A mobile app that sends you locally sourced, 700-calorie meals. Another that alerts a valet anywhere in the city to help you park your car. And, of course, the untold others that tell you if your friends are nearby or offer new ways of sharing photos.
And if you just want to say “Yo,” a San Francisco startup will help you do that on your smartphone.
“It’s a for-us, by-us tech boom,” said Andy Smith, a general partner at Center Electric, a venture capital firm.
Whatever happened to the technology industry’s utopian and ambitious vision of changing the world?
I have, in a series of columns, explored the influence of the San Francisco tech scene on Silicon Valley.
In the first, I wrote about how firms in the South Bay are infusing their suburban headquarters with urban touches to appeal to younger, city-based workers. The second looked at the extensive network of tech firm shuttles that have expanded Silicon Valley’s boundaries, reaching the five core counties of the Bay Area, and how the entire region is now riding the industry’s roller coaster.
In this column, I’m focusing on whether the companies created as part of the rise of San Francisco as the region’s tech capital are contributing to the watering down of the industry’s overall ambition. My take: They are.
This boom has been knocked for being tech lite, with entrepreneurs working hard to address the First World problems of the young, wealthy urbanite — where to eat, how to get the laundry done, whom to date, what to drink. Hipness is the business plan.
And many of the sillier ideas are in San Francisco. It makes sense. There’s a concentration here of young tech professionals looking for a way to outsource the mundane chores that eat up a lot of time. The dense geography of the city makes it a perfect petri dish for testing services powered by mobile apps of any stripe.
San Francisco’s rise as a new tech capital is rivaling the traditional Silicon Valley. In 2014, private firms based in San Francisco received $10 billion in venture investment, a bit more than companies based in Santa Clara, San Mateo and southern Alameda counties combined, which defined the boundaries of Silicon Valley until fairly recently. Critically, startups in San Francisco are attracting more of the lion’s share of angel investment. Last year, San Francisco companies received 79 percent of all mobile investments, with travel and photo-sharing apps dominating, according to CB Insights.
But many folks are thoroughly unimpressed with what the city’s startups are doing with all that loot.
“What is going on in San Francisco is the death of disruption,” said Steve Blank, a serial entrepreneur who teaches entrepreneurship at Stanford and the University of California, Berkeley.
Many are particularly critical of the rash of companies, mostly based in that city, that are essentially new digital middlemen for existing services. They are often referred to as “Airbnb for X” or “Uber for X,” with X being anything — boats, dogs, food, doctors, alcohol or weed.
The city, says Blank, is “a sea of non-interesting ideas.”
Blank and others are right to raise this issue, and investors, tech workers and the general public should do so, as well. Are these startups and the clever minds behind them reaching high enough? If they succeed, will they provide a meaningful public good that justifies the millions of dollars and human hours sunk into them?
I fear the answer is no.
When it comes to money and influence, San Francisco matters more than ever.
In general, these firms are not inventing new technologies but applying existing technology to solve problems.
“We are leveraging the innovation that was done years ago, and not investing enough for the future” said Judy Estrin, a networking technology pioneer who has co-founded eight technology companies.
One may ask, “So what? Isn’t applying technology as meaningful as technological breakthroughs?”
But with the popularity of mobile apps that do one task well, we are in a danger zone. They often attract more talent, money and attention than they deserve.
The focus on these mobile apps “swamps out other things,” said Yatin Mundkur, a partner at Artiman Ventures in Palo Alto. He knows Ph.D.s in chemistry who are going into mobile apps in the city. “Is that the best use of their resources, for society and for themselves?”
The poster child for the emptiness of this boom may be Secret, a San Francisco firm that created an app for people to chat with others anonymously. It didn’t have a clear business model except to gain more users, and most of the chatting was about sex.
Still, in its short, roughly 18-month life, it was the toast of Silicon Valley and received $35 million — and lots of media attention (I wrote about them, as well). But Secret failed to keep up with competitors, and it didn’t offer users something compelling — like a new way to use technology.
Rather than “pivot” and look for something else to be, the typical move of startups today, Secret simply closed its doors in April. That’s to its credit.
Some entrepreneurs, while serving a need they have in their own lives, are trying to do something meaningful. One of them is Sprig, a meal-delivery startup that users access through an app. I recently visited the operation. Set in a now-defunct Chevy’s restaurant in San Francisco’s Civic Center, Sprig promises what seems to be the impossible — a healthy, locally sourced meal of under 700 calories delivered anywhere in San Francisco and Palo Alto. In 15 to 20 minutes. For $9 to $14 per meal.
Dozens of workers downstairs prepared the day’s dinner, creating a mountain of peeled butternut squash. Upstairs, two Sprig employees with Ph.D.s work on “predictive modeling” — how to intelligently route cars with perishable inventory to customers.
Gagan Biyani, the chief executive and co-founder of Sprig, admits the idea for the service came out of his own struggle with being healthy while busy building startups.
“It’s true that entrepreneurs try to solve problems for themselves,” he said. But, he argues, Sprig is about more than finding him a healthy meal. It’s about making healthy eating as “convenient as Uber or Lyft.”
I am a foodie who likes what Biyani is trying to do. But Sprig isn’t disrupting anything; maybe it’s offering a higher quality of takeout. And it’s hard not to wonder if the two Ph.D.s could be inventing something besides the best way to get “Pineapple and Cherry Braised Pork” to the Marina District.
The excitement about startups like Sprig distorts the valley’s values. Ashmeet Sidana, a venture capitalist at Engineering Capital, told me he tries to provide some perspective to entrepreneurs he invests in, reassuring them that what they are doing is important, even if it doesn’t go to market in months like a mobile app that delivers flowers.
“If you are doing an app startup, and you are in San Francisco, you may go through six ideas in a year and a half,” he said. “People assume that’s the norm now. It has an impact on all of technology. The good entrepreneurs understand what they are doing. But the ecosystem needs to be recalibrated.”
One of Sprig’s backers, Simon Rothman of Greylock Partners, argues that we are experiencing an unprecedented time of innovation and entrepreneurship that will improve society. On-demand startups, in particular, “have deceivingly large impacts on society and are deceivingly large tech plays,” he says. “It’s about increasing the speed of life. That can feel superficial and unimportant, but it’s relatively significant.”
Sprig, for example, can improve the long-term health of its customers, Rothman said. Likewise, he points to the potential long-term impact of companies such as Uber and Lyft, which may lead to less car ownership, a cleaner environment and a healthier populace.
“That’s where we see the magic in these businesses,” he said. “In the aggregate, these things become powerful.”
But what’s not built into this San Francisco-based boom are questions about the bigger vision. How many Secrets are out there, I don’t know, but I fear there are a lot. And the tech industry will look back to this time and wish it had tried to do more.
©2015 San Jose Mercury News. Distributed by Tribune Content Agency, LLC.
