Glenn Kelman Continues to Prove Sanity Exists in the Tech World

Posted on February 15, 2008
Filed Under Valley Drama |

Redfin CEO Glenn Kelman has an interesting post that continues to prove he just might be the most sane player in the tech space these days. In “How Green Was My Valley,” Glenn discusses Seattle in the context of how it’s different from Silicon Valley.

He makes some interesting points that are well worth noting here:

In reality, most places don’t even want to try to be like the Valley.

And this is what Michael loves about the Valley: that it calls out at dog-whistle frequencies to nerds across America, Russia, India and China. The single-mindedness of their migration belongs in National Geographic. My first roommate spent four years building a company in San Francisco without ever buying furniture. When his startup went bust, he packed for the trip home to Toronto the same day.

Failure to appreciate a lake is viewed by many Seattleites as a sign of mental illness. But the Valley’s monomania is really just a kind of pubescence. What else could account for the Valley’s self-righteousness, its congregations of frustrated dudes, its all-nighters, idealism, delusions of grandeur, mood-swings, longings, dramas, hero-worship and pranks? Anywhere else by contrast seems all grown-up.

No one in the Valley can afford to grow up. Just as stressful environments delay the onset of sexual maturity in marsupials, a high cost of living – a two-bedroom house in Palo Alto typically costs more than $1.5 million — prevents people from buying homes and having children. In Silicon Valley, Seattle’s 28 year-old family man is still working his tail off for a hit.

The chaos of newcomers and the desperation of those who want to stay make the Valley seem like a capital about to fall in a coup. Dingbat ideas are scattered like pennies on a sidewalk. Overlooking last night’s website launch is like showing up at a party with last year’s purse.

But being apart from Silicon Valley can give entrepreneurs the latitude to think about what works, not what’s fashionable. It was, at first, hard for me to break out of the Valley mindset. My initial question in setting Redfin’s course wasn’t “Is there a business here?” but “Is it cool?”

Because Redfin’s business — real estate — isn’t cool. And taking on the messy business of serving customers directly definitely isn’t cool. But some of the best – and most meaningful — new ventures may be the ones that combine old and new business models, experience and youthful recklessness, perseverance and opportunism. And it is these ventures that really seem to belong in Seattle.

I think Kelman makes some very valid points about Silicon Valley’s shortcomings. Just as Hollywood serves as a hub for the masses seeking fame and fortune in the entertainment business, Silicon Valley serves as a hub for the masses seeking fame and fortune in the technology business. And just like in Hollywood, the vast majority of those who come aren’t going to find it, primarily because they came for the wrong reasons.

Not surprisingly, of course, Michael Arrington at TechCrunch responds with a post entitled “An Outsider’s Flawed View Of Silicon Valley.”

He makes a number of points that are worth considering:

If you want a well balanced life, Silicon Valley is not for you. But if you want to change the world and are willing to do absolutely anything to achieve your dreams, there is no better place to be than here.

Personally, I’m sick of this “change the world” and “achieve your dreams” bullshit that seems so prevalent when discussing Silicon Valley. When you look at the total number of startups that have been launched in the technology space over the past decade and compare it to the number of startups that have gone on to “change the world” (by any reasonable measure), it’s clear that technology entrepreneurs would be better off simply hoping for a successful exit than a world-changing revolution.

Less-than-exciting developments in the oil industry, for instance, are more likely to “change the world” than a Silicon Valley startup, but of course these sorts of observations are overlooked because half of the people in Silicon Valley think that the Internet is the most important thing in the world.

Having literally tens of thousands of bright tech minds around you to listen to and challenge those ideas, as you do in Silicon Valley, gives entrepreneurs a critical competitive advantage.

Silicon Valley might have literally tens of thousands of bright tech minds that can help entrepreneurs, but this can also be a competitive disadvantage. There are smart crowds and there are stupid crowds, and sometimes stupid crowds are composed of smart people. Time and time again, Silicon Valley has been shown to act like a stupid crowd. When the money is flowing, as it is right now, startups that even Drama 2.0, a guy without a college degree, can spot immediate flaws in get money simply because they are in a “hot” space. As TechCrunch commenter Erik Schwartz points out, “Just because all the people you hang out with at Cafe Coupa love your product does not mean John Q. Public will give a shit.”

The truth is that Silicon Valley easily turns into a hub of irrational exuberance. Everybody starts jumping on a handful of bandwagons and the result is a cesspool of too many startups chasing the same dream.

The truth about Silicon Valley is that ideas matter more than anything. A Stanford (or even the occasional Berkeley) student with an idea can turn it into a Yahoo. Or a Google. Or countless other success stories. They are surrounded by people who want them to succeed, who are willing to give them money to support their ideas, and then help them grow it. There is no where else in the world quite like this place.

I always love it when Silicon Valley types talk about how any startup can become the next Google, Yahoo, etc. Sure, it can happen. But for every Sergey Brin or Jerry Yang, there are thousands of Stanford grads who aren’t billionaires. The Googles and Yahoos of the world are the exceptions, not the rules. Just as in Hollywood, a few people come and find stardom. The rest go home disappointed. It’s the technology world’s American Idol.

If you don’t think you have what it takes to make it in Silicon Valley, maybe Seattle or other mini-tech hubs is the place for you. But the best of the best come to Silicon Valley to see if they’re as good as the legends that came before them.

This dick-swinging attitude is flawed. A person with the right idea, the right resources and the ability to execute can make it anywhere. There is no “best of the best” and if you’re trying to compete to see if you’re as good as the “legends” that came before you, you’re already on the wrong track.

True entrepreneurs solve real problems and create value. Wannabe entrepreneurs try to overcompensate for their small dicks.

The fact is that all those great things about Seattle, or wherever, don’t have a damned thing to do with offsetting the business and cultural advantages of Silicon Valley. Making lifestyle choices is fine, but don’t delude yourself into thinking those choices are anything but a tradeoff. If staring at lakes and skiing after work are important to you, don’t pretend to be surprised when your startup doesn’t cut it.

Work-life balance is important no matter what you do and there’s no reason that you need to sacrifice it. It’s unhealthy and the truth is that success and work-life balance are not mutually exclusive. In fact, having a good work-life balance is crucial to maintaining your happiness, and thus productivity.

If you’re working 16 hours a day, 6 days a week at an online video startup, for instance, that is competing against dozens of other funded online video startups, the fact that you’ve chosen to lead a workaholic lifestyle belies the fact that your startup is probably doomed because your startup is a copycat that isn’t doing anything unique and is competing in an oversaturated, overfunded market. The guy who is working 12 hours a day, 5 days a week at a startup actually building something useful, on the other hand, might be heading for a big payday while still having the ability to go skiing on the weekend. The point: there are no “business and cultural advantages of Silicon Valley” that offset the fact that a stupid, useless startup is probably going to fail no matter how hard its employees are working.

At the end of the day, I think this debate is close to moot. It’s about the concept and execution, stupid. It’s not about where you’re located. You can argue that Silicon Valley offers a range of advantages for technology entrepreneurs but for every advantage, there is a disadvantage.

The primary reason I would never consider going to Silicon Valley (beyond the fact that I plan to leave the technology business sooner than later) is that it’s so self-centered that it lacks perspective. Yes, there are bright, creative people there, but I’ve found that far too many people in Silicon Valley can’t see the forest from the trees and completely miss the big picture. That is, they have no ability to objectively analyze the world around them and relate their products and services to it. They’re trapped in a bubble creating bubbles.

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10 Responses to “Glenn Kelman Continues to Prove Sanity Exists in the Tech World”

  1. Cyndy Aleo-Carreira on February 15th, 2008 12:06 pm

    The Valley has become a clusterf&ck. I’ve personally witnessed two companies decimated due to the Valley VC mentality. Offices HAVE to be there (increasing burn rate). Execs HAVE to be there (see same). And everyone is so busy patting each other on the back for their coolness that Erik Schwartz is right in this instance; they have no idea anymore what will actually succeed because they are so out of touch with anyone not in the game.

    I think that Jeff Bezos might disagree with the mentality that you have to be able to make it in SV to have any decent success.

  2. Steve Brewer on February 15th, 2008 12:25 pm

    The next Google, HA! - in Seattle you could build the next Microsoft. What’s crazy is that the valley is so self-adsorbed they believe building the next google is more attractive than building the next microsoft.

  3. Grendel on February 15th, 2008 8:43 pm

    It’s classic head-in-ass disease.

    Maybe Revver wouldn’t have crashed and burned if Michael Arrington didn’t spend so much time wanking off on TechCrunch and actually thought about a business plan.

    Am I the only one who finds it ironic that the people who wax poetic about how the internet can bring everyone closer together and make the world flat also feel that you have to be there to be successful? The fact is that SV has no idea what will be successful and it’s completely scattershot. The fact that any of them succeed is more a function of statistics than good planning.

  4. Morgan on February 22nd, 2008 12:43 am

    Yeah, it’s absolutely hilarious that he’d be so defensive about a geographic location for an Internet business. You’d think he’d be the first to realize the irrelevance of location, he could retype and post those daily press releases to Techcrunch from anywhere.

  5. Dogtown on February 22nd, 2008 1:51 pm

    For the immediate future, the valley is the technology hub of the world. Now that Microsoft’s star is wanning, Glen Kellman is showing sour grapes… being in Microsoft’s shadow is indeed a cold place to be.

    The drama show is ridiculous in the way it tries to deconstruct the supposed Web 2.0 bubble… This is much the same vein a newbie podcaster proclaiming that Hollywood is dead. Google, Apple, Yahoo, Sun, Intel, Oracle, etc… are all HQ’d in the valley. Until the large concentration of tech companies with it’s large concentration of engineers start to dilute, the valley will be focal part of technology. Get over it. There is a reason why Myspace moved it’s development office to SF - not enough LA based programmers worth a damn.

  6. Drama 2.0 on February 22nd, 2008 2:08 pm

    Funny, Dogtown. Last time I checked, Google, Apple, Yahoo, Sun, Intel and Oracle weren’t standalone Web 2.0 companies and they certainly aren’t startups.

    Of course, I forgive the fact that you apparently can’t make the distinction between “real” technology companies that are actually valued in line with their revenues (i.e. Sun, Intel, etc.) and Web 2.0 companies that don’t generate much revenue but receive exorbitant valuations (i.e. Facebook, Digg, etc.). After all, you’re a senior engineer for a company headquartered in the Bay Area so I wouldn’t expect you to actually understand that the business of technology involves more than just technology.

    I also think you miss the point of my post so let me summarize it for you in engineering terms:

    if ($location == “Silicon Valley” && $idea == “stupid”) {
    $outcome = “failure”;

    if ($idea == “good” && $execution == “flawless”) {
    $outcome = “success”;

    On a side note, shouldn’t you be writing code right now instead of reading blogs?

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Drama 2.0 spikes the Web 2.0 kool aid by providing critical analyses of Web 2.0, its people, its startups and its impact on the world of media. Other topics are explored when Drama 2.0 has been drinking too much 1975 Dom Perignon. Read more about the Internet's version of Keyser Söze here.