I’ve been reflecting lately on the cultural differences between the Pacific Northwest and Silicon Valley.
I grew up in Seattle and have deep family ties here, but lived in the Bay Area both before and during the tech bubble of the 1990’s, so I feel like I have a decent grasp of the values that animate each region.
A common refrain among Seattle tech folks is that Valley culture is fundamentally “greedy” or “short-sighted.” An Amazon friend who recently relocated from Seattle to the Bay Area described it more gracefully as a culture of “premature optimization” —where people are so focused on scrambling for money and status that they rarely dig in long enough to build something of lasting value.
By contrast, Bay Area people either don’t think about Seattle at all, or dismiss it as just another farm-team town full of B-players going nowhere, with maybe a few big-leaguers-in-training who will eventually wake up and head south to be in the “Show.”
As with all stereotypes, neither view is entirely accurate, but both contain just enough truth to draw blood.
Last week was a particularly bad one for stereotype-hawkers from both cities, with yet another Bay Area loudmouth trashing San Francisco’s urban poor, while a Seattle City Councilmember trashed this city’s (laughably modest) efforts to promote startups.
All this got me thinking: Is there anything really, fundamentally different between the two cities, or are all the perceived differences just a matter of degree rather than kind?
At this point, more than a dozen years distant, I don’t think I can fairly represent the deep culture of the Bay Area any better than that thoughtless loudmouth. But I go as deep in Seattle as anyone, and here’s what I’ve come to believe:
Seattle — and the Pacific Northwest more broadly — are forging a new kind of “big tent” capitalism that is fundamentally different from the kind that’s taken root elsewhere, and that will make the region more and more attractive to digital creatives as the global income divide grows wider.
This is a bold claim, and as a prodigal son of the Northwest I’m acutely sensitive to this region’s tendency to throw its arm out of joint patting itself on the back. But every day I meet more people in Seattle who add weight to my belief that there is some seriously divergent economic thinking going on here, and that we should actually be leaning into it, not trying to hide it like the crazy aunt in the attic.
First, let me try to explain what I mean:
A significant wave of recent economic and urban design thinking — like Enrico Moretti’s “The New Geography of Jobs” and the Brookings Institution’s related analysis, “The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy” — suggests that the world’s leading innovation hubs are also becoming the functional center of economic and political power, both here and abroad.
The cities at the forefront of this shift — the ones profiled in last year’s Startup Genome report are as good a list as any — are also the ones where the income and opportunity gap between those with knowledge work skills and those without is most acute.
Any city that aspires to a leadership role in the global knowledge economy will be forced to make some very hard choices about how it wants to compete going forward.
A civic leadership class that leans toward free-market libertarian principles will compete most aggressively by favoring the needs of the technical and financial elite over the urban poor and working class. Conversely, a leadership class that worries most about social justice and social mobility will channel more resources to their city’s least-advantaged populations, but at the risk of alienating the entrepreneurial knowledge workers they rely on to stay competitive.
Well-meaning people in every city will try to strike an appropriate balance between these two extremes, and no city will have an easy time reconciling the two as the income gap continues to widen.
My contention is that Seattle is emerging as a global leader in fusing the growth-oriented culture of techno-capitalism with a deep and broad commitment to social justice and social mobility.
What evidence do I have to support this view?
When I started looking for examples, my list quickly became too long to track, but here are just a few of the most noteworthy ones:
The Bill & Melinda Gates Foundation
It may be hard to imagine for kids born in the 1980’s and ’90’s, but Microsoft was once the most feared and admired company in tech, largely owing to the brilliance and relentless competitive drive of its founder and CEO, Bill Gates.
Gates created the foundation in 1997 and left Microsoft to run it full-time in 2008, devoting a majority of his Microsoft fortune ($28 billion to date) to fund its work. Warren Buffett has since pledged a significant share of his own fortune to the foundation, and the foundation’s “Giving Pledge” program has elicited similar commitments from over 100 of the world’s richest families.
Unlike many charitable foundations that are designed to exist in perpetuity, the Bill & Melinda Gates Foundation is chartered to exhaust its resources and “sunset” itself within 50 years of the founders’ deaths. Most importantly (at least as far as my thesis goes): the foundation is explicit about its use of market-based methods to achieve social aims, embracing an approach that has come to be known as “philanthrocapitalism.”
The presence of the Gates Foundation in Seattle is more than symbolic. The foundation is the anchor investor in a significant cluster of high-performing local organizations that are helping to enact the foundation’s diverse agendas in global health, vaccine delivery, agriculture and education — importing and sustaining a significant local talent pool that shares their aims.
Starbucks
Most people think of Starbucks as a globally reliable place to get a decent cup of coffee, and with over 20,000 stores in 62 countries that’s certainly true. But what may be less obvious to the millions of loyal Starbucks drinkers around the world is the company’s deep and long-standing commitment to labor and social justice issues.
From the company’s early commitment to extend health benefits to part-time store staff, to supporting fair trade coffee producers, to more recent public stances on gay marriage and gun safety, founder and CEO Howard Schultz has repeatedly used the company’s global ubiquity as a platform to advocate for progressive ideas. As the company has grown, executives trained up in the Starbucks model have spun out and formed companies of their own with similar ambitions for business success and positive social impact.
REI + Costco
The largest outdoor specialty retailer and the second largest retailer of any kind in the U.S. are both based in the Seattle area. And while the companies have different histories, brands, corporate structures and leadership styles, they share one important distinction that sets them apart from most other retail companies in the world: they are both membership organizations.
REI is a member-owned co-operative that actually sends dividend checks to its members based on their year’s purchases; Costco uses membership fees — and the implied buying power of its membership base — to deliver rock-bottom prices on an astounding range of household goods, grocery items and financial services.
Neither organization is explicitly animated by a social mission — their membership models are fundamentally business model innovations, not philosophical statements — but their customer-centric and value-driven cultures are emblematic of the Pacific Northwest’s strange breed of capitalism.
RealNetworks
While the company itself is now struggling for relevance, the unique history of RealNetworks has left a lasting impression on Seattle’s startup culture. Microsoft alumnus Rob Glaser founded the company in 1994 as Progressive Networks, with a vision of using streaming media to help politically progressive content reach a wider audience.
The idea of using technology for social good wasn’t unique to Glaser, but by combining the technical and competitive energy of Microsoft with a passion for social impact, RealNetworks built a business that married the democratic ideals of early Internet adopters with the fierce competitive spirit of the (at the time) most powerful company in tech.
The company was ultimately forced to broaden its social mission to stay alive, creating the then-dominant format for streaming digital music and going public in 1997. But even as the company’s influence waned, Seattle-based tech reporter John Cook has made a convincing case that RealNetworks alumni went on to become some of the most prolific and successful tech entrepreneurs in the Pacific Northwest
Social Venture Partners
Seattle entrepreneur Paul Brainerd was a co-founder of Aldus, a pioneering desktop publishing company that merged with Adobe in 1994 to create the global leader in digital design and document management.
In 1995, Brainerd created a family foundation focused on Pacific Northwest charities, and a few years later created Social Venture Partners to encourage his peers in the high tech industry to contribute both money and time to social causes.
Today, Social Venture Partners is a global organization with affiliates in 34 global cities and nearly 3,000 members worldwide. The term “social venturing” is now in common use to describe the use of for-profit business skills and techniques to increase the effectiveness and accountability of charitable giving.
Code.org
Seattle entrepreneur and angel investor Hadi Partovi built and sold several technology companies before turning his attention to one of the most fundamental challenges facing the U.S. economy: the lack of job-relevant computer science training among poor and underserved populations.
The organization he created this year to tackle this problem, Code.org, has already touched over 16 million lives worldwide, attracting endorsements from leaders as diverse as Mark Zuckerberg, Bill Gates and Barack Obama, and announcing partnerships with public schools around the country to deliver its free computer science curriculum.
Nick Hanauer
He’s just one man, not a global organization, but Nick Hanauer has become one of the country’s most powerful critics of income inequality by attacking the problem from the inside. As one of the original seed investors in Amazon.com and a co-founder of Avenue A (acquired by Microsoft for $6 billion), Hanauer is a card-carrying member of the 1 percent.
But rather than fade into comfortable obscurity, Hanauer has taken to writing pieces like this one in Democracy Journal, challenging the laissez faire approach that dominates American capitalism today and advocating for a more just and equitable approach to economic policy-setting and income distribution.
Conclusion
These are all just anecdotes — and I’m sure many other cities could pull together a similar list of high-impact efforts by well-meaning citizens to use their business skills for social good. But what interests me is whether the geographic clustering of these efforts can somehow make a whole greater than the parts.
The central thesis of “The Metropolitan Revolution” is that our national political framework has become too unwieldy and fractious to do anything but maintain the status quo — if we want to make progress as a nation we need to forge policy at the city and state level.
If that thesis is true, the political character of a city or region is more than just idle cocktail party chatter — it’s the working model for the kind of democracy and social compact that will carry our country forward for the next 200 years, in the context of ever-accelerating global change.
I’m excited about Seattle’s continued role as a leader in the global technology business, but I’m equally energized by the idea that we are forging a society that fuses all the competitive and economic energy of modern techno-capitalism with a deep and abiding commitment to social justice and social mobility for all. Our region may not be unique in its efforts.
But, if the list above is any indication, we’re in the fight, and that’s a start.
Founder’s Co-op general partner Chris DeVore is a Seattle entrepreneur and investor. Follow him on Twitter @CrashDev.
