Gideon Lewis-Kraus on Silicon Valley

In Wired

Gideon Lewis-Kraus is really very good at long-form reporting. Really, very good.

It was an unseasonably warm December, and somewhere nearby a rising tide in the San Francisco Bay was lifting all kite-surfers, but Nick Edwards and Chris Monberg were crouched at opposite rented desks in a shared coworking space near the Caltrain station in SoMa wondering if, by the middle of February, they would still have a company. At the moment Boomtrain, as the startup was called, technically had something like negative dollars, because it owed the state of New York a $30,000 fine after its payroll company had been six weeks late in telling them about a $400 unemployment-insurance bill for one of their remote engineers. Boomtrain also had no revenue, though that was hardly a hurdle to raising investment capital in Silicon Valley. Somewhat more problematically, it didn’t have a single customer, though there were several pilots in the wings. Almost inadvertently, Nick and Chris had found themselves building a business of enormous complexity—a personalization engine, based on machine-learning algorithms—and they were in over their heads.

Neither man was having an easy time keeping it together. Chris was waking up every morning at 5 am grinding his teeth, and Nick’s belt was clearly two notches tighter than usual. They had not taken paychecks in months; they’d be lucky, in fact, if they ended up paying themselves $30,000 apiece for the year. Nick was making ends meet by Air­bnb-ing out his apartment a couple of blocks from their office and commuting an hour each way from his girlfriend’s place in Petaluma. Chris was leaning hard on his indefatigable wife. For this they had upended pleasant lives, and they could no longer quite remember why.

Nick, 32, has sandy hair prone to straw-pile disarray; he speaks in quick, tremulous bursts, and holds himself with a schoolboy’s fretful defiance. He and his girlfriend have a lithe golden retriever, Emmy, and Nick often seems less like Emmy’s owner than he does her bewildered, affectionate older brother. Chris, also 32, is a calmer presence, with sunken eyes, a shaved head, and a slow, soft, pressurized voice. His mien is both monkish and military, as if he ought to be wrapped in a dark tailored cloak.

Anxiety, as it had mounted steadily through the fall and into December, drove the two friends along opposite trajectories. Nick had become jumpier, more spastic, with the light threat that he might roll his eyes back into his head and faint; while the more out of control their circumstances seemed, the deeper and slower and more effortfully controlled were Chris’ voice and bearing. High-stakes entrepreneurship is an exercise in restraint, and Nick and Chris gave the impression of suppressing different things. Nick seemed as though he might at any moment unravel into fear; Chris, into anger. When Nick began to mutter imprecation—“fuck fuck fuck fuck fuck,” it went, almost Tourettically—Chris folded him into a stern bear hug. Nick is a fidgeter, constantly moving his cursor with his arrow keys and tapping his foot underneath his desk. Chris believes that what saved their relationship was moving to a carpeted office.

Silicon Valley is not a place where one is invited to show frailty or despondence. It is, as Nick puts it, “the place where everybody is killing it all the time.” This might seem peculiar, given that the lot of the small-business founder has always been a fragile one. But in recent years the Valley has successfully elaborated the fantasy that entrepreneurship—and, more broadly, creativity—can be systematized. This is the basic promise of accelerators (Y Combinator et al.), that success in the startup game can be not only taught but rationalized, made predictable. Starting a company was once an urge felt only by the blindly ambitious and slightly unsound, but in the Valley it’s been ostensibly transformed into a scheduled path one can simply elect and apply for, rather as one might choose law school or Wall Street. And the promise of professionalized entrepreneurship has had a particular allure in recent years, since finance has been tarnished and a career in law made increasingly uncertain. Starting a company has become the way for ambitious young people to do something that seems simultaneously careerist and heroic.

This daydream of constant killing-it has made it difficult to talk about how fearful and distraught the life of the founder can be. But over drinks with close friends—on that rare occasion when an early-stage entrepreneur has time to have a drink or see a friend—almost any founder will tell a story that much more closely resembles Nick and Chris’ than it does the story of your favorite billionaire, reverse-engineered to seem a neat matter of destiny. This is especially true today, in the era of what observers have come to call the “Series A crunch.” Due in part to the rise of startup accelerators like Y Combinator, as well as to the surplus capital washing around the Valley from recent IPOs, it has never been easier to raise a small amount of money. And it has never been easier to build a company—especially a web or mobile product—from that small amount of money, thanks in part to the proliferation of cheap, easy development tools and such cloud platforms as Amazon Web Services. But the amount of “real” VC funding (i.e., Series A rounds) to be allocated hasn’t kept pace. The institutions that write the big checks, those that might support and sustain real growth, can survey what a hundred companies have managed to do with a small check and put their real money on the propositions that promise the greatest yield and bear the least risk.

Nick and Chris no longer cared about “killing it.” They were too honest and too tired for that language and that posturing. At this point they just wanted to survive. They had about a month to raise $1 million or they would no longer be able to make payroll.


“It’s a story out of Dreiser,” said the intellectual historian Fred Turner, referencing the late-19th-century novelist who bleakly chronicled the exploitative early days of American industrial capitalism. The Dreiserian was a particularly strange mood to reconcile that day, given that it was winter and, on the way into Turner’s office on the Stanford quad, I’d picked one kumquat from a heavy bunch on a laden tree. “In Dreiser’s day it was the same,” he went on. “New York didn’t care about Chicago, but Chicago was where the hogs were being slaughtered. Now New York doesn’t care about San Francisco, but today the hogs are being slaughtered in San Francisco.” What Turner meant is that these are the charnel grounds of the new economy, and that there isn’t anything all that new about the new economy. Turner’s work, most notably his book From Counterculture to Cyberculture, has described the contemporary ethos of the Valley as a synthesis of Cold War defense research and the ’60s spirit of New Communalism, creating—in theory—a nonhierarchical, networked approach to business. But in practice, business in the Valley continued to run in a familiarly exploitative way. The Valley might not actually make much in the way of tangible goods, but like industrial centers before it, it’s the place where the astounding success of the very few has been held out to the youth in exchange for their time, their energy, and—well, their youth.

For that mild month of January 2014 I’d been renting a pallet at one of San Francisco’s many “hacker houses,” so that I might meet some of those hopeful youths and see how they felt about their odds. On Airbnb and craigslist and Facebook there are at least half a dozen of these shared living spaces, advertising themselves as frictionless on-ramps to Valley glory. “We’ve got guys from every great startup here,” the guy who ran the place said on the phone. “Square, Lyft, Uber, Dropbox, Twitter, Apple.” Securing a bed there required no fewer than three interviews over Google+ Hangout—one of them a “technical” assessment—yet somehow he couldn’t find a way to email a photograph of the available room. I arrived to find I was paying $1,250 for a mattress on the floor, behind a panel of imbricated torn shower curtains, in an unheated rabbit warren of 20 bunk beds under a low converted-­warehouse ceiling. Unmarked from the outside, it was located on a deserted block in the vaguely disreputable neighborhood west of SoMa and south of the Civic Center, separated from the Mission by little tent cities under the highway. To get inside, you had to pass through a bolted air lock piled with trash.

My cohort hailed from all over: Mumbai, Sydney, Hamburg, Appalachia. They’d been in San Francisco two days or two weeks; the longest-standing resident had been there about four months. At least at first, people referred to each other by vocation. There was the iOS developer from Houston: a shy, gangly, endearing kid just a few months out of an Ivy; he’d stayed for his degree, which he worried might seem démodé, but he was only teased a little by the higher-status dropouts. There was the bitcoin guy, wide-eyed with a bowl cut, who’d never before left his Appalachia backwater. And the Australian engineer who was starting an engineering employment marketplace when he wasn’t engaged in Tinder encounters.

Then there was the doctor, who slept on the other side of the curtain from me. A heavyset guy of 23, he’d woken up in Mumbai one morning and could not bring himself to clock in at the large municipal hospital where he worked. He’d always been a coder but had obeyed his parents and gone to medical school. By 9 am India time he’d completed the flophouse’s technical interview via Google+ Hangout and bought a ticket leaving for SFO that night. His parents said, “Why today? Why not tomorrow? Or next week?” But he knew if he waited even a day he’d never go. On his second day ever in America he had an informational interview at Google. He seemed disoriented but in good spirits. He slept without a blanket and with three different devices charging beside him on his bed, lined up like kittens sleeping at the teat. His girlfriend always seemed available for videochat sex. He was really considerate about the whole thing. He usually waited until he thought I was sleeping, and even then he used headphones. All I could really hear on his end was his muffled instructions, along with profuse apologies that he couldn’t be any louder. It occurred to me that his girlfriend was quite a good sport, since in India it was midmorning. I could tell he really missed her.

All these kids, who didn’t yet know what it was like to have a company of their own, or wind down a company of their own, or work for a giant company and ride the bus, seemed certain of one thing: that the longing for total revolution that had for so long been the hallmark of youth was, at last, about to be fulfilled. The only thing they could count on was that they were going to be the generation that partook of the process by which all would be rendered irrevocably different. It didn’t seem to matter what the difference was, or whom it helped or hurt. It just mattered that things in the future would be unlike anything we’d seen before. And that, in the process, they were sure, many of them would get very rich.


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