Where technology and economics collide
During a trip to the San Francisco Bay Area last month, I talked to a number of technology leaders about how the Trump era would affect Silicon Valley. Few were enthusiastic about the new president, and several believed his presidency would be bad for the country and the world. But whatever their personal feelings about the Trump presidency, none saw it as an existential threat to Silicon Valley and its entrepreneurial culture.
“From a policy perspective, Trump is not having a drastic effect on Silicon Valley,” said Parker Thompson, a partner at AngelList. “Meaningful companies tend to be making bets on longer-term trends in technology,” he argued, and Trump administration policies were unlikely to derail them.
“The most significant impact is not regulatory; it’s disillusionment,” said Hunter Walk, a partner at Homebrew. “I think there’s a lot of people who are just kind of bummed out.”
Investors were worried about Trump’s immigration policies. Immigrants have played a significant role in Silicon Valley’s success, and worried that Trump’s restrictionist policies could reduce the size of Silicon Valley’s talent pool.
Still, Silicon Valley investors tend to be an optimistic bunch — and that’s especially true when it comes to the future of their own industry. And so while none of the technology investors I talked to were excited about the Trump presidency, all were confident that their industry would muddle through.
“Silicon Valley is going to do fine,” said Mike Maples, a self-described supporter of free markets and a partner at Floodgate. “I sit here and I think oh, my gosh, there could be some things that, like, put a pebble in front of us while we’re running up the score.”
Trump’s immigration policies could hurt Silicon Valley
Immigrants have always played a big role in Silicon Valley, with Intel, eBay, Google, Tesla, Yahoo, and many other companies having immigrant co-founders. So unsurprisingly, Donald Trump’s agenda of restricting immigration wasn’t popular among the investors I talked to.
“There’s just a whole bunch more fear, uncertainty, and doubt” about immigration issues, said Phin Barnes of First Round Capital. Among companies his firm has invested in, Barnes said, “we’ve had people afraid to leave their companies” due to immigration issues.
Many skilled immigrants come to the United States under a temporary visa, get a job at a technology company, and then apply for a green card while they’re working. Changing jobs — or leaving to start a new company — can reset a pending application. The erratic decision-making of the Trump administration makes it even riskier for these applicants to change jobs.
Still, the investors I talked to emphasized that this was an issue far beyond Silicon Valley. “Over the long term, the administration’s posture and policies are going to have a negative effect on the broad economy,” Thompson told me. “That’s going to affect Silicon Valley maybe more than most places, but that’s going to affect all high-skilled industries in a meaningful way over the long term.”
And ultimately, the long term is what matters here. Many of Silicon Valley’s famous immigrant founders — including Yahoo’s Jerry Yang, Google’s Sergey Brin, and eBay’s Pierre Omidyar — came to the United States as children and started their companies many years later. So Silicon Valley depends as much on America’s large stock of foreign-born workers as it does on a steady flow of new immigrants.
So if we get four years of immigration restrictions under Trump, followed by a return to the more liberal policies of earlier administrations, Silicon Valley’s status as the world’s technology capital is unlikely to be imperiled. On the other hand, if Trump’s election marks a permanent shift toward more restrictive immigration policies, the implications for Silicon Valley could be more dire.
Great companies can thrive in spite of bad policies
“Companies should be built to be resilient to changes in government,” said Jay Zaveri, a partner at Social Capital. “If they aren’t, then they’re going to be in trouble. I do worry about the fact that we have such a polarized environment and people can’t get along. But other than that, I’m not worried.”
This was a theme I heard over and over again in my conversations with investors: If Trump’s election put a tech startup’s future in doubt, that company probably didn’t have a very bright future in the first place.
“The next few years are going to come and go,” Thompson told me. “Many of the companies that are starting today are still not going to be household names when Trump either wins a second term or is out of office.”
“That’s why you don’t see startups in Washington lobbying for regulation,” he added. “It just doesn’t make as much sense as making bets that are going to work in a big way independent of these things.”
And Floodgate’s Maples went further, arguing that Silicon Valley’s obsession with Trump was misplaced. The more important issue, he said, was deeper problems with the US economy that led many middle-class voters to support Trump in the first place.
“The lifeblood of this country, the middle class and upper middle class, is getting hosed,” he told me. Since the late 1990s, he said, workers were increasingly “getting treated not as people who had lifetime career in this company, but they’re like cells in a spreadsheet. They’re disposable.”
“That bothers me a lot more than what will Trump’s policies do to Silicon Valley,” Maples said. “We in Silicon Valley underestimate how freaking lucky we are.”