Silicon Valley’s elite is decidedly liberal, according to a new paper out from researchers at Stanford’s Graduate School of Business.
A survey of more than 600 well-to-do technology leaders and founders—most of them millionaires—revealed that these people overwhelmingly identify as Democrats and supported Hillary Clinton in the 2016 US presidential election. They value being cosmopolitan, entrepreneurial, and global; they are against authoritarianism. They support raising taxes on the wealthy (those making over $250,000 or $1 million a year) as well as federal programs that redistribute wealth and provide targeted aid to the poor. They have near-unanimous support for gay marriage and a majority favor gun control, oppose the death penalty, and are pro-choice on abortion.
But on one matter, these technocrats are not liberal at all: regulation.
Tech leaders are more hostile to regulation not just than other Democrats, but also most Republicans, the Stanford study finds. Eighty-two percent believe it is too difficult to fire workers and 74% would like to see labor unions become less powerful. Seventy percent believe the government should not regulate ride-hailing company Uber like its predecessor, the taxi industry.
“Don’t regulate and do redistribute” is an outlier position on the political spectrum, but it should come as no surprise in Silicon Valley. The startup profession is rooted in taking big, bold bets, and regulation can seem the enemy of innovation. Uber did not become the world’s most valuable startup, last valued at $68 billion, by following the law but by deliberately flouting it. The company trampled regulations designed to protect the establishment taxi industry in cities around the world to gin up demand for its ride-at-the-touch-of-a-button model, to great effect. The story is similar with Airbnb, which has spent years battling rules that protect the hotel industry, like a law in New York that outlaws home rentals of less than 30 days. Entrepreneurs who break the rules and succeed are elevated to a sort of hero status in Silicon Valley, where “move fast and break things” is a mantra.
Such brash approaches don’t always work out. The most famous recent example of a startup that flew too close to the proverbial sun is Theranos, which earned a $9 billion valuation with its promise of “breakthrough advancements” in blood testing. Theranos has since been accused of faking laboratory tests, fudging its financial projections, and violating federal rules for laboratories. It has closed facilities, laid off staff, and voided years worth of blood test results. Another is Zenefits, the fast-growing human resources startup that created a secret software tool to help its California sales reps cheat on a mandatory online training course for health insurance brokers. The scandal forced the resignation of Zenefits co-founder and CEO Parker Conrad, who became a poster child for “breaking things” gone wrong.
The trouble is that the line between success and scandal is never really clear, and can be perilously thin. Uber remains a massively successful startup by almost any standard, but in 2017, its unchecked aggressiveness has also started to take a toll. The company has suffered months of bad press after multiple allegations of sexual harassment and revelations of a hard-charging, toxic culture. It is fighting a trade-secrets lawsuit brought by self-driving carmaker Waymo and facing two federal probes: the first for using software to deceive law enforcement, the second for allegedly violating foreign bribery laws. The scandals led to the ouster of Uber founder and former CEO Travis Kalanick, and the company is only now starting to pick itself back up.
The Uber story is a telling case study. On the one hand, it should be entirely unsurprising that a startup founder who seemed to always believe he was above the law broke the rules until it came back to bite him. On the other, it was that very willingness to break the rules and see past the status quo that made Uber great, allowing it to upend the $100 billion global taxi market and establish the on-demand rides model that so many people now use every day. Regulation might have prevented Uber’s greatest failures but it would also have inhibited its greatest successes. In Silicon Valley, there is a clear winning side to that bet.