The Silicon Boys: And Their Valley of Dreams

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Chapter I

Dreams

Once upon a time, but not that long ago, Silicon Valley was just a dry, sleepy patch of orchards between San Francisco to the north and San Jose to the south. Among the willow thickets near the shore and sunbaked chaparral in the foothills, apricots and cherries blossomed here, not a technological awakening that changed mankind. The Valley was brown, not the color of money. It wasn't even called Silicon Valley until the rise of the microprocessor in the early 1970s. It was just the Peninsula or South Bay. Now, "the Valley"-as those who know it call it-is an American icon, a Sutter's Mill for our time.

If the Valley were a nation, it would rank among the world's twelve largest economies. Back during the Cold War, the area ranked near the top of the Soviets' list of nuclear targets. But far more than the mother lode of economic miracles, fount of overnight millionaires, and international symbol of high-tech know-how, the Valley competes with Hollywood as a place in the culture of money and Celebrity, success and excess. Washington and Wall Street have been left gasping for air in the rearview mirror.

The Valley is otherworldly-a foreign land we know little about, populated by the gearheads we used to tease at recess. Now they're the ones who own the playground. The meek didn't inherit the earth-the geeks did. They live in the Valley so they can work there; you'd think it might be the other way around, given the spectacular setting. But the Valley is one giant company town. Anthropologists are studying it the way they used to look at Papua New Guinea; they know that the more rarefied the culture, the more itdevelops its own values. What do they find? Narcissism. Stuff like a hard-driving mother in one company-we'll call her Compulsive Cathy (not her real name)-whose two kids complained she wasn't spending enough time with them. One morning she had a few hours free, so she called for a "team meeting" with the children. They looked at her as if she were from another planet. Another sees herself as "project manager" for her kids. They wear pagers-just in case Mom's looking for them. At his therapist's suggestion, an engineer is writing a "mission statement" for his personal life. The newest-fangled anthropologists have taken to calling themselves "entrepreneurialologists" (which manages to use all five vowels even if it's not actually a word).

In Hollywood, everyone's got an almost-finished script in the top drawer; in the Valley, it's a business plan for a start-up they're convinced will make investors drool. Hollywood has agents, the Valley has venture capitalists; and between them, their attention span still isn't fifteen minutes. Every season, Hollywood has a new list of releases, while the Valley has new IPOs. Each loves its reborn stars: John Travolta and Steve Jobs. Commuting stinks in both. Bigger, better, faster, richer. The best dream wins-unless Disney or Microsoft gets involved and mucks it up.

Hollywood has Morton's, the Valley has Buck's (in Woodside, naturally); Spago has a chichi restaurant in both places. (Explaining why he opened in Palo Alto, rather than cuisine-happy San Francisco, Wolfgang Puck explained unpuckishly, "It's the demographics.") Eat a meal at any of them and you'll hear deal-making blather at a nearby table. In Hollywood, percentage "points" are the coins of the realm; in Silicon Valley, it's options. Variety runs the weekly box-office scorecard; The Wall Street Journal publishes twelve pages of stock quotes every day. Just as everybody in Hollywood knows Titanic is the No. I box-office hit in history, everybody knows that a dollar invested in 1995 in Cisco Systems (the plumbers for the Internet) octoplied three years later and that during one stretch of time in 1998, Yahoo did the same thing. Hollywood has two Lamborghim dealers, Silicon Valley has four. The buzzword "convergence" isn't about the Internet and cable and Ma Bell. It's about Silicon Valley and Hollywood: The animated movies out of Pixar now feature Steve Jobs as an executive producer and the premieres boast as many digerati as glitterati.

Big money, instant money: The industries may change, but entrepreneurs have always been after it. "Money is life's report card," is the saying of W. Jerry Sanders 111, CEO of Advanced Micro Devices, Intel's semiconductor arch-nemesis. One particularly good fiscal year, Sanders distributed profit-sharing in doubloons. Another time, when asked why he kept a black Rolls-Royce convertible in San Francisco and a white one at his Malibu beach house, he cracked, "So I can tell where I am in California." Next to Larry Ellison, Jerry Sanders is the nattiest titan in the Valley. The stripes in his pinstripe suits say, "Jerry Sanders Jerry Sanders Jerry Sanders."

Even George Lucas, the creator of Star Wars, whose 2,000-employee empire north of San Francisco represents a kind of antithesis of Silicon Valley, has recently conceded a bit to the Valley money culture. Lucas is the sole owner of a multibillion-dollar, entertainment-technology conglomerate that consists of a film company, video-games division, and special-effects studio. He may buy top-of-the-line computers and software from the Valley, but he's steadfastly tried to remove himself from its ways Oust as he's kept out of Hollywood). He's never considered a public stock offering, he doesn't pay his people top dollar, and he stays away from the Valley's high-profile, high-adrenaline ways. Yet Lucas has now been forced to give senior employees stock options that would materialize if he ever sold out. Darth Vader would be proud.

Hollywood and Silicon Valley both think they're so savvy they can affect the national political agenda: Hollywood for social issues, the Valley on technology. Politicians humor the respective self-proclaimed expertises of Kim Basinger and Larry Ellison, but there's a simpler explanation for their frequent visits to California. And in the northern half of the state, when the Washington politicians need spending money, they've stopped bothering with the old biddies on Nob Hill in San Francisco. They go to the Valley where the cash is-money trees they can regularly shake down. Woodside and Atherton and Palo Alto have as many $1,000-a-plate political dinners as Georgetown and the Upper East Side of Manhattan. The tekkies think they're getting their dollar's worth on Capitol Hill-favorable bills on securities litigation, mergers, and trade barriers; often the goal is just to get Washington to stay out of hightech regulation-that is, unless it involves antitrust and Microsoft. Whatever their successes, if nothing else, the tekkies get great seats at...