How Silicon Valley is finally growing up (sort of)

It’s still the land of opportunity, but now it’s confronting the human cost of its success. The new buzzwords: responsibility and empathy.

Read Caption
Fueled by snacks, energy drinks, and diet soda, students from Singapore’s Nanyang Technological University develop ideas for an augmented reality app for photographers during a hackathon in Santa Clara.
This story appears in the February 2019 issue of National Geographic magazine.

Teslas jockey for one of 12 electric-vehicle charging stations in the parking lot. A sea of mostly men gathers in the lobby of the Computer History Museum, some giving each other quick hugs. “How’s my investment going?” one shouts to another across the room. A bell chimes, and it begins to feel like church. The boisterous crowd files quickly into the auditorium and becomes quiet. The doors close. Demo Day is about to begin.

Over the next two days, entrepreneurs from 132 start-ups pitch well-rehearsed two-minute spiels about how they are going to change the world. Turns out, there are countless ways to do that. Radar sensors on bedroom ceilings in nursing homes. Drones that check utility lines. Machine learning for cargo shippers. A laundry-detergent subscription service aimed at men.

On average there’s a future billion-dollar company in every group, Michael Seibel, CEO and partner at Y Combinator, tells the Silicon Valley investors. “Your job is to figure out which one it is,” he says. His firm helps entrepreneurs develop their ideas.

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The first publicly traded U.S. company worth a trillion dollars, Apple has set the pace for innovation in Silicon Valley and continues to expand its influence. Its new headquarters building in Cupertino, which opened in 2017, is known as the “spaceship.” About 12,000 employees work there, less than half of Apple’s Bay Area staff. Recently Apple also has been a critic of Silicon Valley, advocating for customer privacy with jabs at other tech companies.

Minds, Money, and Machines

Evolution of

a Revolution

It’s been 80 years since a start-up called Hewlett-Packard was dreamed up in a Palo Alto garage. The networks fueling the subsequent rise of Silicon Valley have included not just those connecting our ever smaller devices

but also the networks of innovators who’ve made it all happen.

43%

Of U.S. venture capital into the internet goes to Silicon Valley

50b

Devices will be connected to the internet by 2020

Analog to

Wireless

Transistors to

Smartphones

From room-size computers to pocket- size smartphones, our technology is getting smaller and more powerful.

Electrical signals of ones and zeros move faster and faster over expanding networks.

1950

0.25

inch

telephone

transistor

Computers “talk” over phone lines through modems originally developed for transmitting Air Force radar signals.

Newly invented

transistors replace

vacuum tubes and

are the first step to integrated circuits—

arrays of densely

packed transistors.

Professors to Coders

From academics such as Frederick Terman—who first encouraged students

to start electronics firms—to today’s

CEOs in hoodies, Silicon Valley’s leaders have been networking.

Shockley Semiconductor Laboratory brings transistor technology to Silicon Valley. A few years later, eight engineers leave to form Fairchild Semiconductor.

ElectronicS Firms

Frederick Terman

knowledge

exchange

Stanford University

Shockley

Semiconductor

departed

Shockley Eight

founded

Fairchild

Semiconductor

Military Money to Venture Capital

Tech dollars flow after electronics

companies such as Hewlett-Packard

win military contracts over

East Coast rivals in 1943.

MILITARY/

VENTURE

CAPITAL

1960

0.1 in

Integrated Circuit

arpanet

Stanford Research Institute is one of

the first two nodes of the U.S. government’s ARPANET, later known as the internet.

Texas Instruments’

Jack Kilby and Fair- child Semiconductor’s Robert Noyce invent the integrated circuit,

or “chip.”

Fairchild Semiconductor is an incubator for talent that leads to more than 120 spin-offs, building a family tree of risktakers and company founders.

Fairchild

Semiconductor

departed

fairchildren

founded

Gordon Moore

Robert Noyce

founded

firms

firms

intel

Venture capitalists start to invest in the region, often sitting on boards and advising firms.

Shockley defectors, including Moore,

form a new transistor company, Fairchild.

VENTURE

CAPITAL/IPO

1970

ethernet

apple-1

Local-area networks

The Ethernet standard is developed at Xerox’s PARC, connecting computers and

printers over local-

area networks.

Apple-1 is one of

the first personal computers; video gaming begins.

Friends Jobs and Wozniak attend meetings of the Homebrew Computer Club and start to work together on what will become the Apple-1.

Steve Jobs

Former

employee

Steve Wozniak

Nolan Bushnell

founded

apple

atari

oracle

3com

Xerox’s PARC lab creates a graphical user interface, with windows and menus, that inspires the Apple Macintosh.

Xerox’s PARC

VENTURE

CAPITAL/IPO

1980

192.168.1.0

tcp/ip

Connecting networks

The TCP/IP standard states how networks should talk to each other, laying a foundation for the internet and World Wide Web.

IBM PC, Apple

Macintosh, and Sun-1 workstations become common.

Doug Engelbart of Stanford Research Institute develops an “X-Y position indicator” that will later be known as the “mouse.” The technology is leased to Apple.

Cisco

adobe

The first cyber­criminal hacks into Lawrence Berkeley National Laboratory.

VENTURE

CAPITAL/IPO

1990

www

websites

First public access to the internet

WWW “browsing” software is available from several sources. The most popular early browser is Netscape Navigator.

The World Wide Web (WWW) is born.

Start-ups take advantage of their proximity to Silicon Valley’s venture capital, law, and public relations firms, further raising their profiles in the national consciousness.

Larry Page

founded

Sergey Brin

Stanford students Larry Page and Sergey Brin invent Google in their dorm rooms.

google

Ebay

netscape

The first private companies attempt to capitalize on the World Wide Web.

paypal

VENTURE

CAPITAL/IPO

2000

192.168.1.0

ipv6

Seamless connection

Each internet-

connected device needs an address; the IPv6 system is created to expand address space as it runs low.

Apple unveils the iPod

and iPhone; Google creates the Android phone.

Mark Zuckerberg and Jack Dorsey create technology that shapes our lives and connects us but that also raises privacy and other concerns.

Mark

Zuckerberg

founded

Jack

Dorsey

founded

facebook

twitter

Uber

whatsapp

tesla

Silicon Valley’s leading internet companies are publicly traded on the stock market.

Venture Capital and IPO

23andme

VENTURE

CAPITAL/IPO

2010

Internet of things

The Internet of Things concept

refers to a network of devices connected to

the internet and each other, such as

your phone and thermostat.

The IPv6 system can cover up to 340 undecillion (trillion trillion trillion) addresses. 4G mobile networks increase their reach, allowing an explosion of mobile-device use.

Scientists are able to store massive amounts of data on synthetic DNA.

Anne Wojcicki’s 23andMe decodes family history; pools of genetic data help advance medicine.

Anne Wojcicki

VENTURE

CAPITAL/IPO

The symbol of Silicon Valley creativity—the humble garage—is attached to million-

dollar homes.

Manuel Canales, NGM staff. Patricia Healy.

Art: Matthew Twombly

Sources: Martin Kenney, University of California, Davis; Dag Spicer, Computer History Museum;

PwC/CB Insights

Minds, Money, and Machines

Evolution of a Revolution

It’s been 80 years since a start-up called Hewlett-Packard was dreamed up in a Palo Alto garage. The networks fueling the subsequent rise of Silicon Valley have included not just those connecting our ever smaller devices but also the networks of innovators who’ve made it all happen.

43%

50b

Of U.S. venture capital into the internet goes to Silicon Valley

Devices will be connected to the internet by 2020

Analog to Wireless

Transistors to Smartphones

Professors to Coders

Military Money to Venture Capital

From academics such as Frederick Terman—who first encouraged students to start electronics firms—to today’s CEOs in hoodies, Silicon Valley’s leaders have been networking.

Electrical signals of

ones and zeros move

faster and faster over expanding networks.

From room-size computers to pocket-size smartphones, our technology is getting smaller and more powerful.

Tech dollars flow after electronics companies such as Hewlett-Packard win military contracts over East Coast rivals in 1943.

Computers “talk” over phone lines through modems originally developed for transmitting Air Force radar signals.

Shockley Semiconductor Laboratory brings transistor technology to Silicon Valley. A few years later, eight engineers leave to form Fairchild Semiconductor.

1950

Shockley

Semiconductor

0.25

inch

ElectronicS Firms

departed

Frederick Terman

telephone

transistor

Shockley Eight

knowledge

exchange

Newly invented transistors replace vacuum tubes and are the first step to integrated circuits—arrays of densely packed transistors.

founded

Stanford University

Fairchild

Semiconductor

Stanford Research Institute is one of the first two nodes of the U.S. government’s ARPANET, later known as the internet.

Fairchild Semiconductor is an incubator for talent that leads to more than 120 spin-offs, building a family tree of risktakers and company founders.

1960

departed

Venture capitalists start to invest in the region, often sitting on boards and advising firms.

0.1 in

fairchildren

founded

Robert Noyce

arpanet

Integrated Circuit

Gordon Moore

founded

Texas Instruments’ Jack Kilby and Fairchild Semiconductor’s Robert Noyce invent the integrated circuit, or “chip.”

firms

Shockley defectors, including Moore, form a new transistor company, Fairchild.

intel

firms

The Ethernet standard is developed at Xerox’s PARC, connecting computers and printers over local-area networks.

Friends Jobs and Wozniak attend meetings of the Homebrew Computer Club and start to work together on what will become the Apple-1.

1970

Nolan Bushnell

Steve Jobs

Former

employee

founded

atari

Local-area networks

ethernet

apple

founded

3com

apple-1

Steve Wozniak

oracle

Apple-1 is one of the first personal computers; video gaming begins.

Xerox’s PARC lab creates a graphical user interface, with windows and menus, that inspires the Apple Macintosh.

Xerox’s PARC

The TCP/IP standard states how networks should talk to each other, laying a foundation for the internet and World Wide Web.

1980

Doug Engelbart of Stanford Research Institute develops an “X-Y position indicator” that will later be known as the “mouse.” The technology is leased to Apple.

192.168.1.0

Connecting networks

Cisco

tcp/ip

adobe

IBM PC, Apple Macintosh, and Sun-1 workstations become common.

The first cyber­criminal hacks into Lawrence Berkeley National Laboratory.

Start-ups take advantage of their proximity to Silicon Valley’s venture capital, law, and public relations firms, further raising their profiles in the national consciousness.

WWW “browsing” software is available from several sources. The most popular early browser is Netscape Navigator.

1990

The first private companies attempt to capitalize on the World Wide Web.

Larry Page

First public access to the internet

www

Ebay

websites

google

founded

netscape

Sergey Brin

paypal

The World Wide Web (WWW) is born.

Stanford students Larry Page and Sergey Brin invent Google in their dorm rooms.

Mark Zuckerberg and Jack Dorsey create technology that shapes our lives and connects us but that also raises privacy and other concerns.

Each internet-connected device needs an address; the IPv6 system is created to expand address space as it runs low.

2000

Silicon Valley’s leading internet companies are publicly traded on the stock market.

founded

Mark

Zuckerberg

192.168.1.0

Seamless connection

ipv6

founded

facebook

Apple unveils the iPod and iPhone; Google creates the Android phone.

Uber

Jack Dorsey

whatsapp

twitter

23andme

tesla

The IPv6 system can cover up to 340 undecillion (trillion trillion trillion) addresses. 4G mobile networks increase their reach, allowing an explosion of mobile-device use.

2010

founded

Scientists are able to store massive amounts of data on synthetic DNA.

Anne Wojcicki’s 23andMe decodes family history; pools of genetic data help advance medicine.

Anne Wojcicki

Internet of things

The Internet of Things concept refers to a network of devices connected to the internet and each other, such as your phone and thermostat.

The symbol of Silicon Valley creativity—the humble garage—is attached to million-dollar homes.

Manuel Canales, NGM staff. Patricia Healy. Art: Matthew Twombly

Sources: Martin Kenney, University of California, Davis; Dag Spicer, Computer History Museum; PwC/CB Insights

First up is Public Recreation, which offers group workouts in parking lots and other open spaces to exercisers who pay a subscription. “Our secret sauce is, we don’t pay rent,” says one of the founders.

Is that a big market, I wonder as everyone claps. And what about rain, snow, insects, and high-pollen-count days? But we’re on to the next big idea—container optimization for ports using predictive algorithms. The hush in the room is respectful.

During my years as a reporter writing about Silicon Valley, I’ve learned to stifle the urge to guffaw at business ideas. Billions have been made on start-ups I dismissed as toys, solving problems I didn’t know people had. Maybe if Plan A doesn’t work, Public Recreation can switch to Plan B, like Justin.tv, which started by live-streaming the antics of one person, Justin, then anyone, and then turned into Twitch Interactive, which enables one to watch others play online games. In 2014, Amazon bought it for $970 million.

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Maggie Ford, engineering director of the Stanford Solar Car Project, demos a solar car with her team at a September activities fair at Stanford University.

Silicon Valley is a place that is always “fleeing into the future,” says Paul Saffo, a longtime Silicon Valley observer. The entrepreneurs pitching on this Demo Day paint a picture of lives made better by artificial intelligence, augmented reality, robots, drones, and sensors everywhere.

Silicon Valley’s optimism and the pragmatic dreamers who keep it going have long fascinated me. But recently there’s been a sobering-up of sorts.

Responsibility and empathy are the new buzzwords. Silicon Valley knows it is being held accountable for everything: the demographics of its workforce, the industries upended and the pain caused by technology, the hate spread faster because of its social networks, and even the effects of innovation on people here. Even some workers with six-figure incomes have trouble affording housing. And around the world in places such as Bolivia, mining the lithium needed to power the devices Silicon Valley invents is raising concerns about exploitation and the environment.

Technology rules the future, but there’s also a grudging acknowledgment that sometimes in the pursuit of making things better and more efficient, you may be hurting people along the way.

“We are surrounded by people who are dreaming big,” says Anne Wojcicki, co-founder and CEO of 23andMe, the personal-genomics and biotechnology firm. “The reality of Silicon Valley is on the right side of history—whether we like it or not, the world has changed. But those transitions can definitely be hard,” she says. “I think we have a responsibility to all those places that are being impacted.”

Everyone has a dream

“Where is Silicon Valley?” out-of-towners ask me when they visit. There’s no capital city or ground zero. There’s no Hollywood-like sign in the hills announcing Tech Town! With low mountain ranges to the east and west, Silicon Valley is a horseshoe-shaped flatland of offices and neighborhoods. Dazzling at the center are the waters of San Francisco Bay, indifferent to the roar of the traffic clogging the roads or the latest breakthrough from Elon Musk, the chief executive of Tesla and SpaceX. I point visitors to the Facebook thumbs-up “like” sign, next to the company’s expanding headquarters. Facebook doesn’t offer tours, nor do most tech companies.

Of course, that “like” sign might not make everyone happy. We know Facebook’s data policies failed to protect users after a researcher sold personal information that was later used to target us with political ads, and Russian operatives stoked political hostilities in the United States by using Facebook as a propaganda arm. Tech’s epicenter might be the site in Mountain View where one of the inventors of the transistor started a company, a place that Apple co-founder Steve Wozniak visited just to touch the building and see the historical marker there. It can be found in a home on a cul-de-sac in Los Altos, where an Indian-born software engineer tucks her kids into bed and gets back online to work on her start-up. Or it can be found in a recreational vehicle with three flat tires parked near Stanford University, where Jim, a Marine Corps veteran and handyman, lives with his dog, Smokey, and bathes each day with hand wipes.

It’s a much different place from what it was in 1982, when National Geographic wrote about Silicon Valley’s “freewheeling egalitarianism that has replaced the rural pace” and said, “this dynamic growth happens behind a deceptively sedate facade … a monotone sprawl of low, rectangular buildings on which corporate nameplates display fusions of high-technology words that give few clues as to what goes on inside.”

Along winding roads in the surrounding hills where deer feed, one can imagine the people here living at a rural pace. Once the home of apricot and plum orchards, the valley has just last year seen the shuttering of a landmark cherry stand and the closure of Orchard Supply Hardware, which was founded in San Jose during the Great Depression. Yet Silicon Valley can fool you: It looks egalitarian, open, and casual, with CEOs in hoodies and venture capitalists in bike shorts, and it is often whimsical, with workplaces that require people to remove shoes or allow them to bring their dogs.

But it’s serious about its ambition. “People are more interested in your start-up than your actual name,” complains Tristan Matthias, 24, an Australian visitor.

The seeds of Silicon Valley’s appeal today began in the early 1990s. As a reporter arriving then, I thought the place felt kind of dead. The decline of the defense industry at the end of the Cold War and a downturn in the economy resulted in layoffs throughout California. The hot categories were desktop publishing, multimedia CD-ROMs, and video games.

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Dressed as a mermaid, Heather Jenkins dances at a morning alcohol- and substance-free party in San Francisco, Daybreaker, designed to energize attendees for the workday.

Even the great rebel—Apple—seemed to be in decline. Steve Jobs was gone, having left in 1985 after a dispute with the CEO and board; his triumphant return to the company he founded would happen more than a decade later.

An idea was spreading in the mid-1990s: If people could be connected through computers, lives would change. I visited a school that was trying out connected computers with its students so teachers could send messages to parents through a dial-up modem. America Online appeared with its idea of a digital mall you could visit and order flowers from. It was clunky and hard to use, but something big was percolating.

There was a party happening to the north, in Seattle. Microsoft was making computers useful and becoming rich. In August 1995, Microsoft seemed like the winner in a winner-takes-all tech contest. Its executives danced at midnight outside electronics stores, celebrating the launch of the operating system Windows 95. Meanwhile a bomb of sorts was going off in Silicon Valley.

Netscape, which made “browser” software that allowed users to move around the internet, went public less than a year after its signature product was released. Although Netscape was an unproven company with pages of risks outlined for investors, its stock price closed at $58.25 on opening day, giving the company an instant market value of $2.9 billion.

Netscape’s initial public offering (IPO) was the beginning of what came to be known as the dot-com boom, which saw the creation of great lasting companies such as Amazon and Yahoo!—as well as firms that cratered, such as Webvan and Pets.com.

Excitement over what could be done on the internet—sell makeup, rent trucks, find dates, and more—fueled a speculative stock market. In 1999 more than 400 companies, most of them tech related, went public.

Then the market crashed in 2000. More than 200,000 jobs were wiped out.

Embarrassment. Suffering. And yet: “All those start-ups were right,” Wozniak, Apple’s co-founder, told me. “They were all right about what the internet would do for us. It’s just that you can’t change your ways of life that quickly.”

The High Price of

Living High Tech

Silicon Valley, nicknamed for its early days of silicon-chip innovation and manufacturing, has grown from a techie outpost around Palo Alto to a sprawling Bay Area region of high-tech industries and ever higher housing prices that’s known globally as the ground zero of our digtal age.

Detail

below

San

Francisco

Oakland

San Jose

20 mi

20 km

A typical single-family home costs

about $1.3 million in San Francisco and $750,000 in Oakland—prices perhaps within reach for tech workers earning $123,000 annually on average but not for service-­industry workers making $30,000.

Median sale prices of existing single-family homes, 1975–2017

(inflation-adjusted 2017 dollars)

$400,000

0

1975

San Francisco-

Redwood City-

South San Francisco metro division

1985

U.S.

Oakland-

Hayward-

Berkeley

metro division

1995

San Jose-

Sunnyvale-

Santa Clara

metro area

2008

housing

market

crash

2005

2015

0

$400,000

$800,000

$1.2

million

Estimated

monthly

mortgage cost*

Based on median

home sale prices,

August 2018

Median rent

list price

2-bedroom unit,

September 2018

$5,592

$4,720

SAN FRANCISCO

$88,000

Median household income (2012–16)

$2,938

$2,950

OAKLAND

$58,000

$4,257

$3,000

SAN JOSE

$90,000

*Estimate based on A 30-YEAR FIXED-RATE

MORTGAGE WITH A 20% down payment and

4.75% interest rate (DOES NOT INCLUDE PROP-

ERTY TAXES OR HOME INSURANCE)

CRADLE OF INNOVATION AND INEQUALITY

The High Price of

Living High Tech

Silicon Valley, nicknamed for its early days of silicon-chip innovation and manufacturing, has grown from a techie outpost around Palo Alto to a sprawling Bay Area region of high-tech industries and ever higher housing prices that’s known globally as the ground zero of our digital age. Its universities, innovators, and entrepreneurs have transformed the area into a massive engine of wealth. But the prosperity has not reached all, and as the “valley” grows and continues to transform, it is deeply divided along lines of homeownership, wealth, and opportunity.

HOMEOWNERS

High price of entry

RENTERS

Search for affordable housing

Census block group with more owner-occupied housing units than renter-occupied housing units

Census block group with more renter-occupied housing units than owner-occupied housing units

Rental cost as a proportion of median household income (2012–16)

Median

home value (2012–16)

No residential housing

40%

or more

30%

or less

$1 million

or less

$1.5 million

or more

Estimated monthly

mortgage cost*

Based on median

home sale prices,

August 2018

$2,767

$2,250

Median rent

list price

2-bedroom unit,

September 2018

SAN LEANDRO

$64,000

Median household income (2012–16)

CRADLE OF INNOVATION AND INEQUALITY

The High Price of

Living High Tech

Silicon Valley, nicknamed for its early days of silicon-chip innovation and manufacturing, has grown from a techie outpost around Palo Alto to a sprawling Bay Area region of high-tech industries and ever higher housing prices that’s known globally as the ground zero of our digital age. Its universities, innovators, and entrepreneurs have transformed the area into a massive engine of wealth. But the prosperity has not reached all, and as the “valley” grows and continues to transform, it is deeply divided along lines of homeownership, wealth, and opportunity.

HOMEOWNERS

High price of entry

Census block group with more owner-occupied

housing units than renter-occupied housing units

Median

home value (2012–16)

$1.5 million

or more

$1 million

or less

RENTERS

Search for affordable housing

Census block group with more renter-occupied

housing units than owner-occupied housing units

Rental cost as a proportion of median household income (2012–16)

40%

or more

30%

or less

No residential housing

Estimated

monthly

mortgage cost*

Based on median

home sale prices,

August 2018

Median rent

list price

2-bedroom unit,

September 2018

$2,767

$2,250

SAN LEANDRO

$64,000

Median household income (2012–16)

Drag to explore

Detail

below

$4,257

$3,000

San José

State University

$9,473

A closer look at poverty

Poverty rates in Bay Area regions

can be nearly 19 percent, double the

official rates, according to the Califor-

nia Poverty Measure, an index that

factors in regional differences in

housing costs and noncash benefits

such as food stamps.

$5,467

Direction

of view

SAN JOSE

$90,000

$3,100

San Francisco

$3,350

SANTA CLARA

$103,000

$7,094

42 miles

(68 kilometers)

CUPERTINO

$148,000

$4,632

$10,349

$3,600

San Jose

$2,690

SUNNYVALE

High-tech hub

Thirty-three Fortune 500

companies, including Facebook,

Apple, Netflix, and PayPal, as well

as other top high-tech companies,

are based in the Bay Area.

Wealthy enclaves

Many of the most expensive

homes are nestled among the

foothills on the peninsula.

Several tech-giant headquarters

are a short commute away.

FREMONT

$112,000

MOUNTAIN

VIEW

$109,000

$3,727

$4,500

$2,470

PALO ALTO

$137,000

EAST

PALO ALTO

UNION CITY

$92,000

Stanford

University

$2,754

MENLO PARK

$2,210

ATHERTON

HAYWARD

$68,000

REDWOOD CITY

Lower rents but poorer renters

Rents are cheaper in Oakland than

across the bay in San Francisco, but

residents’ typically lower wages trans-

late into a higher portion of their

earnings going toward housing costs.

Counting the costs

A typical single-family home costs about $1.3 million in San Francisco and $750,000 in Oakland—prices perhaps within reach for tech workers earning $123,000 annually on average but not for service-­industry workers making $30,000. The highest home values of all are in Atherton, with a median approaching $7 million. Compare that with the median cost of a home in the U.S.: $217,000.

$2,767

$2,250

$5,676

$3,730

SAN LEANDRO

$64,000

SAN MATEO

$96,000

Controversial commute

Some argue that shuttle services

that help tech workers commute

to the suburbs are further exacer-

bating housing costs in urban areas

such as San Francisco.

OAKLAND

INTERNATIONAL AIRPORT

San Francisco Bay

$4,257

$2,600

SAN FRANCISCO INTERNATIONAL AIRPORT

$2,950

$2,938

$4,757

$3,400

Median sale prices of existing single-family homes, 1975–2017 (inflation-adjusted 2017 dollars)

ALAMEDA

$83,000

UC Berkeley

Higher rents but richer renters

Although mostly covered by rent control laws,

San Francisco is still among the most expensive

rental markets in the U.S. Wealthy renters are

often able to spend less than 30 percent of

their income on rent.

OAKLAND

$58,000

$5,091

SAN BRUNO

$89,000

$3,100

2008 housing market crash

$1.2 million

SOUTH

SAN FRANCISCO

San Jose-

Sunnyvale-

Santa Clara

metro area

San Francisco-

Redwood City-

South San Francisco metro division

BERKELEY

$70,000

$5,592

$4,720

San

Bruno

Mountain

$800,000

Oakland-

Hayward-

Berkeley

metro division

SAN FRANCISCO

$88,000

Founts of innovation

Students and graduates from

Stanford University and the Uni-

versity of California, Berkeley

have a long history of entrepre-

neurship in the region. Since 2009,

they have founded nearly 3,000

companies and raised more

than $63 billion.

Treasure Island

$400,000

United States

Angel Island

Alcatraz Island

*Estimate based on A 30-YEAR FIXED-RATE

MORTGAGE WITH A 20% down payment and

4.75% interest rate (DOES NOT INCLUDE PROP-

ERTY TAXES OR HOME INSURANCE)

GOLDEN

GATE

PARK

GOLDEN GATE BRIDGE

0

2015

1985

1995

2005

1975

Silicon Valley has its own words that turn failure into something positive. “Iteration” means getting a product on the market without worrying about perfection—the tweaks can come later. “Pivoting” (said without embarrassment) is sharply changing course before the money runs out.

Failure and downturns clear the way for new ideas and new entrants. Google occupies part of what was once the site of Silicon Graphics, Inc., a computer company whose co-founder helped start Netscape. Facebook has updated the old Sun Microsystems campus as it has grown. The attempt to link the internet and television was a bumpy ride. But then YouTube showed up.

The social media era launched. Facebook co-founder Mark Zuckerberg moved to Palo Alto to grow Facebook with its hacker creed “Move Fast and Break Things.” In San Francisco a group of friends and co-workers found a way for people to give updates throughout their day in 140 characters, and Twitter was born.

The great churn of Silicon Valley masks what happens to individuals. For many, innovation’s great “creative destruction” cycles are not observed from 30,000 feet but are wrenching on a personal level. Jobs lost. Skills made obsolete. Households and families upended.

Apple offered another template: the comeback. With Steve Jobs back in the driver’s seat in 1997 after the company bought the other firm he started, NeXT, Apple began a slow recovery. The company released the iPod and then its digital entertainment store, iTunes. The iPhone launched in 2007, delivering on the promise of General Magic’s Magic Cap and Apple’s Newton more than 10 years earlier. Fast-forward to today, and tech companies are grappling with their dramatic impact on people’s lives. Their leaders have been called to Congress to testify about the use of customer data, the ways foreign actors have used these prized technologies to disrupt elections, and potential bias in the algorithms that control what we see.

With the advent of artificial intelligence—computers learning to think like humans—data (with its partner, computational speed) has become the most important resource. The new oil. If computers can “think” one day and make decisions, then what?

After more than 3,000 of Google’s employees signed a letter in protest, the company chose to not extend its contract with a Department of Defense project that uses artificial intelligence to analyze drone images. Then, in November, 20,000 Google employees worldwide walked out to protest the company’s handling of sexual harassment and pay-equity issues. Salesforce created an Office of Ethical and Humane Use of Technology following criticism of its contract with U.S. Customs and Border Protection.

I visit John Hennessy, a former president of Stanford University and now chairman at Alphabet, the parent company of Google. He is congenial but not in a relaxed, academic way. The tech industry’s current moment of reckoning is spurring deeper questions about Silicon Valley’s purpose, he says.

“The tricky thing right now is for companies to figure out how they’re going to take responsibility and govern themselves in ways that are seen as aligned with not just the interest of their shareholders but also the interest of society broadly,” he says.

The start-up life

The young out-of-towners keep coming.

“You sit in a coffee shop and hear a pitch and people talking about crypto and Google, and that’s a turnoff for some people. But I like it,” says Shriya Nevatia, a product manager from upstate New York who left Boston after graduating from Tufts University.

In three years in Silicon Valley, Nevatia is on her third job. “It sounds bad, but I prefer tiny start-ups,” she says.

In a leafy Palo Alto neighborhood, Joshua Browder sits poolside at the home where Facebook’s Zuckerberg stayed in the summer of 2004 as the social media site was taking off. Inside the house, Browder’s colleagues work at a dining room table on his company’s app—DoNotPay—which is like a robot lawyer fighting parking tickets and finding price loopholes for airline and hotel bookings. The condition of the kitchen—a pan caked with tomato sauce—is just part of the gestalt of the hacker life: living, working, eating, and sleeping in one place as they race to launch the product. The past and present are entwined in tech legends—people who live, work, and invest in tech. Wozniak is a sought-after speaker, getting well over a thousand invitations a year. Part of his appeal is that he’s the “other Steve” in Silicon Valley’s favorite origin story, the creation of Apple. Woz, as he is known, may be a genius, but he sees himself as a regular guy. He retells one of the most famous stories about himself: Around the time of the company’s IPO in 1980, he sold some of his Apple stock at pre-IPO prices to about 80 employees.

“I have a lot of concerns about the distribution of wealth,” he says.

The ‘bro culture’ endures

This is Immigrant Valley today as much as Silicon Valley. The influx of foreign-born people is helping to offset an outflow to elsewhere in the U.S. In some fields, such as computers and mathematics, foreign-born workers now make up more than 60 percent of the workforce. The figure is even higher for women in those fields—78 percent are foreign-born. Indians, Chinese, and Vietnamese are the main groups of foreigners in the region’s tech industry, but people come from dozens more countries: There were 42 people from Zimbabwe working in tech in 2015 and 106 from Cuba.

The international nature of Silicon Valley means companies, even small ones, have become a jumble of cultures and languages. But it also highlights who isn’t making it into the Silicon Valley dream. On average African Americans and Latinos combined make up just 12 percent of the workforce at major tech firms. Women also are vastly underrepresented in what has been called Silicon Valley’s “bro culture”: Slightly more than 30 percent of the workforce at Google, Apple, and Facebook is female. A survey released last September found that women make up just 13 percent of start-up founders and hold only 6 percent of founder equity.

But women are also slowly gaining traction. In 2018, women made up 24 percent of technical jobs and 18.5 percent of firms’ leadership, according to a survey of 80 U.S. companies by AnitaB.org, a nonprofit that works to increase women in tech fields.

When it comes to pay, women in tech are offered less than men more than 60 percent of the time for the same role (with an average gap of 4 percent), according to a report by Hired, a job-hiring firm. Major tech companies say they want more diverse teams, but it’s hard to change employee demographics quickly.

“I’ve heard young women say Silicon Valley is bad for women, and they brace themselves for it,” says Shriya Nevatia, the product manager, over a cup of tea. She has created a group called the Violet Society to help women and nonbinary people during the first 10 years they are in tech, to help get start-ups going. She’s intrigued by the wide networks men have developed during college, through roommates, and in their early careers. Companies, seemingly founded through what seem like chance connections, actually arise from these networks. “We need more women for happenstance,” says Nevatia, who wants to bring women together in the same way.

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Imelda Valencia spent time living in a trailer parked on a friend’s driveway, because her job cleaning houses in Atherton, one of the most expensive U.S. zip codes, pays barely $600 a week.

Squeezed by the boom

As out-of-towners continue to pour into Silicon Valley, driving up real estate and rental prices, many people here who aren’t part of the tech economy—and some who are—see life becoming more difficult, mostly because of the rising cost of housing.

No place is perhaps more squeezed than East Palo Alto, a city of about 30,000 with formidable neighbors: Facebook is just to the north, and Google is to the south. For the past 50 years, the city largely has been a mixture of African-American and Latino families. Now new families, many white and Asian, are moving in. The median home price has already passed one million dollars—up from around $260,000 in 2011, according to Zillow. One million. That’s what passes for affordable housing along the peninsula that stretches from San Francisco to San Jose.

For many longtime residents here who haven’t enjoyed the current tech boom, rents have escalated, and buying a home is out of reach. They move out to the edges of the area, driving for hours each day to and from work. Or they move in with family and friends. Or they leave the area altogether. “They are building one-million-dollar homes right next to homeless shelters,” says Pastor Paul Bains, who with his wife, Cheryl, runs a human-services nonprofit in East Palo Alto.

Patricia Carter lives in East Palo Alto and has a full house: her grown son, his three young daughters under four, and her daughter, plus her son’s ex-partner, who lives in the garage and pays rent. Carter, a UPS driver, faced the threat of foreclosure on her three-bedroom ranch-style home, bought in 2003 for $447,000, but with help was able to save her home.

Michael Seibel, the CEO of Y Combinator, sees a roughly generational shift in Silicon Valley today. Younger workers want their companies to hire diverse employees and act with a bigger social conscience. Firms, desperate to hold on to talent, are falling in line.

And what about his purpose? After graduating from Yale University, Seibel planned to spend his 20s making money, his 30s being a parent, and his 40s going into politics. He moved to San Francisco in 2006 and started a company. He was co-founder and CEO of Justin.tv and Socialcam. Socialcam was sold to Autodesk in 2012, and Justin.tv eventually became Twitch Interactive. Now 36, he just became a father. But politics are out; he feels he has more social impact now.

If Silicon Valley has a spiritual center, it might be the Internet Archive, a nonprofit inside a former church in San Francisco. Servers churn away day and night, archiving much of the public web in its many forms. Nearly every Wikipedia article. About four million tweets a day. More than a half million YouTube videos a week. It’s archived more than 340 billion web pages. The internet’s lost and found.

Fog blowing in through open windows keeps the archive’s servers from overheating.

Scattered among the pews in the archive’s Great Room are more than 120 three-foot-high statues of people who have contributed at least three years to the archive. The internet’s terra-cotta army. I recognize some of them in this eerie but powerful scene.

It’s kind of creepy, these lifelike statues, some holding a book or a cup or a guitar, as if they were interrupted while working on a project or taking part in a sing-along. Or, perhaps, while arguing with each other about the right thing to do.

Michelle Quinn is the Silicon Valley bureau chief for Voice of America and has covered the region since 1994. San Francisco–based photographer Laura Morton is the winner of the 2018 Canon Female Photojournalist Award.