If the Jeopardy answer is “A high-end, high-performance, electric car, designed and manufactured in Silicon Valley,” there has, until now, been just one correct response: “What is a Tesla Roadster?”
Starting in 2015, however, if all goes according to plan, Tesla will no longer be the only auto company making electric cars in Northern California. Last week Renovo Motors unveiled the 2015 Renovo Coupe, a 500-horsepower electric sports car that the company says goes from 0 to 100 kph in less than 3.4 seconds (that’s 0.8 seconds faster than the Tesla Model S and 0.3 seconds faster than the Tesla Roadster), and can fast-charge in 30 minutes. The price—US $529,000—is a lot more than the Tesla Roadster, which shipped in 2008 with a list price of $109,000. It will be manufactured in tiny tiny quantities in Campbell, Calif.; just 100 are expected to reach customers next year. It’s going for the high-end, high-performance niche—higher than Tesla. It’s not the first company to think there’s a market for an electric car with higher performance than a Tesla—Tesla co-founder Ian Wright parted ways with the company a few years back and founded Wrightspeed to go after that niche. (Wright never got beyond the prototype stage, and changed his focus to designing commercial powertrains instead of cars, aiming to be the Tesla of garbage trucks.)
Renovo has much in common with its Silicon Valley neighbor Tesla. Like Tesla, whose founders’ resumes include Wyse Technology, Network Computing Devices, NuvoMedia, Packet Design, and Paypal, Renovo’s founders came up through the computer industry, not the automotive industry. Renovo CEO Christopher Heiser worked at Verisign, LightSurf, and IDEO; Renovo CTO Jason Stinson was a long-time Intel employee. And the company is not shy about touting its Silicon Valley roots. Says its web site:
We are fortunate to live in the most innovative place on Earth. It is a place where companies born in a garage—like HP, Apple, and Google—can achieve incredible scale and impact in an amazingly short amount of time. There is no better place to build a company—and no better place to work.
Renovo’s engineers (the company says it employs around 20 people) have been working on the design for four years. The body design is a modified Shelby Daytona CSX9000, a 1964 racecar; the secret sauce is Renovo’s battery architecture and the distribution of the batteries in multiple packages around the car. A Motor Trend writer took a test drive and called the car’s acceleration “fairly epic.”
Journalist and author Mike Malone, who grew up in Silicon Valley and has written about the companies and the people here since 1979, came to the Computer Museum in Mountain View recently to promote his latest book, The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World’s Most Important Company.His conversation with NBC Bay Area anchor Scott Budman on the Computer Museum stage in front of a packed house quickly veered beyond the book’s subject matter and became an opinionated romp through Silicon Valley’s past and into its future. Some highlights:
On the people who represented the eras of Silicon Valley:
“There are a series of key figures in the Valley’s history. Terman sets the ground. Packard is the first world historic figure and the leader of the Valley through the 60s. Then Noyce. Then Jobs,” Malone said. Right now, however, there is no obvious leader. “When Queen Elizabeth came to the Valley, it was assumed that Packard would meet her,” he said. “When the Japanese semiconductor industry attacked, the only person who could speak for the U.S. industry was Bob Noyce. Now, when Obama flies in, who stands up and says they represent Silicon Valley? No one.”
But that vacuum may soon be filled. “I think Elon Musk is the next major figure of the Valley,” Malone said.
“There’s a nostalgia,” NBC’s Budman interjected,“for a smooth CEO, a good-looking CEO.”“An adult CEO,” Malone quipped, someone who will “take off the hoodie and put on a shirt.”
On Intel’s management:
Malone described Noyce, Moore, and Grove as a “Holy Trinity. You’ve got Noyce, the father of Silicon Valley; Moore, with the law, as the Holy Spirit; and [Grove] the difficult but ultimately successful son.”
On Steve Jobs’ connection to Bob Noyce:
“Apple is patterned on Hewlett-Packard, but Jobs is patterned on Noyce. Noyce’s death shattered Steve Jobs,” Malone said. “It grew him up. Jobs grew up twice—Noyce’s death, and his own illness—those [events] created the Steve Jobs of legend.
On Gordon Moore’s big mistake:
Malone thinks Gordon Moore made a big mistake in 1965, when he wrote the paper that described what came to be known as Moore’s Law. “He wanted to write about the performance of memory chips, and he had maybe six of them. He drew a graph, and [the slope was so steep] it went off the page. So he did it again with log paper, and it formed a shallow, comfortable line.” That’s the graph he used. “We got used to that nice line,” Malone said. But it was misleading, because it made the rate of technology change seem fast, but not too fast to assimilate. He explained that replotting that line as a regular graph, not a logarithmic one, from 0 to 10 billion transistors, you discover that in 2005 the curve takes a dramatic vertical turn. And then, Malone said, you can see “that everything we’ve been through—from transistor radio through the Internet and smart phones, is all in the foothills, and the leaps every two years now are staggering. Everything we’ve gone through now is just a prelude to what’s about to hit us.”
On the shifting center of Silicon Valley, geographically and technically:
Malone, a resident of Silicon Valley since childhood, said the capital of Silicon Valley, the center of the action, keeps changing. It started in Palo Alto, he explained, with companies like Hewlett-Packard and Varian. It then slowly crept south, to Mountain View and Santa Clara and Sunnyvale (where many of the semiconductor companies are located). Then, he said, with the boom in Internet-related startups, it hopped north to San Francisco. “The capital of Silicon Valley has been San Francisco since 1998 he said.”
But change is coming. “The valley is getting ready to make another move of its capital,” he said. “This is ground zero: the triangle of Sunnyvale, Mountain View, and Cupertino. And it will be for next 10 years. Facebook is down here. Google is here. I was in downtown Sunnyvale and there is a million-square-foot office building under construction—for Linked In. And the Apple donut is coming.”
One reason, he said, is that San Francisco is becoming inhospitable to tech companies, with the current backlash against tech workers. And those tech workers are growing up, and looking for a more child-friendly place to have families.
But probably a bigger reason, he explained, is the technical shift, from software back to hardware. “ They code stuff up there, we build stuff down here,” he said. “If you look at Tesla, wearables, health care, mobile medical, it’s all hardware.”
On the future of Apple under Tim Cook:
Malone said that he predicted that Tim Cook was going to be a great CEO, at least for a while, because he knew “how to handle Steve, if you controlled him, he created magic, if you unleashed him, he destroyed the morale and created chaos.” Cook’s management talent would make Apple more profitable than ever for a few years, but Cook is not the person who, Malone said, “when you came with a new idea, would say that isn’t crazy enough. [Under Jobs,] Apple was pro-risk, not risk adverse—you got punished for not taking enough risk.”
Without that risk-pusher at the top, Malone said, “I think the age of Apple as the most exciting company has gone by.”
On Facebook’s strategy:
Malone thinks Facebook’s push to make money off of its users is “a very dangerous game.” If they make a mistake, people will walk away from the site, he said, because there isn’t enough to hold them there. But, that said, Malone says “Zuckerberg’s strategy has been brilliant, because he knows the vulnerability. So he goes out and buys Instagram. Then Instagram is no longer the flavor of the day, so he buys What’sApp. Zuckerberg is jumping from rock to rock in this roaring river of the technical revolution. [And he can do that because] every company around here is like Scrooge McDuck, they have vaults filled with gold coins.”
About a year ago, CPI Corp., the king of the portrait studios, with storefronts inside Sears, Wal-Mart, and Toys R Us stores, closed its 2000-plus U.S. outlets. I was sad to see it go—for more than a decade, I dragged my kids over to one of those studios for an annual portrait. Now, in an era of cameras in every gadget, like most families, we moved from portraits to selfies, from framed photos to Facebook posts, and left the portrait studio behind.
But CPI may have given up just a bit too soon. Because the portrait studio may be about to come back, thanks to sophisticated scanning technology that’s coming down in price, and 3-D printers that are getting better and better at creating realistic full color objects.
San Francisco’s Momentum Machines has been working for several years to develop a robotic system that can make the perfect custom hamburger—cooking the burger, slicing and placing the toppings, even, eventually, grinding meat to order—at the rate of 360 burgers an hour. The company’s aim is to replace the line cook at fast food restaurants. Initially, it plans to set up its own chain of restaurants; eventually, it expects to sell its burger-robot to competitors.
The company recognizes that when a restaurant brings in its system, jobs will be eliminated; it wants the men and women who lose their jobs to become engineers and work to design more automated systems. On the website, the company states: “We want to help the people who may transition to a new job as a result of our technology the best way we know how: education. Our goal is to offer discounted technical training to any former line cook of a restaurant that uses our device. We will certainly need more engineers to design new devices and technicians to service a growing line of automated restaurant solutions. These are the minds that can do this job.”
It also is asking for ideas about other ways it can “help with the transition” as robots replace workers; to submit your thoughts, email firstname.lastname@example.org.
Silicon Valley CEO pay is typically all over the map—with some CEOs, rich in stock, taking a token $1 in salary, and others (even those with large stock holdings), raking in astronomical paychecks. And some salaries are simply head-scratchers. Here are a few highlight’s from the latest “What the Boss Makes” survey, a study conducted annually by Equilar for the Bay Area News Group. A searchable database of the study results is here. (Note: annual compensation includes, in most cases, a mix of salary and stock awards.)
Still way at the top is Oracle’s Larry Ellison, at more than US $78 million, down 18 percent from last year. That’s a weird one though—his salary and stock grants totalled up to a grand $1, his pay is largely based on performance bonuses. But we all know that Larry Ellison is the king of the paycheck.
More interesting is number two, Zynga’s Don Mattrick, at just under $58 million. Mattrick moved over from Microsoft in 2013 to turn the once high-flying company around or, in corporate speak “guide the company into its next chapter of growth”. That turnaround? Not happening, at least not yet.
Marissa Mayer at Yahoo ($25 million) came in ahead of Cisco’s John Chambers ($21 million), even though it was a good year for Chambers; his pay was up 80 percent from the previous year. Intel’s Brian Krzanich’s paycheck totalled about $9.5 million, putting him in a crowded $5 to $10 million group that also included Electronic Arts’ John S. Riccitiello, SunPower’s Thomas H. Werner, and AMD’s Rory P. Read, and a number of other semiconductor industry executives. Of course, the executives who really get bragging rights are those who are forgoing pay altogether (or close to it); like Larry Page ($1), Ubiquiti Networks’ Robert Pera ($0) or Tesla’s Elon Musk ($70,000—or almost exactly the price of a 2014 Tesla Model S.)
Trust me, Mark One’s $200 drinking cup ($100 if you preorder), Vessyl, won’t be the next Fitbit. But if it works as its creator, Justin Lee, says it will, it’s pretty amazing. And it's a demonstration of the power and availability of low-cost sensors today.
The system involves a washable (but not dishwasher-safe) cup that can be used for hot or cold beverages. The cup contains proprietary sensors, a processor, memory, and a small display; it does some analysis and tracking onboard, but uses a bluetooth transmitter that can connect it to a smart device, where an app can perform more detailed analysis and tracking of beverage consumption. The cup charges on a pad that looks like a coaster; it takes 30 minutes for a charge that can last up to a week.
Lee, a biomedical computing graduate of Queen’s University, Kingston, Ont., has been working on his smart cup design for seven years, taking sensors from the food manufacturing industry and reducing them in cost and size.
“We built our sensors,” Lee said, “and they use a proprietary technique to analyze what’s inside the cup, even though they don’t come in contact with the substance.” He’s not saying specifically what he’s sensing, or how the app uses information from the cup to figure out characteristics about the beverage like calories, nutrients, and caffeine content, but it’s some combination of sensor data and profiling, that is, after the app identifies the liquid, it consults a database to get detailed nutritional information about it.
The system is sophisticated enough, Lee says, to distinguish between orange juice with pulp and juice without, to calculate how much sugar or cream you added to a drink, and to know the caffeine content of a cup of coffee (handy for folks trying to monitor caffeine content, as the caffeine in a cup of coffee can vary dramatically, even from the same vendor). The database, Lee reports, is extensive: the company recently added beet juice, Kombucha, and a lemon-ginger beverage.
The app will track calories, nutrients, and basic hydration using the user’s height, weight, and gender to calculate his needs. And it only tracks what you drink, not just what you put into the cup; it also knows the difference between water that you’re drinking and water that you’re using for washing.
Mark One has 17 employees right now, about half engineering, and recently settled into San Francisco’s South of Market area, a short walk from Pinterest and Dropbox, where, Lee reports, “there’s a lot of engineering talent; we’ve been able to build our team with some really phenomenal people out of Nike, Apple, and Google.”
Lee says preorders surpassed his initial goal of $50,000 in less than two hours. And, giving the company a further marketing boost, in July comedian Stephen Colbert skewered the gadget, pointing out that the only real use he could identify was telling the difference between Diet and Regular coke in a restaurant. Getting on Colbert, even as the butt of a joke, can only help.
HBO’s Silicon Valley, a television series heading into its second season, tells the story of Richard, a young whiz kid plunged into the wild world of Silicon Valley startups. He forms a company, Pied Piper, and pitches his technology to venture capitalists and at a startup competition even as he and his cohorts struggle to improve their product, scribbling on whiteboards during long meetings. The technology is practically a character of its own in the show.
So the creators of Silicon Valley needed to “cast” the right technology. Early on, they settled on a piece of software—a universal compression algorithm. They were looking for what venture capitalists call “deep tech,” some kind of core technology that could be part of many different kinds of products or affect multiple industries. (The original working title of the show was “Deep Tech.”) They also needed a technology whose usefulness could be easily understood by a lay audience—and compression is a simple concept to comprehend, though not always easy to execute.
The creators had already hired a tech advisor with Silicon Valley startup experience, Jonathan Dotan. But Dotan isn’t an expert in compression, and the show’s creators wanted everything technical about the show to seem as real as possible. And so Dotan turned to Google to find an expert on compression and landed on information about a class taught by Stanford professor Tsachy Weissman.
Dotan sent Weissman an email, asking to chat with him about an upcoming TV series. Though Weissman often doesn't get around to looking at unsolicited emails, he opened that one, and was immediately intrigued. He quickly tossed out a number of ideas involving genomic data compression algorithms, lossy compression, and denoising, but kept coming back to a sort of Holy Grail in the compression world—a form of lossless compression far more powerful and efficient than anything that exists today, that could work on any type of data, and could be searchable, that is, could be decompressed in small chunks.
The busy Weissman brought in Vinith Misra, a student working on his Ph.D., to flesh out the details of the fictional algorithm.
“We had to come up with an approach that isn’t possible today, but it isn’t immediately obvious that it isn’t possible,” says Misra. “That is, something that an expert would have to think about for a while before realizing that there is something wrong with it.” It would pass, he said, a Powerpoint test, that is, in a Powerpoint presentation you could convince even technically knowledgeable people that it might be theoretically possible; it’s just when you sit down to build it that you run into insurmountable problems.
They wear hoodies, spill out of crowded bars on weekends, and are whisked to work on luxury buses with tinted windows. They are driving up rents all over town. They are the techies, the new immigrants to San Francisco that long-term residents love to hate, going so far as to stage protests against the buses and toss the occasional egg at them.
I’ve followed the Mime Troupe for decades; its shows are always entertaining and thought provoking, and typically take on issues surrounding the national government or the global economy. So the local focus of this year’s show, "Ripple Effect," came as a surprise.
Michael Gene Sullivan, lead writer of and a performer in this year’s show, says "Ripple Effect" indeed came out of a plan to tackle a national issue—the idea that many of the workers in today’s economy don’t realize that they are working class, and that “the middle class is an invention to get the workers of the world to fight among themselves” (a line used in the show). He quickly came to realize that this issue is the heart of San Francisco’s current conflicts.
“We in San Francisco are making the tech workers who are moving to the city feel isolated and separated. That’s a problem. These are hard working people. Yes, they are paid a lot of money, but we are in a tech bubble—in six months, a year, companies might suddenly downsize,” Sullivan says.
“We want them to see themselves as part of our class, the working class," he says. "We want to show the people who today define the city—the leftist activists, the immigrants, and the software engineers—that they have more in common with each other than they do with the bosses.”
"Ripple Effect" features three women—long-time radical Deborah, immigrant and salon-owner Sunny, and tech newbie Jeanine—who are literally in the same boat, taking a tour of the San Francisco Bay. Jeanine just moved to California from a small town to work for giant Silicon-Valley-company Octopus Tech; she won the job in an app design contest. Her app, "SUSI", the Support Utility for Special Individuals, lets anybody check up on anybody else; Sunny uses it to make sure she knows everything her daughter is doing and thinks it’s brilliant; she can read her daughter’s emails and turn on the smartphone’s camera to observe her daughter without her daughter’s knowledge. Deborah sees SUSI as a tool of the “cryptofascistic surveillance-ocracy”, yet another extension of the “electronic chains holding you in a CIA prison of the mind”. For Jeanine, SUSI is a gift of love: she developed it to help her mom take care of her Grandma Susi, who was getting lost and bankrupting herself by excessive online shopping.
"Ripple Effect" also involves Octopus Tech’s effort to build condos (and evict Sunny), a few lessons in the history of the radical left, a skewering of the current trend to open office space, Octopus’s agreement to sell SUSI to the government (repurposed as the Secret Utility for Surveillance and Intelligence) and Jeanine’s repeated assertion that she’s just a software engineer, she’s not political. In the end, techie Jeanine saves the day—using a backdoor in her software to create an alarm that alerts you if someone has installed SUSI on your phone without your knowledge.
“With an app,” she says, “you can do anything.” And, Jeanine comes to understand, “There is no such thing as not political.”
As a long-time member of the Mime Troupe, writer Sullivan’s familiarity with radical history and working-class immigrants wasn’t surprising. Perhaps more unexpected was his sympathetic portrayal of idealistic software engineer Jeanine; but, it turns out, Sullivan is no stranger to the tech world.
“My father,” he told me, “worked in Silicon Valley in the 70s and 80s; he was one of the first people who worked for Amdahl Corp. (as a senior engineer). After he retired, he taught computers to homeless people.”
In everyday life, Sullivan has found himself coming to the defense of the hoodie-wearing hordes. “People complain that when they see techies in the Mission District they are hanging out in the bars, drinking in the street. I tell them that these guys are working 80 hours a week. When you see them on the Google bus, they are working. If you see them in a bar, they earned that. When you’re in you’re 20s, and you grind at work, and what you used to do for fun has turned into a job, [in your free time] you get drunk and scream.”
When the show opened in San Francisco, Sullivan says, a fair number of tech workers showed up. “People came because they were excited that we were writing a play about a tech character that is likable, not crazy, not trying to be evil," he explains. "She’s not thinking about the money, she’s saving her grandma; she sees a need, and she fills it. That’s like most apps: there’s a small need, the app fills the need, and it makes people’s lives easier. The thing to understand, though, is that these things can be manipulated.”
Besides tech workers, Sullivan says he has talked to people in the audience who admit to egging a Google bus. “They didn’t feel that we are being too kind to the tech worker in this show," he says. "It’s not that they hated the people on the bus, they hate the idea that the city is giving the buses a pass, letting them park in bus stops for $1 when these are the richest companies in the world.”
Sullivan hopes that the play will help members of all three communities—the leftist activists, the immigrant community, and the software engineers—understand each other better. And that the techies will realize that they can’t live in a bubble, that it’s time, both metaphorically and literally, to look out the windows of the bus.
Google has long had a maxim: Don’t Be Evil. (We can, of course, argue about how well it has kept to this principle.)
New peer-to-peer startups need to keep in mind another guiding rule: Don’t Be A Jerk.
Peer-to-peer commerce, with high-tech companies building apps and managing transactions between individuals, is disrupting long-stable businesses like apartment rentals, car and taxi services, and food delivery. Many peer-to-peer companies fall into a legal grey area, and local governments around the country are scrambling to figure out just how to regulate them.
But while Airbnb (apartments), Uber (car service), DoorDash (food delivery), and their brethren may be pushing the boundaries of what makes an acceptable commercial enterprise, they didn’t leap right over those boundaries.
In contrast, Monkey Parking and likely its competitors—ParkModo, Haystack Parking, and Sweetch—did. And they've landed themselves right in the center of what is beginning to be called “JerkTech,” or #JerkTech, a term coined by Josh Constine at TechCrunch. Reservation Hop, a startup that created a peer-to-peer market for restaurant reservations, is in that spot too. After much pushback and a legal slap for Monkey Parking, both startups last week said that they will “pivot” —a Silicon Valley term that usually means scrambling to figure out how to survive as a company.
Monkey Parking creates an online marketplace for people to buy and sell parking spaces. Nothing wrong with that, right? Park Circa has been experimenting with peer-to-peer rentals of driveways and didn’t cross over into the Jerk Economy. But Monkey Parking users aren’t leasing out their own driveways—they are selling public parking spaces in city lots or streets. To do so, a user parks in a public parking space in a busy area, and then uses the Monkey Parking app to auction off the parking space for US $5 to $20 to someone who is looking for a place to park. The winner of the auction pays the owner of the car sitting in the spot, who pulls out, allowing the auction winner to pull in. The auction winner still has to feed the meter. This reduces the availability of parking, encouraging people to hang out and wait for someone to buy their parking spot, or for the area to get busier and rates to go up. It could even draw parkers into busy areas just to capture parking real estate for later sale.
Last month, San Francisco reminded Monkey Parking that what they are doing is illegal, according to a law already on the books banning the private sale or rental of public parking spaces. The city sent the company a cease and desist letter, giving it until 11 July to comply. Monkey Parking initially argued that it is just selling information about availability, not the space itself, but last week it stopped operating as it tries to “achieve [its] mission within the intent and letter of the law and in full cooperation with the local authorities.” Good luck with that.
The Jerk Economy doesn’t limit itself to the parking business. Reservation Hop allows people to resell restaurant reservations. It’s classified as a jerk company because its users are trying to sell something that doesn’t belong to them. And it did not make restaurants run more efficiently, by, say, maximizing the number of diners a restaurant can serve in a given evening by better managing the flow of reservations. Instead, it is potentially reducing that number: if one of the reservations it makes fails to sell, it ends up as a no-show, and few restaurants have recourse against no shows. The app is also encouraging speculators to stockpile multiple tables at popular restaurants for busy time periods. Reservation Hop last week announced that it is changing its approach by only allowing restaurants to sell their own reservations, taking the reservation scalper out of the loop. It likely didn’t take that approach in the first place, because, there is a huge established competitor that will be able to crush it, OpenTable, the online restaurant reservations service.
The pivoting of Monkey Parking and Reservation Hop is likely not the end of JerkTech, rather the beginning of an unfortunate wave. But hopefully the pushback will inspire a few entrepreneurs to think about whether their companies are peer-to-peer companies or JerkTech companies. It may not always be obvious; one person’s great new car service is a taxi driver’s nightmare. But they might start by asking themselves:
Will people who use my service be selling something that belongs to them or to someone else? (Don’t rent your neighbor’s house.)
Am I going to make the market I intend to disrupt work more smoothly or less? (Don’t screw something up just so you can scrape some money off the top.)
When I walk away after my elevator speech, will people be thinking, “I wonder why nobody thought of that before?” or, “What a jerk!”