Everything you didn't realize you wanted to know about the denizens of Cerebral Valley
It’s incredible how much venture capital is being poured into a technology which experts in the field believe has a 10% chance of ending all life on the planet
The statement that in 2000s SF "tech wasn’t something you went into if you wanted to make a lot of money" is true only in a relative sense. Yes, there was a lot *more* money focus before and after. But it was pretty clear to a lot of us that if you got in early at one of the rocketship companies of that decade, it was a ticket to wealth, and that a lot of people were trying to get that ticket.
I interviewed at Google in 2004 and started in 2005, and this was very much on the minds of both interviewees and new Googlers. We were all conscious that the then-recent IPO was a Very Big Deal and we should care a lot about both the size and the strike price of our equity offer. One of the most frequently repeated pieces of lore was about the then head of engineering, Wayne Rosing, at the pre-IPO all hands threatening to take a baseball bat to the windshield of any excessively fancy cars he saw in the parking lot post IPO-- and though I wasn't at that all hands, I have it on excellent authority that this (the threat, not the execution thereof) actually happened.
You should have been here in the mid-90s before the dotcom bust. Early Wired magazine culture was full of genius dreamers and we built Hotwired (the first commercial website) created the free software movement which built Apache and most of Linux and started all kinds of failed and successful companies and ideas. Burning Man really took off after the whole staff of Wired went and then ran a whole magazine about it.
It was a pretty amazing time and we had our share of all night parties and rave camp outs. And while lots of people thought they were going to get rich, more were there to create something amazing. It did give me my first IPO though.
Most of what happened in SF in the early aughts was by those who survived the massive downturn after 2001. I was out of work for 16 of 21 months. By the time things took off again I was too old and settled down to enjoy it but I am glad you did.
It’s nice to see young people recreating the sense of possibility and excitement for their own era in their own way. Cook that you got to see that.
“… rising rents push more of the bohemians out of town every year.“
Moved to SF in 1990 onto to Oakland in ‘94. Moved into tech when working as a photographer at an ad agency in 95. Winkler was one of the first agency’s to go onto the web, they paid me more to do care and feeding of that than photography. Exit one creative into tech. Worked a few of start-ups in 98, 2000 and 2008. The money was better, by a lot.
My wife is a creative, a metal worker and jeweler. With each downturn she watched her sales go down even though there was always interest in her work. Similar story with most of the creatives in the east bay, where much of the art being created for Burning Man was done.
There was always the story of lots of money, it just only trickled to the creatives. Tech likes art, just does not want to pay for it. It’s why most of the artists have left the area, including us in ‘21 to New Mexico.
I lived in Silicon Valley in the early naughties, living a very normal life in a fairly normal company which did involve bars and restaurants, but not all night crazy parties in SF. I’m not sure what came out of the VC craziness in the area as I was exempt from all that in my 9-5 job. We did create the iPhone though.
Great writeup. There’s something a little too efficient about the lifestyle/career networking optimization you’re describing, but I wish them luck in having it all.
Bravo! Now just ask ChatGPT to rewrite it in the style of Tom Wolfe!
In the late 1990's I was living and working as a software developer in San Francisco. There were obviously plenty of stories of people getting financial windfalls during the IPO boom of that period, but most of the engineers I knew were first and foremost there because they loved the tech, and because engineering jobs were for the most part stable and paid a good salary - one that would allow for a perfectly fine upper middle class existence in a desirable city somewhere in the Bay Area. From the mid 2000's to the mid 2010's, I was working down in Silicon Valley and I would describe the tech scene in that period as almost aggressively normal. Everybody wore sneakers, jeans and polo shirts, nobody was overly political, and to the extent that there were subcultures they were around activities like road biking, home brewing, and digital photography. Sure, people would talk about what their favorite Thai restaurant was on Castro Street in Mountain View, but there was no snootiness about it. Companies would often host BBQ's on Friday afternoons in the summer, and people would stand around and drink beer from plastic cups. Sometimes one of the home-brewer hobbyists would bring a keg of their latest batch. Aside from the hours of my life I wasted commuting on I-880, I recall that time fondly.
In the mid 2010's I started working in San Francisco again, after a 10+ year hiatus. I was shocked at how the tech scene had changed. I was working for AWS and was deeply involved with the unicorn startups that were popping up like mushrooms, as they were all heavy users of AWS cloud services. Name a 2014-2018 vintage SF based unicorn startup and I probably spent time working with them. Two things I recall noting at that time were how perks were being showered on employees, and how there seemed to be a lot more arrogance and posturing. There were definitely people trying to cultivate a certain image or personal brand, and that was something I just didn't see very much in the prior decade working down on the peninsula. And then there was the money - gobs and gobs of money just flowing to the tech scene. I would read VentureBeat on BART on my way to the office each morning just to see which one of the AWS customers I was working with had newly raised a couple hundred million at a $1B+ valuation.
I left AWS after nearly a decade at the end of last year, and founded a startup with several ex-AWS colleagues. Several of us worked together in the AI/ML service team at AWS - in NLP, no less - so yes, my company is an "AI startup." As the "old guy" on the team I don't spend a whole lot of time in the bars or cafes where this AI subculture dwells. But I like the vibe I get from the startup scene in SF these days. It feels like the excess of the 2010's has been washed out, and the people who are still around are those that really like building stuff. I can see the contours of another "gold rush" forming, this time with AI technology. But right now, we're in that halcyon period where people are building cool stuff out of passion for the tech. I've got no doubt that if you're a young engineer working with AI, that San Francisco probably feels a lot like Hunter S Thompson described it in "Fear and Loathing in Las Vegas." I remember having the same feeling when I was in my early 20's during the internet boom.
It's an interesting culture but I wonder how likely they are to really make so much money. From what I can tell, AI tech is heading in the direction of being both highly centralized and surprisingly easy to use, which is a recipe for a tiny number of extremely rich people who happen to get first mover advantage in infrastructure (so, maybe OpenAI and a few early startups that build on them) and then a huge long tail of mostly failing startups with hopes and dreams but little profit. Think mobile apps: a small number of huge commercial successes, mostly in gaming, and then a bazillion trivial and clone apps duking it out for little bits of attention. Except that AI doesn't have a direct path to the gaming industry unless RPGs start using LLMs for their NPCs (now there's a pile of TLAs for you!).
The obsession with "safety" is also a major risk factor for these guys, at least it seems obvious from the outside. That obsession has already completely crippled Google and put it firmly in last place, alongside Facebook, which I admit is not a twist I saw coming. I wonder how many AI startups are going to self-destruct through in-fighting. Maybe it's an uneasiness with that possibility that leads to the (highly interesting, unexpected) coolness towards woke politics Noah is reporting.
I lived in Palo Alto (Byron St) in the early 80s, walked to the CalTrain Station through downtown, then rode the express train and Financial District shuttle bus to the 500 block of Sansome, where I worked. It was a very different era. Palo Alto was very quiet and not outrageously overpriced. The professional ranks were eclectic and interests ranged widely.
I'm one of the techies I suppose who's part of this AI subculture, but not in Silicon Valley because of life reasons (PhDing at CMU). I feel your article has captured the major cultural undercurrents pretty well and is pretty representative of my friends in industry and academia alike.
I do have a couple questions, maybe you can shed some light.
1. Why are the VCs so bullish on one specific paradigm (the flavour of the season appears to be Generative AI)? I see this sort of concentration is cyclic, Web3 and Self-driving were the big flavours earlier. Has the strategy shifted? I think I saw some articles about a16z moderate risk strategy lately.
2. What is your take and the estimate of the AI hype-train vs actual AI progress in terms of real life products? ML is certainly very critical already in many applications more subtly. I certainly believe we are at the cusp of the post internet age (my personal bet is on vision, ML and robotics), but I'm not certain how increasingly AI-first and automation products will be received by people and society.
These group houses remind me of the party scene in "All the Birds in the Sky", which more than anything, reminds me how uncomfortably accurate Anders' depiction of SF was (gets at the weird intersection between bohemian culture and tech culture), but also that this manifestation of "AI" specific houses isn't actually a divergence from the past. Scott Alexander's "Every Bay Area House Party" series (https://astralcodexten.substack.com/p/every-bay-area-house-party) is also wonderful
I live in Hayes Valley and on paper am part of this culture. It’s depressing how completely cutoff the tech/finance world is from the actual city of san francisco. An entire corporate playground has been built on top of a formerly cool city. What’s left is rich people paying for these “bohemian” experiences and a working class struggling to survive.
All the actual cool people live in Oakland now.
Noah can you write an article about AI and interest rates:
It's my belief that
1) AI will be a very powerful technology compared to competitors
2) Well-developed economies grow a slower rate as they move increasingly into a regime of diminishing returns.
3) So no giant economic growth is coming but there may still be a giant transformation of our society. (I.e. Markets are broadly right on this one.)
Palo Alto Cowboy