Nobody can mistake HBO's comic farce "Silicon Valley" for real life. At least, I hope not.

The premise is that some marvelously vapid coders have an idea that will make them instant millionaires. The characters may have tech skills. But their lack of life skills--like, say, finding a place to sleep--threatens to derail them before market competition does. So they crash in a Brady-bunch California ranch in exchange for granting their blowhard of a landlord a share of the business.

Thomas Middleditch plays the hapless team leader to perfection. His heavy-lidded responses to imminent disaster remind me of Stan Laurel's classic double-take. We see this reaction a lot because the team's invention is in constant danger of falling prey either to the laws of physics or to unscrupulous competitors. And in the tech universe, "unscrupulous competitors" means everyone.

Keeping it Real

What is interesting to me is that the show's producers are apparently maniacal about keeping the fictional Silicon Valley close to the real SV in every way--from real equations on slides, to the cultural niceties of current tech-land. So now we have a show that combines the real-life real estate economy of Silicon Valley with the fictional living situation of "Silicon Valley." Then there are the over-the top product announcements--complete with the garish flesh-toned microphones. The elaborate free-food cafeterias. The painful in-office facial treatments.

It may be real to techie California--but most middle-market companies operate in a completely different universe. When coastal entrepreneurs ask me why my midwestern clients can't just pivot to new business models, I remind them that for most of us the tech economy is just fictional.

Real Life Companies are Different

Here's why:

Abundance of capital. In the real world, you are lucky to have a bank loan--and the bank can take that away from you in a heartbeat.

In Silicon Valley--both the show and the current cultural phenomenon--investment funds are always available. The woodwork is fairly crawling with venture capitalists, merger specialists and hungry CEO's looking to put cash behind a fanciful idea. A recent "Silicon Valley" had the landlord, played by T.J. Miller, make a deal, sight unseen, for a company rumored to be developing an oculus. Here he validates the Simson capital rule: cash is abundant in inverse proportion to the due diligence effort. No effort means much capital.

Product first, business second. Middle market companies live to be of service to powerful customers. Having customers equals having a business, cash flow, a lifeline.

Whereas In Silicon Valley, much of the action is product based. A new algorithm, business model, product, applet. Our heroes in the TV show develop something called a compression algorithm. It's a joke: something that squishes other products.

Fashion. In real life, great companies are formed through unerring focus on one product or service, sometimes only pedestrian ones. Trucking, distribution, metal bending, retail. These companies don't change focus. In the real world, long commitment leads to success.

The tech world is really a fashion business. Today you might invest your time in photo sharing, tomorrow it'll be a storage product, or encryption, or a musical toy. The speed with which hapless money-minders switch focus is breathtaking Of course, that means that investors really aren't investing in the sense that real-world companies do. They are simply chasing the current fad. (But, in the show, their trials are hilarious. For example: The oculus company I mentioned before? The company was really an "octopus" company --as in recipes for--and it still got funded!)

Failure. The Silicon Valley folks always talk about failure. As it, if you haven't failed, you haven't climbed on the first rungs of business success. In the show, it is easy to imagine that each of these each of these misfits will fail in their inconsequential startups.

This whole failure trope is just nonsense. My clients lose sleep over the prospect of failure--loss of jobs to the community, loss of family wealth, and, worse, loss of personal reputation.

Liar, Liar

The author Michael Lewis says that when he wrote "Liars' Poker" about the gross behavior of 1980's Wall Street, he was surprised that most people actually wanted to live the life that he parodied. I have a similar fear--that in today's economy, the shallowness of "Silicon Valley" is lost on privileged entrepreneurs.

I'd rather laugh at "Silicon Valley" than live in it. Because it's just not that easy.

Published on: May 12, 2017