Money, Power + the Culture of Innovation

The concept of acquired situational narcissism has been in my head since 2001, when the New York Times Magazine included it in their annual “Year In Ideas” issue.

The phrase describes the lack of empathy — and resulting self-serving behavior — that the rich and powerful tend towards when they mistakenly interpret their own success as evidence of their innate superiority, and not just a happy confluence of of birth, luck, environment, hard work and timing.

Living in Seattle, I (thankfully) don’t cross paths with many investment bankers, heads of state or Hollywood celebrities, and the per-capita incidence of the condition is probably lower here than in LA, DC or New York.

But as our culture increasingly looks to technology for its heroes (think Mark Zuckerberg or Steve Jobs) this pathology is starting to seep into in the nominally egalitarian world of software innovation.

This change is already visible in the national discussion — tech founder stories that used to be told with a light-hearted “revenge of the nerds” angle now have a darker tone, lamenting the billion-dollar valuations ascribed to “trivial” companies like Facebook, Twitter and Instagram, and claiming that the current easy-money culture of Silicon Valley signals the death of innovation.

Unsurprisingly, the attacks are most often launched from the East Coast, long the center of American money and power. 

The New Yorker recently waded into this bi-coastal culture battle with Ken Auletta’s piece on Stanford’s abrupt withdrawal from the New York Tech Campus project, ominously titled “Get Rich U. : There are no walls between Stanford and Silicon Valley. Should there be?“

The tone of the article veered wildly, beginning with a celebration of Stanford’s remarkable success as the intellectual heart of Silicon Valley, then shifting to a vague but unmistakably critical profile of Stanford President John Hennessy and his handling of the negotiation with Mayor Bloomberg’s office over the project.

One particular pair of quotes from the article jumped out at me:

“Mayor Bloomberg, in a speech at M.I.T., in November, had said of two of the applicants, ‘Stanford is desperate to do it. Cornell is desperate to do it. . . . We can go back and try to renegotiate with each’ university. Out of the blue, Hennessy says, the city introduced the new demands. 

To Hennessy, these demands illustrated a shocking difference between the cultures of Silicon Valley and of the city. ‘I’ve cut billion-dollar deals in the Valley with a handshake,’ Hennessy says. ‘It was a very different approach’—and, he says, the city was acting ‘not exactly like a partner.'”

Taken together, Bloomberg’s and Hennessy’s comments cut to the heart of the massive cultural gap between the dominant values of the technology innovation community and those of traditional industries like financial services:

• The “heroic” cultural action in the software innovation community is creating, making something from nothing, growing the pie, and giving everyone who helps a slice of the gains. In this mode, negotiations tend to be friendly, focused on achieving mutual gain and equitable outcomes.

• By contrast, the “heroic” action in financial services (or politics, for that matter) is winning, “being on the right side of the trade”. The pie is finite, the game is effectively zero sum, and each players’ share of the gains tend to come at the expense of the other players.