It has been a truly bizarre week. We’ve watched three banks die, and then a fourth bank almost died (Credit Suisse) before being scooped up by UBS for the rock-bottom price of $3.2bn. Credit Suisse’s fall from grace is especially remarkable given that it was once worth almost $80bn and had an impeccable reputation for safety, as with most Swiss financial institutions.
As of writing this, First Republic Bank’s future is “uncertain,” and I must be clear that I have had to learn so much about banks that I never wanted to know. I, like most people, assumed that banks were (after the 2008 crisis) not interested in playing stupid games for fear of tanking the entire economy. Sadly, they are part of the same growth-at-any-cost economy that has burned the heart out of startups, playing as risky a game as they can legally afford to with the assumption, again, like so many others, that nothing bad would ever happen to them.
People are justifiably frustrated at the fact that the world’s most powerful people are simultaneously incompetent and invincible, ever protected from the consequences of running a risky, rotten economy. And why wouldn’t they be? When the federal government started topping-up unemployment insurance benefits, raising the amount that recipients would get by $600 a week (which was then cut to $300), those on unemployment were demonized for depriving the labor market of willing workers, leading to the early dissolution of the program in many states. This, of course, did not actually work.
When the government even floated the idea of student loan forgiveness, wealthy scumbags crowed about how unfair it was that the taxpayer would somehow be on the hook for someone else’s decision-making. The fact that student loan debt is a crippling financial burden for millions - one that cannot be discharged through bankruptcy - was immaterial. So too were the credible allegations of price-fixing levied against some of the nation’s most prestigious schools, or the predatory behavior of many private colleges, which lumber lower-income students with unconscionable levels of debt but do nothing to improve their employability.
When workers had even the slightest amount of power, the media demonized them, claiming they were “quiet quitting” their jobs, despite going to said jobs and doing their work. At no point were corporations actually held accountable for treating workers badly, all while telling us that it’s good for more people to be unemployed because it drives down inflation, which, despite being caused by corporate profits, supply chains and commodity prices only ever seems to mean “corporations get to fire people and make things more expensive”
While all of this happened, tech experienced an incredible bull run, with big tech companies raking in hundreds of billions of dollars without, well, seeming to actually make the world better at all. In fact, the loudest thing that tech had to offer in this seemingly prosperous era was cryptocurrency, which was marketed as a way for the average Joe to finally have a shot at generating wealth. It was the same pitch used by rapacious pyramid schemes like Amway, Herbalife, and Lularoe, but disguised with the ostensible credibility of the technology industry.
Those who invested during the massive crush of crypto-related Super Bowl commercials have watched their investments crater every single day since. And I didn’t even mention the supposed boy genius at the heart of the decentralized economy (if that’s even a thing) was actually an unsophisticated and reckless fraudster.
The reason I’m walking you down memory lane is that I’ve had many conversations over the last week with people in tech that do not understand why people are angry at their industry.
For years the Valley has had an elevated status, forgiven for burning billions of dollars on speculative moonshot ideas because they were, theoretically, striving to improve society. We’ve spent decades lionizing startup founders for “taking the risk” to make something that would theoretically be worth billions, and applauded those who “made it” based on a vague sense that building something and selling it is somehow nobler or more worthy of praise than any other pursuit. In the grand societal hierarchy, we seemingly valued tech founders more than the people that take our garbage or serve us food, and many never questioned why. Perhaps people accepted that because their lives did become a little cooler. A speaker that could tell you the weather or control your lights. A doorbell that could let you see who was there. A car you could charge rather than gas up. A supercomputer that could fit in your pocket.
The problem is that it’s been a minute since we’ve seen anything new from tech that has truly improved most people’s existence. People have been able to justify the opulence and societal hero complex of the Valley because of the vague promise that life would improve as a result of giving them that space. Except the last decade of tech has been filled with broken promises: the average person was not enriched by cryptocurrency, virtual reality remains and broken, and autonomous cars have mostly resulted in a dangerous open-air beta test on the world’s roads.
What do people have to be excited about? The metaverse, a half-baked concept that is yet to be even quarter-delivered? Generative AI has some promise, but also has the potential to cause genuine harm. The average person’s life is changed when the things they do each day are both faster and better - and it’s hard to point to products that have meaningfully done that in quite some time.
I’ve also recently made the point that the tech regular people use has gotten significantly worse over the past few years. Google searches are obfuscated by sponsored results and SEO-gamed content, making it harder to find information. Facebook and Instagram prioritize ads over the things you actually want to see. Musk’s attempts to make Twitter profitable have made the site slower and harder to use (while also failing to make it profitable). Mobile gaming is almost entirely dominated by microtransactions. Amazon is a labyrinth of dodgy brands and confusingly-placed buttons. Netflix has become so obsessed with analytics that they’re better known for canceling shows and raising prices for a service that was once the default streaming platform.
Even Apple — a company with an unparalleled level of cultural cachet and admiration — isn’t immune from this downward spiral. In the decade following Tim Cook’s ascent to the top position, the company has aggressively sought to frustrate any kind of user-serviceability or upgradability, with the goal of making people buy more stuff. Once-replaceable components are now permanently soldered to the motherboard, meaning that if your SSD dies, you need to buy an entirely new computer — or otherwise pay Apple thousands for a new logic board. For reasons unknown, it links iPhone screens and cameras to the device they first shipped with, meaning that if you replace them with an unauthorized (read: non-Genius Bar) replacement, they won’t work properly.
This is from a company that endlessly crows about its environmental values. And I haven’t even mentioned the Butterfly Keyboard debacle, where it deliberately made its computers worse to type on and more prone to breakage, or the fact that it removed the ports that people actually need from its laptops, only backtracking slightly following the release of its post-2021 MacBook Pros, which re-added HDMI and an SD reader. Apple continues to follow Jobs’ “give the customer what they’re going to want before they do” mantra without considering that it may not know what that is.
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This isn’t about the validity of who does or does not get funding, or a startup’s worth. It’s about the fact that to the outside world, tech expects respect and status as its tangible contribution to society becomes more and more opaque. And when the bank that banked 50% or more of America’s startups collapsed, forcing the FDIC to rescue depositors, I would argue the loudest voices in tech didn’t act with gratitude or appreciation of how lucky they were, but with truculence and annoyance at those who would critique them.
Silicon Valley Bank treated tech workers with more respect than the average person would receive at a regular bank, including offering personal loans based on a person’s private company valuation and investments. And when your industry’s loudest mouths are uncharitable quasi-libertarian demagogues, it is hard to imagine why anyone wouldn’t feel scorn toward an industry that regularly gets to play by its own rules.
Steve Jobs, though a deadbeat dad and an abusive monster, unquestionably improved the world with the iPhone, using Apple’s outsized wealth and power to create an entire category. Mark Zuckerberg previously made a website where people could connect with each other wherever they were in the world. Elon Musk was a quirky weirdo that made a cool-looking car you could charge in your garage. Drew Houston made it so that we could share our files directly from our computer and send a link to someone else instead of relying on email or, worse still, FTP services.
The concept of startups being something that venture capitalists gambled money on didn’t feel quite as vulgar, because tech seemed to be coming up with reasonable yet expensive ways to improve our personal and professional lives. Whether or not these are actual heroes is somewhat irrelevant to the larger fact that you could point to rich and famous people in tech and at least understand why.
The problem is that the pace of innovation in tech dramatically slowed at precisely the moment that scrutiny grew. Facebook went from an enjoyable product that helped you speak to your friends to an advertising network that sometimes let you see videos they posted, one that also played a role in polarizing American politics for profits with disastrous consequences. Elon Musk has gone from a beloved “respectable” billionaire that made electric cars and rockets to a pathetic and creepy culture warrior that seems more interested in petty conflicts and the whims of an old man called “CatTurd2” than changing the world.
While one could argue Venmo, CashApp, and Zelle have all been transformative for the average person’s ability to move money, being able to easily access and move one’s money that one owns is not something that anyone should be particularly grateful for. The irony is that this all happened because the tech industry finally got the attention and respect it deserved, which in turn earned it the scrutiny and suspiciousness that any multi-trillion dollar industry should have.
This isn’t even necessarily a judgment of the tech industry as a whole - it’s more of an explanation as to why the general public just might have a bad taste in their mouth. Seemingly every major tech story of the past five or six years has been about the tech industry getting filthy rich while others suffered or losing unthinkable sums of money, with no counterbalance of “but at least we got this” to go with it. Tech’s heroes aren’t guys in turtlenecks who reveal the future in a cinematic presentation - they’re billionaire whiners crowing about “woke AI,” or buying up hundreds of acres of land in Hawaii, or claiming that remote work is bad after laying off thousands of people before taking a 10-day “digital detox” in French Polynesia.
Simply put, what is aspirational or inspirational about today’s tech leaders beyond the amount of money they make? The exciting thing about startups is (was?) that the average Joe could take the computer and make a billion-dollar program. There was a quasi-believable story that people - who were often weird, or awkward, or would have not succeeded elsewhere - were underdogs that hit it big through sheer force of will and skill.
Perhaps the problem is that tech has begun to painfully resemble the ways in which people in other industries get rich - by having the right connections or resemblance to other people rather than the best ideas or execution. This may have always been the case, too - it’s just that it was much easier to accept the beautiful lie when the heroes of the story weren’t so painfully villainous.
It was much easier to root for a youthful, awkward Mark Zuckerberg telling us we’d be able to connect with our friends than for the unfireable deca-billionaire that changed his company’s name to “Meta.” It’s much easier to believe that Elon Musk has “earned” billions of dollars when he’s contributing space-age electric vehicles and rockets rather than increasing the amount of anti-semitism online.
If tech wants to change its image, it has to recognize the amount of special treatment it’s received both in society and the media. It has to recognize that the most noticeable things it’s contributed in the last few years have been forms of societal division and upward wealth extraction. It has to recognize that the average person does not know what SaaS or an API is, nor that they should be “grateful” for software that makes things go a bit faster. If tech wishes to have an elevated place in society, it has to earn it, and it has to be grateful for it.