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Silicon Valley's Slaughterhouse
How venture capital fattened up startup culture to sell on the public markets — and brought out the bolt gun when things got tough
Elon Musk has threatened to sue the Anti-Defamation League for defamation, claiming that their accusations of anti-semitism (both from Musk and Twitter at large) have reduced advertising revenue by 60% and halved Twitter’s valuation. The ADL has been critical of Twitter for years going back as far as 2018, with two reports published this year painting a grisly portrait of what happens when you destroy the trust and safety features of a product used by hundreds of millions of people.
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Musk, fitting with the Silicon Valley culture that made him, is absolutely full of shit. Top advertisers have been concerned about Musk’s “racist rhetoric” since April, with McDonald’s (who have now returned to advertising on Twitter) CMO Tariq Hassan saying that Musk’s “willingness to leverage success and personal financial resources to further an agenda under the guise of freedom of speech” was to blame. Twitter’s valuation has tumbled since he acquired the company, and changing its name to X cost Twitter billions in brand value. The company’s CEO Linda Yaccarino has done very little other than tweet limp platitudes tied to obtuse metrics like “videos views being up 465% over the last 10 days” or chirping “did someone say sports?” with the empty excitement of somebody cashing a check and sitting around not doing anything because they’re bound by a non-compete agreement.
Musk is cruel, capricious, and joyless, a “builder” who doesn’t build anything, an “operator” who loans himself money from his own companies, and the true symbol of what Silicon Valley has become: a hollow culture that simply demands “more.” Silicon Valley’s leaders no longer write academic papers about the things they’re building or think about the societal implications of tech itself outside of whether it can raise venture funding or grow into something they can sell.
This culture grew from Marc Andreessen’s famous “Why Software Is Eating The World” essay, which claimed (ironically) that too much of the debate around software companies was in their valuations before spending thousands of words explaining why, in fact, software was extremely valuable and would “help the economy.”
While Andreessen wasn’t totally wrong — software would indeed bring “innovation” to industries like healthcare and education — his piece focused almost entirely on how this would help the economy rather than society. Andreessen wasn’t advocating for a tech industry that accelerates the development of the human race, or elevates the human condition. He wanted to (and succeeded in creating) a Silicon Valley that builds technology that can, and I quote, “eat markets far larger than the technology industry has historically been able to pursue.”
This, in my mind, began tech’s age of empty innovation, where software poisoned every aspect of our lives without making them appreciably better. Venture capital turned the tech industry into a machine that took regular industries and turned them into vending machines — billions of dollars into direct-to-consumer mattresses, subscription boxes, unprofitable apps that used cheap labor to do stuff for you, and cryptocurrency, an industry that monetized financial desperation and religious dogma by dressing it in the clothing of decentralization.
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Silicon Valley, despite being a supposed hub of innovation, one separated from the garish demands of regular industries, has culturally grown to resemble an open-air private equity firm where companies are incubated like animals bred for slaughter.
While I’m not saying the Valley is entirely bereft of innovation, the modern tech ecosystem has become an alternative asset market built to enrich the very same people it once claimed to reject. Fred Wilson, the co-founder of Union Square Ventures, said in 2016 that startups that took corporate money were “doing business with the devil,” yet the only remaining difference between the current state of venture capital and private equity appears to be how willing they are to say the quiet part (“we need to make money off of this investment”) out loud.
Silicon Valley’s key differentiator was that it was theoretically the place where venture capital took risks on interesting and innovative technology, yet the best-funded startups remain siloed in whatever industry venture capital believes will be “big,” even if they haven’t got any true path to profitability.
It may also be a result of the different incentives that bring people to the Bay Area and the tech industry in general. A decade ago, engineers made an average base salary of $92,648 versus $139,729 in 2023. The software industry has created 82 new billionaires since 2010, and the 2019 tech IPO rush created an estimated 5000 new millionaires across eight tech companies. In 2013, there were 39 unicorns (tech companies worth a billion dollars or more). According to CBInsights, there are now over a thousand of them. And because Andreessen and his fellow venture stooges forced so many lossy, unprofitable companies to go public, many of them are underwater (and they have been for some time), with the top 50 Tech IPOs since 2020 losing 59% of their market capitalization as of May 13 2023.
As a result, the Valley is left with the avaricious culture of the finance industry without any of the stability. Venture capital’s elite turned startups into alternative investments, fattened them up to sell, and, when the market dropped out in 2022 and 2023, shrugged their shoulders and blamed the workers. They, along with tech’s leaders, derided a culture of “entitlement” that they themselves created. Oh, workers want food at the office? They want a gym? They want a place to nap? Then why didn’t you fucking complain when companies started offering this shit back in 2015?
Because tech’s elite hates labor, and hoarding talent was a necessity to pump valuations. The tech industry — by which I mean the Valley’s powerful venture arm — spent a decade convincing software engineers that they were an elevated class, promising them the world and oftentimes delivering it without requiring them to build something that improved the world in any way. And the second the party ended — the moment that the economy stopped endlessly providing growth to every single company in the market, and when money stopped being free — tech was ready to eject tens of thousands of workers, and tech’s venture capitalists were ready to stop signing checks and start requiring “hard numbers” for the first time in years.
And the problem with an industry that is led and powered by venture capital is that it doesn’t build any real culture. “Startup culture” is a vague shibboleth that exists to justify labor abuse in exchange for a theoretical massive payday in the future, with the hollow premise that there is something more noble about writing code or “working at an early-stage company” than there is any other job. While there are people doing cool, weird or societally-beneficial shit, they are endlessly drowned out by a combination of founders trying to build “the next big thing,” with “big” referring to how much they can sell it for, and “thing” being “whatever is going to sell to someone.”
Sadly, the only way to reverse this trend is for venture capital’s incentives to entirely change, something that will not happen as long as we live in the era of growth-at-all-costs rot economics. While investors are now suddenly concerned about “market fundamentals” and profitability, it’s tough to believe that this represents a long-term systemic change, but rather empty platitudes designed to soothe the institutional investors and high-net-worth individuals that typically fill VC coffers. I’ve found no evidence to suggest that this sudden cautiousness is anything more than a momentary blip that will fade as soon as interest rates descend from their post-pandemic spike. It is — and I really fucking hate this term — virtue signalling.
Without real, long-term change, Silicon Valley will remain a decrepit West Coast version of Wall Street where innovation fights to be heard above the endless white noise of valuations and venture’s vultures.