Zero Likes: How The World Turned On Silicon Valley

Telegraph, Mar 2014

With their displays of excess and arrogance, the tech industry’s ‘masters of the universe’ are now battling pickets, protests and bricks through the window.

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To open the Crunchies – the website TechCrunch’s annual awards show in San Francisco – the host, comedian John Oliver, gently roasts the gathered elites about how unpopular the tech industry has become. “You’re not underdogs anymore,” he tells them. “It used to be that the people in tech were emotional shut-ins and you could get behind them. Now, you’re pissing off an entire city!”

Meanwhile, just down the road, another awards event proves his point: The Crappies, a slapdash razzies for the tech industry, held on the street by a motley rabble of protestors and street performers.

“It’s our town! We paid for it!” declares one protestor, dressed up as Dick Costolo, the CEO of Twitter. He waves his Tax Evader Award in the air – a golden toilet brush. “I don’t care if there are people here. That’s progress!” Others step up to receive toilet brushes on behalf of Marissa Mayer, Yahoo’s CEO (and director of Walmart), and the so-called Godfather of Silicon Valley, the investor Ron Conway (who wins the Angel Investor of Death Award).

This is par for the course now in San Francisco, where a backlash against the tech industry has been gathering steam for the last six to nine months. Even tech luminaries like Conway have taken to addressing their industry’s toxic public image, from the stage at the Crunchies no less. “We may not agree with everything the protesters outside have to say,” he says, “but they do represent an anxiety over a widening income gap.”

But the income gap is not the half of it.

The backlash started with the protests against the shuttle buses that tech companies provide for their workers in the city – heated protests at that, with angry banners saying “F*** You Google” and graffiti referring to “Google Scum”. Just before Christmas, a rock came through a bus window in Oakland.

Then there’s the steady stream of gaffes by members of the Technorati. The August blog post by start-up founder Peter Shih, for example, titled “10 Things I Hate About You: San Francisco Edition” (number six was “homeless people” and number five, “all the girls who are obviously 4’s but behave like they’re 9’s”). Or the December 11th rant on Facebook by AngelHack founder Greg Gopman, again picking on the homeless: “the degenerates gather like hyenas,” he wrote. “There is nothing positive to be gained from having them so close to us.”

Stories of tech excess haven’t exactly helped things – Sean Parker’s $10 million Game of Thrones theme wedding, say; or Evan Spiegel of Snapchat turning down $3 billion from Mark Zuckerberg; or Yammer’s billionaire owner David Sacks celebrating his 40th with a Let-them-eat-cake themed party at his $125 million mansion in the Hollywood Hills (with Snoop Dogg as the entertainment).

But the moment that captured tech’s predicament best of all came on January 24th, in a letter to the Wall Street Journal by Tom Perkins, the Mr Burns of the Tech boom, a billionaire and self-described “King of Silicon Valley”. He likened the bus protests to the persecution of the Jews in Nazi Germany. “Kristallnacht was unthinkable in 1930,” he wrote. “Is its descendant “progressive” radicalism unthinkable now?”

Instantly, Twitter exploded with invective against the industry that invented it, forcing Perkins to, in short order, dash off a penitent letter to the Anti-Defamation League and mealy-mouth a half-apology on Bloomberg TV. And then, barely a month later, he did it again, this time suggesting that the rich should get more votes than the poor since they pay more in taxes.

While he’s a far cry from your typical start-up zillionaire – he’s not a cocky young “bro-grammer”, he’s 81 – Perkins nevertheless crystallized what this conflict is bout: an arrogant and often tone-deaf industry, and a simmering theme of class war.

As Oliver jokes from the Crunchies stage: “I heard that the new design for the buses had tinted windows, but with the tint on the inside: ‘look, I don’t mind if the peasants see me, but I’d rather not see them…’”

“What do we want?” Erin McElroy, 31, of the San Francisco Tenants Union, yells into a loudhailer. A crowd of 100 or so responds: “Stop the evictions!”

They’re gathered on a street corner in the rapidly gentrifying Mission District, on a crisp Tuesday morning, surrounding a Google bus that made a regular stop on its way to the company offices out in Silicon Valley. The Googlers sit nervously behind the dark windows as the speeches and chants go on around them. After the violence in Oakland, they have a security detail outside – but there’s no hint of trouble today. There’s even a brass band, the Brass Liberation Orchestra.

“From San Francisco to across the bay,” McElroy says. “What do we want?”

“Make tech pay!”

The buses are nothing new. Tech firms have long employed shuttles, given that their campus offices are in Mountain View, Palo Alto and Menlo Park, some 40 miles south of San Francisco. But for many locals, they represent an industry that is overwhelming their city. Certainly, San Francisco is somewhat small (only 49 square miles) to absorb such a sudden influx of tech workers – besides the shuttle bus crowd are the tech companies in the city itself, 1892 of them at last count, of which Twitter is the most high profile, particularly since its IPO which created some 1600 new millionaires.

The net effect of all this has been a sharp spike in rents, evictions and house prices – all the markers of aggressive gentrification.

“We have the highest rent in the country, at $3250/month for a 2 bedroom apartment,” says McElroy. “Evictions have gone up 83% over the last three years. And Ellis Act evictions have gone up 170% just from 2011 to 2012.” (The Ellis Act is a California law that permits landlords to evict tenants so long as they keep the property off the market for five years.)

The toll on the city goes beyond economics. As tech workers move in, the historic Mission district is being reduced to a bedroom community for Silicon Valley, in which the new residents are literally disengaged, spending most of their lives 40 miles away.

“San Francisco has always been a sanctuary city for lots of different kinds of people,” says McElroy. “And they’re being driven out now – the people who made this city what it is.”

People like Paula, a 55 year old Chilean woman who runs the Chile Lindo coffee shop in the Mission. “I’ve put nearly 20 years into this community, and I’ve been told I’ve got six weeks to move out,” she says. “I’m seeing people in their 70s get evicted – terminally ill women who have lived in their homes for 45 years. Our ecosystem is in danger.”

But McElroy doesn’t want to single out the tech industry. Once the protestors let the bus go, they march to the San Francisco Realtors Association to protest the property speculators, and then onto Mayor Ed Lee’s office. “We want to connect all three,” she says. “We know the Mayor [Ed Lee] meets with the tech industry on Tech Tuesdays – what about Tenant Tuesdays? The shuttles are using public bus stops, but our public transportation services lines are being cut, so why is the city prioritizing tech? Why give Twitter a $50 million tax rebate when homeless services are being cut?”

Not all politics are local, though. In such a staunch progressive city there are plenty of wider reasons to protest Big Tech, whether it’s the fact that Silicon Valley women make 49c on the dollar that every man makes, or the tech companies’ cooperation with the government’s programs of mass surveillance.

“They might have logos like ‘don’t be evil’, but they’re doing some pretty awful things,” says McElroy. “Like when Google funded Ted Cruz [Tea Party senator from Texas], who was on a crusade against Obamacare. Or when Facebook and Google joined ALEC [the American Legislative Exchange Council, a far right lobbying group that denies climate change]. They’re big corporations at the end of the day – Google makes a lot of its profit by offshoring its money and not paying full federal corporate taxes.”

(The rate in the US is 35% but Google, while breaking no laws, pays only 10%. And in the UK, by basing its operations out of Ireland, it paid all of UKP 11.6 million in 2012, despite revenues of $5.5bn).

It’s a perfect storm – a famously left wing city, during a time of huge economic disparity, at the epicenter of a boom that has created mind-boggling wealth for the very few. And then a gleaming white bus drives into the middle of it – white for Google, blue for Facebook. At this point, the buses symbolize not just gentrification, but a winner-takes-all system of politics and economics that is fundamentally corrupt.

“This backlash is long overdue,” says Sam Biddle of Valleywag, a blog that has become ground zero for the backlash. Since its relaunch in January 2013, Biddle and his colleague Nitasha Tiku – a grand staff of two – have gleefully lobbed missiles at Silicon Valley from their offices in New York (Valleywag is part of the Gawker Media empire). They particularly enjoy feasting on crass tweets from techies and stories of billionaire excess.

“It’s like how the public turned against Wall Street, except bankers have no delusions, they know their business is about greed,” says Biddle. “But there’s a utopianism in Silicon Valley. They truly think that they’re ushering in a golden age. They talk in these grandiose terms about changing the world, or reinventing communication. So with these bus protests, they’re not like the yuppies in New York or DC who can just afford a higher standard of living. They think they deserve that great apartment: ‘Who are you to say I shouldn’t move here, I’m making an app that’s going to change the face of humanity!’”

The Wall Street comparison is especially fitting since it’s been widely reported that Silicon Valley is snapping up top graduates that would typically have pursued careers in finance. Bankers are so vilified now that a lot of “top talent” choose instead to head west to the infinitely cooler, less stigmatized start-up culture of Silicon Valley – the so-called “bro-grammer migration”. But now, start-up culture is coming in for a drubbing, and not just from Valleywag – Mike Judge (Office Space) will soon debut a new sitcom about start-up entrepreneurs in the Valley.

No doubt there’s something delicious about seeing the mighty lampooned so mercilessly. But the subtext to Valleywag also chimes with broader suspicions that these tech firms are so powerful as to be sinister – the keepers of our information, our tech overlords. In a recent scoop, Biddle produced an internal Google memo to its shuttle riders that demonstrates the extent of its corporate control. The memo informed staff what to say at a public hearing on the bus issue, providing example statements like, “I am a shuttle rider, San Francisco resident and I volunteer at…” and “My shuttle empowers my colleagues and I to reduce our carbon emissions by removing cars from the road.”

Biddle’s take: “This is what it looks like when the most powerful entity in the history of the internet starts to realize people hate its guts.”

To date, there has been no official response from Google or any of the other tech giants on the bus issue. So the only defense of Big Tech has come from isolated individuals, often tech workers, writing counter articles. Not surprisingly, they don’t take kindly to Biddle. A lengthy takedown in PandoDaily – a silicon valley news site – described Biddle as a phoney class warrior and “grotesque hypocrite” who not only comes from privilege himself (his father is a Pulitzer prize winning journalist) but also works for a loathsome corporation (Gawker Media). One software engineer, Tim Herd, even published a Chrome extension that allowed users to read Valleywag without actually clicking on the site (and so depriving the company of traffic).

Biddle laughs. “The idea that someone would spend their time doing that means we’re doing something right,” he says. “The funniest part is he still wanted to read the site.”

But Valleywag’s agenda is transparent – and the closer one looks at the issues surrounding the bus protests, the harder it becomes to paint the tech companies with quite so evil a brush.

For one thing, San Francisco’s challenges are the product of a boom not a bust – Detroit would love to have such problems. The tech industry has created 23,500 jobs since 2009, according to one report, so the city’s tax base has grown and unemployment has shrunk to 5.3 percent, the lowest since 2008. (By comparison, Los Angeles is at 9.7 percent).

Furthermore tech workers are famously philanthropic to local causes. Maria Amundson of Edelman PR – which represents Ebay, Adobe and others – cites the Silicon Valley Community Foundation’s figure that Bay Area companies gave 20% more than average per employee in 2012. “So this negative civic image is really not accurate,” she says. “In PR terms, I think the industry should speak up more about all the good they’re doing for the local community.”

She’s referring to gifts like the $100 million that Mark Benioff, the CEO of Salesforce, gave to build the University of California, San Francisco Children’s Hospital in June of last year. (Valleywag pilloried him for having the hospital named after him). Then there was Mark Zuckerberg’s donation of $990 million in Facebook stock to the Silicon Valley Community Foundation, the largest grantmaker to non profits in the Bay Area. Plus, Facebook recently gave laptops to students at two Mission District public schools, Yelp announced $100,000 in grants to local nonprofits, and Google helped fund free Wi-Fi in parks. It’s a far cry from unscrupulous bankers liquidating pensions.

“Remember, protesting is what we do for fun in San Francisco,” says Gabriel Metcalf, the executive director of SPUR, a non profit that works towards better government in the Bay Area. “So we need to keep a sense of humor about this! The key problems are a dysfunctional housing policy, and underinvestment in public transit. They’re both solvable, it will just take time. The trouble is, the economy has grown too quickly.”

Critics of the shuttles argue that they represent a wider malaise of corporations investing in private services rather than paying taxes to support public services which benefit the wider community. And this may be true – when the design group Stamen, based in the Mission, mapped the private routes of all the buses, including Apple, Yahoo and others, it does look as though a significant private mass transit system has developed alongside the public one – the tech buses carry an estimated 14,000 people per day.

But given the short term inadequacy of the public system, shuttle buses are clearly better than having tech workers drive to work. By the Bay Area Council’s estimates, each year the buses reduce traffic by 45 million vehicle miles per year, and emissions by 11,000 tons of carbon.

Another argument holds that without the shuttles, many tech workers would live closer to the valley and so relieve pressure on housing in San Francisco – a study from Berkeley puts the proportion at 40%. But this isn’t the full picture either. Firstly, the remaining 60% are still underserved – according to the San Francisco Apartment Association, the city added 68,000 new jobs last year and only 120 new housing units. And, what’s more, the reason workers have moved to San Francisco in the first place is the lack of housing closer to the Valley.

“The tech companies would love cities like Palo Alto and Mountain View to approve new housing,” says Metcalf, “but they won’t. Mountain View even denied Google’s application to build housing with its own money, on its own campus!”

(The rumor is that Google was defeated by an old biddy on the Mountain View council who argued that new residents would lead to new pets, specifically cats which would hunt endangered birds in that area. Calls to the Mountain View council were not returned.)

So for now, the conflict continues.  The Mission continues to gentrify at a painful pace. And the buses continue to symbolize a them-and-us separation between tech workers and locals. It’s ironic that an industry that set out to connect the world should be so disconnected from its own neighbors.

“We’re making progress,” says McElroy. “These protests have got us a lot of attention, and the Mayor’s office just met on the issue and came up with a specific policy proposal. So that’s positive.”

The proposal, which passed recently, is to charge the buses to use the public bus stops – $1 per bus per stop. Over a year, it would raise some $100,000 per company for the city.

“But it’s not enough,” she says. “These are multi billion dollar corporations, and they’re already getting huge tax breaks. It doesn’t do anything about the eviction crisis. So we’re going to up the ante. We’re confident.”