Beyond the Valley of Hype and the Plateau of Despair

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I can’t get Dan Lyons out of my head.

Lyons is the author of Disrupted, the buzzy new book about what happens when a curmudgeonly fifty-ish tech writer gets unceremoniously dumped from a plum role at Newsweek and takes a job as a “content generator” at Hubspot, a white-hot Boston startup selling marketing software.

Best known for creating a “Fake Steve Jobs” blog, and more recently for his work on the writing team for HBO’s achingly funny Silicon Valley, Lyons has a taste for the absurd, and his prologue (excerpt here)–describing his initial experience at Hubspot–is a laugh-out-loud takedown of tech startup culture.

The fun only lasts a few chapters, however (captured perfectly in this review by Erin Griffith), as Lyons hopes to convey a more serious point (conveniently summarized in an op-ed in today’s New York Times): that the excitement around technology companies is largely empty hype, enthusiasm used to sucker naïve young adults to work for peanuts (and candy), and to enrich savvy founders and venture capital investors, and the investment bankers who enable them, at the expense of the gullible mom and pop investors who buy shares of these fast-growing but often profitless companies after they go public.

I read Disrupted with perhaps an unusual degree of interest. Like Lyons, I found my way to tech startups late (mid-40s for me, early 50s for him); like Lyons, I often feel like an interloper, a cultural observer rather than someone who has been coding from the age of three; like Lyons, I have a deeply ingrained sense of “East Coast” skepticism; and like Lyons, I’ve been struck by the excesses associated with startup culture (as regularly discussed in these columns).

Yet I’ve come away from my experiences (disclosure/reminder: I’m chief medical officer at DNAnexus, a health data management company based in Silicon Valley and Boston) with a profoundly different–and far more optimistic–set of conclusions.

First, Lyons argues that technology is more hype than substance. Based on Lyons’s description, it sounds like he worked at a company that hyped its marketing software yet behind the scenes, relied on an army of low-paid call-center workers (and not its own software) to actually generate new business. The entire enterprise seems to be running on the “Mechanical Turk” model.

While there’s no shortage in Silicon Valley of entrepreneurs overselling the promise of their technology (a key premise of Tech Tonics, which I co-authored with Lisa Suennen), there’s also a lot–a staggering amount–of truly exciting technology in Silicon Valley, especially around healthcare, and very creative people trying to figure out how to apply emerging technologies and novel analytics to a range of interesting problems.

Second, Lyons observes that many tech businesses focus on growth not profit, and suggests they are effectively scams aimed at achieving IPOs and extracting money from a gullible market. He calls out Salesforce and Amazon as examples of companies that have public valuations far in excess of what their profits (or lack of profits) imply (to him) they deserve.

While Lyons is not entirely wrong here–there’s been a real problem with young companies chasing growth at the expense of plausible business models–I’m not sure most investors today are as forgiving as he suggests; the ones I know are generally extremely interested in plausible paths to profitability.

It seems especially surprising to call out Amazon in the context of smoke-and-mirror models, as it’s difficult to imagine a more genuinely transformative–genuinely disruptive–company.

Lyons also argues that (back in the Days of Giants) tech companies used to prize talent, but now they value cheap labor instead; the modern tech company, he suggests, is a “digital sweatshop”–only now with candy and caffeine.

Again, there’s an aspect of this that Lyons get right: the frequency and abruptness of staff departures, a disturbing phenomenon I noticed during my first year of tech company work, and which (like Lyons) I continue to find uncomfortable.

But while Lyons explicitly suggests employee turnover reflects the lack of serious interest in talent (and perhaps that was how management at his former company viewed the call-center workers they employed), I’ve seen exactly the opposite–a ruthless interest in finding the very best possible person for each individual role.

While continuously evaluating employees was neither invented in nor is peculiar to Silicon Valley (Jack Welch, anyone?), the small size and high growth expectations of startups creates a heightened sense of urgency to field the best possible team every day. (Less clear: Do startups successfully identify higher performers? What is the cultural impact of the constant threat of replacement, as well as the frequency of replacement, on remaining employees?)

Finally, Lyons tags startups for a litany of workplace problems–“undertrained (or untrained) managers,” arbitrary performance reviews, distinct vocabularies, obsession with personality tests and a tendency to self-mythologize–criticisms that seem, frankly, universal, and in fact feature in almost every workplace book I’ve read, from Martin Kihn’sHouse of Lies (management consulting) to Samuel Shem’s House of God(medicine). (A more interesting anthropology study might be why these patterns are inescapable.)

It has seemed clear for some time that the somewhat smug enthusiasm of Silicon Valley entrepreneurs has irritated the equally smug community of East Coast skeptics (each location used in the Lyons sense, representing not a physical place but a way of thinking); both the New Yorker and the New York Times Magazine have featured a succession of stories arguing basically that Silicon Valley culture–even “disruption” itself–isn’t all that it’s cracked up to be.

In some cases–many cases, perhaps–the skeptics have a point, but it’s also possible that in their determination to believe it must all be a mirage, they are missing not just exceptional technology but also undervaluing important and positive changes associated with its adoption.

Positive changes in the workplace, where there’s now a new focus on agility and problem solving that even large traditional companies such as GE are intelligently adopting. Positive changes in the way we live–from the range of products we can order to the ease of home entertainment to the utility of GPS-mediated navigation. Positive changes in the way information is increasingly democratized, and available instantly to anyone. Positive changes in the way we can connect with expansive distributed communities in a fashion never before possible.

As Susannah Fox, Chief Technology Officer of the Department of Health and Human Services, said last Tuesday–in Boston–“technology is a Trojan Horse for change,” adding (per reporter Jonah Comstock) that the thrust of this culture change is “the democratization of technology development being enabled by the internet.”

No, it’s not all positive–of course it’s not. But even as we point out the failings and satirize the excesses, let’s keep in mind how much remains both hopeful and encouraging about Silicon Valley, and not underestimate the authentic determination of so many here to, yes, make the world a better place–an even better place.

2 replies »

  1. Excellent discussion. Again.

    Observations –

    1. Startup cultures vary widely. Your company sounds a lot closer to a traditional biotech research model than the kind of startup than Dan Lyons described. That’s by necessity.

    2. The digital sweatshop model is more prevalent in companies that require digital piecework (content management, marketing, social media outreach, biz dev, customer service); less in enterprises that are research or data-driven focused …

    3. There’s a culture of tolerance in the Valley, I think. A sort of “if people are stupid enough to go for this..” who are we to say anything? That’s probably shortsighted. The hype and bullshi* problem is something that everybody working in the tech should be concerned about, in the end everybody takes a reputation hit.

    Think it isn’t your problem? When investors flee – which they will – your company’s valuation and possibly even your company may be going down with the other guys ..