Thanks, Frank.
Thanks for showing us what business life is all about these days. Thanks for this dose of reality.
Until recently, Frank Quattrone headed Deutsche Bank Securities Inc.’s technology group, and was one of the Silicon Valley’s most prominent investment bankers. Then he and several top lieutenants quit to join Credit Suisse First Boston Inc. in a similar capacity.
Spoilsports make much of Quattrone’s prior insistence that he and his team had no intention of leaving Deutsche Bank. In March, responding to rumors of job-hunting, he told his clients in a letter: “We are here to stay. Please trust us.”
If this were a culture where loyalty and trust were more than mere words, Quattrone’s career might suffer from such actions. But in today’s Silicon Valley–in today’s America–such qualities have become the quaintest of artifacts. They do not matter, as long as business gets done. And Frank Quattrone undoubtedly will remain a powerful, successful investment banker.
Silicon Valley is the new paradigm, and Quattrone is one of the people who defines it. This is the place where giant ambitions rise, where prodigious intellects are sorting out our digital future. It is a place afloat in money, and filled with hard-edged people who will do anything to get their slice of this enormous pie.
It is a place that runs on Internet Time, the harsh compression of normal time that forces everyone to move at hyperspeed and allows no time for reflection. Hesitate, and you’re toast. In Internet time, last month’s corporate strategy is this month’s failure. Last month’s gold-plated promise is this month’s change of plans.
Silicon Valley has followed, to a logical extreme, the path on which it embarked more than a quarter-century ago, when Robert Noyce and Gordon Moore left Fairchild Semiconductor to form Intel Corp. Since then, every successful company–and many a failure–has been the womb for new ventures. Leaving one’s current company to join a start-up is now considered entirely normal.
And in Silicon Valley, companies leap into existence like spring dandelions. The boom of recent times has been built around stock options, with executives and employees counting on Wall Street or a bigger company to help them cash in. The valley has become a spawning ground of investors’ dreams, fueled by an insatiable Wall Street that plays a game of pure momentum: As long as the stock is hot, up and up goes its price; the first sign of bad news, wham.
Why should loyalty mean anything to an employee whose company shows none in the other direction? The corporate bloodletting of the last decade has trained us all to view ourselves as little more than free agents.
Free agency now defines the valley culture, and increasingly it is becoming the way of business life throughout the economy. Fail to meet your Wall Street expectations–or, if you’re not public yet, give off the slightest whiff of failure–and last month’s happy, options-holding employees are this month’s competitor.
What’s wrong with this? In many ways, nothing. People can stagnate, and so can companies. Free enterprise includes freedom to move and the birth of new enterprises is such a vital part of the valley success story that no one would want to see it end.
Nor is there anything wrong with selling one’s services to the highest bidder, whether the inducements are pure cash, stock options, perks or other rewards. In general, it’s reasonable that the people who do the work reap benefits along with the people who risk money.
You can take anything to extremes. And that’s what has happened in Silicon Valley. Amid the satisfying aromas of prosperity and creativity wafts another, increasingly rank odor–and the latter isn’t just from the ever-increasing exhaust fumes from all the cars clogging the freeways.
It’s the smell of hypocrisy, for one thing. Companies complain bitterly about a skilled-worker shortage, but then add jobs with not the slightest concern about where new people will live in an already over-stressed region. Because people living elsewhere are rational enough not to move to a place where they can’t afford a home, companies resort to raiding each other and bidding up salaries. Then they complain again about a worker shortage.
You can also smell the panic–the buying panic for stocks whose values make sense only to people who plan to get out before the inevitable shakeout. Momentum investors control markets, and many people are getting rich on their moves. The greatest fools will emerge someday.
Frank Quattrone is clearly no fool. He found a better deal and took it.
Maybe he’ll suffer modest public-relations embarrassment for his trust-me vow, but maybe I’m just naive.
Someday, historians will examine these early years of the Information Age. When they ponder Silicon Valley’s pivotal role, they’ll undoubtedly chronicle the marvels of human brain power, drive and imagination–the qualities that have helped create this economic rocket ship.
I hope they’ll also record the moral maze from which this new age is emerging.
