For all the discussion about the relationship between Trump and Silicon Valley over the last several weeks, there is a deep narrative similarity that I think has gone under-acknowledged. It is this similarity between Trump and the Valley that is going to make it particularly difficult for them to work together in the coming months and years—far more so than if they were more dissimilar movements.
First, it is worth recognizing that the story of Trump’s ascendance is an almost textbook political adaptation of Silicon Valley’s favorite fable. An outsider enters and disrupts an important space dominated by legacy players in spectacular form. Everyone doubts him. He spends less money more efficiently, leverages changing technology, communication tools, and even, so the rumors go, machine learning. He refuses to play by established rules. And he wins “against all odds” and the establishment.
This narrative is behind everything from the rise of upstarts like Snap and in its day, Facebook and the Jobs/Apple story from a generation ago. Setting aside policies and demeanor for just a moment and looking at the story alone, Trump should be exalted by the tech culture.
It is hard to deny that if Trump were a VC-backed company challenging a legacy industry, he would be heralded as the unicorn of the decade.
Different Populations, Similarly Populist
But the similarities between Trump and Silicon Valley go beyond origin stories. If you look deeper, both derive their power from populism—just different populations.
Trump’s acknowledgement of his own populism explains his adamant focus on the narrative around the popular vote and how many people attended his inauguration. He’s obsessed with speaking directly to his supporters via Twitter. He knows that his power is supposed to be a mandate of the people who voted for him.
It is less obvious, though I believe equally true, that the Valley’s power is also fundamentally derived from a form of populism. Tech companies’ market valuations and power exist because they are able to coordinate the love of consumers with deep commitment of talented engineers and, frequently, marketplace suppliers.
As I have written before, this should be clear in the case of a company like Uber. The service is valuable because consumers like the service, drivers want to drive for them versus competitors, and engineers believe in the mission and leadership and want to work for them and the “transportation revolution.” The company isn’t yet beholden to shareholders as well, but their private market valuation anticipates that the public market will value them—like other technology companies—on enormous growth instead of short-term discounted cash flows. It is this populism that has historically allowed Uber to take aggressive stances on local regulations under the mandate of the people and their ability to mobilize them.
It’s not just Uber. Social networks, commerce platforms and many others all fight the war for talent based on strong cultures and strong missions, making them highly beholden to an empowered employee base. Further, they all fundamentally derive their power from maintaining and coordinating the love of customers, who can easily switch to competing services. They have told their teams and customers they represent them.
This sort of populism isn’t normal in corporate America. In most large and powerful companies, the power dynamics flow very differently. Assets are usually in a “harder” form. Growth requires bigger and more diverse employee populations. Technology companies are particularly exposed to the will of their people.
So, in the dynamic between the leadership of the government and the leadership of the technology community, you see one form of populism versus another.
The Makings of a Difficult Relationship
Policy differences between President Trump and the Valley would be a large gulf to traverse regardless of the broader context. But, the fact that the Valley and the president share so much in their framework makes the relationship all the harder to navigate—not easier.
Populism can limit leaders’ options. Regardless of what would be strategic or right, when you watch leaders like Uber CEO Travis Kalanick, who is accountable to millions of drivers, passengers and thousands of spirited employees, step off a Trump advisory committee, you have to wonder how many degrees of freedom he really has in choosing the optimal course of action. Similarly, even if he wanted to, how many degrees of freedom does the president really have at this point in choosing what to back down from and what to push?
Contrast the populism that Kalanick needs to draw on to the situation that faces Elon Musk, who has stayed in Trump’s business advisory group. He also, conveniently, builds rockets and very expensive cars—neither of which have broad constituents of consumers. Musk has more freedom, in a sense, than Kalanick, in choosing what he believes is the ideal course of action, although the fact that Musk’s companies recently opposed Trump’s immigration ban shows even he is also feeling some pressure.
Having one populist at the negotiating table is difficult. But having populists on both sides of the table, each claiming the backing of their different sets of followers, is an unstable situation where traditional negotiation and collaboration can become impossible. There is little room to compromise when both sides are so directly beholden to their base.
A Difficult Time for the Valley
I also believe the similarities in narrative are causing a real identity crisis in the Valley. For a generation, disruption has been equated with good. Now, as technology threatens industries and jobs, it’s not feeling so universally good to employees or customers. That’s destabilizing to the narratives these companies weave to derive support from their bases.
This can help explain why the Valley hasn’t quite figured out how to react to Trump in office so far. At first, companies and CEOs expressed an early willingness to publicly collaborate. Then there was some notable silence around issues like the Women’s March. Then companies pursued engagement, initially uncoordinated, on immigration. It is clearly taking time for the Valley to find its footing.
Meanwhile, technologists, by threatening everything from jobs to communication, are starting to tinker with the fundamental workings of the state. This means that conflict is somewhat unavoidable.
Regardless of the administration, history was already forcing the Valley to get more and more politically engaged. A Trump administration, built upon similar tactics but targeted at different audiences, complicates the situation for everyone.