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Business Impact

Less Money, Better Technology

Are the vast sums of money pouring into Net ventures creating innovators who lack the character to deal with failure?

Palo Alto, Calif.-Three-thousand-dollar mountain bikes line the wide sidewalks on this town’s main street. His-and-her Jaguars clog public parking lots. The local diner serves $100 bottles of champagne with burgers and fries. Three-bedroom, one-bath “bungalows” rent for $8,000 a month.

Those sound like Hollywood prices, but this isn’t Hollywood; it’s the heart of Silicon Valley. The stretch of land between here and San Jose to the south remains the world’s hottest hotbed for innovators in information technology. Yet today greed defines the life of this place, not inspiration or dedication, and that’s troubling.

When I moved to the Valley in 1985, it was a paradise for those, young and old, who wanted to invent the future. These self-styled pathbreakers had trouble tying a tie, and if they bought homes at all it was not to furnish them. Sure, engineers and marketers-the twin pillars of Silicon Valley’s wealth-wanted wealth: fair pay and stock options. But the task of “getting it and spending it” took a back seat to “making it,” and “it” usually was a thing that worked, a machine with a soul, or at least an innovator with one.

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Most machines have no souls anymore because their innovators have sold theirs. So much money is pouring into Silicon Valley that the hunger is gone. People don’t play for the fun of it, the joy of it, the glory of it any more. University graduates, fresh on the payroll, talk about how quickly they will make their first 10 million dollars. A mere million is no longer cool. Not when a modest tract home in south San Jose-the sort of place a schoolteacher might own in Oklahoma City-costs that much.

No one really knows how the passion for instant wealth will influence innovation.Wealth isn’t the enemy of invention, just as necessity isn’t always its mother. The history of invention is rife with bold thinkers and brave doers who built great things and never got their just rewards financially. But the other extreme holds now. Any electrical engineer from Stanford or MIT can haul down big bucks and support a lifestyle better suited to Elvis Presley.

Easy money makes the tough choices even tougher for innovators. Easy money creates a culture where people will cut corners because showing up counts for more than putting on a good show.

If this stands, watch out. Innovators in the fields of computers, software and the Internet have been spared the product blowbacks that bedevil other industries-so far. For instance, when Firestone’s tires began to fail on Ford cars, people actually died, and Firestone had to replace millions of tires: a grim reminder that technologies do fail regardless of good intentions.

In the world of Internet time and e-commerce, the possibility of disastrous failure has been removed from the lingo and the mindset. The best and the brightest face only “challenges” today, and the worst that ever happens to them is a “setback” for which they are nonetheless rewarded. Failure, in short, no longer humbles innovators. It should. But how can failure humble a multimillionaire, especially one whose riches were built without scoring a hit product or service?

Easy money, I fear, is turning innovators into show horses, ready to jump on command but lacking the character to deal with the inevitable downturns. Sated on riches, obsessed with equity portfolios and charitable donations, high-tech innovators no longer think they need to accept the costs of failure.

We are accustomed to technologies soaring onward, relentlessly delivering the “new and improved,” but this is not always the case, and computer innovators will learn this sooner or later, as engineers in the field already have. Someday, the Web world will suffer its own equivalent of the blown tire that led to the grounding of the Concorde. When this happens, will the pooh-bahs of the Internet have the honesty of the British and French officials who revoked the Concorde’s flightworthiness certificate? I’m afraid they won’t, and one culprit will be undeserved riches, which have made tough choices that much tougher. Less money, better technology. Less money, more inspiration. Less money, more honesty.

Walking down the streets of Palo Alto, dodging the fancy bikes, I catch snippets of overheated conversations and entertain the thought that I am on the wrong side of history. Hey,maybe there’s nothing wrong with Dom Perignon and fries. But living well can betray the artist in us all, and savage the rare creator. So in Silicon Valley-and the many boomtowns it has spawned-the inventor who played for glory is a vanishing species. Now they only play to win. Andall for the sake of an overpriced bungalow.

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