Watch out, Obama. The renegades of Silicon Valley are moving to the right

Romney and Obama referred to entrepreneurs and startups more than 30 times in their first debate
Romney and Obama referred to entrepreneurs and startups more than 30 times in their first debate
Image: AP Photo / Pablo Martinez Monsivais
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The balance of financial power in American politics has long been divided between Wall Street’s support for Republicans, and Hollywood’s support for Democrats. But over the past decade, a third force has financed elections in the Democrats favor: Silicon Valley. And it may be about to tilt right.

Not just money, minds

What’s at stake for the Democrats isn’t just money. Yes, the top corporate donors to the Obama campaign hail from Google and Microsoft. 

But the symbolism of Silicon Valley’s support is even more important to the Democrats. The reason that Mitt Romney and Barack Obama referred to entrepreneurs and startups more than 30 times in their first debate is the same reason that Mark Zuckerberg appears on the cover of Time magazine: amid anxiety about national decline, Silicon Valley represents the triumph of American ingenuity, powered by the lone genius who sets out West. To be the party of Silicon Valley is to be the party of the future. And without the technology industry’s support, the Democrats would have no support from industry at all.

The Democrats’ popularity in the Valley has also resulted in more tangible benefits too: the Obama campaign employs five times more people from the technology industry than the Romney campaign, to devastating effect.

The country may be evenly divided between Obama and Romney, but the president wins online. He has nearly ten times more subscribers to his YouTube channel, and an even larger advantage on Twitter. The Romney campaign attributes the gap to incumbency, but some is domain expertise: friends of mine at the social media companies being eagerly courted by campaign officials say the difference in talent between the two sides is smaller than it was the last time around, but still huge.

The success of Obama’s saturation-email tactics is the main reason why the campaign has more than 4 million individual donors and, more strikingly, an advantage of 500 to 1 among donors who contribute via text messages. It is why Obama’s ability to drive voter turnout, despite waning enthusiasm, will be even higher than most expect. Machine politics, long a metaphor but now a literal reality, will probably be Obama’s margin of victory if he wins the race.

Why Democrats should worry

So why should the Democrats worry? Silicon Valley is developing a philosophy for the new economy that is profoundly at odds with the labor-driven allegiances of the Democratic party.

This has been a long time in coming. Many of the ex-hippies who started companies like Apple, or the early online bulletin boards dedicated to organic food and following the Grateful Dead, were an odd combination of liberals and libertarians.

A new breed of industry leaders are mostly just libertarians. The technology industry’s most influential thinker, Peter Thiel; its most well-known investor, Marc Andressen; its most visible entrepreneur, Mark Cuban; and its most influential writer, Michael Arrington, are all to some degree libertarians. Another very influential investor, Fred Wilson, recently wondered aloud how long he could continue to support the Democratic party due to social issues when he also favors smaller government. All but Thiel were once supporters of President Obama, if not lifelong Democrats.

The hacker philosophy

This drift away from the Democrats in part reflects society’s waning enthusiasm for an incumbent in a downturn, but also a way of thinking about the world that is unmoored from traditional party lines. Entrepreneurs have probably never felt comfortable with the inevitable bureaucracy of a federal government, but those feelings have been sharpened by Eric Ries’s idea of the “lean startup,” in which businesses ship the “minimal viable product,” so customers can quickly validate or reject its design.

Facebook’s “hacker way” expands on this concept, arguing for software, and by extension organizations, that are designed from the start to be easily changed by any member of the organization, so that renegade efforts can be tried and then discarded or embraced by the whole organization.

This philosophy of speed has been a phenomenal success in part because it came at the exact moment that technology could support it, with Internet-accessible computers to provide additional processing or storage on demand, and technology for combining programs from different authors so that even complex websites can be updated daily.

A small team, backed by investors with names like “500 Startups,” can now ship a product in weeks not years, for tens of thousands of dollars rather than millions, which has led to an explosion of startups, albeit with a lower success rate. For Silicon Valley, this has been a revolution that no one else has noticed, validating a new way of thinking about everything, not just 1’s and 0’s. It is now common for example to talk of hacking education, hacking health-care, even hacking currency.

No ideological loyalty

The only ideological principle of these efforts is that they have no ideological principle. The core hacker premise that “code wins arguments” is just another way of saying that anything is worth trying, regardless of whether it is a conservative or liberal idea, and that whatever works is worth keeping. Whereas any political party, and nearly all voters, prize consistency as a sign of authentic, values-driven thinking, it is deeply alien to the hacker, who holds that changing your mind is simply intelligence in action.

This commitment to whatever works makes many in Silicon Valley swayable, which is all the more remarkable given how few swing voters there actually are in the U.S.: less than one in five voters supported both Republican and Democratic candidates in 2000, compared to nearly one in three in 1972. It is popular to mock these folks as hare-brained but at least some are Silicon Valley engineers whose whole mindset is rigorously open to reconsideration.

There are some government programs, such as Obama’s Race to the Top, which rewards states that hasten education reforms, that seem to incorporate hacker principles. There are many others, such as Social Security, where “failing fast” and “deploying continuously” are impractical. But the underlying premise of this mindset is unruly and impatient. And the government, after all, is what’s being hacked. If, in the Valley’s archetypal narrative of lumbering dinosaurs and the plucky upstarts who topple them, the dinosaurs within the government become a target rather than a sideshow, the Valley will support more Republicans.

Investment, not spending

There is one other element of the “small-is-beautiful” philosophy that is up for grabs between Democrats and Republicans. In a culture that fetishizes the garage and the door-desk,  entrepreneurs view spending with suspicion but not investment. I was once told that the ideal entrepreneur dives for nickels in the toilet, by the same investors who were happy to see my company lose tens of millions of dollars building what we hope will be long-term competitive advantage.

This is why, when a prominent venture capital firm recently made its case for turning around America as if it were a wayward portfolio company, it attacked entitlement programs but sought more spending on infrastructure and research, a distinction in spending both parties have struggled to maintain in the debate over Keynesian stimulus, Tea-Party politics and federal deficits. Many of the libertarian entrepreneurs who only want the government to leave them alone have simply forgotten how important government research, public education and immigration policy are to Silicon Valley’s long-term success.

A political awakening

All this comes at a time when the Valley is becoming increasingly political. Ed Lee, San Francisco’s new centrist Democratic mayor, certainly owes some of his success to Silicon Valley’s foray into king-making. More broadly, former eBay CEO Meg Whitman attempted to become California’s governor in 2008, and former HP CEO Carly Fiorina a U.S. senator in 2010. Both ran as Republicans.

The Valley has also become more confident about making political statements. Opponents of a recent federal anti-piracy bill went so far this year to as to organize a blackout of their own websites, a no-holds-barred move that traditional media companies would never have contemplated. If a major media website became openly political, like Fox News or MSNBC television networks, the impact would be enormous.

Today, the firewall for the Democrats in SIlicon Valley is on social issues. Especially around civil rights and drugs, Silicon Valley remains solidly left-wing. This won’t change: no other industry sends so many of its elites to Burning Man, a mostly rule-less, week-long Woodstock of creativity in the Nevada desert.

For the Washington DC strategists, the question of who captures Silicon Valley depends in large part on who moves first: the Republicans on social issues, or the Democrats on fiscal issues. But in Silicon Valley, the question is how entrepreneurs can make government work better, be it through Republican or Democratic candidates. Entrepreneurs after all tend to see ourselves not as pawns to be captured in a political game but as kings and king-makers. The only party a hacker can belong to for long is no party at all.