Getting to the truth of Silicon Valley

Tech commentator and author Michael S. Malone ’75 MBA ’77 has made the study of Silicon Valley his life’s work. And his new novel finds the point where fact and fiction meet. This article first appeared in the San Jose Mercury News.

If you really want to understand Silicon Valley—not the venture capital system or the function of a chip’s logic gate or even the stickiness of a social network—but the soul of the place, how it works and what drives the people who come here from all over the world, you could do worse than spending an hour with Michael S. Malone ’75, MBA ’77.

You could call him a tech columnist, author, historian or businessman. But what he really is, is the professor emeritus of Silicon Valley, a guy who has made the study of this place his life’s work.

“I came here as an Air Force brat when I was 9,” Malone was telling me the other day. “I mean, I’m valley. I can’t imagine living anywhere else. And I do love this place.”

I called Malone recently after reading Learning Curve, his most recent of many books. Yes, it was about his favorite subject—Silicon Valley—but this one was different. It was fiction, Malone’s first novel. I’ve said before that truth in the valley is often stranger than fiction—and so maybe fiction is the best way to handle it.

“I spent my whole life writing nonfiction about the valley and there are certain things that non-fiction just can’t do that you can do in fiction,” Malone says. “There’s the personal dynamics and the wheeling and dealing and the back-room stuff and the realization that everybody here is plotting. And I wanted to capture some of that.”

(How strange is valley truth? Malone tells the story of sending his manuscript to venture capitalist and author Tom Perkins to get a promotional blurb for the book cover: “I had trouble reaching him. He finally got it. Had me send it to him, to his submarine, which he was testing in Tahiti.”)

Now, I don’t call every author whose books I read. Malone has been a helpful source for years and I regularly call to bounce ideas off him. But in talking to him about his book, which manages to poke fun at the hyper-competitive valley without reducing its characters to cartoonish caricatures, it struck me that Malone has a grip on how the valley works that’s tighter than anyone I know.

“He has this real sense of time and decades and the paradigms that have pertained here,” says Joe DiNucci, a former SGI executive and a valley veteran who works with Malone on a program to build relations between Silicon Valley and the University of Oxford. “He’s a great storyteller.”

And why wouldn’t he be able to tell the Silicon Valley story? Malone, 59, literally lived through the head-spinning change that transformed the valley from farm land to tomorrow land. He wrote about much of it in books about Hewlett-Packard, Apple, IPOs, the rise of the semiconductor industry, and risk-taking entrepreneurs. He was in the right place at the right time as an early stockholder in Siebel Systems and eBay. He’s networked to the max. And he still lives in the heart of the valley, in an old Sunnyvale farmhouse that is the oldest in town.

Malone is the sort of player that every subculture—be it Washington D.C., Hollywood, Wall Street—has and needs. He flits from advising startups, to teaching writing at Santa Clara University, to debating at Oxford, where he’s an associate fellow at the Saïd Business School, to work at startup PatientKey, where he is a director. But mostly, he writes, writes, writes. His opinion pieces show up, among other places, in the Wall Street Journal and in Forbes, where he once worked as an editor of ASAP, one of a slew of tech/business magazines that blossomed during the dot-com boom.

He just finished a history of Intel, which is due out this summer. And Learning Curve, which charts the collision course of a global company with a bigger-than-life founder and a startup competitor filled with 20-somethings, is the first of what Malone says will be a quartet of Silicon Valley novels. And while the first installment indicates that the series will be highly entertaining, they are likely to come with a heavy dose of Silicon Valley insight.

“There are truths about the valley that we kind of all have internalized, but we don’t say them out loud,” Malone says. For instance, the truth that “at some point in Silicon Valley you’ve either worked with, for, or against every other person in Silicon Valley.” (Marissa Mayer, meet Sergey Brin and Larry Page.)

In fact, the valley, which we think of as the capital of reinvention, reinvents itself over and over again—semiconductors, PCs, the Internet, dot-coms, social networks. The projects and platforms change, but the underlying stories are the same. (Blockbuster IPO for profitless Twitter, meet blockbuster IPOs for profitless Netscape and Yahoo.)

“Everything changes, but nothing changes,” Malone says. Sure, he says, the people are different, more diverse now, and the products they are building and who they are selling them to have changed.

“But right at the core, it’s the story of the entrepreneur.”

It’s a riveting story that Malone will no doubt find new ways to tell. And if we’re smart, we’ll continue to listen.

Following is an excerpt from Learning Curve: A Novel of Silicon Valley.

V. 2.5

With her head swimming with caffeine and the implications of her decision, Alison pulled the Prius onto the 280 on-ramp. The sun was bright in the blue sky, and the fog had retreated back over the hills. The freeway too was almost empty.

What do I do now? she asked herself. What do I tell my people? I’ve never managed an IPO before. Heck, I’ve never been in an IPO before.

All she knew about Going Public was what she had read, that it was a miserable experience that tore the company n two for months, as one management team took off on an exhausting global road show and another team stayed home and tried to run a fast-moving company with half the staff. Just as bad, the entire company would have to enter into a ‘Quiet Period,’ when any public statement, any unprecedented media coverage—good or bad—could anger the SEC, leading it to suspend the offering… with all of the damage to the company’s reputation and value that this would entail.

She gripped the steering wheel at the thought. All the years of work, all the sacrifice—and to lose it all with one wrong word.

But don’t forget, she told herself: Going Public is a good thing. It’s what everyone dreams of, isn’t it? The big cash out. Everybody gets rich; everybody gets rewarded for taking the risk of joining a start-up. Isn’t that what Silicon Valley is all about?

Yes, but no one ever talks about the other side. The handing over ownership of the company to anyone with a few bucks to buy a share. The required financial reporting—and the very public media scrutiny that accompanies it. And worst of all, the change in the employees… and the change in you. We’ve been family; now we’ll never be family again. People—like me—who right now are willing to die for eTernity will suddenly take their new fortunes and leave.

And who will replace them? Mere salary workers. The risk averse. The office politicians. The gold watch crowd…

The car’s tires chattered against the lane markers, shocking Alison out of her thoughts. She over-reacted. The Prius swerved into the opposite lane, nearly hitting a passing panel truck. The truck driver pounded on the horn and waved a fist at her. She recovered control and made an apologetic wave.

She found herself panting, high with adrenalin. When it didn’t diminish, she quickly searched for the nearest exit and took it. She only recognized where she was when she passed the big, disconcerting statue of Father Junipero Serra as she pulled into the parking lot of the rest stop. She had passed this place a thousand times, but had never found a reason to stop. Now she raced the car to the first parking slot she saw, braking so fast that the little Prius rocked on its shocks.

Shw was panting more quickly now, and was becoming more and more light-headed, until her vision began to blur at the edges. Oh God, she thought in a panic, not this. She had hyperventilated under stress all her life—before going on stage as a girl, in the run up to her first public speeches and her doctoral presentation, even once as she waited for a blind date to arrive—but it had been a long time. And she’d never suffered from this during her whole time with eTernity.

Now here it was again, like an old warning from her past. With her head bobbing and her chest hurting, she searched frantically in the car for a paper bag to breathe in. It had been years since she’d carried one for emergencies. She tore open the glove compartment—nothing. The door pockets? Her blouse? The terror was coming on now. What if she fainted and injured herself?

She spotted her purse in the passenger foot well, grabbed it, tore it open, and shoved her head into it. With her face against wallet, hairbrush, tampons, ad a tube of lipstick, she slowly regained her breath using the tried and true method of inhaling her own exhaled carbon dioxide.

After several minutes, her face was wet with her own breath. At last, she pulled her head out of the bag and sat back against the headrest, exhausted.

When she finally opened her eyes again, she caught a glimpse of herself in the rearview mirror. Her face and eyes were red, her wet hair plastered to her cheek by tears… and a loose eyebrow pencil had drawn a black line across the bridge of her nose.

If only my future shareholders could see me now, Alison thought ruefully.

Instinctively she reached for her cell phone to call home. Then she closed it again and tossed it on the passenger seat. He’s probably still asleep, she told herself.