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What Doesn’t the Valley Understand About Washington?

By - April 17, 2012

A few weeks ago I ventured to our nation’s capital to steep in its culture a bit, and get some first hand reporting done for the book. I met with about a dozen or so folks, including several scholars, the heads of the FCC and FTC, and senior folks in the Departments of Commerce and State. I also spoke to a lobbyist from the Internet industry, as well as people from various “think tanks” that populate the city. It was my first such trip, but it certainly won’t be my last.

Each of the conversations was specific to the person I was interviewing, but I did employ one device to tie them together – I asked each person the same set of questions toward the end of the conversation. And as I was on the plane home, I wrote myself a little reminder to post about the most interesting set of answers I got, which was to this simple question: What doesn’t the Valley understand about Washington?

It’s not a secret that the Valley, as a whole, has an ambivalent attitude toward DC. Until recently, the prevailing philosophy has trended libertarian – just stay out of the way, please, and let us do what we do best. Just about every startup CEO I’ve ever known – including myself – ignores Washington in the early years of a company’s lifecycle. Government is treated like plumbing – it’s dirty, it costs too much, it’s preferably someone else’s job, and it’s ignored until it stops working the way we want it to.

SOPA and PIPA is the classic example of the plumbing going out – and the Internet’s response to it was the topic of much of my conversations last month. Sure, “we” managed to stop some stupid legislation from passing, but the fact is, we almost missed it, and Lord knows what else we’re missing due to our refusal to truly engage with the instrument of our shared governance.

To be fair, in the past few years a number of major Internet companies have gotten very serious about joining the conversation in DC – Google is perhaps the most serious of them all (I’m not counting Micrsoft, which got pretty serious back in 1997 when it lost an antitrust suit). Now, one can argue that like Microsoft before it, Google’s seriousness is due to how interested Washington has become in Google, but regardless, it was interesting to hear from source after source how they respected Google for at least fully staffing a presence in DC.

Other large Internet companies also have offices in Washington, but from what I hear, they are not that effective beyond very narrow areas of interest. Two of the largest e-commerce companies in the world have a sum total of eight people in DC, I was told by a well-placed source. Eight people can’t get much done when you’re dealing with regulatory frameworks around fraud, intellectual property, international trade, infrastructure and spectrum policy, and countless other areas of regulation that matter to the Internet.

In short, and perhaps predictably, nearly everyone I spoke to in Washington told me that the Valley’s number one issue was its lack of engagement with the government. But the answers were far more varied and interesting than that simple statement. Here they are, without attribution, as most of my conversations were on background pending clearance of actual quotes for the book:

- The Valley doesn’t understand the threat that comes from Washington. Put another way, our industry figures it out too late. The Valley doesn’t understand how much skin it already has in the game. “When things are bent in the right direction here, it can be a really good thing,” one highly placed government source told me. Washington is “dismissed, and when it’s dismissed you neither realize the upside nor mitigate the downside.”

- When the Valley does engage, it’s too lightly, and too predictably. Larger Valley companies get an office on K Street (where the lobbyists live) and hire an ex-Congressperson to lobby on that company’s core issues. But “that’s not where the magic is,” one source told me. The real magic is for companies to use their own platforms to engage with their customers in authentic conversations that get the attention of lawmakers. This happened – albeit very late – with SOPA/PIPA, and it got everyone’s attention in Washington. Imagine if this was an ongoing conversation, and not a one-off “Chicken Little” scenario?  Counter to what many believe about Washington, where money and lobbying connections are presumed to always win the day, “Fact-based arguments matter, a lot,” one senior policymaker told me. “Fact-based debates occur here, every day. If you take yourself out of that conversation, it’s like going into litigation without a lawyer.” Internet companies are uniquely positioned to change the approach to how lawmakers “hear” their constituents, but have done very little to actually leverage that fact.

- The Valley is too obsessed with the issue of privacy, one scholar told me. Instead, it should look to regulations around whether or not harm is being done to consumers. This was an interesting insight – and perhaps a way to think about protecting our data and our identities. There are already a thicket of regulations and law around keeping consumers safe from the harmful effects of business practices. Perhaps we are paying attention to the wrong thing, this scholar suggested.

- The Valley assumes that bad legislation will be rooted out and defeated in the same way that SOPA and PIPA were. But that’s a faulty assumption. “The Valley is techno-deterministic, and presumes ‘we can engineer around it,’” one scholar told me. “They don’t realize they’ve already been blinkered – a subset of possible new technological possibilities has already been removed that they are not even aware of.” One example of this is the recent “white spaces” spectrum allocation, which while promising avenues of new market opportunity, was severely retarded by forces in Washington far more powerful than the Internet industry (more on this in another post).

- The framework of “us vs. them” is unproductive and produces poor results. The prevailing mentality in the valley, one well-connected scholar told me, is the “heroic techie versus the wicked regulator…Rather than just having libertarian abstractions about regulations versus freedom,” this source continued,  “it’s important to realize that in every single debate there are… regulations that strike better or worse balances between competing values. You just have to engage enough to defend the good ones.”

Put another way, as another senior government official told me, “The Valley doesn’t understand there are good and decent people here who really want to get things done.”

If I were to sum up the message from all my conversations in Washington, it’d be this: We’re here because as a society, we decided we needed people to help manage values we hold in common. Increasingly, the Internet is how we express those values. So stop ignoring us and hoping we’ll go away, and start engaging with us more. Decidedly better results will occur if you do.

I don’t pretend that one trip to DC makes me an expert on the subject (it surely does not), but I left DC energized and wanting to engage more than I have in the past. I hope you’ll feel the same.

(image: traveldk.com)

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17 thoughts on “What Doesn’t the Valley Understand About Washington?

  1. BBowen says:

    Agree
    - The Valley is too obsessed with the issue of privacy, one scholar told
    me. Instead, it should look to regulations around whether or not harm
    is being done to consumers. This was an interesting insight – and
    perhaps a way to think about protecting our data and our identities.

    A great venue to engage The Valley on topics like this is Internet
    Identity Workshop IIW in Mountain View on May 1-3.   
    http://iiw14.eventbrite.com/

    • Anonymous says:

      Thanks for that. Yeah, on my radar but not sure I can make it due to calendar conflicts

  2. Anonymous says:

    The Valley doesn’t understand how little it accomplished in stopping SOPA. In the current environment, there are few things easier than stopping action in Washington. The JOBS Act was actually a much greater accomplishment because something actually passed (made much easier by the fact that the White House and Republican leaders agreed; it was liberal Democrats who opposed it.) I’ll take the Valley seriously in Washington (where I have lived for nearly 40 years) when they take on the TV industry or Hollywood, or better yet, a combination of the two, and win.

    • Anonymous says:

      Steve, can you say more on why you think stopping SOPA wasn’t a win?

      • Anonymous says:

        It was a win and a significant one. But it was too easy to be tremendously meaningful. The bill was miserably drafted and its manager, Rep. Lamar Smith, had no idea of what he was doing. Rigging the only hearing to stop opponents from testifying was a strategic error. By the time the tech industry united in opposition (and once Microsoft finally realized it had more to lose from SOPA than from piracy), the legislation was ready to be knocked over with a feather. Let’s see how the industry does on fixing CISPA. It’s going to pass in some form, but a united and effective industry could turn a problematic bill into a decent one. John Parry Barlow and the ACLU will never like it, but something decent could come out of this.

  3. Leon Rossiter says:

    I would just like to say firstly great article, even though I am from the UK its fascinating to see a perceived disconnection from technology companies that change the world and the regulators that govern them, you may expect differently based on the influence the valley and DC have on the world. 

    Secondly I would like to give a massive thanks and gratitude shout out to Mr Battelle for all his continued posting and insight, you recently put a shout out to readers and were disappointed by the engagement figures you got back, I am a frequent reader and cannot express how important firstly your book the Search and now your blog has been to me in the last 2 years since I have started a digital marketing agency in Liverpool UK. In the UK I generally receive your blog posts hot of the press to my email client at between 11.30pm and 2.00am and I look forward to everyone of them. I was one of the people who didn’t respond to your recent call for action from readers and I, like I would imagine thousands of other readers was too busy to respond or had other things crop up! 

    Basically dont stop what your doing its really important, and fascinating to me and no doubt thousands of other people.

    When I start a company that ends up being one of the big six I look forward to thanking you on stage at a web 2.0 summit event. 

    Kind Regards,

    Leon.

  4. Anonymous says:

    Interesting John.  I think the Valley is not really serious about Washington.  I think the Valley is simply too self-absorbed and believes too strongly that what they do is ultimately what matters in this world.  What they do is important.  But people in this country tend to greatly overestimate their contribution and greatly underestimate the contribution of their environment and their engagement with others in that environment.  And I think they may think in terms of technical approaches when our challenges in Washington aren’t, by and large, technical. I think the famous line, “we could send a man to the moon but we still had starving children in this country” sums it up for me.  Just because you can create iPads and iPhones and become billionaires doesn’t mean you can address all challenges that way.  

    The Valley, like Buffett, is in an ideal position to counter all the nonsense that doing well in business means having the weakest government  possible.  Stanford’s funding and activities are dependent in so many cases from funding from the federal government and areas that may not have immediate payoffs.  Who better than the Valley folks to speak to this?  Is it not in the Valley’s long-term interest to see infrastructure issues addressed?  What if the folks that met with Obama at Doerr’s house spoke out and said we need to pay for what we have committed to, we need to act collectively in some places (like global warming), and the government may be imperfect but it is us. It would help.  And it is our future (and the future of the kids of those who live in the Valley).  

    I think the fiscal challenges we face will, over the long term affect the Silicon Valley.  I’m not sure how they cannot.  We are at a stalemate.  Who better to rip through the arguments about business being hurt by raising taxes than, well, the titans of the Valley?  I mean, I gather that a good portion of the Valley was built from government funding.  The rest of the country needs the celebrities of the Valley to point this out again and again and again.  They have a duty, in my view.  

    Finally, I agree with Steve Wildstrom.  Stopping legislation is one thing.  Our system is designed to make it extremely difficult to pass legislation.  So passing it, is quite another thing.  It was a victory.  But when the Valley is able to get such a controversial piece of legislation passed then I think they will have a more impressive victory.  

    • Anonymous says:

      Very well put, David. I think we do stand at a crossroads. And I agree, this industry can lead or not. I want it to lead.

  5. John, this was a fascinating take. Thank you, first, for venturing to Washington and also for distilling your thoughts so clearly. Your take is exactly what I’m finding as I help start up an organization called Engine Advocacy, which is meant to leverage the ideas, personalities and stories from the emerging tech community and band them together to make a difference on policies that matter in Washington. What we have found, and as you discuss, is that while privacy and copyright issues may dominate the debate, it’s interesting to see that, building off the SOPA momentum, the impact working with Washington can have on the everyday lives of founders, entrepreneurs and startup companies with issues like immigration or financial regulation or patent. We’re working to gather more good data from our growing community and also build relationships of trust (thus avoiding the “us vs. them” mentality you speak about) between the startup community (especially beyond the Valley) and those in government so that we can change the perception of what our companies do, how they do it, the ideas we have and can share to make better policies, and how we can all work together to make America better. The very first step in that process is, as you lay out here, simply having a conversation. We’re working to have more conversations and keep people engaged, and it’s great to see more people getting involved in the process to help deepen that understanding. 

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  9. About your statement I am bit curious. 
    ” Two of the largest e-commerce companies in the world have a sum total of eight people in DC, I was told by a well-placed source.” 
    How come two largest e-commerce companies have only 8 people? 
    About online privace act, I know, Sopa kicked some file hosting owners like megaupload founder, yes valley is too much strict on this now.  

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