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Dear Silicon Valley: America's fallen out of love with you

Dear Silicon Valley: America's fallen out of love with you
From TechCrunch - October 8, 2017

Dear Silicon Valley,

You used to be the envy of the world. Over the last decade Ive seen countless cities try to become you, fromthe Silicon Savannah to the Silicon Bayou.

At last years Global Entrepreneurship Summit on Stanfords campus, hundreds of entrepreneurs from Mongolia to South Sudan came to listen to President Obama and Mark Zuckerberg and get a touch of your magic fairy dust. The American Dreamanyone with an idea, a garage, and a good work ethic can build a great companymight as well have been born in your backyard. I admire your innovation, openness, creativity, and all you stand for.

In case you havent noticed, though, youve changed from hero to villain. Youre too expensive and exclusive for the rest of the world: The garages that gave us Hewlett-Packard and Google now cost millions of dollars. Youve moved from icon to jokethe show that bears your name is a cringe-worthy, true-to-life satire.

Youre churning out companies that are raising hundreds of millions of dollars, and going bankrupt in literal satires of themselves: a $700 million blood-testing company that never had any actual results; a $120 million juicer with packets that can actually be squeezed by hand.

NowFast Company is declaring the end of the publics love affairwith the Silicon Valley ideal, and everyone from socialist Bernie Sanders to hard-right Steve Bannon is calling for your biggest companies to be heavily regulated, and your reputation is fast approaching that of Wall Street (which actually used to have a good reputation too).

Here are a few places that you went wrongand what you can do to fix it.

Your ideas are only as good as the people in the room. And your door is shut to most people.

As evidenced by the major backlash over the recent launch of a company called Bodegawhere the founders and investors genuinely didnt understand why the name was problematicyou dont always have the best handle on how your ideas will be received outside of the Silicon Valley bubble. Youve got major blind spots.

Why might this be? Face the facts: when Silicon Valley investors are considering new ideas, you dont have very many different perspectives around the table. Over 90% of the decision-makers in the venture capital industry are white men.

Youve known this is a problem for a while, but havent done anything to fix it: less than 5% of the new ideas that get funding are founded by women, and less than 1% of venture funding goes to Latinos and African-Americans.

Youve concentrated capital in the hands of a few people (nearly all white guys) who have huge power to determine which people, places, and industries get funding. And your decision-makers are often (unintentionally) overlooking ideas that come from people who arent like them, which exacerbates gender, racial, and geographic divides in our country. Much worse, this financial privilege creates power dynamics that leads to too-frequent cases of investors sexually harassing founders or tone-deaf ideas like Bodega.

Your rainforest of innovation has turned into a factory farm.

Silicon Valley, perhaps your greatest achievement is that youve built a community where the little guy could build a great company to disrupt the establishment. Silicon Valleys innovation engine has been driven by the creation of iconic companies: HP, Intel, Apple, Google, Facebook, that took on bigger competitors.

But thats changing. In his famous bookZero to One, Peter Thiel writes, Competition is for losers. Be a monopoly. And that philosophy has come to prevailthe average venture capitalist would say that in a portfolio of 20, they are OK with 19 losers and one grand slam. Follow that to its logical conclusion: for every billionaire Peter Thiel, Silicon Valley, youre OK with 19 broke people. Its no wonder that inequality is at a 100-year high, entrepreneurial activity is at a 40-year low, and eight men control half the worlds wealth.

Over the past fifteen years, big has crushed little in Silicon Valley, to an increasing degree. The former giant-slayers like Apple and Google have become giants themselves, shutting out or buying up new entrants.

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