Skip to Navigation Skip to Content

Why Do We Admire Silicon Valley Entrepreneurs But Hate The Ones in Our Own Backyard?

The first time I saw San Francisco, I knew I wanted to live here for the rest of my life. It was during the peak of the dot-com bubble, and I was a reporter on a two-week loan from a business weekly in Memphis. Those two weeks would turn into four, which would turn into more than a decade.

Much of my attraction had to do with the region’s celebration of entrepreneurship and culture of meritocracy—a huge departure from the old boys’ club of the South. No matter how big the bubble inflated or how bad the bust hurt, people in San Francisco were always entrepreneurial—even if they weren’t starting companies. I wasn’t surrounded by anyone punching a clock. I was among men and women who believed that if you didn’t like your reality, you should work hard every day to change it. I’ve always told people it’s something in the water here.

Oh, if only it were. I’d give a good portion of San Francisco an IV of Hetch Hetchy right about now. Something culturally strange is happening in the city I used to love. I’m talking about the growing cultural rift between the city and Silicon Valley, despite the obvious geographic overlap.

If you drew a Venn diagram between San Francisco hipsters and people who work in and around the Web industry, the middle of that diagram would be fairly large. And implicit in almost every Web 2.0 startup is the idea of scaling quickly. Big is good in startup land. Getting big fast is what separates startups from small businesses. Doing that repeatedly, decade after decade, is what separates the valley from nearly anywhere else on Earth. Yet in San Francisco, a vitriolic hatred is emerging for anything big and successful. The conflicts strike at the heart of what has made Silicon Valley great. And it’s becoming an epidemic.

Consider a few recent examples. The city filed a cease and desist notice to the popular startup UberCab—now just called Uber. The company makes use of available black cabs by allowing you to book them on the fly via an iPhone. It’s similar to how travel websites move unused and perishable hotel rooms or airline seats, a celebrated business model that has netted billions in profits and thousands of jobs. Except that Uber made the mistake of running afoul of San Francisco taxi drivers.

Before that, there was an ugly blowup around local highbrow coffee vendor Blue Bottle Coffee, which wanted to open a coffee truck in Dolores Park. Residents became so incensed that they didn’t get adequate opportunity to approve or disapprove of this “chain” store opening a non-permanent location in their neighborhood, an army of people threatened to boycott, protest, and—believe it or not—actually spit on employees as they went to work their first day.

That same week, the San Francisco Chronicle reported that Trader Joe’s may pull out of a Castro development, in part because the city was forcing them to make patrons pay to park. The city wanted to discourage people from driving to Trader Joe’s, and the popular low-cost organic retailer rightly balked.

And, of course, there was Supervisor Chris Daly’s well-choreographed uproar over a proposal to upgrade San Francisco’s port so that the city could host the America’s Cup in 2013 or 2014. For a relatively low price tag of $270 million, the upgrade was estimated to generate $1.4 billion in economic activity and create 9,000 local jobs, while helping repair the aging Port of San Francisco. In his long rant, Daly declared that “San Francisco should not be going so out of its way, using the people’s money so that a billionaire can have his yacht race.” Or, I guess, using the people’s money to give several thousand others jobs. Oracle’s Larry Ellison has a lot of enemies, but most would admit that building the second largest software company in the world in SF’s backyard has done more good for the area than harm. And calling the America’s Cup his yacht race is extreme—even given Ellison’s colossal ego.

Beyond these public examples, I know self-made Internet millionaires who’ve bought historic properties in transitional SF neighborhoods, only to give up on restoring them because they met so much neighborhood opposition to anyone wealthy coming in. And I don’t mean trust-fund kids. I mean people who moved here because it was a land of opportunity, started from nothing, and took huge risks to build companies that employ hundreds of local residents.

My husband and I were proud to buy a house on a rough street in the Mission two years ago. We’re active with the neighborhood watch, help organize clean-up days, and do what we can to make our block better. But somewhere in the mire of permitting and politics, while trying to ensure our 100-year-old house has updated electricity that won’t catch fire, I’ve fallen out of love with a city that seems to care more about radical rabble-rousers than those who invest in it, whether it’s by creating jobs or buying old homes.

Somehow the same city—the same cultural mix—that supports a Web startup going from an idea to a global powerhouse in a matter of months rushes to tear down a retailer that’s been successful enough to open a few stores. It’s such a staggering disconnect of rewarding success on one hand and punishing it on the other—one of the most open, competitive systems of working capitalism, juxtaposed against a system that is downright anti-capitalist and protectionist to a rabid extreme.

Somehow, in the city that benefits the most from their hard work, the entrepreneurs have become the enemy. Those who can’t or don’t start companies are tearing that meritocratic ethos down in the name of looking out for the little guy. But who’s really better for the little guy: An entrepreneur investing in building a profitable, growing company or a self-important political activist?

Sarah Lacy is a senior editor at TechCrunch and author of Once You’re Lucky, Twice You’re Good (Gotham) and Brilliant, Crazy, Cocky (Wiley), coming out in January.