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Economics and the Silicon
Review of "The Nudist on
the Late Shift"
| Editor’s Notes by
This issue is devoted to the Silicon Valley. Along with this introduction, I have included an article written by my friend Keith Fenwick who lives in New Zealand. He got his impressions about where we live from reading articles and the newspapers. The other article on the Valley stems through a review that I have written on Po Bronson's book, "The Nudist on the Late Shift."
I am putting out this newsletter a few weeks early due to the fact that
I've been looking for a new apartment, and cleaning up around here, and
therefore, I don't know if I'll have time to work more on the newsletter
in a couple of weeks. What sparked my want to perhaps change my
However, what really makes this time different than all the other times, is that for the first time, I feel a sense of entrapment because I see all the limitations. I think I had a reality check when I started to look at a new apartment to live in.
The computer industry has made the real estate market in the Silicon Valley a nightmare for anyone not in the industry, or for anyone making less than $60,000 gross annually. As an experienced litigation secretary, I make a competitive salary for this area; however, since I am way under the $60,000 annual gross, living conditions are limited for me.
I found that either apartments were unavailable, or some property managers
were taking names for a waiting list, or some had so many names, they
refused to take new names. In every case rents were extremely high,
and I found myself limited to only studio apartments, which still were
barelyaffordable for my salary. And despite the expense of these
apartments, many were in poor sections of town, off the main track. For
instance, I found apartments in Mountain View that appeared run down
on the outside, or the apartments situated side by side, wherein I could
easily foresee lack of privacy issues and potential noise problems. Many
of these apartments looked like they were designed from run down motels. These
looked like places I would not want to live in even if they were inexpensive.
I don't know if I'll be successful in finding a new place. It's been extremely discouraging due to high rental rates. Of course, the owner of my building is totally unsympathetic towards my discomfort in living across the short hallway from an unbalanced individual, for if I move, the complex can raise my already excessive rent easily by another $100 a month, and someone will pay it, not knowing about the situation across the hall, but happy that they found a place to live.
I am totally disenchanted with the Bay Area, and have decided I would only stick around now due to the fact that I finally found a good firm to work for, and have a few friends here, and the weather is okay. Some people think this is the best place to live in the world. I, instead, feel suffocated here.
My e-mail is: email@example.com and my mailing address on the last page of this newsletter remain the same until further notice. I have printed some letters I received via e-mail in response to the last newsletter I put together (January/February 2000). I encourage feedback on this newsletter as well.
I got several new e-mail pals through an ad I ran in the Spring 2000
issue (#49) of "The Letter Exchange." Check it out. Latest
issue for $9.00. Write: The Letter Exchange, Box 2930, Santa Rosa,
California 95405. Mention that you saw information about their
magazine in the SFPCC newsletter.
"Letters to the Editor"
January 10, 2000
I read the SFPCC newsletter yesterday. I think it's excellent.
You gave a short segment of a screen-play about you and Lee (driving , hitting a deer etc.) Maybe it can be the basis of a member-provided series: members can submit their proposals for the "next installment", and each issue the editor will choose the best proposal, and publish it as the next installment. Probably a better concept for a writer's group, than a computer club, but I just thought I'd give you my idea.
I liked the article about "The Software Conspiracy" the best. Sounds like an excellent book. There is some point where I think I disagree with the author of the book. (I say "I think", because I only read your article, not the book itself, so maybe I misunderstood that point). According to the article, one of the examples he gives is calculators with limited precision (e.g. 8 decimal digits). He mentions that in some cases (e.g. space flight calculations) it is not good enough. Well, I don't think you can call this a bug, or put any blame on the manufacturers here. Let's say that you have 8 kids, and you want to buy a house. If you buy a 2-bedroom house, can you blame the constructors of the house for doing a lousy job, because you need more space? Or even if you have no kids, and buy a 2-bedroom house, and later have 8 kids, can you blame the constructors for not foreseeing your future needs? Of course not. This is a cost/benefit issue. If someone is stupid enough to use a 8-digit calculator to plan a trip to Mars, well, too bad. This is definitely not a bug or a deficiency of the hardware/software.
I also liked the editor's introduction. Funny - this editor had the same problem (computer crash) like you had!
I just finished reading the Jan/Feb 00 newsletter and really enjoyed your article about getting a new computer. It makes me think about what I went through at Christmas. When my brother asked me what I wanted for Christmas, I told him I wanted more RAM and to have him install it for me.
Well, when Christmas came, he was very picky about which presents I should open from him and in what order. It turned out instead of getting RAM, he was sold a new Mother Board and a new processor, and also 32 megs of RAM. Nothing was wrong with the old computer, mind you, it was just as slow as the Dickens. It was a 486 with a 56k modem and only 8 megs of RAM. The new "guts" was an AMD K6-2 with 3D NOW technology and 32 megs of RAM. So, on Christmas day, my brother Mark and my cousin Fred, down from Portland, took out the old Mother Board and put the new one and chip and RAM. A week later, after my brother tweaking the settings and getting the computer up and running, I had my Christmas wish, a faster computer. I am happy with my new computer, and although I had to wait a week to see my email and do stuff on the new computer, the wait was worth it.
You can print my story in the next newsletter if you want. People might be interested.
January 11, 2000
One of the few times, I could not put it [the newsletter] down, until I read it from end to end.
January 11, 2000
Read your newsletter. The Software Conspiracy review was excellent. I see you got me involved in screenwriter sample. Wonder what the old boys (men) in the club think? I like the newsletter format with the exception of the double box around the SFPCC news header which looks confusing.
Ed's Note: I fixed it. I hope you like it now.
Saw a few typos, but I was really impressed with the issue. I liked the Control-Alt-Del article a great deal.
"Economics and the Silicon Valley" By Keith Fenwick
Last Wednesday was the first day of the rest of my life. For
the past ten years, I have been known in New Zealand as a courier. .I
was an. independent contractor working for a major New Zealand company
delivering small parcels, documents, and mail like DHL, Federal Express,
New Zealand Couriers, or a UPS man. I've had ten years of long
hours, continual fatigue, little time off, and an increasingly stressful
working day. Over the years I have realized that being a courier
is more than a job, it's a lifestyle. For me being a courier, especially
in the last four years, has revolved around getting out of bed around
4am and not being home much before 6.30 p.m. most evenings. My
whole life has revolved around making sure I can get out of bed and trundle
off to work, more or less in one piece. Whether I be hung over,
full of a cold, or nursing broken bones, rain, hail, snow, or sunshine,
the job has to get done. Late last year I concluded that I'd ignored
the signals that my body and my brain had been sending me for too long,
decided I'd had enough and made arrangements to sell my contract. From
Wednesday I have been training a new contractor to take over my courier
run, an effort that initially at least, was more physically and emotionally
demanding than doing the job myself.
In some respects, Silicon Valley is an extreme economic and social model for the new high tech digital age that we are on the brink of embarking on. On one hand, millionaires are created everyday in this area. On the other, almost half of the workers employed in the high tech industries are on precarious short-term contracts with no associated employment benefits and earning barely enough to get by. Technological developments are being made on a daily basis that will help to shape the world of the future while people are sleeping in cars or commuting long distances because they can't afford to live close to their jobs.
This is the capitalist or free market model working at it's best or worst depending on your point of view, with a wide social and economic disparity between the social and economic have and have nots. People are being rewarded for their innovation, hard work or entrepreneurship (I don't know how fairly), while at the same time other people are being excluded simply because they can't afford to live in a particular area.
The focus of resources on high growth areas like Silicon Valley also means that there is less capital available for industrial or infra-structural development in other industries or in other regions. With capitalism and the dogma of the free market being embraced around the world as a means of developing economies as quickly as the failed socialist and communist dogmas of the last half of the 20th century are being discarded, there seems little apparent thought given to the social impact of a reverse in policy on the vast majority of populations that aren't equipped benefit from the free market. The disintegration of the command economy model of the old Soviet Union is a glaring example of how the sudden imposition of free market policies has resulted in widespread corruption, the accumulation of vast wealth by an elite minority, rising crime and the increasing struggle for the so called average man in the street to survive. The economic model might have changed and promised to deliver what the old command economy model didn't; cheap consumer goods, increased agricultural production, and better incomes. But while people wait in vain for these promises to come to fruition, they find their standard of living quickly deteriorating and government services like education and health crumbling around them. If you don't make enough money to live, can't get a job, if there is no unemployment benefit, or your pension has been stopped because the government has run out of money how are you supposed to live? The burdens of rising crime and the growth of black economies are a result of economic policies that benefit particular areas of an economy at the expense of the rest of it.
The free market only creates wealth for a small minority of people. People in the know, or who possess a particular skill or have a brilliant idea, or some other kind of leverage that is beyond the reach of most people who are consumed by the effort of simply surviving. The rewards might have been different under the old Soviet regime but the effect was the same, the creation of an elite, privileged, quasi aristocracy at the expense of the rest of the population.
It's a sad commentary on the state of human development that we haven't been able to create new socioeconomic models at the same rate we are developing new industrial ones and stunning new technology. In fact, the world presently seems obsessed with an economic model that was an abject failure right from the time it evolved during the industrial revolution. Capitalism has always been about the creation of wealth for people controlling human, capital, and raw material resources at the expense of other people. At some point in time somebody has to stop and ask the question about what's the point of producing something if nobody can afford to buy it?
Communist and socialist doctrines were developed to try and make everyone equal and ensure that workers received fair compensation for their effort but they ultimately failed because of a lack capital for investment and a lack of real rewards for innovation and creativity. Besides communist and socialist economies are or are more about politics and retaining power over a country or a population at any expense than rational economic decision making.
In New Zealand we were promised that the benefits of the free market would trickle down to everyone. Most people are still waiting for the drizzle to start but I am encouraged by evolution of our Ministry of Commerce into the Ministry of Economic Development. Economic development under whatever label you attach to the fashionable dogma of the day is as much about the allocationof resources both to stimulate the creation of sustainable wealth as it is about making a profit. The two things don't always go hand-in-hand. Anybody in the right place at the right time can make a profit, but creating sustainable wealth and ensuring that sustainability is a different matter. It's even harder act to juggle the needs of different sectors of the economy without discriminating against them in some way. We need to ensure that people are rewarded fairly for their efforts but we also need to ensure that everyone has an opportunity to compete and that those that can't compete are reasonably provided for by the rest of us. Contemporary economic development needs to be about including people rather than excluding people if we are to survive as a species in the long term and for our societies not to disintegrate into warring factions or tribes struggling for control of diminishing resources.
The wealth created by places like Silicon Valley is ok for the people who benefit from and enjoy that wealth. But what future is there in a life in a wealthy enclave that is continually trying to fight off a seething mass of resentful humanity hell bent on either partaking of some of that wealth or if they can't, ensuring that nobody else can either?
On another note, If you are in the vicinity of the Empire Tavern on
Friday night after six p.m., pop in and I might buy you a celebratory
drink to mark the end of my life as a courier.
"Review of ‘The Nudist on the Late Shift' Book by Po Bronson"
By Marsha Brandsdorfer
"Everyone knows money is more important than love." Two years ago I was told this by a very ambitious Asian engineer I met at a singles' group.
I had just finished reading an article "Everybody Needs Somebody, Even in Silicon Valley" in the February 7, 2000 issue of Techweek magazine. The article says, "Interviews with technies and Valley observers suggest friendships here are suffering from the need to network and meet ever-tighter project deadlines. The result can mean loneliness...What's more, nearly 20 percent of Silicon Valley residents say neighbors keep to themselves and only half of residents say they chat with their neighbors when they're both outside."
The article continues, "With record amounts of venture capital available and the promise of millions to those who create the next Yahoo!, employees at start-ups and related businesses throughout the Silicon Valley are working around the clock." The article says because these technies are so busy, they stop interacting with friends.
Since I live and work in the Silicon Valley as a single person, I do get to see first-hand what this area has done to relationships with other singles, or more precisely, lack of friendships and relationships. For one thing, the Silicon Valley is extremely expensive. To survive here as a single person, one must keep working. I do not work in the technical field, but I am a legal secretary. As a legal secretary, I am paid much better here than when I lived in Los Angeles and New Orleans, mostly because the competitive market insists I get paid a certain sum to survive in this area. However, I still find that a huge portion of my salary is eaten away by my high rent, which continues to rise annually.
The area is expensive because of supply and demand. Engineers from all over the world come here to live and work. The opportunities for them are enormous. Some just like working for a big company. I have an Israeli friend of mine who works for National Semiconductor as a software engineer. He was with the company at their Israel office and had the opportunity to relocate here and took it so he could live in America, in the Silicon Valley, California. Some engineers and programmers come here to work at start-ups, hoping that they can strike up the opportunity to become millionaires. As the quote from Techweek states above, they are hoping to develop the next Yahoo!
This is what Po Bronson's book is about. "The Nudist on the Late Shift" is the engineer or programmer sitting at his desk at 4:00 in the morning, working on his dream. In his book's introduction, Bronson also mentions that the Silicon Valley is about opportunity; the opportunity to be a "mover or a shaker." The next Bill Gates, perhaps? Money does appear to be more important than love in the Valley. My only fault with Bronson's book is that he only touches briefly, only so slightly upon this topic. He touches on all the avenues of the big dream in his very descriptive book, but does not mention the suffering of human relationships. He does not mention how the engineers who are so used to sitting behind the desk, behind the computer, have lost the lack of communication with the human being. I have met many engineers in singles groups I have belonged to, and yet very few of them know how to talk to women.
Many of them are extremely shy; some of them are cold and callous and speak only of the money they make and their stock options, thinking that impresses others, but it only bores us.
So many of the engineers I meet, including my Israeli friend have so many money, but so much unhappiness. They do not know how to have relationships and they have the pressure to work hard and to be successful financially. To me, I see them as already successful, as their salaries are at least twice, sometimes three times the amount I make, but as they are not millionaires, they don't see themselves as successful at all. In the Valley, one almost needs to be a millionaire to live comfortably, as housing is so very expensive here.
These are the items Po Bronson does not touch upon in his book. He does not talk about how it affects the job market in general. Although I now work in a law firm that does estate planning, probate, civil litigation, municipal law, and just about everything else that does not have to do with the technical market, I have done temp work in large Silicon Valley law firms that are engaged in International Properties ("IPO"), and it is amazing to me how much money is involved with this field. The largest Valley law firm, Wilson, Sinsoni, et al., with about 700-750 attorneys and three office buildings in Palo Alto, charges an average of $600 an hour in legal fees to their clients. They have a team of attorneys working on a project, many of them young, just new breeds out of the top law firms in the Country, helping with SEC filings, employee contracts, and any other related necessity, working round the clock. I temped at the word processing department for four months, which was open 24-hours. When I came in at 9:00 a.m, many times I was working on assignments that were clocked in by attorneys at 3:00 - 4:00 a.m. the previous morning.
I've also temped at other law firms, helping out with patent litigation, and patent prosecution, and these firms are just throwing the money around, at temps, at secretaries willing to work over-time, at high salaries and bonuses for the attorneys. I see all this and I am in awe. Money has indeed become more important than love.
Yet, this magical place, looks like anywhere else. When people come here, Bronson says they have been hoping "for an establishing shot that (says) ‘You're here!,' the equivalent of New York City's skyline or the Hollywood lettering in the hills.... So far all they (find is) an endless suburb, hushed and nonchalant, in terrain too flat to deserve the term ‘valley.' Along the peninsula the setting (seems) to repeat itself, a cartoon backdrop - every few miles another Blockbuster Video, another Chevy's, another Toyota lot. In between (are) office parks, quiet in the hot sun." (Introduction, page xvii).
But, yet "you can stand in the aisle at Fry's Electronics
on a Friday night and see people's endless fascination with joysticks
and Dilbert books... and know that probably half the people there are
in the business, though there's no way to tell which half." (Introduction,
In fact, with free e-mail on the web, "you no longer even
had to own a computer - you could log on from a McDonald's in Czechoslovakia
or a café in Taiwan." (Page 87).
Bronson does not explain how the programmers designed the software to develop Hotmail, but he does say that after it was launched to the public, it became successful, because the first users who discovered Hotmail, would tell their friends about it, who in turn would tell their friends, and so forth. "It introduced the concept of ‘viral marketing,' in which each e-mail message sent from a Hotmail account was, in effect, an advertisement for the service to its recipient. The service did not need the marketing budget that had originally been anticipated. Sabeer spend a few thousand dollars on some advertisements in college newspapers but then never spent another advertising dollar for the next two years." (Page 87)
This story, shows that: "You don't have to be a genius. You don't have to be superhuman. You don't even have to be a techie. Just have an idea. And the best ideas are under your nose." (Page 80)
"But," Bronson writes, "you'd better act on your idea fast, because the same trends that made your idea pop into your head are making that same idea pop into competitors' heads." (Page 217)
Bronson shares a story about a company that went public and the excitement and waiting that emerged from that. Going public is about prestige. "It's about getting the respect of one's peers. It's about a valley full of superachievers trying to climb up that highest rung on the ladder." (Page 61)
"The day you go public, it's sort of like a birthday. It's your special day, but you wake up and you still look like you and talk like you and act like you, and if people don't know it's your birthday they can't tell. Your day isn't really different from any other day, but you know it's special, and you feel special, and for most of the day it is special, even though absolutely nothing has really changed except that your liquid net worth is close to $28 million." (Page 74)
There's a chapter about programmers. "Top programmers are not nerds stuck in the back room anymore." (Page 103) "This was not 1993 anymore, when game coders working on a deadline were barked at, driven to exhaustion, and underpaid. This is 1998, and it's the era of the Internet, which has squared the complexity of programming, causing a paradigm shift in the market for talented coders. Never before have the few good ones had so much leverage. Talent!" (Page 109)
Bronson mentions how top programmers are in high demand and can make massive amounts of money freelancing. But he does mention that there are some new pressures too. He writes: "When programming was confined to the computer desktop (before the Internet), it was always pretty easy to hide the fact that its guts/architecture might be mangled. We, the modern masses, have always judged software by its features, or the way it looks on the surface, ignoring its guts....But in the transition to networks, guts are everything. You can no longer hide ugly guts. On the Internet, ugly guts will crash the system under the stress of multiple users. When a Web site crashes, the whole world knows about it. In the era of the Internet, the gap between the studly and the sucky is suddenly very conspicuous...That's the test of programming today: build a system that will scale from hundreds of users to millions." (Page 112)
The author realizes that it is money that motivates the individual,
but also there is more pressure to keep up with the present and "in
inventing the near future." (Page 202)
The market is competitive, and there are more demands. "Silicon Valley changes so fast that no sooner am I done describing its many elements than I have to start in again for a fresh look. The sequel begins before the prequel's finished-already it's time again to upgrade," says the author. (Page 214) "At the rapid rate at which (the industry is) evolving, can you afford not to get in?" (Page 248)
Bronson is realistic in writing that the Valley is competitive,
and it requires hard work, but I don't think he is objective in his opinion,
or he might have written more about the downfalls. There are so
many more companies that fail than succeed, and as I mentioned above,
so many people are lonely and unhappy. I am not a big fan of the
Silicon Valley. Never have been and never will be, but money is
the root of all evil and money can be found here.
He read an original piece of writing for us, something he said he wrote just for us for this event. And after he read, he talked to us. And he said that we were all so lucky to live in this area and live here at this time. He said we are lucky because this area holds so many opportunities. There is money to be made here. This is the gold rush.
I had walked around the convention and there were booths from sponsors, from businesses, all of which had web pages. It was overwhelming and it was only a small salt grain of what's happening with the Internet. Some of the samples of companies were a bank on line (www.wingspanbank.com); a coupon savings site (www.ecoupons.com); a site that pays visitors to sign up for various services and shopping sites through their central registration form (www.xmarksthespot.com); a site that provides discounts on various products and services if their employer signs up (www.beyondwork.com); a service that helps you access and pay your bills so you can be organized and not forgetful (www.statusfactory.com); and so much more.
However, when I left the Giftcenter Pavillion, it was rainy and everything looked gray as the sky darkened, and things did not appear so colorful anymore. As I walked through the streets of San Francisco, heading up to Market Street, I saw the homeless, the crazy, who live on the streets, who cannot hold any type of job, not even a minimum wage job. And I thought, so if you're not involved in the computer industry, are you out of luck? If you're not sane enough,fortunate enough, are you out of luck? If you're not creative enough, are you out of luck? If you're not educated enough, then are you out of luck?
And, if you are in the industry, you find yourself so busy working, trying to come up with ideas, being competitive, and making money to pay your high priced mortgage or rent, to pay for your expensive car, to make your fortune, that you do not realize you don't know how to talk to people, that you don't have the time, that you don't want to think about how lonely you are.
Somehow, things just seem so twisted. No one seems to be able to see each other. Again, I hear Po Bronson's words in my head. Bronson, journalist, author, standing before me, before an audience of a few hundred, standing before Bay Area residents, telling us how fortunate we are, how lucky to live in this area and live here at this time. And I think, maybe we are. But, then maybe we are not.
Meetings are always the second Thursday of the month at 222 Laurel Street, at 7:30 p.m. Cross streets are Oak and Hull. Please do not park directly in front of the building. You may park at the lot behind the stores at Oak and El Camino, or park down the street, parking in front of the building is reserved for residents of the complex. Look for signs leading to the meeting room. Occasionally, access to our meeting room is unavailable, and since we do not want to cancel any meetings, we would then meet at the Round Table Pizza just up the street on El Camino. This does not happen often. However, should you find that the meeting room is locked, please look for us at the pizza place, and buy yourself an inexpensive salad! Sorry for the inconvenience.
The next meetings are May 11, 2000 and June 8, 2000: At the time
of publication, scheduling had not been determined. Lee Hill suggests
checking our club web site for an update. Remember, it is www.sfpcc.org. You
can also check out Judy Oliphant's page, which is: www.sirius.com/~jlo.
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