Defending the Brash Arrogance of Silicon Valley

The best thing about being a statistician is that you get to play in everyone’s backyard.

I read this quote in a New York Times obituary in 2000, and it’s stuck with me ever since. As a data guy (I’m too much of a hack to be called a statistician), I love the idea of playing in lots of backyards.

If statisticians are playing in everyone’s backyard, the best Silicon Valley entrepreneurs are knocking down all of the houses and businesses in the neighborhood and putting in place something completely different.

Oh, and by the way, this is their first construction project, and it’s all going to be finished next month.

It’s pretty arrogant to attempt that sort of thing, isn’t it? It’s arrogant even if you’re not being forced to reinvent your neighborhood — or get the latest smartphone and move half of your communications to Facebook/Twitter/LinkedIn.

Early on at PayPal, the founders brashly spoke of reinventing the way people paid one another, even describing PayPal as a new world currency. Who were these founders who wanted to reinvent payments?

Peter Thiel was a thirty-something former lawyer and hedge fund manager who had little experience with either payments or tech companies. Max Levchin was a recent college grad with coding skills and no special knowledge of payments.

So did they hire other “experts” to do all of the detailed work? Not really. To solve the fraud problems that were draining the company, they hired people like me: a recent Stanford grad who’d never thought about, let alone worked on, understanding fraud patterns.

They did the same thing in other areas central to the company’s success. Peter brashly spoke of PayPal’s lack of “adult supervision”; clearly he reveled in being the cocky first-timer, destroying the experts at their own game.

Today, there are at least two Silicon Valleys. One is the Silicon Valley of yesteryear, building faster and smaller processors, bigger and clearer screens, and lighter and longer lasting batteries. The other is the Silicon Valley I got to know at PayPal. That Silicon Valley arrogantly tries to reinvent industries with a mix of deep technology, persuasive marketing, appealing products, and data-driven insights.

In the past few months, I’ve listened to entrepreneurs’ pitches for shaking up a vast array of industries, everything from diabetes care to home-buying, from photography to car insurance, from restaurant payments to government budgeting. Most of these entrepreneurs — like Elon Musk with SpaceX and Tesla, and Max and Peter fifteen years ago — have little or no experience in the industries they’re trying to upend.

In most of the world, people wouldn’t have the guts to do that. But Silicon Valley encourages a special type of arrogance, a type that claims a few smart “kids” can solve problems that have been vexing experts for generations.

Inevitably, that arrogance can be off-putting: is the slightly awkward 22-year-old computer science major who was spending half his free time at frat parties two months ago really the right person to reinvent health care?

Most likely, he isn’t the right person. But like science — a set of theories which are sometimes individually wrong but collectively get closer and closer to truth over time — Silicon Valley is a system.

By going after the big stuff — sometimes unjustifiably or arrogantly — the system collectively increases the probability of big breakthroughs. For that system to work well, you need a culture that encourages smart people who don’t know everything to brashly assert that they can do better.

I’ve seen that pattern again and again: like many in Silicon Valley, I’ve worked in a range of areas (payments, social networking, parenting) where most of my colleagues and I started with no expertise whatsoever. And the results — both for me and for many others — have been astounding, reinventing industry after industry.

Every now and then, someone like Chamath Palihapitiya bemoans the lack of big innovation in today’s startups.

I suspect that this claim is quantitatively wrong: though there are many frivolous me-too startups, there are probably more ambitious (arrogant) work-on-a-big-problem startups than ever.

Nevertheless, I completely agree with Chamath on where we need to go. Silicon Valley at its best is both arrogant and thoughtful: brashly trying to conquer problems others couldn’t solve, while thinking seriously about the societal ramifications.

Let’s go knock down some neighborhoods and build them up to be a whole lot better. Metaphorically… right?

Mike Greenfield founded Bonafide, Circle of Moms, and Team Rankings, led LinkedIn's analytics team, and built much of PayPal's early fraud detection technology. Ping him at [first_name] at mikegreenfield.com.