Why No One Cried for Silicon Valley Bank's Customers

[marmar]

This article is from Big Technology, a newsletter by Alex Kantrowitz.


In the early 2010s, hundreds of technologists would pack New York University’s Skirball Center for the monthly New York Tech Meetup. At the event, local developers would show off their latest products. Depending on the slate, you might see new dating websites, funny weather bots, or Foursquare plugins that made you look busy while you did nothing.

The meetup had just one rule: Show the tech. Anyone with a long preamble got “Get to the demo!” heckled at them. Founders who discussed their VC funding got booed. There was a feeling that tech was there to be useful, be fun, and to challenge the establishment. How you made money was secondary.

The obsession with demos was natural in the early 2010s, when the tech business was much smaller. Back then, people used desktops more than mobile devices. Business school students preferred to work at banks. And Google’s market cap was less than $200 billion. Hoodies, not suits, ran the industry.

As the economic opportunity in tech grew though, things changed. Bankers and finance professionals, looking to reinvent themselves after the financial crisis, found the tech sector. They became CEOs and COOs as the developers stood back. The New York Tech Meetup started putting more finance people on stage. They talked about their funding. They got booed.

....(snip)....

But the tech sector, or at least parts of it, then trended into overfinancialization. Instead of thinking about what problems they could solve for people, some companies looked only at growth and margins. They became extractive. DoorDash, for instance, counted tips toward its minimum delivery worker payments, changing the policy only after an uproar. And as this happened, VCs—not builders—became the tech industry’s most recognizable names. .................(more)

https://slate.com/technology/2023/03/silicon-valley-bank-startups-vcs-tech-backlash.html

[CoopersDad]

1. While we were sleeping, the tech sector took over our lives and our democracy.

One prime example is with transportation, tech loathes public transit, preferring everyone to subscribe to apps for transportation services in self driving cars.

Even bike share systems track user data, which has more value than the revenue stream for use.

Amazon, Google, and Facebook didn't get rich on trading services or goods, they grew filthy rich on collecting your data.

Great article, K/R.

[Casady1]

3. There is a difference

between startups and Google, Amazon etc. Having been in the community since 2004 and I used to get paystubs from SVB, I think highly of the people in startups. Hard working and really liberal.

[Casady1]

2. Being part of tech startup community

I agree with his assessment. The typical startup is small people with a good idea. They needed to be bailed out. What was in SVB was their operating capital and they are responsible for almost all the software we see today. VC's are a necessary evil. Banks would never loan these startups money. Go watch Boogie Nights and Don Cheadle try to get a loan. This is what we happen to every startup in normal banking.