TCS Daily

How Green Was the Valley?

By Nick Schulz - April 5, 2002 12:00 AM

A recent piece in the Financial Times offered a fascinating window into just how much attitudes and postures in the technology sector can change in a short period of time.

No, it wasn't about dot com boom and bust or industry-wide malaise. Instead, it was about how much of an active interest technology executives are taking in Washington.

"We cannot say the net will have a huge influence on everyday life and also say 'Hey, Washington, keep out of it'," Les Vadasz of Intel Capital, Silicon Valley's biggest venture cap fund, told the FT.

Ah, how times have changed.

Butt Out!

Barely five years ago, Silicon Valley and techno-enthusiasts had (understandably) nothing but disdain for the machinations of the federal bureaucracy. This view was articulated most pungently by Tim Draper, one of the biggest 'swinging [doors]' in the Valley and the personification of venture capitalist as master of the universe.

Draper famously penned a piece in the Wall Street Journal, titled "Silicon Valley to Washington: Ignore Us, Please."

Well, that summed up his sentiment nicely. But to get a sense of just how much attitudes have shifted, it's worth quoting Draper at length:

"A few weeks ago I attended a "technology summit" near Palm Springs, Calif., where the mood was almost as bright as the desert sun. We in the high-tech business have reason to feel good: Last year set records for initial public offerings and venture capital raised; investors can't seem to get enough of tech stocks.

"Despite the sunny atmosphere, an ominous cloud appeared during a panel discussion entitled 'Navigating the White Water in Washington.' GOP consultant Ed Rollins, a lawyer and three lobbyists -- including George Sollman, chairman of the American Electronics Association -- pedantically droned on about the need for us to 'build better relationships with Washington,' as Mr. Rollins put it. Mr. Sollman added that we should 'educate' politicians and bureaucrats, so that they'll make the 'right decisions as they inevitably regulate the technology industry.'

"Huh? We don't need Washington to make 'right decisions' for us, thank you very much. Some facts: Our industry now accounts for 11% of gross domestic product and a quarter of U.S. manufacturing output. We employ more than 4.2 million people, who earn almost double the average salary of manufacturing workers. Our industry is the biggest reason the U.S. has the world's most competitive economy."

He went on to say that:

"Teaching the folks inside the Beltway too much about our business is a dumb idea. ... We ought to count our blessings that most of our industry is 2,500 miles from Washington and that most bureaucrats either fear, don't care about or don't understand technology. ... Bureaucrats can't regulate and ruin something they can't understand. So why explain it to them? No one I know in this industry wants to spend any more of his productive time filling out forms, trying to explain why we picked one technology over another.

"I earned an MBA from Harvard and an electrical engineering degree from Stanford. I worked at Hewlett-Packard and Alex. Brown before starting a venture-capital firm. My favorite periodicals are Upside and the Red Herring, not the Washington Post or The Weekly Standard. In my free time I surf the Net; I don't watch "Capital Gang" or C-Span. ... If Washington doesn't understand my business, I'd like it to stay that way. The fact is that politicians and bureaucrats can't help us; they can only get in the."

At TechCentral we advocate limited government intervention in the private sector and people's lives generally, so we are sympathetic to the spirit of Draper's breathless rant. Indeed, we are constantly railing against companies seeking help from Washington or the court system to bash their competitors, preferring that they fight their battles in the marketplace whenever and wherever possible.

All Grown Up

But at the time I couldn't help thinking that, while all that learning he accumulated at Harvard and Stanford, and all his successes at H-P and Alex Brown, and all those nifty magazines he reads and all those jobs he helped create may have enabled alpha Draper to do some impressive chest-thumping, he had a very cramped understanding about how human beings and organizations actually think, work and behave.

Politics is, if nothing else, primarily about the competing interests, demands and desires of individuals and groups. Of course, in a certain sense, so are markets. Businessmen like Draper, working as they do in a competitive environment, understand the market aspect, as they are constantly laboring to identify those wants and demands and meet them.

But life is, for better or worse (often worse), not as simple as just identifying the needs and demands of others and meeting them. People (and companies) are also motivated by petty jealousies and grievances, ambition, greed, as well as altruism and a host of other factors. And when human beings (or companies) act out on those motivations, there will often be public implications - that lead, inexorably, to political implications.

The tech sector has understood this dimension of life exceedingly poorly. And it shows. It has generally been clumsy and ham-handed now that it has entered the "Washington" game and embraced it with an enthusiasm not seen since Healtheon went public. ('We make an inferior product? No worries. Those bureaucrats in D.C. that don't understand a damn thing about tech will do our bidding and squash you for us. Your subpoena is now served'). Lawsuits or complaints coming out of the tech industry seeking redress from the courts or from Capitol Hill multiply at something approximating the rate observed by Moore's law.

Time is a great leveler, of course, and it was only time before Tim Draper and the rest of Silicon Valley moved from saying, "Hey, Washington, leave us alone" to "Hey, Washington, look at me." Now there's the real sign that the bloom is off the technology rose.

URL Next Door - This week's URL Next Door will be no stranger to some long-time TechCentral readers. It is Andrew Sullivan's online Book Club.

There are two reasons Sullivan earns the URL Next Door honor this week. First is that his book club is among the best examples of how the Web as a medium has advantages over other media such as TV or radio or print publications - simply put, this sort of book club is something that was not possible before the advent of the Web.

There have been lots of silly articles of late lamenting how the web isn't exciting or fun anymore - as if and it's vacuous brethren were helping usher in a new era of civilization. Sullivan's book club (and the blog uprising generally) shows that such obituaries are premature.

Second, Sullivan has been wise enough to pick excellent books, most notably the newest selection by the Danish scientist Bjorn Lomborg, "The Skeptical Environmentalist."

Dr. Lomborg might well be the most controversial academic in the world right now and his book threatens to topple a sclerotic environmental establishment that feels threatened by new ideas, arguments and data. That establishment has come out guns (and pies) blazing against The Great Dane. It remains to be seen who will be left standing when the dust settles.

That said, it will be fun to watch, and to participate in the debate. Sullivan's book club is one way to do that (there will be Lomborg skeptics, supporters, and agnostics participating) and I encourage all TechCentral readers to buy the book through Sullivan's site and participate in reading and debating this challenging and important work. I know I will. See you in the club.

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