Monday, September 30, 2013

Wealth, Class, and the Startup World

The myth of Silicon Valley is that it is a perfect meritocracy where things like wealth and class are irrelevant.  The truth is that while Silicon Valley and the startup world are better than most other institutions, wealth and class still play a role.

The vast majority of entrepreneurs are young, well-educated, well-off men, who have both been encouraged in their ambitions, and have the financial cushion to take risks.

I know, because I've benefited from these dynamics.  My parents paid for my extremely expensive Stanford/Harvard Business School education, which allowed me to be debt-free.  That lack of debt allowed me to go without a salary each time I started a company; having helped entrepreneurs who didn't have this luxury, I can tell you that it helps a lot.

Wealth and class are problematic subjects, even for those on the more desirable half of the divide.  When I was at Harvard Business School, my friend Bull Gurfein, our class president, created a special "Leaders of the New Millenium" shirt for the entire class--it was free, thanks to sponsorship dollars from Goldman, McKinsey, et al.  Yet despite our collective (delusional?) sense of our own worth, wealth and class played a role in school, where the bankers and consultants had the funds to party, and the ex-military and non-profit students did not.  A recent set of articles focused on the class divide at HBS, including a secretive, possibly apocryphal "Section X" of wealthy international students throwing expensive parties at destinations around the world:

Meanwhile, New York residents can make $700,000 per year, and still feel poor, because there's always someone richer down the road.  By any reasonable standard, I live an incredibly fortunate life, but I sometimes feel guilty about my family's somewhat run-down digs when I compare them to the trophy homes of other folks I know.  And even the people who live in those (well-deserved) trophy homes can't help but feel a little jealous when Marissa Mayer moves in down the street, buys two adjoining homes, then tears them down and builds a posh family compound, complete with a miniature version of the Peninsula Creamery, her favorite restaurant.

The irony in all this is that many of the people who have been financially successful are down-to-earth folks who are themselves terrified of seeming like the snobbish wealthy; Silicon Valley millionaires go out of their way to conceal their wealth or apologize for it, as if it were something of which to be ashamed.

My strategy for dealing with these issues is to realize the unimportance of wealth and class.  While having a big bank account helps give you credibility, the most important sources of credibility are your ideas and achievements.  Similarly, spending time with my kids makes me realize how little they care about whether our hardwood floors are worn or sparkling new.  Treat everyone, rich or poor, with respect, and don't let wealth and class affect how you interact with people.  If you do this, you'll make everyone feel comfortable and want to work with you.

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