June 21, 1990

If you want a glimpse at what’s wrong with Silicon Valley, and indeed, what’s wrong with the American business community as a whole, take a look at the latest issue of Upside magazine.

The June edition of Upside, a Foster City-based publication that claims its readership is “executives and investors in technology companies,” hit the newsstands this week with a cover picturing John Sculley, chairman of Apple Computer Inc., sitting in a sandbox wearing a Little Lord Fauntleroy suit while a jack-booted bully smashes a Macintosh computer made of sand.

The headline: “Has Silicon Valley Gone Pussy?”

If I were a different person, I might be hard-boiled and cynical enough to say, “Well, at least they know how to get attention.” But I was outraged, as was nearly everyone to whom I showed the magazine, and everyone — male and female — who dialed my phone to express their anger and disgust.

Though you couldn’t have guessed it by the headline, the story was author Michael Malone’s opinion that Ivy Leaguers with MBAs are choking the life out of Silicon Valley’s companies, changing them from risk-takers to bean counters. This, he writes, is why we’re losing our competitiveness in world markets. This is why innovation is on the wane. It is, he says, the “pussification” of Silicon Valley.

Though there may be a grain of truth in Malone’s theory, I must admit I’m baffled by what seems like an imperious urge on the part of Malone and Upside to use the word “pussy” in nearly every paragraph and headline. The term, slang for female genitalia, is usually considered an epithet for weakness, a junior-high term for boys who don’t live up to junior-high masculinity quotients and, as one colleague said, “a word for everything (men) don’t like about women.”

Upside devotes lots of space to defending the word, stating flatly that the word is not a female putdown. Malone asserts, “By pussy (his italics), we mean neither the female nor the homosexual derogation.”

The very fact that neither will acknowledge the word’s sexual connotations is a signal flare over the entire macho culture of Silicon Valley, a culture that has even affected some of the valley’s brightest women. Public relations executive Andrea Cunningham and Ask Computer founder Sandra Kurtzig, both mentioned as examples of what’s right with the valley (women and gays were given three whole sentences), shrugged off Upside’s use of the P-word after the story was published. A piece of every woman’s self-respect dies when such women give their tacit approval to such adolescent nonsense.

But more than just the use of the word itself, Malone’s story and the fact that Upside clearly planned to sensationalize it — “the one that’s going to make us famous,” crowed publisher Tony Perkins of the issue — is a snapshot of everything that’s wrong with Silicon Valley, and why the electronics industry is sliding face-first into economic decay.

First, beware when anyone — be it politician, industrialist or journalist — starts mooning about “the good old days.” In his piece, Malone’s opening (hypothetical) scene is of the “Silicon Valley veteran . . . whose career dates back to the Wild West days of Fairchild (the seminal valley chip firm).”

Having just finished smoking a cigarette in the parking lot, the veteran is sitting across a table from a venture capitalist, asking for money. (VCs in this story are the biggest “pussies” of all.) The VC scans the business plan and says, “Aren’t these projections incomplete? Where’s your company’s long-term strategy?” etc. The vet reminds the VC of the days “when business plans were written on cocktail napkins and venture deals were cut in an afternoon.”

Yep. And if the vet were so successful using those methods, why is he back in a VC’s office? Why doesn’t he have his own million dollars, or two or five, to invest in a new venture, based on his past, enormous success achieved via flying by the seat of his pants? Maybe it’s because he lost his butt, as did the last VC firm who invested in him.

Second, beware of people who point fingers. Malone’s piece chokes on its indignation at the MBA “plutocrats-in-training” who became corporate managers, attorneys, investment bankers and VCs, and whose lack of business experience and courage, coupled with arrogance, is choking the lifeblood out of Silicon Valley.

Malone, and anyone who seriously thinks MBAs are the problem, is trying to treat the symptom and not the cause. Silicon Valley’s woes started a long time before MBAs descended on it. The chip business, which used to be the valley’s lifeblood, started to die when valley firms like National Semiconductor Corp. and Intel Corp. relinquished the memory chip market to Japan without a fight. Industry lions like Charlie Sporck and Gordon Moore didn’t think it was a big deal. Don’t blame that on the MBAs.

Blame, instead, the everlasting greed of people at the top of the corporate ladder — not just VCs — whose desire for quick-and-dirty profit prompted the hiring of MBA-types in the first place. Blame the lack of shareholder education, tax incentives and a lot of other factors that impact innovation and creativity. Blame companies who’d rather send their manufacturing offshore than find a way to make their products here. But don’t rewrite the history of Silicon Valley around a naughty word so you can help increase the circulation of a magazine.

In fact, it’s Upside’s facile treatment of a deadly serious subject that makes me wonder if we’ll ever regain our sanity and our edge as competitors in the world market. As with the old “it takes one to know one,” Malone’s mewling about how the venture capitalists are ruining Silicon Valley sounds very much like the people he says are “mewling off to Washington in search of tariff protection, tax breaks and best of all, some kind of monopolistic consortium to defend market share.”

He says this is why the Japanese hold us in such contempt. I disagree. The Japanese hold us in contempt because no one wants to get back in the trenches, as did Intel founder Robert Noyce when he took on the heroic task of leading the Sematech chip manufacturing consortium, and do the dirty stuff that no one else would do. Everyone wants to point fingers and no one wants to do the work.