The Other Tech Bubble

Silicon Valley start-ups used to be everyone’s darling. Following the vilification of Wall Street in the aftermath of the 2008 financial crisis, the business media turned their attention to these young, dynamic tech firms that promised to change people’s lives for the better. Facebook was making the world more interconnected. Twitter facilitated communication among protesters during the Arab Spring. The media celebrated the quirkiness of start-up founders and the innovation-driven, nonhierarchical workplaces they created. That some start-up founders quickly became billionaires bothered few. These highly successful innovators were pursuing worthy causes, and they weren’t Wall Street bankers.

“Evidence is mounting that the world is no longer fascinated with Silicon Valley: It’s disturbed by its callous behavior.”

Public opinion about Silicon Valley tech start-ups began to shift dramatically in 2017. A series of scandals revealed Silicon Valley’s fault lines. Sexual harassment cases like Uber’s exposed Silicon Valley as a pervasively hostile work environment for women. Revelations about Facebook’s widespread collection of personal data and its role in helping governments censor political speech emphasized the immense influence these companies exert over people’s lives. A cheerful announcement by Bodega that its vending machines would soon replace neighborhood corner stores caused widespread backlash on Twitter and painted the company as arrogant and out of touch with people’s lives. The scandals have made venture capitalists more cautious about investing in Silicon Valley start-ups, knowing that their reputations might suffer. Furthermore, civil society organizations and governments are increasingly demanding stricter regulations for tech companies related to antitrust, compliance or transparency concerns.

“In 2008, it was Wall Street bankers. In 2017, tech workers are the world’s villain.”

Today’s big tech companies are no longer underdogs disrupting industries. They have become powerful economic forces in their own right. Yet few inside the industry are willing to address the issues that sparked the change in the public perception of the Valley. Technology companies continue to run their companies the same way as before the scandals broke. Industry leaders seem unresponsive to the negative headlines they receive – be that because they still believe in the righteousness of their companies’ mission or because they understand that their technology products have become an indispensable part of modern life. In turn, they will unlikely be able to resuscitate their image.