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Gambling with science

From focusing on hard science, today the silicon valley has become a casino, a place where smart kids arrive hoping to make an easy fortune, writes Daniel Lyons.

india Updated: Mar 06, 2011 13:12 IST
Daniel Lyons

The people who run Facebook are furious about a new movie that takes lots of liberties in its depiction of how Facebook came into existence. They’re upset because much of The Social Network, which opens October 1, is completely made up. That’s fair enough. But to me, the really interesting thing about this movie is that while much of the tale is invented, the story tells a larger truth about Silicon Valley’s get-rich-quick culture and the kind of people — like Facebook’s 26-year-old founder and CEO, Mark Zuckerberg — who thrive in this environment.

The Valley used to be a place run by scientists and engineers, people like Robert Noyce, the PhD physicist who helped invent the integrated circuit and co-founded Intel. It, in those days, was focused on hard science and making things. First there were semiconductors, then came computers and software. But now it’s become a casino, a place where smart kids arrive hoping to make an easy fortune, building companies that seem, if not pointless, at least not as serious as, say, old-guard companies like HP, Intel, Cisco, and Apple.

The three hottest tech companies today are Facebook, Twitter, and Zynga. What, exactly, do they do? Facebook lets you keep in touch with your friends; for this profound service to mankind it’ll generate about $1.5 billion in revenue this year by bombarding its 500 million members with ads. Twitter is a noisy circus of spats and celebrity watching, and its founders still can’t figure out how to make money. Zynga, the biggest of those Facebook app-makers, reportedly will rake in $500 million this year by getting people addicted to cheesy games like Farmville and Mafia Wars, then selling “virtual goods” to use inside the games.

Meanwhile, among some longtime techies, there’s a sense that something important has been lost. “Today almost everyone in the Valley will tell you there is too much ‘me-tooism,’ too much looking for a gold rush and not enough people who are looking to solve really hard problems,” says Nathan Myhrvold, the former chief technology officer at Microsoft who now runs an invention lab in Seattle.

Myhrvold says he means no disrespect to Facebook and Zynga, which have had clever ideas and are making loads of money. “What bothers me is the zillions of wannabes who will follow along, and the expectation that every company ought to be focused on doing really short-term, easy things to achieve giant paydays. I think that’s unrealistic, and it’s not healthy,” Myhrvold says. His company, Intellectual Ventures, intentionally runs counter to the prevailing trend in Silicon Valley. The only problems it tries to solve are ones that seem overwhelmingly difficult. These include creating a new kind of nuclear reactor and developing technologies that could address climate change and eradicate malaria.

Myhrvold doesn’t have problems raising money. He made a fortune at Microsoft and is a close friend of Bill Gates. But he worries about “the unknown engineers and professors who have good ideas. Are those people going to get funded or will they be talked out of it and told they should do something like Zynga, because virtual goods is where it’s at these days?”

The risk is that by focusing an entire generation of bright young entrepreneurs on such silly things, we’ll fall behind in creating the fundamental building blocks of our economy. “If we distract people with the lure of easy money, with making companies that don’t solve anything hard, we’re going to wind up derailing the thing that has been driving our economy,” Myhrvold says. We’ve already fallen behind in areas like alternative energy, better batteries, and nanotechnology. Instead of racing to catch up, we’re buying seeds and garden gnomes on Facebook. This won’t end well.

Daniel Lyons is also the author of Options: The Secret Life of Steve Jobs and Dog Days: A Novel

This is an abridged version of his article that appeared in Newsweek, The views expressed by the author are personal