Tim Draper on what this election means for Silicon Valley

For someone in the Silicon Valley, the President is 3000 miles away. He and his opponent come out to raise money every four years and neither stays long enough to hear what we have to say, because the Democrat always wins in California and both parties know it, so our votes don’t count out here. For the people of Silicon Valley, this system of neglect worked fine while the laws were relatively benign and the costs were relatively low, and the spending was relatively frugal in Washington. But now, we are not happy, and we don’t see any way out of this mess.

It is not the election that matters, it is structural. We have a serious structural problem in America. We are trapped in process, and regulations are stifling our people as they pursue the American Dream. Yes, America, land of the free and home of the brave–isn’t anymore. And now, even the Silicon Valley is being affected. This is scary. Let me explain how I got to this line of thinking.

At first, I thought it was the politicians, or the elected officials. “Why can’t they fix this?” I would ask myself. It seems so simple. Our government spends more than it makes. We have too many regulations for entrepreneurs and businesses to thrive. So we should cut back the spending and we should make more money, and we should cut the unnecessary regulations.

I met with many politicians and they made it clear to me that they individually were doing the best they could. But it was those guys in the other party that were holding them up. When I crossed to the other party, the answer was the same. So, all the politicians know they have a problem, but they can’t fix it. So, I thought, “maybe it is out of their hands.” I also wonder whether cutting regulations is like cleaning out the garage. You always intend to do it, but it never really gets priority, so it just piles up.

So then, I approached the bureaucrats. “Why are there so many bureaucrats?,” I thought, “and what are they all doing?” But then, as I got to know them, I realized that our bureaucrats are hard-working, intelligent people who are trying to interpret the laws laid down by the politicians. Even if they are pro-business, progress oriented, and economically driven, they have to trip over themselves to make the laws work for the people who want to do anything proactive. Clearly, this is a problem for the Silicon Valley, and for any other region who thrives on proactive efforts of entrepreneurs.

And then, I determined that there are just too many laws and regulations. Every time we get a new one, the bureaucratic workload increases, and the productivity of society decreases. I realized that the regulations have just been added to, none have been taken away. If our country is of the people, by the people and for the people, why have we not dumped our old regulations and improved the systems so that people can follow regulations with less friction? It turns out that there is no incentive for anyone to dump old regulations! There are still regulations on the books about not throwing tea into Boston Harbor and what constitutes a legal buggy whip. In my own experience, as a venture capital investor, the number of forms I have to fill out has gone up about 50 fold in 25 years. And more recently, as a real estate developer, I have found that the construction is the cheapest part of development! Regulations cost me the most in both time and money. I even have a situation in which different regulators have legal conflicts that make no solution possible!

So finally, it dawned on me. I am not a customer of the government anymore. While there is great competition in the Silicon Valley, allowing customers to choose, there is no competition in government for citizens. There is no system to make government more efficient, nothing to give its citizenry more choice. Of course, I can choose a new candidate, and I can move from state to state, or even out of the US, but generally people stick with their political party and don’t want to move their families. So until our government is one with true competition and transcends geographic boundaries, I think we are trapped. In the Silicon Valley, we complain that Google controls too much of search or Apple controls too much of apps, but our government controls our lives!

Without choice and competition, any entity is a monopoly. Our government is a monopoly, and if there is one real enemy of the Silicon Valley, it is monopolies. Monopolies and oligopolies limit choice and competition. There is only one US Government, only one SEC, only one FASB, only one Dept of Energy, only one NEA, only two political parties, only one California. And none of them have to adapt to competitive threats to survive. But in the Silicon Valley, there is competition in every field. In search, there is Google, Bing, Ask, AOL, MyWebSearch, Blekko, Lycos, Dogpile, WebCrawler, Info.com, Infospace, Search.com, and thousands of others. There are more than twice as many search results for “social network” as there are miles from us to the Sun—193,000,000. And while search and social networks continue to delight us, government seems to fall short.

So, for me, I will vote for change agents. I will vote for Proposition 32 to shake up union and corporate monopolies. I will support the new candidate over the incumbent, I will vote to encourage choice for all citizens, so that they can decide which government or union or corporation they want to support.

And if we all pursue choice in government the way we demand choice in the products we consume in the Silicon Valley, we will again be the land of the free, and the home of the brave. Progress will accelerate and elections will again have meaning to us.

Timothy Draper Timothy Draper (1 Posts)

Timothy C. Draper is the Founder and a Managing Director of Draper Fisher Jurvetson. Tim currently serves on the boards of DoAt, Glam, Prosper, and Miartech. Tim also launched the DFJ Global Network, an international network of early-stage venture capital funds with offices in over 30 cities around the globe.