Collapsing ceilings. Windowless trailers. Clogged commodes. Electrical outlets. Not the usual heady buzzwords that you'd expect to hear flying about in a schmoozing mob of Silicon Valley entrepreneurs, venture capitalists and dot-commers.
Outlets? Trailers? How very brick and mortar.
But at a recent $250-a-head backyard fundraiser in Woodside, Calif., John Doerr, the Valley's best-known venture capitalist, and John Chambers, the CEO of Cisco Systems, stumped for the passage of a state initiative that's humbly anchored in the non-virtual world. Before a rapt crowd of more than 200 well-capitalized doyens of the local tech biz, the two Valley icons lamented the sorry state of California schools.
"Half of the classrooms don't have the electricity to plug in a computer. It just makes you sick," rallied Doerr.
"We live in one of the richest valleys in the world. And we understand that's just not right," boomed Chambers.
The subject at hand: California's dilapidated public schools, and a state proposition on November's ballot that aims to make it easier to raise funds to fix them. The details of the measure are arcane, but they boil down to this: Under California's constitution, local school bonds -- whether they're to repair aging facilities or build new classrooms -- have to win a two-thirds majority to pass. Proposition 39 would lower that threshold to 55 percent. (A similar measure that would have lowered the threshold to 50 percent failed to pass in March.)
"In California, you can build a prison for a 50 percent vote, but a local school bond takes two-thirds," says Reed Hastings, the CEO of NetFlix.
Doerr and Chambers aren't the only high-powered Valley executives on the political warpath; their proposition isn't even the only initiative aimed at fixing California schools. Proposition 38, takes on arguably the most controversial issue on the ballot. It seeks to introduce free-market competition into the public school system by extending a $4,000 voucher to each of California's 6.6 million schoolchildren for use at a private or parochial school. Proposition 38 is probably the most far-reaching voucher plan ever to come before U.S. voters, but the $20 million campaign supporting it is funded almost entirely by one man, venture capitalist Tim Draper of Draper, Fisher, Jurvetson.
Both measures can be seen as responses to the funding problems California schools have faced ever since the tax revolt of Proposition 13 more than 20 years ago. The bond measure would essentially try to undo the rollbacks of the 1978 tax revolt, while the Draper measure would steer the school system into a free-market solution. What's surprising is the widely varying success of the two measures in generating support in Silicon Valley. Given the Valley's reputation as an anti-government, privatize-everything, free-markets-conquer-all mecca for Ayn Randophiles, one might expect Draper's voucher initiative to be steamrolling ahead. Instead, it's the campaign to spend more money to fix public schools that's found Valley support, not the plan to bring the wonders of the market into public education. Proposition 38 has failed to find broad support in the local tech community; indeed, its main proponent, Draper, has now become a national poster boy for Silicon Valley new-economy political naiveti.
In the past, the tech industry has ventured into politics when the industry's own interests were at stake. Think H-1B visas, shareholder lawsuits, Net taxation. But with these two education measures, the Valley is reaching beyond its narrow self-interest. "There's a growing realization that a tremendous amount of our society is affected by public policy and the political process, and that's an area that you need to play in," says Josh Becker, a venture capitalist at Redpoint Ventures, who was one of the co-chairs of the Woodside Proposition 39 event.
"We are becoming the information society, and Silicon Valley is on the leading edge of that. We can clearly see that the education system that we have today has not transformed itself to become an information society education system," says Hastings, the former CEO of TechNet, the industry's most prominent political lobbying group. Hastings, along with Doerr and Chambers, are the co-chairs of Yes on 39, a coalition that's raised $21.8 million to campaign for the initiative. A who's who of Valley bigwigs have lined up to endorse the cause, including former Netscape CEO Jim Barksdale, Handspring CEO Donna Dubinsky and Marimba chair Kim Polese. Companies like Hewlett-Packard, Intel, Mohr Davidow, Qualcomm, Novell, 3Com and Travelocity.com are also among the ballot measure's backers. The Woodside event alone raised $221,000.
Is the Silicon Valley money pouring into the initiative finally a sign that the industry is getting more involved in the community, or just an unnerving indication that techies have finally looked up from their monitors long enough to realize that there's a lot of other arenas they can influence? Depending on your point of view, the initiative system is either a great leverage point for enacting change or an undemocratic loophole that allows the very rich to push whatever issue they'd like to a public vote. Because there's no limit on how much an individual can pour into backing an initiative, from getting the measure on the ballot to selling it to voters in commercials, it's a prime forum for the wealthy to wield their influence.
But in Draper's case, it's not working.
The California voucher measure has attracted national interest -- and criticism -- because of the dramatic changes it would entail for public education. Unlike existing voucher programs in Milwaukee, Cleveland and Florida, which offer money only to low-income students, the Draper plan offers vouchers to all students, regardless of their family's income.
It's that crucial distinction that's led even national leaders of the voucher movement, like John E. Coons and Stephen D. Sugarman, law professors at the University of California at Berkeley's Boalt Hall and the authors of "Making School Choice Work for All Families," to come out against the initiative. Voters aren't going for it either. Throughout the campaign, the initiative has consistently languished in the polls. In one recent Field Poll, of the 72 percent of voters who knew about the initiative, 28 percent said they favor it and 35 percent said that they oppose it. In contrast, voters appear evenly split on Doerr's initiative, Proposition 39.
"It's not going to help anyone when [Draper] spends 15 to 20 million dollars and loses," says Hastings of the Draper voucher campaign. "It's been dead since the day it started. Tim means well. He cares about the same things that all of us do. I hope afterwards he continues to invest in fixing the system, but tries a more incremental, pragmatic approach." Hastings, reportedly, tried to convince Draper to hang up his costly campaign in the eleventh hour, so that the teachers' unions would spend their dollars in the remaining weeks before the election working to pass Proposition 39, instead of fighting Proposition 38.
Chris Bertelli, the press secretary for 38Yes, brushes off the criticism that Draper is on a one-man, quixotic ballot bid to bring his extreme free-market education views to voters. "What's worse: an individual donating his own time and his own money to a cause, or three unions emptying their members' bank accounts fighting that cause?" he says, pointing out that 95 percent of the money to oppose the initiative has come from three teachers unions. Both camps have raised about $22 million.
Silicon Valley types like to think of themselves as bringing a fresh, different and totally radical model to everything they do. But politics may not be as amenable to that approach as software. As Hastings says: "It's not like building a company and being the brilliant maverick. It's about coalition-building. Draper's campaign has been in the maverick model."
The Proposition 39 camp has managed to avoid looking like a bunch of new-money businesspeople who think that now that they've conquered the Internet they also know how to run education. They've done so by aligning themselves with a wide-ranging group of endorsers, from former Republican Gov. Pete Wilson to current Democratic Gov. Gray Davis, from the American Association of Retired Persons to predictable groups like the California Teachers Association. On the other side of the issue is the conservative Howard Jarvis Taxpayers Association, which sees Proposition 39 as a recipe for increased property taxes.
Surprisingly, Doerr, who with his family and business associates has contributed $8 million to passing Proposition 39, is the first to denounce the initiative process. "I hate initiatives," he says. "They cost too much. It's much better to work with the local representatives, schools and communities." But he points out that changing the threshold for school bonds requires changing the California constitution, which can only be done by putting the subject directly to the state's voters.
Hastings says if Proposition 39 passes, the group will turn its attention to creating a statewide advocacy group. He argues, "If you're organized, the legislature is a much better process; if you're disorganized, you end up having to rely on initiatives to get things done." He predicts that the approximately $30 million that the group will spend on Proposition 39 could have accomplished 10 times as much through the legislative process.
Are tech moguls finally realizing there are limits to what personal fortunes can and can't accomplish? Jamie Daves, a former politico who was the special assistant to FCC chairman William E. Kennard before he became a Stanford MBA student, says, "Doerr and Draper understand that they could set up foundations and give away all of their money, and it would still be small in comparison to the amount of public funds that go toward an issue like education. That's what they've all realized. Doerr and Draper are trying to take their credibility and their money to support reforms in public policy."
"Is it great that it's easier for people with a lot of resources to get involved in public policy? No. But am I happy that John Doerr is doing what he's doing? Yes. He's been very open and inclusive. He understands that it's not just enough to spend money to buy TV commercials. There needs to be a real grass-roots movement toward education reform."
So maybe the question isn't whether Silicon Valley will help reinvent California's education system. Instead, the real question could be whether the old-style politicking of the Proposition 39 campaign and the my-wallet-my-way bravado of Draper's Proposition 38 will educate Silicon Valley about politics.