Everywhere I go in Silicon Valley these days, I seem to hear the same conversation: So-called dot.com wealth is making people crazy. The market's amazing embrace of Internet-related companies that are long on business models but often short on actual business has created tens of thousands of millionaires. Yet people who haven't made it, many of whom have never before aspired to great wealth, suddenly find themselves perplexed and panicky that the bubble will burst before they snag their share.
We all now collect "sudden and weird wealth" anecdotes, like Beanie Babies. There's the guy who grabbed the rights to the "computer.com" Web address in 1994 for a few dollars and recently sold it for a half-million dollars. But my favorite story comes from Ron Trugman, a Menlo Park (Calif.) investment adviser, who walked to the end of his driveway one morning only to have his garbageman come bounding up with a big grin and an outstretched hand. He thanked Ron for neatly bundling up the business publications he throws out each week, because the garbageman had been taking them home and reading them. Based on something he read in the stack, he invested in online auctioneer eBay Inc., whose stock had zoomed up about $40 a share in recent days. Trugman, on the other hand, had looked at the same story and decided to pass. Trugman laughs about it now. He didn't then.
There's nothing new about the bitter taste of missed opportunity or good old-fashioned envy. But there is something new about so many Valley dwellers swapping stories where the punchline always seems to be: "I must be doing something wrong." The most disaffected crowd seems to be professionals, such as doctors and attorneys, who have worked hard and been well-compensated and thought they were doing just ducky a couple of years ago. Now, some Net phenom who never finished college has just bought a neighbor's house and leveled it to build one twice as big. "I help these guys who aren't very smart take companies public and see them walk away with $30 million," says a friend of mine at a prominent Valley law firm. "I feel like it's the Gold Rush out there, and I'm handing out shovels."
CORROSIVE. Clearly, standing in a half-million dollar house fretting about economic injustice does not make even the bottom rung of the world's tragedy scale. But here in Silicon Valley, the pressure and stress of this preoccupation with wealth is palpable and corrosive. The Valley's value scale has shifted from who's making the coolest stuff to who's making the shrewdest job jump. "I have nothing against self-made men and women," Valley attorney Lorraine Hirsch says, "but being self-made used to mean you had something going for you--brains, determination, savvy--and it took at least some time and hard work. Here, people become enormously rich just by being in the right place at the right time."
Networking kingpin and Cisco Systems Inc. CEO John T. Chambers has little patience for this kind of talk. He runs a company that has created many millionaire employees. When I ask Chambers about the dark side of the wealth boom, he looks at me like I'm Austin Powers flashing him a peace sign: No one in Silicon Valley begrudges anyone any wealth, Chambers assures me. He thinks the opportunity to hit it huge is a giant motivator. "I would like to see the whole country move this way," says Chambers, the Valley's biggest defender of rewarding employees with stock options.
I respect Chambers' point of view, but I fear he may be breathing rarified, Internet-spiked air. In fact, even most beneficiaries of the dot-conomy admit with no small cynicism how off the dial it is. "Right now, you could put dot.com on your grandmother and take her public," says venture capitalist Michael Moritz, the Sequoia Capital partner who discovered Yahoo! Inc.'s founders in a Stanford University trailer office and shoved them down the road to billionarity. At a conference a couple of months back, someone asked Infoseek Corp. founder and Chairman Steven T. Kirsch how the Internet has changed his life. "Without the Internet, I'd just be another multimillionaire," said Kirsch. "But I started an Internet company, and my net worth is...nearly half a billion."
"ON MARS?" Valley religious leaders say ungodly wealth isn't paradise. Menlo Park Presbyterian Church has many successful high-tech types in its congregation. Executive Pastor Jay Mitchell not only sees the dark side of Valley life first-hand in the pain of some families stressed to the breaking point, he finds himself right in the middle of the action, gnashing his teeth at million-dollar starter homes and wondering how to raise his children amid the excess. Driving his kindergartner's classmates on a field trip recently, Mitchell heard a voice in his backseat say: "My dad just bought a Maserati." Another replied: "My dad just bought a Ferrari." In another time and place, the good pastor might have scolded the boys for telling whoppers. But he's sure they weren't. He recalls thinking: "Have I landed on Mars?"
Venture capitalist Wally Hawley, a founder of InterWest Partners, is proof that conceding some negatives about the dot-conomy won't cripple the great march of capitalism. He scoffs at the growing ranks of entrepreneurs and venture capitalists who "keep score and count toys" like jets and in-home theaters. "Three years ago, I said: `I've made a lot, I don't need more."' He opted out of InterWest's latest fund and started trying to make the nonprofits he works with more effective--while challenging fellow businesspeople to make a commitment to investing in philanthropy and social good.
I'm starting to think an uptick in philanthropy may be one silver lining to the angst cloud. The Valley has been unconscionably stingy, but that may be changing. Kirsch's crack offended me until I heard more about his considerable giving: He wrote a check for $1 million when our local United Way recently announced a shortfall. Hawley predicts that "in 10 years, people like me won't be a rare example." Lecturer Tom Mahon says disaffected techies are packing his talks on "reconnecting" with the spirit of community and humanity he thinks the Valley has lost. He, like Hawley, preaches the old-fashioned notion that while money spawns some amazing tales around here, it never has and never will buy happiness.