Features & Columns

Winners Pick Themselves

Lessons learned from San Jose's failed urban initiatives
Downtown SanJose Malone says naming public buildings after Rod Diridon, left, and Tom McEnery, right, while they were still very much alive is an example of a 'second city' mentality.

Almost a decade ago, I wrote a cover story in Metro about about Redevelopment and the state of downtown San Jose. I want to revisit the questions I asked back then, because I think that now we have some answers to at least some of them.

The first question I asked was

Would San Jose have been better off to have let its downtown grow organically, rather than through some master civic plan devised by urban planners in the Redevelopment Department using diverted taxpayer money?

Yes. I'm convinced that we would have been better off rebuilding this city from a million small decisions made by tens of thousands of individual citizens and business owners than by a gang of bureaucrats with no stake in our success beyond their own r–sum– padding.

We may have gained a couple of extra high rises and a few more public buildings going down the path we did, but the cost was far too great. We sucked the soul and culture out of old downtown San Jose and replaced it with a comparatively sterile and empty metropolitan center that constantly has to dangle expensive bait to lure in young people and wealthy suburbanites.

It will take at least another generation to bring back the random juxtapositions of shops and businesses, the welcome and well-worn seediness and the population of hungry young urbanites that make up a healthy city center—and that were so thoughtlessly torn down or driven away back in the '80s and '90s.

The second question I asked was ...

Old City Hall

Where was all of that Redevelopment money coming from?

The typical answer I got at the time was either a shrug or that it was a kind of magical "free" money that would have absolutely no effect upon the overall finances of the city.

Well, we now know that was utter bullshit. A city is an ecosystem. You can't segment off one corner of it, rewrite its financial underpinnings and expect it to operate in a vacuum. No matter how you try to firewall it off, inevitably everyone is affected. And now we can see what that means—a shiny and empty downtown, the loss of numerous small downtown businesses (many of them a century old) that gave San Jose its character and culture—an aging infrastructure in the other, outlying districts, public buildings that have become financial sinkholes, a city budget too strained to pursue major new initiatives, a rising crime rate and a declining quality of life.

I hope we won't make the same mistake the next time some fiscal snake-oil salesman comes around selling his wares.

The third question was ...

Why, despite being one of the largest cities in the United States, and even as it was staking its claim to be the "Capital City" of Silicon Valley, did San Jose insist on behaving like a provincial small town?

My case in point at the time was the naming of public buildings after living people. Then it was the McEnery Convention Center, now we can add the Mineta International Airport and the Diridon Transit Center.

I've known all of these men and have tremendous respect for them, but dammit, you give civic honors to people when they are dead, not when they are still alive and still capable of bringing enormous embarrassment to the community.

How would you like to be entering Ron Gonzales City Hall every day?

The naming of buildings may seem a minor matter, but it is emblematic of the larger problem of San Jose's endless, "second city" mentality. San Jose claims to be the capital of the most influential and prosperous community on Earth, and yet it behaves like some prairie metropolis, boostering itself to the natives but ducking its head and scuffing its shoes in the company of its big-city cousins.

I've spent my entire life listening to how San Francisco is "more sophisticated" and filled with "old money" that's more willing to give the big bucks to support the arts, the zoo, the symphony and all of the other trappings of a great city.

I heard it when I was a cub reporter at the Mercury-News, and 30 years later, I'm still hearing the same old story about how the valley is New Money and can't be expected to step up and share its fortunes with its home community, like the Fleishhackers and Sterns and Davies did in San Francisco.

I believed it then; I don't believe it now—especially when I see the billions those new-money valleyites have happily given to Stanford University, their personal foundations and social enterprises around the world.

I think I first saw the situation clearly when I was producing and hosting TV shows at our local PBS station, KTEH. You know, the one now called San Francisco's KQED-Plus? In one of my series, Betting It All, I brought into the studio, one after another, Silicon Valley's greatest CEOs, with a total estimated net worth of $100 billion. The station manager never even left his office to meet them—at a time when the station itself was in financial peril.

san jose

I think that experience captures a larger picture. Year after year, the nonprofits go back to the same family names, the same collection of downtown philanthropists to once again beg them for operating funds.

God bless those donors for all that they have done. But man, they must be getting tired of being hit up by every charity with a San Jose zip code on its letterhead. Meanwhile, they must be wondering why all of those millionaires and billionaires in the Golden Triangle and across the rest of Silicon Valley aren't stepping up to the plate.

Well, the answer is that they aren't being asked. And if they are being asked, it's a drive-by request from some organization they know nothing about and have never heard from before.

I'm now convinced that, for all of its bluster, the real truth is that San Jose fears Silicon Valley. It doesn't understand it and doesn't want to understand it. It wants its money but doesn't want to raise a finger to support it—indeed, San Jose has gone out of its way to assert its control over Silicon Valley with regulations, "living-wage laws," zoning, etc. It wants to keep the valley out of the downtown and its politics, even while betting the city's future health on the valley's long-term success. In other words, San Jose wants to hold Silicon Valley at arm's length, with one hand around the valley's throat, while using the other one to empty the valley's pockets.

Ignorance may be bliss, but it is also an insult to San Jose's constituents. There hasn't been a San Jose mayor in memory—even the one who worked at Hewlett-Packard—who could explain how a microprocessor works, or watched a start-up team pitch a venture capitalist. And there isn't a congressperson in Silicon Valley who can give a quick explanation of packet switching—even though its inventor lived and died here, and it underpins both the cell phone and the Internet. Some of those Representatives have been in office for 30 years. Wouldn't you think they'd have taken a weekend along the way and boned up on a topic so central to the lives of the people they represent?

And there is one more thing I would expect our elected leaders to know something about: Entrepreneurship. Entrepreneurship built Silicon Valley; entrepreneurship is the source of this valley's economic power; entrepreneurship is this valley's only hope of a prosperous future. San Jose claims to be the capital of Silicon Valley—and Silicon Valley is the world's capital of entrepreneurship . . . so why is it that the leaders of this city appear to have no real understanding of entrepreneurship?: Who does it. How it happens. And what it needs to survive.

I know they don't understand because their actions tell me so. Here are three truths about Silicon Valley entrepreneurs:

1. The big fancy buildings and famous company names don't matter. The future is in the hands of men and women working on business plans in Denny's and Starbucks.

2. Entrepreneurs don't need support. They need benign neglect.

3. You can't pick winners in advance. There are too many variables. Winners pick themselves.

Venture capitalists are some of the smartest people I know, but even they are lucky to pick a successful start-up in one out of every 10 investments. It's a game of numbers and ratios.

In other words, if you are going to build a prosperous future, a city that will come roaring out of this recession into a new era of prosperity, then you don't try to pick winners—especially some in industry like clean tech—and you don't help mature, and likely doomed, tech companies build nice high-rise headquarters, and you don't burden struggling start-ups with endless regulations, taxes and fees, and the latest social engineering boondoggle.

And most of all, you don't leave it up to a committee of bureaucrats to guess which companies will succeed and which won't.

Instead, you give the start-ups cheap office or warehouse space, tax breaks and the fastest broadband you can deliver. Then you get the hell out of the way and trust them to do the rest. Ninety percent of them will fail, but that last 10 percent will change the world—and the fortunes of the city of San Jose.

As for the big companies: in tech, it is the new little firms that lead, and the big, mature ones that follow. Make San Jose inviting to entrepreneurs, and you'll get all of the corporate headquarters you've ever dreamed of.

See the problem? Has anybody wondered why Palo Alto got Facebook, Mountain View got Google, San Francisco got Twitter . . . and downtown San Jose has . . . Adobe? Anybody still curious why most of the thousand-plus new valley start-ups of the last few years have been founded almost everywhere but San Jose?

In the end, it comes down to trust. And to leadership. And lately in Silicon Valley, we've been dangerously short of both.

By trust, I mean that for politicians and community leaders, entrepreneurship is a character test. Political leaders like to guarantee solutions; they like to determine success stories in advance; they like to control. But for a community like Silicon Valley, the only successful way to lead is to recognize that your economic future is out of your hands, and most of all to surrender control—and trust in the native genius of your constituents to invent a prosperous future. And those loose reins have to be matched with a huge vision, and a very high national, even international, profile.

In San Jose, we have not had that kind of leadership in decades. In Silicon Valley, we have not had that kind of leadership in a generation—not since the untimely death of Intel's Robert Noyce.

Don't get me wrong: we owe a great debt of gratitude to Mayor Reed. With all of the scandals, and then the economic crash, the valley and San Jose desperately needed a return to normalcy, a competent hand at the controls and, most of all, a nice heavy dose of integrity.

But I also did an informal poll over the last couple months. I asked San Joseans, most of them strangers, in meetings, in elevators and even on the street, to tell me the name of their mayor. About a third of them knew. "I don't know" came in second place.

Silicon Valley, by comparison, has just the opposite problem. Twenty-five years ago, this valley had a wealth of brilliant figures who could speak for the region and represent it in Washington and around the world. But since Noyce's death we have had no one. As I've already noted, our elected representatives haven't a clue, and two generations of world-class valley executives, from Ellison to Jobs to Zuckerberg, have been simply too dysfunctional to take on the job.

That kind of low-key leadership will not work when this city and this valley find themselves a couple years from now in the next great growth boom. If we are to achieve the kind of success we deserve, the global influence we have worked for, and the opportunity we need to maintain our position as the Capital of the Digital World, we need men and women who have the ambition, the ability, the vision and most of all, the trust, that it will take to be the Leader of Silicon Valley and the Mayor of San Jose. And it sure wouldn't hurt if they had experience as high-tech entrepreneurs.

We will need world-class figures at the helm of both this City and this valley, men and women comfortable playing on the national and international scene—not just the next person whose 'turn' it is to hold the title. We are already running out of time. Who will answer that call? Who will usher in a new Era of Trust, of Entrepreneurship in San Jose, and of overarching purpose and vision in Silicon Valley? Who will step forward and lead us toward our true destiny? Let's hope they make their appearance soon.