As a Silicon Valley bank collapsed before our eyes Thursday, one of the founders told me the world felt the same as when COVID-19 first exposed its teeth. I scoffed at his analogy at first: Are we really using a still-ongoing, devastating pandemic to describe the downfall of a prominent bank? But then I realized we were indeed witnessing the collapse of something sacred.
Now, I see the parallels between the bleak COVID days and the surrealism of this past weekend — even among the mass relief that reverberated across Silicon Valley as regulators told depositors that depositors’ funds would be fully accessible from Monday. Over the past four days, DrWe reported an inducing banking run on Twitter, regulators taking over SVB, spurring the project to help startups and entrepreneurs in the resulting scramble to survive. All while Tech Twitter wFrom panic to anger to dread to relief, all with fear sitting heavy on the shoulders.
Some investors spoke up, others pointed fingers, and though Twitter was full of heated posts and ill-timed jokes, my line manager was never more energized with raw, factual stories about how the collapse of SVB affected people at the frontiers of innovation. Now my DMS is full of people partying, letting one out, and appreciating a moment of immediate relief that felt like the end of lockdown.
But while it may seem like a euphoric end to a nightmare, here’s what has changed irreversibly: People have been slapped in the face for the interconnectedness of technology and an over-reliance on certain institutions and voices. I think we’ve all been reminded that the finance story is an inherently human story. And that a failure of this magnitude affects far beyond the “tech elite” and whatever you define Silicon Valley. And I will add, I hope there is a realization that we should all stop trying to be expert bankers (just as we should all stop trying to be epidemiologists).
I don’t see technology working the same way after what has been said and seen and pushed so loudly over the past few weeks. Founders are more aware than ever about which of their investors adds real value. VC, often publicly friendly, drew lines and picked teams, I’m sure we’ll see each other in the future. Ordinary people have just opened their eyes to how the often insular (as chaotic) world of ventures and startups works.
Silicon Valley let out a collective exhale with the news that depositors will be covered by regulators. There are still more questions to be answered before the rebuild can begin. But the big story that lies ahead is still being written, both with a better understanding of what happened and what is imploding in the broader Silicon Valley reservoir.