Sometime soon after the most recent financial crisis that threatened to bring down the entire global economy, I was sitting with one of the scary smart guys — Bradford Cross, who is co-founder and chief executive of Prismatic. We were talking about the changing of the guard in Silicon Valley. I called it the Hollywoodization of the technology ecosystem. Cross paused and looked at me in an intense-scary way (a look that he, by the way, has perfected), and said: “It is the next Babylon, man.”
He meant the Babylon in the biblical (though not literal) sense — a mystical, massive bustling city — and he was pointing to the San Francisco Bay area. It was also an apt metaphor for technology becoming the post-industrial, post-internet zeitgeist. That was brought home yesterday when Jeff Bezos bought that most venerable of institutions, The Washington Post.
A lot of ink (pun intended) has been spilled on why Jeff Bezos bought the Post, how much Jeff Bezos loves reading and what Jeff Bezos will do with the media company. The right question to ask is: What does it all mean? I read the news and thought to myself: As Amazon becomes the Wal-Mart of the 21st century and starts to compress the job market even further, it will need to have allies in D.C. to carry its water.
Last month, when President Obama visited Amazon’s warehouse in Chatanooga, Tenn., it seemed like a great photo opportunity, but it also sent a message about the increasing influence of Bezos & Co on future labor markets. If anyone thinks that Amazon’s attack on Wal-Mart, mid-market grocery chains and middle-of-the-road department stores isn’t going to cost retail jobs, I want to know what they are smoking — and I want some of it. Where Amazon puts its distribution center is going to be as much an economic decision as it is a political decision.
Bezos paid $250 million of his own cash to buy the Post, but that seems like money well spent. The reason rich people buy media is because they know that money can buy power and media can help reinforce that power. The allure of media to the super-rich is not that they want to set their media dogs on rivals — rather, it is a quieter power: Bezos effectively says to the political establishment: I own your hometown paper. I don’t need to live in your town, but I want to make sure you know who you are dealing with next time you have something to say about Amazon.
In some ways, Bezos’s $250 million outlay is the biggest gift to Silicon Valley. In buying the Beltway’s hometown paper, he very quietly is getting in the face of regulators and legislators and tom-tom-ing to them: The world is changing. Technology is part of that change. Don’t ignore it. Get with it, for society itself is embracing those changes. And what better way to deliver that message than to own the paper that sits in the Oval Office itself.
That conversation with Cross sticks in my mind so vividly because it bookends another thought from another era. In 2003, when Red Herring, the bible of the technology industry during the ’90s, shut down, I wrote its obituary, pointing to the not-so-slow permeation of technology into our daily lives. A decade later, thanks to the emergence of the iPhone, the catalyst and accelerator of anywhere computing, technology is so pervasive, so embedded in our lives that it is starting to impact how we live, work, create, consume and communicate.
Twitter and Facebook might not start revolutions, but they sure help shape the narrative of those revolutions. And in doing so they reinvent what it means to be media. Netflix takes attention away from the television and in the process reinvents what it means. YouTube is the new daytime TV — and it’s anytime. Uber and AirBnB are using technology to challenge preconceived notions of urban transportation and hospitality. Kickstarter and Indiegogo have become the new laboratories. The fact that my mother uses FaceTime with the dexterity of a 5-year-old without really having used a PC in her life is a sign that we are living in a society that has one foot in the industrial past and another in the new post-internet society.
For the past two decades, I have watched up close the transformation of technology and its geographical manifestation, Silicon Valley, from a quirky little outpost to bright lights, big city. The microprocessor, the microcomputer and the personal computer made a lot of entrepreneurs famous and wealthy. Some of them even became billionaires. One of them for a while was the richest man in the world. His main rival may have gone on to become the modern Disney, but they were really just outsiders — quirky and crazy and driven by a mission of change. Their fortunes grew at the speed of their business: the more PCs sold, the more valuable their companies and the higher their net worth.
The New New Metabolism
Then came the internet, and everything changed — it upped the tempo of innovation and altered the way technology interfaced with normals on a daily basis. It brought the computer (its good and its evil) out from the office and into the bedroom. The internet changed Silicon Valley, too. It helped create companies like Google and Amazon — outsized companies worth tens of billions of dollars at one point or another. And all this happened in relative short order. Facebook followed thereafter and accelerated change even further.
If there has been one big change in (the proverbial) Silicon Valley since the time I started chronicling its vagaries and wonders, it has been an increase in the metabolism of the technology companies. Today someone like an Instagram can come from nowhere and three years later be acquired for nearly a billion dollars and gather up more than 150 million people across the world to share their photos and videos for free. Snapchat is adding people to its network faster than Skype. (I know: not exactly apples to apples, but they are both communication applications.)
With the mainstreaming of technology, it seems that Silicon Valley has found the flywheel of creating growth and growing mega-fortunes. It is hardly a surprise that Silicon Valley is attracting pretty, bright, young things from around the globe much like starlets making a beeline for Hollywood. (Actually it is more like over-confident and overeager Harvard undergrads lining up for Wall Street interviews in the ’80s and MIT quants heading to the hedge funds during the aughts!)
As U.S. manufacturing went into a decline in the ’70s and lost its preeminent place in the world, the ’80s saw Wall Street emerge as the cynosure of mystery, power and money. Gordon Gekko was just a caricature of Wall Street and its role in society. The business press wrote about finance and then Wall Street became the story — the cultural zeitgeist. Fast forward to today, and the technology industry has the same heady mix of mystery, power and money. Of course, this time around we don’t need to invent fictional characters to exaggerate this bizarre world. Instead, Hollywood makes a movie about Mark Zuckerberg!
And the Rise of the Tech Tycoon
With the rapid growth of internet businesses, we are seeing the rise of the tech tycoon. While in the past many of technology billionaires (Larry Ellison notwithstanding) were reluctant to show off their wealth, today it is no longer gauche to be young and rich and somewhat brash in your own backyard.
Microsoft co-founder Paul Allen might have dabbled in sports teams and Bill Gates might have invested in fine art, but today’s techno-rich are looking for something else, something that puts them on a bigger stage. Chris Hughes, a gentleman among the Facebook alumni, bought the New Republic, a magazine that hasn’t been interesting in years. I don’t know his motivations — and I can’t find any apart from influence, given that he might make more profit from the interest on his personal holdings in a day than from that magazine.
Facebook’s meteoric rise has made Sean Parker a billionaire, and that is why he and his marriage are interesting to Vanity Fair, a magazine that relishes vapidity and nowness and knows a cultural moment when it sees one. It has showed up again, with its neon lights and its fog machines, so you know that they know that a new class of tycoons/moguls is rising from the Babylon by the Bay.
Bezos, too, is doing what tycoons do — buying instruments of mass influence.