Opinion: Silicon Valley has become the land of no consequences

Photo credit: blamb / 123RF Stock Photo.

A man walks into his local bank and says, “I’ve had four amazing ideas and I raised US$5 million for each idea. They all went bust, but now I have this really truly special idea and I want US$5 million for this one.”

The bank manager says, “So basically, you have lost US$20 million of other people’s money?”

“Yeah, but they were amazing ideas,” the man says.

The bank manager says, “Next in line, please.”

The same man walks into his local early-stage VC firm and says the same thing.

The VC associate says, “So you successfully raised US$20 million of other people’s money? Please sign this term sheet here.”

The problem

For those who have been following the Silicon Valley news in the past weeks, a number of high-profile VCs have been outed for their inappropriate behavior and sexual harassment. The responses have been varied. Most of the accused have fessed up as gracefully as possible.

Some see the problem of sexual harassment as systemic while others are rallying around the home team, claiming that one bad apple shouldn’t ruin the bunch.

I, too, have been tracking these developments and tend to fall in the “cultural” camp. I see rampant sexism as something deeper than just one-off incidents by high-profile men. But I think the issue of sexual harassment is just one facet of a larger trend in the whole industry, particularly in the Bay Area.

More specifically, Silicon Valley has become the land of no consequences.

Over the last decade or so, the high-tech VC-startup culture has become one where ramifications for poor decisions are negligible. You can see it everywhere:

• The housing struggle and forced gentrification of San Francisco
• The housing crunch in the Bay Area that effectively locks out teachers, first responders, and even municipal employees
• The continued support for dubious products that clearly cater only to the top 1 percent without any consideration for the rest of the country
• The bizarre logic behind Google and Facebook’s support for increasing the toll on the Bay Bridge
• And yes, you can see it in the persistent sexual harassment, bubbling just below the surface.

I think the core of this is money—as it has always been. LPs simply don’t care that VCs are making bad business decisions. (Remember HomeJoy?)

What we can do about it