to turbochargers of growth. The technology industry changed dramatically in less than a decade, but in ways few people recognized. What happened with Facebook and the other internet platforms could not have happened in prior generations of technology.

Under these conditions, it’s much easier to experiment and it’s easier to fail. As he points out, Facebook’s infamous motto Move Fast and Break Things is emblematic of the freedom which decreasing engineer constraints offers for a nascent firm. But what does this mean culturally? I think this is a crucial question to explore both in terms of the firm itself but also the expectation which investors then have of what constitutes adequate growth for a lean startup?

To what extent does the obsessive drive for increased user engagement have its origins in the changing expectations of investors and the challenge of meeting them?  McNamee observes it makes investors more inclined to identify what they perceive as losers and kill the startup before it uses too much money. The rewards on offer for successes are so immense that many failures can be tolerated if they lead to one success.

It also makes it much less onerous for the firm to scale, with important consequences for a nascent corporate culture. Inexperienced staff can be a plus under these circumstances, as long as they have the relevant technical skills. McNamee argues that the success of Facebook’s staffing policy had a big impact on human resources culture in Silicon Valley.

Another extract from Audrey Watters, this time from The Curse of the Monsters of Educational Technology, who analysis of the rhetoric of disruption has fast become one of my favourite examples of digital cultural critique. From loc 184:

“The Silicon Valley Narrative,” as I call it, is the story that the technology industry tells about the world—not only the world-as-is but the world-as-Silicon-Valley-wants-it-to-be. This narrative has several commonly used tropes. It often features a hero: the technology entrepreneur. Smart. Independent. Bold. Risk-taking. White. Male. “The Silicon Valley narrative” invokes themes like “innovation” and “disruption.” It privileges the new; everything else that can be deemed “old” is viewed as obsolete. Things are perpetually in need of an upgrade. It contends that its workings are meritocratic: anyone who hustles can make it. “The Silicon Valley Narrative” has no memory, no history, although it can invent or invoke one to suit its purposes. (“ The factory model of education” is one such invented history that I’ve written about before.) “The Silicon Valley narrative” fosters a distrust of institutions—the government, the university. It is neoliberal. It hates paying taxes. “The Silicon Valley narrative” draws from the work of Ayn Rand; it privileges the individual at all costs; it calls this “personalization.”

Upstarts, by Brad Stone, loc 337-353 describes Airbnb co-founder Brian Chesky’s preoccupation with Silicon Valley as a dissatisfied recent graduate of design school: 

At the time he was obsessively following the story of the fantastically successful founders of the video-sharing site YouTube; he was spending hours on the site as well as watching Steve Jobs’s keynote presentations and the television film Pirates of Silicon Valley. This was a universe where new things really did change reality. “I got kind of obsessed,” he says. “I was living vicariously, escaping to a world where someone could build something and actually change something. I was not doing that. I was sitting in a dark office making stuff for closets and landfills.”

Interestingly, Chesky also describes being inspired by a biography of Walt Disney. This highlights how there have always been mechanisms through which people find inspiration in the lives of others. However does the mediation of Silicon Valley lend it a particular power, in so far as there are more cultural products in circulation which depict lives lived there?

In his remarkably prescient Listen Liberal, Thomas Frank describes the rapid capture of the Democratic Party by the professional class which took place during those decades when economic transition left them ascendent within the country as a whole. This was originally a predominance of financiers within the party but, with a transition marked by the defection of finance to Romney in the 2012 election, it’s more recently been a matter of Silicon Valley.

As a striking example of this, on loc 2742 he describes the innovation mania sweeping a city like Boston,

Back in Boston, meanwhile, there is meaning and exciting purpose wherever you look. When I visited, in the spring of 2015, I found a city in the grip of a collective mania, an enthusiasm for innovation that I can only compare to a religious revival, to the kind of crowd-passion that would periodically sweep through New England back in the days when the purpose of Harvard was to produce clergymen, not startups. The frenzy manifests itself in countless ways. The last mayor of Boston was mourned on his passing as a man who “believed in innovation”; who “brought innovation to Boston.” The state’s Innovation Institute issues annual reports on the “Massachusetts Innovation Economy”; as innovation economies go, they brag, this one is “the largest in the U.S. when measured as a percent of employment.” And of course there are publications that cover this thrumming beehive of novelty: “BostInno,” a startup website dedicated to boosting startups, and “Beta Boston,” which is a project of the more established but still super-enthusiastic Boston Globe.

Meanwhile those outside these ‘innovation hubs’ struggle across the state. The self-confident creative class march ever onwards, supported by municipal and state governments for whom subsiding innovation is axiomatic, while inequality soars in a state ranked amongst the most unequal in the United States on common measures. It’s in this schism that we can see what Harris Gruman describes as a “liberalism of the rich” (loc 2928).

If we see this ‘innovation liberalism’ in terms of its class politics, the growing revolving door between Silicon Valley and government becomes much more than a matter of curiosity. As he describes on loc 2918-2934:

By that time, the place once filled by finance in the Democratic imagination had begun giving way to Silicon Valley, a different “creative-class” industry with billions to give in campaign contributions. Changes in the administration’s personnel paralleled the money story: at the beginning of the Obama years, the government’s revolving doors had all connected to Wall Street; within a few years, the people spinning them were either coming from or heading toward the West Coast. In 2014, David Plouffe, the architect of Obama’s inspiring first presidential campaign, began to work his political magic for Uber. Jay Carney, the president’s former press secretary, hired on at Amazon the following year. Larry Summers, for his part, became an adviser for an outfit called OpenGov. Back in Washington, meanwhile, the president established a special federal unit that used Silicon Valley techniques and personnel to revolutionize the government’s web presence; starstruck tech journalists call it “Obama’s stealth startup.”

The whole tenth chapter of Listen Liberal explores this issue and I can’t recommend it highly enough. I’m increasingly convinced that we can’t understand the failings of the contemporary Democratic party without an adequate account of the rise of digital elites within them, as the latest turn in a much long-standing process of capture by professionals. On loc 3184 he describes how talk of ‘innovation’ serves to prop up this accelerating inequality:

Technological innovation is not the reason all this is happening, just as the atomic bomb was not the cause of World War II: it is the latest weapon in an age-old war. Technological innovation is not what is hammering down working peoples’ share of what the country earns; technological innovation is the excuse for this development. Inno is a fable that persuades us to accept economic arrangements we would otherwise regard as unpleasant or intolerable—that convinces us that the very particular configuration of economic power we inhabit is in fact a neutral matter of science, of nature, of the way God wants things to be. Every time we describe the economy as an “ecosystem” we accept this point of view. Every time we write off the situation of workers as a matter of unalterable “reality” we resign ourselves to it.

A wonderful snippet I just came across on Wikipedia:

Elon Musk, after viewing the first episode of the show, said: “None of those characters were software engineers. Software engineers are more helpful, thoughtful, and smarter. They’re weird, but not in the same way. I was just having a meeting with my information security team, and they’re great but they’re pretty weird—one used to be a dude, one’s super small, one’s hyper-smart—that’s actually what it is. […] I really feel like Mike Judge has never been to Burning Man, which is Silicon Valley […] If you haven’t been, you just don’t get it. You could take the craziest L.A. party and multiply it by a thousand, and it doesn’t even get close to what’s in Silicon Valley. The show didn’t have any of that.”[31]

In response to Musk’s comments, actor T.J. Miller, who plays Erlich on the show, pointed out that “if the billionaire power players don’t get the joke, it’s because they’re not comfortable being satirized… I’m sorry, but you could tell everything was true. You guys do have bike meetings, motherfucker.” Other software engineers who also attended the same premiere stated that they felt like they were watching their “reflection”.[31]

https://en.wikipedia.org/wiki/Silicon_Valley_(TV_series)#Season_3

From The Deep State, by Mike Lofgren, pg 255-256:

The quality of blind self-absorption is not confined to our national security elites. Many Wall Street and Valley billionaires, living a hermetically sealed existence surrounded by sycophants and coat holders, appear genuinely surprised that their public reputation is not that of heroic entrepreneurs selflessly creating jobs for employees and value for shareholders, but rather of greedy buccaneers who are not above exploiting labor and shortchanging investors or depositors. 

Since these superrich elites are beyond reproach in their own minds, they interpret the criticism as victimization. When Obama suggested eliminating the “carried interest” loophole so that hedge fund managers would have to pay the same federal tax rates on their income that ordinary Americans pay, Stephen Schwarzman, the Blackstone Group CEO, said, “It’s war. It’s like when Hitler invaded Poland in 1939.” 5 Pretty strong stuff, considering that Obama’s suggestion went nowhere, nor did he even push it very hard. Silicon Valley venture capitalist Tom Perkins continued with the Nazi trope, writing a letter to the Wall Street Journal to “call attention to the parallels to fascist Nazi Germany in its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich.’” 6 Oh, the humanity!

A really enticing analysis by Evgeny Morozov of the “eventual depoliticization of extremely political and contentious issues by wrapping them up in the empty, futuristic language of technology and innovation”. Silicon Valley increasingly dominates the discursive representation of our global future, with the amelioration of social problems limited to a technologically-driven intensification of consumption:

Like many in Silicon Valley, Ross believes in what has become known as the Varian Rule—named after Google’s chief economist, Hal Varian—which states that the kinds of luxuries enjoyed by billionaires today will eventually be provided, albeit in a somewhat modified, heavily technologized form, to the poor and middle classes. You won’t get a chauffeur, but you will get a self-driving car; you won’t get a secretary, but you’ll get Siri or Google Now. The only benchmark of success is access to goods and services, while the actual terms on which this access is provided—for Google Now to work, for example, you need to let Google monitor you pervasively—are never discussed. Here is a capitalism-friendly version of social mobility, whereby consumption, rather than the dissolution of existing power relationships, becomes the sole goal of emancipatory struggles.

http://thebaffler.com/salvos/made-a-moron#

A bit later in Battle of the Titans, Fred Vogelstein transcribes a talk he saw Eric Schmidt give at a technology conference. From loc 1904-1918:

We have a product that allows 82 you to speak to your phone in English and have it come out in the native language of the person you are talking to. To me this is the stuff of science fiction. Imagine a near future where you never forget anything. [Pocket] computers, with your permission, remember everything—where you’ve been, what you did, who you took pictures of. I used to love getting lost, wandering about without knowing where I was. You can’t get lost anymore. You know your position to the foot, and by the way, so do your friends, with your permission. When you travel, you’re never lonely. Your friends travel with you now. There is always someone to speak to or send a picture to. You’re never bored. You’re never out of ideas because all the world’s information is at your fingertips. And this is not just for the elite. Historically, these kinds of technologies have been available only to the elites and not to the common man. If there was a trickle down, it would happen over a generation. This is a vision accessible to every person on the planet. We’re going to be amazed at how smart and capable all those people are who did not have access to our standard of living, our universities, and our culture. When they come, they are going to teach us things. And they are coming. There are about a billion smartphones in the world, and in emerging markets the growth rate is much faster than it is anywhere else. I am very excited about this.

I don’t think it’s hyperbolic to suggest this vision can and should be analysed using the conceptual resources provided by the Sociology of Religion. In fact Schmidt has apparently used that term himself:

large-schmidt-quote-graphic
But what would such a study look like in practice? I don’t think I’m qualified to do it but I’d love to help someone with a background in this area who is interested in this topic. Given the power wielded by devotees of this nascent religion, with only 5 tech companies sitting on $430 billion in cash between them, it seems urgent to better understand how these new elites interpret their own place within the world and orientate themselves to it.

From Zero to One, by Peter Thiel, loc 155-171:

Dot- com mania was intense but short— 18 months of insanity from September 1998 to March 2000. It was a Silicon Valley gold rush: there was money everywhere, and no shortage of exuberant, often sketchy people to chase it. Every week, dozens of new startups competed to throw the most lavish launch party. (Landing parties were much more rare.) Paper millionaires would rack up thousand- dollar dinner bills and try to pay with shares of their startup’s stock— sometimes it even worked. Legions of people decamped from their well- paying jobs to found or join startups. One 40- something grad student that I knew was running six different companies in 1999. (Usually, it’s considered weird to be a 40- year- old graduate student. Usually, it’s considered insane to start a half- dozen companies at once. But in the late ’90s, people could believe that was a winning combination.) Everybody should have known that the mania was unsustainable; the most “successful” companies seemed to embrace a sort of anti- business model where they lost money as they grew. But it’s hard to blame people for dancing when the music was playing; irrationality was rational given that appending “.com” to your name could double your value overnight.

This Wikipedia page makes for interesting reading: https://en.m.wikipedia.org/wiki/PayPal_Mafia

“PayPal Mafia” is a term used to indicate a group of former PayPal employees and founders who have since founded and developed additional technology companies[1] such as Tesla Motors, LinkedIn, Matterport, Palantir Technologies, SpaceX, YouTube, Yelp, and Yammer.[2] Most of the members attended Stanford University or University of Illinois at Urbana–Champaign at some point in their studies. Several also attended the Illinois Mathematics and Science Academy during high school. Three members, Peter Thiel, Elon Musk, and Reid Hoffman, have become billionaires.

The PayPal Mafia are sometimes credited with inspiring the re-emergence of consumer-focused Internet companies after the dot com bust of 2001.[10] The PayPal Mafia phenomena has been compared to the founding of Intel in the late 1960s by engineers who had earlier founded Fairchild Semiconductor after leaving Shockley Semiconductor.[3] They are discussed in journalist Sarah Lacy’s book Once You’re Lucky, Twice You’re Good. According to Lacy, the selection process and technical learning at PayPal played a role, but the main factor behind their future success was the confidence they gained there. Their success has been attributed to their youth; the physical, cultural, and economic infrastructure of Silicon Valley; and the diversity of their skill-sets.[3] PayPal’s founders encouraged tight social bonds among its employees, and many of them continued to trust and support one another after leaving PayPal.[3] An intensely competitive environment and a shared struggle to keep the company solvent despite many setbacks also contributed to a strong and lasting camaraderie amongst former employees.[3][11]