How Silicon Valley Culture Led To A Bank Run Pt. 1

Silicon Valley Bank Sign

The Silicon Valley Bank (SVB) debacle has my head spinning in so many directions over the last week or so I have been having a difficult time putting it all into words. But here goes, dear reader.

I had a front-row seat for the first time our intrepid tech gurus faceplanted, the Internet bubble of the late 1990s. I was employee number four at an Internet startup, jumping on board in late 1998. These were halcyon days, my friends. Silicon Valley declared that they had completely destroyed the old economy and created a new one where the lowest-rung employee at could get 500,000 stock options and become a millionaire.

This was the cover of Wired magazine in late 1997.

Godzilla on Wired magazine cover with headline "Here Comes the New Economy"

Yeah, that sort of happened, but not how they envisioned it. I heard a tech conference speaker in late 1998 boldly declare that behemoths like Walmart and Target were going down because most of the economy would be online-based. Not “the companies that can’t adjust to the Internet will die” which really did happen. But, because the tech bros were so clever, there was no conceivable way a bunch of rubes from Arkansas (Walmart) could beat them.

Walmart laughed, made adjustments to its business model, and gobbled some of them up. But at the same time, there were mammoth success stories, like Amazon, which I am so old I remember when they were a humble online bookseller out to destroy the nice lesbian-owned indy bookstore with the two cats. Store cats did indeed lose their jobs as humans lost their stores as Amazon (and Walmart) grew and expanded what they sold. I could write an entire blog post on how giant stores both brick and mortar and online have decimated a lot of local culture, but that is for another time.

My theory about how the tech world got so powerful is pretty much that the rest of the world got these dazzling gadgets dropped into the world and *some* of the first wave of tech leaders became fantastically wealthy. So, everyone took them seriously and bowed to them.

The first wave of Silicon Valley’s march to power receded when the bubble burst. Back in my first-wave Internet days, I remember going to’s holiday party soon after they did an IPO and their stock price leaped into the hundreds, and there were plenty of drunk people giddy about their new-found wealth. In 365 days, their stock had plunged to under 10 and soon they went bye-bye.

But the techies never went away. The Internet steadily grew, and more and more people became connected. By 2006, 73% of all American households had an Internet connection. Then the iPhone and social media happened, roughly around the same time, and we had another big boom.

All this time, Silicon Valley developed into a sort of cult. There were gurus, like Mark Zuckerberg, Mark Cuban, Elon Musk, etc. There were sacred incantations, like “move fast and break things” and “disruptive technology” and “it is easier to ask forgiveness than ask permission.” These people also had some very odd ideas. I encountered a lot of libertarians and Ayn Rand proponents. I remember talking to a person at a Pittsburgh tech event who was telling me that making money is a spiritualist endeavor, a peak level of holiness, in this grotesque amalgamation of libertarianism and 80s-style New Age bullshit. I thought he was a random looney tune until I began to notice this strange argument pop up in places like tech event presentations and comment sections.

The most sacred of these beliefs is the tech people had the True Knowledge not just for their own success, but for a better society. People would defend Steve Jobs’ disdain for being charitable by declaring that giving the world the iPhone was enough goodness. Yikes, right?

They were the disrupters who were Sticking It to the Man. Apple became their denomination, Jobs became the high priest. They were the cool, nice dudes who were smart and just plain better people, and well, the corporate types who were still using PCs, well, they were uptight, not very clever, and kinda shitty people. Unfair? My goodness, you must have never seen the I’m a Mac and I am a PC commercials that were perfectly done by Justin Long as Mac and John Hodgman as PC.

They were the Wise Ones who were giving us “game changers” that were Making the World a Better Place. Cures for formerly incurable disease? Solutions for global hunger? Ideas to end poverty?

My goodness, no. Those are silly and pale in comparison to apps for your iPhone that help you order pizza.

This obsession with cool and image and “vibes” as being very important extended to more than just conference keynotes and TV commercials, even after it was clear that they were no longer the “disrupters” fighting the powerful old guard, but grew so much they became the Old Guard itself. That idea of “cool tech bros” merged with the idea of “we are changing how money works” thinking from the late 1990s to become a way of doing business, even banking.

The “bros” part is also an aspect of Silicon Valley’s problem. Female representation is not great in the tech world. There has always been an aspect of High IQ Adolescent in the Valley, and Ew Ick Girls They Can’t Code is still a mindset that won’t go away. On other diversity issues, tech is also not great. At the 2015 SXSW conference I attended, I went to see Jesse Jackson and Van Jones speak on tech diversity issues. It was very poorly attended, and the sight of about 100 people in an auditorium that holds 2,500 spoke volumes about how much the tech world cared about diversity and inclusion. Not all that much has changed, really. Silicon Valley continues to be rather monolithic.

To be fair, there are wings of the tech world that are not like this. Educational technology, which was what I worked in for 14 years, is more about understanding how to fit the tech into the current system and improve it, not destroying the old model. But it is hard to deny this is where the tech world is in 2023 and they themselves have become The Bad Guys. The Valley does not have a great reputation with the general public. Some of their superstars are flat-out repugnant, like Musk and Peter Thiel, and shady at best like Mark Zuckerberg. They seem ultra-dismissive about non-technology concerns ranging from people losing their jobs due to their technology to the basic right to privacy, often sounding like sociopaths when asked about these real issues. Tech people should not be surprised that recently, a certain Superman uber-villain was portrayed as a tech bro.

So, what does this all have to do with the collapse of a bank? See Part II, which I will publish here at First Draft on Monday.

The last word goes to John Mellencamp.



One thought on “How Silicon Valley Culture Led To A Bank Run Pt. 1

Leave a Reply