Does Silicon Valley Have a Public Relations Problem?
Silicon Valley is facing an image problem. Facebook didn’t even leave the Valley to ring the opening bell on its tragic IPO, and that was after spending $1 Billion on Instagram. Meanwhile Zuck’s sister is shooting a “reality” show in San Francisco and calling it… well, reality. Let’s not forget the Angry Birds movie, either.
The land of Apple, Google, Twitter, Facebook, Oracle, SAP, and thousands of bootstrapped and VC-backed startup admirers are facing a public relations problem in light of a modern-day, technology-fueled gold rush.
Nobody should have bit at the Facebook IPO, just look at the filing. Twelve percent of Facebook’s revenue is based on Zynga, creators of Farmville. Anyone remember Zynga’s IPO? Albeit much less hyped, it was worse than Facebook’s. Furthermore, the filing states that Facebook’s revenue and user base has likely already peaked, yet they haven’t figured out advertising, with major brands including GM pulling their campaigns ahead of the IPO.
Facebook is an ad network and until businesses find true value in their ads that valuation is staying inflated and their stock price is staying low.
Stereotyping Silicon Valley:
Let’s move onto the reality show. Bravo is now shooting “Silicon Valley” – check out the early promo (at 1:20):
Before filming, the show caused a debate over image in the valley, and rightfully so. It continued just this week with the New York Times saying the show is causing the valley to “cringe.” The cast is connected but questionable. Take Hermione Way, video director with The Next Web as an example.
When Hermione relocated from the UK she wrote perhaps the most honest piece of tech journalism you’ll ever read - The Problem with Silicon Valley Itself.
At one point “largely unimpressed and disappointed by the quality of startups here [in Silicon Valley],” Hermione is now saturating social media, traditional media and her own startup in a Trump-like cocktail of self promotion. Meanwhile, plenty of startup founders and VP’s hoping for a cameo or just a social check in at “The Villa,” the “Silicon Valley” version of MTV’s “Real World” houses.
Hermione is great, but we need less self-promotion and more hard-hitting journalism in the Valley.
A Golden State of Bubble and Burst:
Let’s be clear, long-gone are the days of Pets.com. Nevertheless, the Second St. corridor of San Francisco is beginning to look awfully reminiscent of the early 2000’s. It’s nothing but old, formerly empty buildings converted into offices for bloggers, startups, and hip, young people full of incredible talent. Sure, mobile industries are more sustainable, but are the business models and the money that backs them?
According to the National Venture Capital Association (NVCA):
“Next year , there will be a seed and early stage funding shortage according to 58 percent of VCs. CEOs anticipate a difficult funding environment as well with 67 percent predicting that raising follow-on money will be equally or more difficult in 2012 than in 2011. Still, 75 percent of the CEOs plan to raise money in the coming year.”
In other words, VCs say funding is harder to come by, and CEO’s say they expect that but are burying their heads in the sand as more expect to raise funds in 2012. Meanwhile, the same report claims:
“73 percent of VCs [are] predicting total commitments to remain the same or decline in 2012. This compares to 2011 when 62 percent forecasted stable or declining levels of fundraising.”
Does the well run dry? No. Will it be enough to sustain the boom? That’s anyone’s guess. I have my money on “no” in a California economy built on bubbles.
How to Fix This
Facebook, the self-promoting masses, VC projections and the PR problem they cause is not irreparable. Here are a few thoughts on a little image makeover. First, stop with the blogosphere echo-chamber. Despite that most blogs compete for eyeballs and hot startups draw eyeballs, the media in Silicon Valley needs to stop regurgitating the same stories to the top of Techmeme every day. Secondly, focus on BIG problems – stop saturating the media with acquisitions like Instagram which do nothing to actually change a significant problem in the world. Finally, look to the established giants who are solving the world’s most important problems – from healthcare, to politics, to green energy and education. There are plenty of startups tackling a small section of each, but established companies and leaders that are using technology to cause tangible, real disruption to the bigger picture are equally newsworthy, yet often underreported - less Foursquare, more actual advertising and retail solutions.
Don’t Get Me Wrong!
I’ve spent the better part of a decade in San Francisco working in firms which represented everything from ad networks to apps to consumer electronics and robotics. From AdMob (exited to Google for $750 million) to OpenFeint (exited to GREE for $104 Million) to my first client, bootstrapped app developer lucky enough to cross Steve Jobs’ desk – I owe my profession and career to some of the brightest minds I’ve ever had the pleasure to meet.
Now I’m here in Boston, one of the first tech capitals of the world – “The Hub”. The greater Boston area is home to Harvard, MIT and is the original birthplace of countless innovations including the Valley-dwelling king of the Internet, Facebook. It’s a welcome change to join a city built on long-standing technology innovation from healthcare to networking to storage and green technology.
In time, Silicon Valley may need to look at the image of a city like Boston for guidance, until then, let’s all tune in to “Silicon Valley” on Bravo.