Silicon Valley's 1%: Stinginess Is Not The Problem
Are the people who drive Silicon Valley a bunch of self-centered elitists? Let's debate business diversity -- not make gross generalizations about "the wealthy."
Wadhwa starts to drift into generalization territory when he piles onto the 1%ers, arguing that Silicon Valley tech companies "are also disconnected from the communities in which they live … aloof about the problems that the poor face. Very few help set up soup kitchens, build houses for the homeless, or provide scholarships for disadvantaged children." He goes on to say that "most startups focus on building senseless social media-type apps or solving the problems of the rich -- and that is what venture capitalists typically fund."
If "most" Silicon Valley start-ups are focusing on "senseless" social media apps and just trying to solve the problems of the rich, there won't be much of a Silicon Valley in five years. The evidence suggests otherwise. As of last year, VC firms had invested $31.5 billion in Silicon Valley tech start-ups, across 3,308 deals dating back to 2009, according to VC research firm CB Insights. Perhaps Wadhwa doesn't consider the robust VC and start-up activity around healthcare IT, mobility, cloud computing, and networking to be socially worthy. But it shouldn't be overlooked.
Meantime, how do Wadhwa and other critics, including Salesforce.com founder Marc Benioff, know that "very few" Silicon Valley tech companies are doing charitable work? My own San Francisco-based tech media and events company and its employees have supported various soup kitchens and home-building projects, but the world isn't privy to those efforts because they're not PR affairs. Could it be that lots of like efforts are happening under the radar across Silicon Valley?
And what of the enormous social good we do know about? Let's start with Benioff. Since he started Salesforce.com in 2000, the company's philosophy has been to donate 1% of its equity, 1% of its profit in the form of product giveaways or discounts, and 1% of its employees' time. Those donations have amounted to free or discounted products to more than 16,000 non-profits, 400,000 hours of employee community service, and more than $53 million in grants to The Red Cross, United Way, and other organizations, he says.
Benioff's old boss, Oracle founder and CEO Larry Ellison, takes heat in the media for spending lots of his wealth on America's Cup competitions and a Hawaiian island, but you may not know that his Ellison Medical Foundation has awarded nearly $430 million in grants since its founding in 1997, mostly in the area of anti-aging. Meantime, Ellison, like most Silicon Valley leaders, chooses to keep his extensive personal philanthropy private, including environmental work on that Hawaiian island. Outside Silicon Valley, Microsoft founder Bill Gates and the Bill & Melinda Gates Foundation are the most generous, influential philanthropists of our time, donating and marshaling tens of billions of dollars to raise healthcare, education, and living standards worldwide.
Is Vivek Ranadive, founder of Palo Alto-based Tibco Software, "disconnected" from the community he adopted to the east, Sacramento? When the NBA's Sacramento Kings were set to leave town for Seattle, poached by an investment group led by Microsoft's Steve Ballmer, the city turned to Ranadive, who led a group that laid out an NBA record $550 million to keep the Kings in Sacramento and build a new arena for the franchise. Ranadive has become a local hero, working with Sacramento mayor and former NBA guard Kevin Johnson. Ranadive and his partners will make some money on their investment, for sure, and Tibco's getting a lot of free publicity, but there's no ignoring what Ranadive has done to boost municipal pride.
I could go on with countless other examples of tech companies and their leaders making a difference outside of their commercial accomplishments. They're not exceptions. So many great things have come as a result of people striving not only to build great products and companies, but also to build great wealth for themselves, their families, and their shareholders. Yes, these individuals also have a responsibility to give back to society in meaningful ways. Most of them do, sometimes after they're finished building their companies and in ways you and I don't necessarily know about.
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