Slate Money: The Valley of Genius Edition

Date: December 29, 2018
Host: Felix Salmon
Guests: Anna Shymansky, Emily Peck, Adam Fisher (author, Valley of Genius), Charles Duhigg (journalist, Wired)

Overview:

This special edition of Slate Money delves into the mythology, history, and culture of Silicon Valley, using Adam Fisher’s oral history Valley of Genius as the lens. With contributions from insiders and experts, the episode explores what makes Silicon Valley uniquely capable of birthing world-altering firms, the roots and consequences of its “founder culture,” the persistent frat-boy atmosphere, and the evolution from idealistic invention to monopolistic profit-seeking. The discussion culminates in a deep-dive into Elon Musk and Tesla with journalist Charles Duhigg.

Key Discussion Points & Insights

1. The Silicon Valley Investment Model

• Biz Stone’s Take on VC Funding (02:15-03:34)
  • Biz Stone (Twitter co-founder): "Only in Silicon Valley can you be like, yeah, we would like $10 million and we'll sell you a percentage of our theoretical company that may one day have lots of profits. And if we lose all of the money, we don't have to give it back to you, and maybe we'll start something else." (02:19)
  • The ethos: high risk, high reward, with investors betting on people rather than ideas or products.
  • Uniqueness: Adam Fisher points out that “investors go pre-idea” (04:49), making it a culture of speculative bets unprecedented elsewhere.
  • Anna Shymansky traces its roots to historical economic booms driven by cheap money and euphoria, but notes the tech VC model’s intensity and product differences. (04:51-05:27)
  • Increasing money flows (SoftBank’s $100B fund vs. $3B/year during dot-com era); need for massive capitalization due to winner-take-all competition in consumer tech. (06:33-07:57)

2. The Arc of Startup Growth: The Ebay Case

• Pierre Omidyar (Ebay founder) describes meteoric 20–30% month-over-month growth, overwhelming the original team’s capabilities. (11:05-12:00)
  • His solution: bring in experienced adult leadership (Meg Whitman), then step back, something now rare in SV founder culture.
  • Emily Peck: “It’s a remarkable bit of intelligence and maturity on his part.” (12:42)
  • Adam Fisher notes the post-Facebook era’s shift to keeping founders in power, attributing it to fear of losing their ‘founder magic’ as happened with Steve Jobs/Apple and Napster. (13:29-15:56)

3. Changing Power Structures: Founders vs. Adult Supervision

• Early SV model: founders step aside for "adult supervision."
  • Examples: Apple, Google, and even Facebook (via Sheryl Sandberg) attempted hybrids.
• Power shifted after Facebook’s success in keeping Zuckerberg at the helm, with entrepreneurial investors like Peter Thiel, Reid Hoffman, and Mark Pincus backing a "founder-centric vision." (16:12-16:32)
• Anna Shymansky and Adam Fisher debate whether the pendulum could swing back if capital becomes less abundant, making founder control less tenable in capital-intensive ventures (e.g., self-driving cars, healthcare). (16:43-18:20)

4. The Boys’ Club and Party Culture—A Silicon Valley Tradition

• Adam Fisher quantifies the gender imbalance: women make up about 15% of interviewees in Valley of Genius. (18:45-18:51)
• The early culture: wild parties, drugs, and unchecked personal behavior.
  • Michael Malone on Nolan Bushnell: “It was, you know, Coke with the assembly line girls in the hot tub... He really had that whole Master of the universe thing.” (20:07)
  • Charlie Ayers describes Google’s co-founders fostering a “harem of admins.” (21:58)
  • Facebook’s frat-like office culture: “...hearing beer cans being moved as you open the door... office smelling like stale beer and just being trashed all the time.” (22:42)
• Panel’s consensus: a “childish, entitled” ethos, with tech “geniuses” unaccustomed to limits, compared to both athletes and figures like Trump. (23:06-23:51)
  • Emily Peck: “Playfulness, inventiveness, and creativity is all of a piece... but now we’ve closed off the avenue to creativity that created it in the first place.” (31:47)

5. The Utopian vs. Monopolistic Arc

• Founders like Steve Jobs and Alan Kay began with aspirations for computers as "bicycles for the mind," amplifying productivity.
  • John Markoff: Jobs “was turning it into an entertainment device... I was very sad about that. But that's the way the world moved.” (26:48-27:37)
  • The iPhone becomes emblematic of the shift to entertainment, addiction, and passive consumption rather than empowerment.
• Panel notes the irony: the same dreamers who wanted to “make the world a better place” now run monopolies extracting maximum rent (money, data) from users. (34:01-34:45)
  • Adam Fisher: “The kind of utopian visionaries turned into the kind of, you know, rent extracting plutocrats... It's the same people.” (34:48)

6. Gamification and the Ethics of Tech Power

• Felix Salmon: Twitter turns its service into a game to maximize engagement, often at society’s expense. (32:33)
• Anna Shymansky: The data and power amassed by tech firms can be both productive and manipulative; the challenge is finding a balance. (33:22-34:01)

Notable Quotes & Memorable Moments

• Biz Stone on the Absurdity of SV VC Culture
  • “What hell is that? I'm like, it's just crazy... It's a crazy world. This is like some kind of nut place where you can do that kind of stuff.” (02:48-03:34)
• Pierre Omidyar on Recognizing His Own Limits
  • “I wasn't a businessman... I voluntarily stepped back and turned this entire company over to grown up supervision.” (12:00-12:41)
• On the Founder Model Shift:
  • Adam Fisher: “Facebook was the first company where the angel investors, the early investors were largely entrepreneurs themselves... They all agree with this founder centric vision.” (16:12-16:32)
• Emily Peck on Play as the Root of Innovation
  • “There's something just really delightfully human about being so driven to find something fun to play with and being so creative that you wind up stumbling onto these amazing advances...” (31:47)
• Adam Fisher on Utopian Visions Turning Monopolistic
  • “What’s amazing to me, it's the same people running them... utopian visionaries turned into... rent extracting plutocrats.” (34:48-35:12)

Deep Dive: Elon Musk and the Tesla Culture (with Charles Duhigg)

Segment Start: ~[35:12]

• Charles Duhigg spent 6–7 months reporting on Musk, talking to 50+ current and former Tesla employees. (36:49-36:51)

• Tesla’s “abusive relationship” management style:

  • Employees describe Musk’s demanding approach with abrupt firings for wrong answers, public shaming.
  • Duhigg: “The whole company is in an abusive relationship with him because he does. He demands things... if you don't know the right answer... he might say, that's it, you're fired.” (38:18-38:53)
  • Tesla denies these depictions, claiming firings always have reasons. (37:47-37:57)
  • Example: one engineer fired on the spot—“You're a fucking idiot. Get the fuck out of here.” (39:05-39:12)

• Adam Fisher: This is “in the zone” for Silicon Valley but Musk is still extreme even by industry standards. (39:26-39:44)

• The impact of “genius culture” and celebrity:

  • Emily Peck: “This is the natural culmination of when you call these men geniuses and brilliant and you think they walk on water... He feels entitled to act like a... total asshole.” (40:03-40:33)
  • Charles Duhigg: “He went from being Silicon Valley famous to being famous famous... that's head turning.” (40:33-40:55)

• Adam Fisher on SV’s weirdness advantage:

  • “There's lots of behavior that would get people fired and never working again... And that doesn't happen in Silicon Valley.” (42:22)
  • SV’s tolerance for eccentricity and risk-taking played a role in its rise compared to other tech regions.

• Duhigg: “We don't know the name of the head of Ford or General Motors, but we... know the name Elon Musk.” (44:57)

Segment Timestamps

| Segment / Topic | Timestamp | |-------------------------------|---------------| | VC Absurdity (Biz Stone) | 02:15–03:34 | | Investment Model & Money Flows | 03:34–09:28 | | Ebay’s Founders Step Aside | 11:05–13:29 | | Founder Power Model Shift | 13:29–18:20 | | Gender & Boys’ Club Culture | 18:20–21:58 | | Party/Childish Atmosphere | 22:42–25:52 | | Utopian to Monopolistic Arc | 26:48–34:01 | | Gamification / Tech Ethics | 32:33–34:01 | | Elon Musk & Tesla Culture | 35:12–45:30 |

Takeaways

• Silicon Valley’s wild money: Born out of a unique culture of speculative investing in youth and charisma—not just ideas.
• Persistent “bro” culture: From Atari to Facebook, childishness, parties, and entitlement shaped the tech world, hindering diversity and real maturity.
• From Utopia to Monopoly: The same founders who dreamed big are now the gatekeepers, extracting rents and shaping global behavior, for better and worse.
• Personality cults and power: Elon Musk epitomizes both SV’s genius-myth and its toxic side, enabled by a culture that celebrates eccentricity and results above all.
• Balance of promise and peril: The tools that empower have also enabled manipulation, addiction, and exploitation. The episode calls into question how to manage this duality going forward.

This summary captures the episode’s energetic, irreverent, and insightful tone, bringing together the oral histories, commentary, memorable quotes, and major themes for anyone wanting to grasp the essence of The Valley of Genius Edition of Slate Money.