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Silicon Valley status symbols emphasize mind over material

Flashy cars? Meh. Young tech stars are putting their wealth into social causes and start-up ventures. The culture measures achievement by what entrepreneurs build, not what they buy.

June 18, 2011|By Jessica Guynn, Los Angeles Times

At the same time, Parker has a closet filled with Tom Ford suits, trots the globe in private jets and is known to have dropped $13,000 on dinner and wine. He keeps a $100,000 Tesla electric sports car in Los Angeles and an Audi S5 in San Francisco. He has a pad in San Francisco and a $20-million, six-floor New York townhouse called the Bacchus House after the Roman god of wine.

"In certain corners, you will find excess. There's nothing wrong with people with money wanting to spend it," said Dave McClure, a tech investor and former PayPal executive. "But entrepreneurs are trying to be smarter and more frugal."

More typical, Silicon Valley insiders say, is Joe Greenstein, who last month sold his San Francisco company Flixster to Time Warner Inc. for about $80 million. Greenstein says the windfall hasn't made "a single material difference" in his lifestyle. The 33-year-old entrepreneur pays $1,000 a month for the same no-frills San Francisco studio apartment he has rented for the last 10 years.

He says he feels fortunate not to have to live paycheck to paycheck or worry about losing his job. And he gets to do what he loves every day.

"I don't feel like I live a life of sacrifice," he said. "I probably feel guilty that I don't sacrifice enough."

That was not the prevailing sentiment during the tech boom of the '90s, which ushered in a period of conspicuous indulgence. Instant millionaires bought Lamborghini sports cars and tore down small houses to build mansions.

Today's entrepreneurs who grew up in the shadow of that boom's collapse say they learned from it.

Kevin Hartz, 41, founder and CEO of the online ticketing company Eventbrite, says this time around, entrepreneurs are taking a more sensible approach to managing their businesses and their lives.

"It would be a contradiction for me to watch every penny at my company and then turn around and buy a $5,000 bottle of wine," Hartz said.

One reason many tech prodigies avoid living large is that it takes time to adjust to a sudden increase in wealth, said Edward Wolff, an economics professor at New York University who studies income and wealth. The newly rich don't know how long their good fortune will last, so they're cautious, he said.

Kevin Rose, founder of Digg, a service that helps users discover and share content from across the Web, appeared on the cover of BusinessWeek five years ago under the headline: "How This Kid Made $60 Million in 18 months."

Rose said he didn't end up making $60 million. That's just what some estimated his shares were worth.

Rose, 34, said he never bought into the hype, though he did buy a sports car (he won't say what kind) before realizing that extravagant spending "leads nowhere."

He's now working on a start-up called Milk and investing in what he hopes will be the next generation of hot companies. He spends weekends watching sports and eating home-cooked meals in his San Francisco condo with his girlfriend and their dog, a Labradoodle named Toaster.

Rose is selling the sports car and now gets around in a Mini Cooper.

"I know guys who have crazy boats and planes, and that's maybe something you do when you retire. But I don't want to retire," Rose said. "I don't feel like I have made it. Internally, I feel I have much to prove."

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