Jan 05

Systemic Imbalance and Income Inequality in the Bay Area

You can’t end economic inequality without preventing people from getting rich, and you can’t do that without preventing them from starting startups.

– Paul Graham, Economic Inequality

Sure you can.

Paul Graham’s rather defensive essay seems to wonder how Silicon Valley could even start to attack income inequality without stopping the ambitious from pursuing wealth. Graham calls himself “a manufacturer of income inequality” and says, “I’ve become an expert on how to increase economic inequality, and I’ve spent the past decade working hard to do it. Not just by helping the 2400 founders YC has funded. I’ve also written essays encouraging people to increase economic inequality and giving them detailed instructions showing how.”

Let’s set the record straight. Helping people generate “wealth” is not the same as generating “income equality.” Generating wealth assumes you are creating more money than you were given, which you can choose to either distribute or will be taxed away from you. Generating income equality indicates that this wealth comes at someone else’s expense.

The problem of income inequality in the Bay Area derives from a systemic imbalance in industries, with Paul Graham’s contribution as only part of the equation. It seems a bit grandiose of Paul Graham to even worry that he is somehow responsible for something as big as income inequality.

Follow the Tax Subsidies in the Bay Area

So what caused income disparity in San Francisco, for example? Hundreds of startups have flocked to the SoMa area for cheap rents, who have by all measures generated a lot of tax revenue for the city. By reasonable measures, these companies crush other Bay Area companies in this respect. But (and this is a big but) tax revenue has somehow not prevented the second biggest poverty gap in the country. What have these companies not generated?


Any intelligent VC or angel investor will do what’s called “hedging one’s bets”. You invest in a variety of industries and companies. If one or several fail and another takes off, you’ve protected yourself. San Francisco was sadly dependent on tourism before the tech boom. Politicians like Gavin Newsom came in and ensured protection to tech startups. Hundreds flocked in. These are companies that generate white collar jobs the average San Franciscan could not obtain. So lots of tech revenue, not a lot of opportunity for everyone else. Fierce competition for housing, food costs, etc for anyone NOT in these fields.

San Francisco has been flushed with cash as well as a huge influx of workers (mostly young and male). Some might invest back to promote a more diverse community, but others might also (and more likely) hole themselves at work for 13 hours a day in hopes to get rich and then leave.

Such a move is like introducing too much of a single species, like a tiger fish, in an aquarium. Sure, your tank is full of impressive predator fish. The end result is a tank of angry hungry tiger fish ( = tech workers complaining about costs) and other fish scared under the rocks ( = respectable blue collar workers and artists who are getting evicted and priced out in droves). There’s absolutely no crime in being a tiger fish. But tiger fish will do what it takes to survive, including eating all of your other fish.

tiger fish

It was the best of times, it was the worst of times

This is the imbalance that causes income disparity. So sure, we can knock ourselves out getting rich with our startups. We just have to secure our homes every time we leave the house, and dress in potato sacks because any flash of wealth is subject to ridicule or worse — getting mugged. Hiring people is impossible because the cost of living makes no sense for families. If the shit somehow hits the fan for us and we get sick, it’s time to leave. No one will help because they are too busy trying to make it themselves.

No middle class = no hope for the poor, and no protection for the rich. Paul Graham states that “economic inequality per se is not bad” and I’m saying that by just about every economist’s standard, it is bad for this reason. Every community has a finite number of resources at any given time. It is a ridiculous notion to think that extreme wealth should or even can peacefully co-exist around extreme poverty.

So what can the tech elite do to end class disparity?

So back to the quote, “You can’t end economic inequality without preventing people from getting rich, and you can’t do that without preventing them from starting startups.”

If someone asks us to embrace the notion of balanced community around us, it is not “preventing us from being rich.” They are asking for the opportunity to stay relevant *as well*. They are asking us, the newly arrived tech community, to be aware that diversity in our actual physical community is economically important for our own collective survival. It’s a way of hedging our bets to promote stability in our region. If we don’t, we’ll just be a bunch of angry tiger fish in a tank with no more food.

So it’s not all Paul Graham’s fault. It’s our fault for not heralding the Paul Graham of art, or the Paul Graham of life sciences. It’s our fault for being assholes by thinking that somehow tech should dominate this part of the world, or that “Silicon Valley” should be known for no other reason. A varying distribution pattern of wealth emerges as various industries wax and wane at any given time.

This city means something…and isn’t showing up

So now there is a swarm of young, well intending but very similarly minded gentlemen with more money than the people around them. As a result, San Francisco is increasingly becoming home to an expensive, insufferably boring monoculture. The first American place many Asian immigrants called home remains in relative silence as a serious presidential candidate calls to end Muslim immigration. One can’t walk into a bar without hearing something new about Burning Man, but mention something about poverty in middle America and you’ll get a joke about “flyover states.” The people who made history on the very ground we walk on are being pushed aside to make room for a sea of frivolous iPhone apps and concierge services like “the AirBnB for cats” and “Uber for Laundry.” There have got to be 200 bullshit “big data for x” startups by now. Corruption due to corporate campaign contributions is crushing democracy and violent Islamo-fascists want to destroy the Western world, but hey, we can get bento boxes ON DEMAND, people! What else do we need?

For happy, productive coders, choose Soylent!


New York has diversity. So does LA, Paris, London, even Austin and Portland. The Bay Area has a boom and bust history of investing a lot of money into “the next big thing.” Maybe it always will, but I don’t think it’s to the longterm benefit of its citizens, myself included.

Here’s a challenge: name a single living Bay Area citizen known around the world in an industry that is not either sports or tech.

Aug 24

How Can We Clone Steve Jobs?

Tim O’Reilly’s Google+ stream tipped me off to a very interesting post on Forbes about how outsourcing both helps and hurts us. You really should read it yourself, but the long and the short of it is this:
1.) We have to outsource where it makes sense, to keep pricing competitive, but
2.) As soon as we do it, whomever we outsource to will most certainly approach our competitor with the same proposition, so
3.) We end up back where we started.

The key to solving the equation? Outsource where it makes sense, but always add innovation.

Say what you will about Steve Jobs as a person. As a figurehead of Apple, his vision, passion and perfectionism as CEO of Apple are unmatched. Apple products are copied mercilessly and are the source of tech lust all over the world. It is why despite Michael Dell stating Apple should close shop and give money back to its shareholders, Apple is now worth more than Dell. Oh and Microsoft and Intel combined.

Whether we tax high and offer decent public services, or tax low and allow the business sector to cover the weight, it doesn’t matter. If we don’t innovate, we will cease to be relevant.

So I’m asking you, America: quit arguing. Just figure out how we can make more Steve Jobs(es?).

Let’s look at what helped make Steve Jobs successful:
1.) Republicans like Rich Perry seem to be strangling education for the sake of keeping taxes low. Steve Jobs went to a public high school in Cupertino, California. So did Larry Page and Marissa Mayer from Google. Yet today, we are cutting teachers and school funding is as low in some areas as it was in the Depression era. That doesn’t seem conducive to being competitive in a global market.

That being said, we really need to address teachers’ unions ability to protect bad teachers from being fired. Mr. Jobs is not a fan of this policy, and he doesn’t like teaching kids to take tests either.

2.) Apple is in Cupertino, which is in a hotbed of technology. Apple talent could come from Berkeley, Stanford, CalTech, and a host of other technical schools. So while Jobs himself got his education at Hewlett Packard with Woz, he was empowered by an educated base.

Right now, college tuition is increasing, but college kids are not learning about technology at the rate the private sector is producing it. Ask any tech company how difficult it is to hire developers and you’ll see.

3.) Reform patent law. I’m not a lawyer or an inventor, so I can’t confess I have a solution here. I just can’t imagine inventing anything with as many patent trolls as we see now.

4.) Reward innovation and people who think out of the box. Foster change makers. And for God’s sake, quit watching those ridiculous mindless television shows.

The G.I. Bill produced more engineers among the “Greatest Generation” than any other generation before or since. It helped foster engineers that put a man on the moon. Can our nation create an entire generation of Steve Jobs(es?) that innovate us out of this recession, or are we destined to care more about “Dancing with the Stars” than the X Prize?

Jun 21

How Can Tech Get Rid of Its Unsightly “Blubble”?

Color got some big print recently. Not for technological advancements, mind you. Color is highly regarded as the quintessential poster child for the tech bubble, and their excesses were covered in the New York Times. Color raised $41 million, doesn’t seem to have a lot of active users, and has already gone through one founder. You know what makes VCs and angels happier than an active user base? Seeing a half pipe skate park at a portfolio company that makes no money. Color has one, apparently.

I could be biased. My experience working in startups began in 2006. If the vibrant startup scene today resembles the parties from the movie “Old School”, the startup scene then resembled “The Hangover”. Unlike now and the scene in 1998, a startup existed to make money. Not theoretical YouTube money that eventually turned into a pot of gold in five years. Few banked on being bought by behemoth publicly traded companies who couldn’t innovate their ways out of a paper sack, and those who did had experience doing so. You didn’t have to be making money at that moment in time, but if you didn’t have a viable business model, you didn’t exist. Period.

One of the best speeches I have ever seen was actually an impromptu speech by Wil Shipley at GitHub’s CodeConf. In it, Shipley expressed his frustrations with the all too common question VCs ask: “What is your exit strategy?” Shipley’s answer was simple. “Code until I die.” He cited Larry Page, Sergey Brin, and Jeff Bezos as examples of entrepreneurs who made more money sticking with their respected companies than selling them.

That’s the big difference between what I see now and what I experienced in 2006. Back then, there was no “startup lifestyle”–you just worked at a software company. We had to work hard because there were very few handouts. Every hire mattered, every dollar counted, and every new and retained user was a win. It wasn’t about the “exit strategy”. It was simply about delivering value to people. The reality of successful startups hasn’t changed according to data from the National Venture Capital Association, but our perception of how to obtain this success certainly has.

Seeing these types of startups is like watching those guys who think they are going to eat a bunch, get really fat, and then magically turn it into muscle somehow. Now I suppose it works for some people but for the most part, they just turn out like beefcake Cartman. Yuck.

Jul 06

Read ASCAP’s Letter Attacking CopyLeft and Creative Commons

4751889273_d8bc6d563d_mThis photo was taken by Trey Ratcliff at stuckincustoms.com and is protected by a Creative Commons license. His stuff is pretty awesome which is why people decide to buy his prints and books, attend his workshops, and buy the stuff he says is cool. He is an artist who makes money taking pictures and letting geeks like me reference them to make points and well, spread happiness to other people.

An organization called ASCAP, an organization created to “protect” artists and composers, apparently thinks Trey’s business model doesn’t work and will hurt artists and “dry up” the work they produce. They launched a campaign to lobby against Creative Commons and the EFF. I hope I don’t get sued for re syndicating this Twitpic from @mikerugnetta, but in a letter to their members, they say,

“At the moment, we are facing our biggest challenge ever. Many forces including Creative Commons, Public Knowledge, Electronic Frontier Foundation, and technology companies with deep pockets are fighting to promote ‘Copyleft’ in order to undermine our “Copyright”. They say they are advocates of consumer rights, but the truth is that these groups simply do not want to pay for the use of our music. They spread the word that our music should be free.

This is why your help is vital. We fear that our opponents are influencing Congress against the interests of music creators. If their views are allowed to gain strength, music creators will find it harder and harder to make a living as music shifts to online and wireless services. We all know what will happen next: the music will dry up, and the ultimate loser will be the music consumer.”

Music makers have rarely made much money with albums. Record labels are the big winners with albums. Artists make the vast majority of their fortunes touring, with shwag, and by selling the commercial rights to their music. It has always been this way. Releasing albums with a Creative Commons license only feeds these methods of making money. They aren’t the boogie men here–they are the good guys.

This concept doesn’t just apply to music though. It applies to literature, art, science and culture as we know it. The medium that is the internet feeds the distribution of information. It does not prevent us from selling goods or services–it just fuels it.

I’m a little late to add to Joi Ito’s big push, but you can still help Creative Commons educate the public as well as lobby Congress by making a donation now.

Jan 24

Why I Never Want to Buy a Non-Hybrid Car Again

I recently got a great deal on Toyota Prius from Motorphilia. I have never been so pleased purchasing a car. Not even when I bought a BMW 328 brand new.

Why do I love my car?
1.) I like the fact that my car contributes significantly less CO2 in the air than my other car did. Why? Because I as well as other people I like breathe air, and I’d just assume keep it clean.
2.) I am saddened by the political landscape in the Middle East and other regions dominated by oil. Oil is a capital-rich, labor poor industry, which often presents a ripe breeding ground for corruption. By driving a car that gets 45 miles to the gallon average, I am helping reduce the demand for oil. America should be free of this addiction once and for all.
3.) It’s very cheap to fill up. $20 can fill the tank.
4.) It drives well and has a very nice fit and finish.

Toyota puts a meter on the dash that shows how many miles you are getting per gallon. It feels like a video game when you try to reduce it, and I like the notion that they reward drivers for responsible behavior.

Joshua Baer claims he’ll never drive another gas powered vehicle again. I don’t blame him one bit. Once you realize how enjoyable it is to drive a battery powered car, you’ll wonder why more vehicles don’t use one.

Anyway, not trying to be a smug hippie here. I just really dig my new (to me) car.

Jan 18

What if Disaster Relief Were Run Like an Open Source Project?

Today I watched two hours of Haiti news coverage. It breaks my heart to see the devastation in the area. I’m also a bit concerned that government bureaucracy could slow down crucial relief efforts.

If you check whitehouse.gov, we can give money and pay attention to what’s happening. But what if I have a big company and I can actually implement solutions much faster than a government organization can? Should I want to passively observe the devastation?

What if Obama used his massive power with the media to crowd source relief? I would imagine the first line of order would be to get communication in the area and relief workers to give out food and water. One of the telcos could step forth and various water and food companies could come forward. UPS actually does logistical work and could help coordinate some of the shipping to a Haiti port.

Doctors and pharmaceutical companies could offer their services. Airlines could fly them there.

After this, there would need to be security to keep the peace as well as efforts to offer shelter. I’m not sure the military could get crowd sourced, but Architecture for Humanity allows architects to contribute ideas for sustainable housing in developing nations. Obama could use the winning designs and then the fledgling building supply companies could offer up housing.

Why would these companies offer these services for nothing or next to nothing? The same reason why developers contribute to open source: for fulfillment and credibility.
1.) If Obama comes out and says, “We could count on American Airlines to deliver our thought leadership teams to Haiti on time,” it’s worth more than any add they could put on TV. If he says “Southwestern Bell really dropped the ball with our communication strategy”, the opposite rules apply. Obama and his staff can hold parts of the puzzle accountable, which keeps them honest regardless of payment.
2.) One backlink/dedicated page from the biggest crowdsourced project to date (Haiti relief from whitehouse.gov) is worth more than just about any backlink an SEO expert could buy you. You’d also want to consider all of the residual backlinks you’d get from people discussing specific parts of the project.
3.) It’s the right thing to do and giving product away is often cheaper than advertising.

This would obviously require “architects” familiar with this type of work to coordinate. But given how long government contracts can take to get through and the bureaucracy and expense involved, isn’t it the right thing to do? Shouldn’t that be what “Yes We Can” means?

Jul 26

Reflections on Universal Health Care from Someone Whose Sister Just Died of Cancer

After battling a brutal leukemia relapse for six months, my sister passed away this passed May. I like Lance Armstrong, but the reality is that cancer doesn’t always lead to a bunch of Tour de France wins for people.

I did my best to keep my chin up and to stay optimistic. Deep down, I am still incredibly angry and actually debated leaving this country to go somewhere with universal healthcare and a conscience about the environment. Here’s why.

When we think of cancer, we think of Lance Armstrong on the bike. We don’t think about a severely swollen 41 year old single mom with blisters with the diameter of a softball, who can’t get out of her bed for six months. My sister’s blood platelet count was so low, she bit her lip softly and it started to bleed. When a nurse went to brush her teeth with a small sponge, her gums bled. Anti-fungal drugs made her hallucinate about bugs and gave her dreams that Obama was going to get shot. Her skin was jaundiced and her eyes were yellow. She sometimes would cough up stuff that was so black, it was hard to conceive it coming from a human body. In the months before her death, she had both a tracheotomy and was on oxygen. She was restrained to the bed and at several points, I had to prevent her from disconnecting her oxygen and killing herself because the drugs did crazy things to her head. I felt like I was facilitating torture against my own sister. There was absolutely no dignity to the way she died and I was happy she finally passed because she wasn’t suffering anymore.

So frequently, I would be in her in room and I’d want to take a picture of her. I wanted to send that picture to Monsanto and all of the other companies creating sketchy products, as well as to big pharma that seems more driven to treat cancer than to cure it. I wanted to send it to the politicians who permit healthcare to be a business. What happened to Deb has happened to millions of people and could just as easily happen to them. I refrained because I wanted to maintain Deb’s dignity.

My sister didn’t just die of cancer. She died of a lack of hope. Even if she had been cured, there’s no way any employer would want to deal with her health care costs. Doctors would have thrown every drug her way, and each of these drugs would have some weird side effect. Her life would be inundated with paperwork. For every Lance Armstrong, there are millions more who suffer in fear of a relapse and the absolutely barbaric treatment associated with cancer.

I asked my sister before she died, and she did support universal health care. She believed people should not have to worry about whether their treatment would be covered or not because they should just focus on getting better. I’m not faulting Lance Armstrong by any stretch, but we don’t all have big companies like Nike backing us up when we get sick.

My endorsement of universal health care comes with a huge caveat though. I want Americans, non-profits associated with cancer, and politicians to seriously look at the carcinogenic effects of the American lifestyle. Right now we are consuming foods that have been sprayed with Roundup, which is known to cause severe health effects and avoided in many parts of the world. We eat chickens and turkeys that are given hormones to make them so big they can’t even walk. We drink milk from cows that are given hormones to produce more milk. What do you think happens to these hormones and chemicals? You are what you eat–remember?

I am tired of politicians protecting companies that poison us and Americans who turn a blind eye to all of this. Ask the people of Aniston, Mississippi about the devastating effects of pollution on their community and ask them how the legal system left them astray. These people were hit hard by Monsanto’s pollution, but what are the effects of a little pollution to everyone over the course of a lifetime? The Native Americans understood the connection between the land, air, and water they surrounded themselves with and their own personal well-being. We are turning a blind eye to the horrible things companies are doing to our food and to our land and we are paying the price.

Cancer isn’t a business. It is something that is killing us and destroying our quality of life. IT’S NOT JUST HEREDITARY, PEOPLE. There are second world countries who have longer life expectancies than ours. We spend more per person on health care and yet people in Andorra and 43 other nations live longer than we do. We are poisoning ourselves as a nation, and to avoid a tax burden to us all through universal health care, we really need to take back our land and our food from the corporations that control it first.

Jun 15

Acknowledging Ahmadinejad (and Others) Means We Lose Our Way

I recently saw a tweet from Mark “Rizzn” Hopkins that hinted the possibility that YouTube clips were being deleted out of Iran regarding their recent presidential election. I have no doubt that this is a reality. Iran has a long history of silencing opposing voices such as feminists and those who wish the country could be secular. This would in no way surprise me whatsoever, but does frustrate me because I feel powerless to help them.

The dialog in the United States must change. We are not facing merely “terrorists” and “evil doers”. We’ve elected Obama and are passed that. In this world, we have open countries, who believe in free speech and civil liberties. We have somewhat open countries, who monitor what is said and may interfere, but do not restrict free speech as heavily as others. Then we have closed countries, who feel every message must come from the top and must be controlled. These nations such as Iran, North Korea, and to a concerning extent China, feel that order is more important than free speech. They feel that control from the top is crucial to executing their plans. While the concept of free speech varies from country to country, the people of China should be able to know that Tienanmen is not just a tourism spot. Women in Iran should be able to blog about equality for women without being detained for “disturbing public opinion”.

Our nation was not born in the paranoia that haunted us for eight long years of Bush. Our country was born from the blood and sweat of people who felt they should have a say in how their lives should be lived. This is a fundamental desire of people around the world, and the way to stay true to our heritage is to honor that. By accepting the Iranian elections and others like it in Egypt, Russia and Pakistan (which we have unfortunately done for decades because it is convenient to us), we are telling the world that this is a right that is good enough for us but not for others. By turning a blind eye to worldwide free speech via the internet, we allow countries dominated by the few to suppress the will the many. Given the harsh realities of being punished in some of these states it can often mean turning a blind eye to murder.

I believe Bush was claiming this idea, but violence won’t fix this problem if it doesn’t come from an internal revolution. It only exacerbates it as it gives these dictators justification behind their strict rule. Rather than criticizing those who suppress, we must praise those who don’t and empower people within these closed countries who seek free speech. We must always remain free ourselves. That is what people around the world admire about us and it’s what we do best. If we do not apply this principle to ourselves as well as others, we are lost.

P.S. Follow Mark Hopkins on Twitter. That guy is smart. Oh, and use the hashtag #iranelections if you are mentioning them so we can keep track of what’s going on.

May 10

Please Vote for My Idea for OpenAustin.org

About a year and a half ago, I had not only a cyber stalker, but a real stalker. This person did not see it this way–he just did not understand that his violent actions frightened me, and so therefore there was no way he would engage me in the dialog he was seeking.

I filed several cases with the police department. One time, I asked the woman on the phone to email me my case number instead of dictating it because I was in my car. Apparently, the city doesn’t do that. The city also doesn’t let you fill out paperwork online. To file for a restraining order, you go to the building across from the courthouse. To get victim’s assistance, you go to a building which I never visited, but sure isn’t close to the courthouse. To speak with investigators, there is a building by Ed Bluestein Blvd. way off of 183. To follow up with cases, you go to the police station off of 7th Street.

I pressed charges because this person was reading my email without my knowing it. Even though we have logs of his IP address accessing material only available in those emails, they never prosecuted. Even though he ALSO vandalized my property, found where I lived without me telling him and repeatedly came by unannounced, was physically harmful to me, and lied ON THE STAND about all of it. They never caught him because they have a log of other psychos to take care of, and since he wasn’t choking me like I heard from another victim at the courthouse, it was essentially “case closed”.

Guess what? You can’t fill out the paperwork to catch these bozos in your spare time. You have to do it when they are open. So even though YOU were victimized and YOU are doing everything you can to keep yourself safe, it is a bureaucratic nightmare to do so. Imagine driving around from office to office just to do something that would take a few hours online. I felt victimized twice. I felt angry that I paid taxes at all, because my government is supposed to protect me, and I had (and still have) nightmares about this person. What happened to life, liberty, and the pursuit of happiness?

Why am I telling this story? Because Whurley’s gathering ideas for the city of Austin’s website. And my idea is that the city should make it easy to make people feel safe. Driving around during business hours, filling out paperwork, and writing all sorts of case numbers down when you are afraid to park your car in front of your house at night is ridiculous. Websites make geography obsolete. If I could have filled out this paperwork at home or on my lunch hour, I would have been finished sooner, which would have meant quicker restraining order and more safety for me.

Please vote for my idea. A lot of women aren’t as lucky as I am.

May 04

Something to Think About Before You Go to Work…

This passage is from the book A Little History of the World by E.H. Gombrich. Even if you don’t like history, Gombrich captures what it is to be human. Hat tip to my sister for pointing it out.

Gombrich asks the reader to imagine he or she is on a plane at the end to survey all the places he recounts in the book. He then writes this:

“But now let us quickly drop down in our plane towards the river. From close up, we can see it is a real river, with rippling waves like the sea. A strong wind is blowing and there are little crests of foam on the waves. Look carefully at the millions of shimmering white bubbles rising and then vanishing with each wave. Over and over again, new bubbles come to the surface and then vanish in time with the waves. For a brief instant they are lifted on the wave’s crest and then they sink down and are seen no more. We are like that. Each one of us no more than a tiny glimmering thing, a sparkling droplet on the waves of time which flow past beneath us into an unknown, misty future. We leap up, look around us and, before we know it, we vanish again. We can hardly be seen in the great river of time. New drops keep rising to the surface. And what we call our fate is no more than our struggle in that great multitude of droplets in the rise and fall of one wave. But we must make use of that moment. It is worth the effort.”