Tuesday, January 31, 2012
For Newcomers in Silicon Valley, the Dream of Entrepreneurship Still Lives
By ERICA GOODE
SAN FRANCISCO — Atha Fong, 22, has trouble explaining to her mother exactly what she does as a product manager at iSkoot.
“Basically, her understanding is that I work with engineers to make mobile phone applications, but more than that, not really,” she said.
Her more than $70,000 salary, stock options and personal investment portfolio, though, go a long way to alleviate any parental concerns.
Ivan Lee, 25, turned down a lucrative offer from Microsoft to start his own company, developing location-based games that he hopes will eventually dominate the industry. Bansi Shah, 23, picked up her undergraduate diploma, then took a job at Lattice Engines, a small San Mateo startup, where she makes “near the top” of the company’s $80,000 to $130,000 range for an entry level product manager, plus equity.
These are the latest high-tech migrants to Silicon Valley, in their 20s and fresh out of college, drawn by a surge in start-ups and investment money that in the last year and a half has created more jobs than companies can fill, and eager to help shape the technology that infuses their lives.
Their peers in other parts of the country — indeed, in many other parts of the state — may be struggling to find jobs, their independence stunted by financial hardship. But these recent college graduates are, at least for the moment, snugly protected from any hint of the recession.
“We’ve always had this gravitational pull,” said Julie Hanna, a serial entrepreneur who sits on the boards of a number of successful companies, “and then on top of that, we have the economic contrast, because the rest of the country looks like a desert and here money is flowing freely.”
Boom and bust cycles are endemic to Silicon Valley, where many older denizens have vivid memories of the giddy highs of the 1990s and the desperate lows that followed, when the dotcom bubble burst.
But buoyed by the frenzy of entrepreneurship around them, many young newcomers exhibit an optimism and confidence no economist could dampen. To some who have watched successive generations land here, this latest crop seems brash and entitled, with short attention spans and a video-game approach to life. Others see in them a social conscience and maturity that set them apart from the high-tech gold diggers of the 1990s.
Still emerging from their student years, most have yet to translate their earnings into material tokens of success. In San Francisco’s expensive housing market, they tend to rent rather than own, often sharing quarters. They drive Hondas and Fords and maybe a Mini Cooper or two. In the tradition of start-ups here, they dress in jeans and other casual attire, augmented by the occasional pair of Bonobos.
At bars in the Mission District or trendy restaurants in the Marina District, they chatter about software upgrades and angel investors and new applications that could change the world — or at least the way people use their iPhones. They go hiking rather than clubbing, look with a hint of impatience at their less social-media-savvy elders, are picky about their sushi and unhappy with iceberg lettuce.
The temples of the valley — Facebook, Google, Twitter, Zynga — loom large in their conversation. Some have already founded companies; nearly all have toyed with the idea.
“It’s always at the back of my mind,” said Danny Schauffer, who landed a job at Facebook after college and now works on the company’s platform operations team.
Many started fending off job offers even before graduation, besieged by recruiters desperate to fill slots at established companies and start-ups, which at the last count numbered about 23,000, according to Russell Hancock, chief executive of Joint Venture, a company that analyzes Silicon Valley trends.
Computer engineers, in high demand but short supply, can command six-figure salaries right out of college, augmented by signing bonuses and equity or stock options. Eric Roberts, a professor of computer science at Stanford, said he knew of at least one $160,000 offer “and I imagine there are larger numbers that I just don’t know about.”
But technical skills are not essential. The rise of social media, with its more human face, has drawn graduates in history, psychology or music, and a slowly growing number of women and minorities.
Morin Oluwole, 27, grew up in Nigeria, moved to California in high school and graduated from Stanford with a bachelor’s degree in biology and Spanish, a master’s in sociology and a strong interest in fashion. Now she works in strategic partnership development at Facebook, helping fashion designers “engage online.”
“What I’ve done is to turn my personal interests into what I do for a living,” she said.
Ms. Oluwole’s salary and benefits, she said, allow her “to live more of a wider-range lifestyle,” to travel and go hiking in Argentina and travel to other cities for events.
“You just have more disposable income to have an idea and actually act on that idea,” she said.
Though many new graduates are content to draw high salaries working for others, entrepreneurship is still the elixir of the valley, but failure has a lower cost: anyone with an idea and a few hundred dollars can raise the money to take a spin on the start-up wheel.
“I might be losing two years of salary, but no risk, no reward,” said Mr. Lee, who still receives regular queries from recruiters at Facebook and Google but pays himself $2,000 a month and shares a house with co-workers at Loki Studios, the company he founded.
“It’s a nice dream to have: If I didn’t have to answer to anybody, if I could run my own company,” he said. “Everyone has a friend who was at a start-up and made their own fortune, and everybody is curious if they could do it, too.”
Still, making billions of dollars is not what propels him, Mr. Lee said. “The long hours, the stress, the roller coaster — if that’s your primary reason, you’re going to burn out so quickly,” he said.
Randy Komisar, a venture capitalist and serial entrepreneur, says the cavalier attitude of some young entrepreneurs worries him, and he wonders if they have the grit and resilience to cope if boom turns to bust.
“I think there’s something as too much self-esteem,” Mr. Komisar said. “Everybody is doing their app, and everybody is doing a start-up, and everybody has raised a million dollars.”
Most, he said, “have no clue how to connect the dots” to create a sturdy, long-term product.
“My guess is that at some point the music stops and we find out that there’s not just one less chair but hundreds of thousands of less chairs, and we’ll have thousands of kids who haven’t learned anything because they’re all expecting to learn from each other,” he said.
Professor Roberts, who has watched enrollment in computer science courses shoot up in the last year — a class that last spring had 70 students now has 200 — is less concerned. The newest crop of Silicon Valley hopefuls, he said, are “interested in making enough money, but the crazy multiple millions of dollars that no one can spend, that I don’t think is driving as much of the equation as it used to be. Increasingly, there are people who want to work on technology because they see that as a way to help people in the world who just aren’t benefiting from that technology.”
In fact, as a group of former and current Facebook employees, including Ms. Oluwole and Mr. Schauffer, dined on ahi tacos and rock shrimp tempura at Umami in Cow Hollow on a recent evening, it was Bill Gates who was singled out as a role model, his bank account a definite plus but his philanthropy more important.
“Hitting the lottery is secondary to making a change,” Mr. Schauffer said.