In September, I met with a prominent entrepreneur looking for positive press on his new project. Meetings like these are a common, usually formulaic, part of my job—except in this one, the conversation drifted to the tech industry’s year of bad headlines. As we discussed the latest sexual harassment scandal, he posed a question: Will anyone ever write another positive story about a tech startup?
I said probably not.
We’ve been burned, I explained. The many hype-building stories about deceptive companies haven’t aged well. I once wrote a largely positive story about Zenefits CEO Parker Conrad, lightening his outsize personality by calling him “the enfant terrible of the back office.” Not long after, he was ousted after the company admitted its employees cheated on mandatory compliance training.
The issue is bigger than any single scandal, I told him. As headlines have exposed the troubling inner workings of company after company, startup culture no longer feels like fodder for gentle parodies about ping pong and hoodies. It feels ugly and rotten. Facebook, the greatest startup success story of this era, isn’t a merry band of hackers building cutesy tools that allow you to digitally Poke your friends. It’s a powerful and potentially sinister collector of personal data, a propaganda partner to government censors, and an enabler of discriminatory advertising.
The world is no longer interested in that kind of story, I told him. Anything that doesn’t address the thorny questions facing the tech industry feels beside the point.
The entrepreneur was disappointed by my cynicism. The industry’s problems, he believed, could be solved with more technology. As a matter of fact, his startup was working on just the thing: a tool that would tackle a problem caused by tech. If he was successful, the world (and his bank account, and his investors’ bank accounts) would be better off for it, he argued.
So if I could just do him—and by extension, everyone—a favor and explain that in an article, it would really help us all out.
Talking to tech founders every day, it’s clear how little their lives have changed in the last year, even as the world around them has shifted. Even top bosses who’ve noticed the change in public opinion aren’t willing to adjust. On his blog, Y Combinator president Sam Altman argued that political correctness was damaging the tech industry. “This is uncomfortable, but it’s possible we have to allow people to say disparaging things about gay people if we want them to be able to say novel things about physics,” he wrote. On the ground, the startup kings haven’t changed their behavior. They’re still pitching me their companies with the same all-out exuberance. They’re continuing their quest to move fast and break things—regardless of what broken objects are left in their wake.
Outside the bubble, things are different. We’re not egging on startups that willingly flaunt regulations. We’re wary of artificial intelligence and its potential to eliminate jobs. We’re dubious of tech leaders’ promises to make their products safe for their kids to use. We are all sick of the jokes that no longer feel funny: lines about the lack of women in tech, about obscenely rich 20-somethings, about awkward coders with bad people skills, about “hustling” and growth at any cost. It all feels inappropriate.
But this backlash against tech is difficult to see from inside the Silicon Valley bubble. And it’s not hard to understand how we got here. In the late 2000s, just after the financial crisis, the world was eager to hear positive stories about tech. The fast rise of services like Twitter and Facebook was thrilling—a spot of optimism in the gloomy aughts—and their geek genius founders made better heroes than the greedy Wall Street jerks that had just tanked the economy. Facebook was making the world more open and connected. Twitter was aiding revolutions in the Middle East. Sure, those fresh-faced founders became billionaires, but their mission-driven companies felt about as noble as capitalism gets.
The business world celebrated this swashbuckling freedom, adopting startup culture’s management philosophies, office designs, and ethos of innovation. It seemed impossible that a company like Uber, the most valuable privately held startup in history, could ever face a moral reckoning. But that was before 2017, when journalists revealed that Uber’s swaggering “bad boy” reputation had enabled a host of abhorrent and potentially illegal business practices. Uber’s meltdown was part of a steady drumbeat of revelations that have turned the headlines out of startup-land negative.
When Bodega, a startup making “smart” vending machines, announced its launch in September, it encountered an angry mob on Twitter. Bodega’s co-opted name, along with its founders’ stated plan to make corner stores obsolete, fit perfectly with the stereotype—arrogant, elite tech bros trying getting rich by disrupting a lovable local icon. “Let’s see your shitty glass box make me a bacon, egg and cheese with jalepenos on a roll you sick, capitalist scum,” the rapper El-P tweeted. The company’s founder issued an apology, which was subsequently mocked.
“Bro-dega,” as it’s since been named, was just one catalyst of the anti-tech sentiment rippling beneath our collective surface. After Skedaddle, an “Uber for Buses” startup, was featured on Business Insider, a screenshot of the four young male cofounders, smiling atop an article describing an unsavory-sounding mission, ricocheted across Twitter. “What a nightmare,” the writer Lisa McIntire tweeted, adding, “Silicon Valley is run by complete sociopaths.”
A trend story about startups riding the trend of “co-living” emerged; Twitter screamed, “YOU INVENTED ROOMMATES!” When Bloomberg revealed that fruit packs made by Juicero, a well-funded startup selling expensive juicing appliances, could be squeezed with bare hands, commentators howled with schadenfreude. Juicero wasn’t just a preposterous company: It was “a symbol of the Silicon Valley class designing for its own, insular problems,” and “an absurd avatar of Silicon Valley hubris.” When a study showed that a “brain-hacking” supplement created by a venture-backed startup called HVMN was no more effective than a cup of coffee, mockery ensued.
This week, when Netflix tweeted a joke about some of its customers’ viewing choices—a marketing ploy that, just a few years ago, would have felt like a clever insight gleaned from the wonders of big data—the press and tweeting masses immediately attacked it as creepy and a violation of privacy. These rifts have solidified the feeling that techies and their moneymen are painfully out of touch.
The Valley’s investors are at least aware of the problem. Two years ago, a bad reference or a small public scandal wouldn’t have blown up a fundraising process for a hot deal. But venture investors are increasingly passing on deals—including hot ones they’d normally fight to get a piece of—because of negative character references. Post-Uber, post-harassment scandals, post-tech backlash, investors are hesitant to touch companies that are adjacent to any kind of scandal. “People are hypersensitive to working with anyone with any type of issues,” one investor told me. They’re scared of the reputational blow they face if they’re associated with a “tainted” startup.
In 2008, it was Wall Street bankers. In 2017, tech workers are the world’s villain. “It’s the exact same story of too many people with too much money. That breeds arrogance, bad behavior, and jealousy, and society just loves to take it down,” the investor said. As a result, investors are avoiding anything that feels risky. Hunter Walk, a partner with venture capital firm Homebrew, which invested in Bodega, attributes the backlash to a broader response to power. Tech is now a powerful institution, he says. “We no longer get the benefit of the doubt 100 percent of the time, and that’s okay.”
The privilege that techies have enjoyed for years is starting to erode. It’s taking them some time to see what other people are seeing, but if VCs, media critics, and people adjacent to the industry are starting to get it, then it’s time to make a change. Right?
Startup founders with any potential for success are used to being treated with the reverence of a war hero. This status earns them business clout, like extra voting power and control over their boards (a practice that’s caused problems for startups like Uber and Theranos). But more importantly, this heady mind-meld convinces them they’re invincible. The culture of founder worship is bred into tech’s legacy, from Steve Jobs to the latest batch of Y Combinator wannabes. The royal treatment seems surreal at first, but most founders quickly acclimate to the free helicopter rides, the free concerts, the free gadgets, and the invites to rub elbows with one another at plush resorts on Montauk or Necker Island or Hawaii. They work hard, the justification goes. They’re changing the world. They deserve it.
Which is why many of them were delighted when the city of Lisbon came to a standstill in November. I was attending the Web Summit conference, on a bus headed to a private dinner where the prime minister of Portugal was slated to make an appearance. Police motorcycles, their sirens blaring, surged through gridlocked traffic as caravans of entrepreneurs and investors tried to keep up. Our busses zipped down winding cobblestone hills, darted against traffic on narrow one-ways, and careened around stopped vehicles in the middle of intersections. The rest of the city waited for us to pass.
“I feel like an asshole,” I said to the men seated around me. It seemed wrong to create a massive traffic jam so we could zoom through the fast line. “Move aside, losers!” the sirens screamed in my head. “These techies have a special, fancy palace dinner to get to!”
“This is awesome!” one of the techies exclaimed. A police escort—what an Insta-brag! (#VIP #BallerStatus.) He and the others leaned toward the windows, phones extended.
Over the years I’ve spent chronicling the ups and downs (but mostly ups) of the startup world, I’ve witnessed plenty of over-the-top parties, publicity stunts, and gift-lavishing. “This is why they hate us,” I used to joke. But in Lisbon, I realized the joke was true.
Evidence is mounting that that the world is no longer fascinated with Silicon Valley: It’s disturbed by its callous behavior. But it will take a massive shift to introduce self-awareness to an industry that has always assumed it was changing the world for the better. Cynics would argue it doesn’t matter. The big tech companies are too big to fail, too complicated to be parsed or regulated, and too integral to business, the economy, and day-to-day life. We’re not going to abandon our cell phones or social networks. This is how we live now.
But even if things stay the same inside the Silicon Valley bubble, change is coming from the outside. Critics from the government, the media, and watchdog groups are calling for regulation, be it antitrust, compliance, or transparency around advertising. Some execs are beginning to acknowledge their personal roles in the shift. But for a lot of them, it’s business as usual. They are still preparing their apocalypse bunkers. They’re still privately wondering if the sexual harassment accusations are turning into a witch hunt. They’re still hiring models to fill their holiday parties. They’re still one-upping one another at Burning Man. They’re still asking if it’s possible do something, and not whether they should.