IP Democracy: Must-Read: Obama's Silicon Valley Money Machine

Joshua Green has this excellent piece entitled "The Amazing Money Machine" in this month's Atlantic that deconstructs how Barack Obama's campaign has rewritten all the rules of campaign fundraising by brilliantly embracing social networking and shrewd Internet and mobile technology tools. Obama's "preternatural ability to elicit huge sums" would not have likely materialized if a group of Silicon Valley innovators hadn't jumped on the Obama train early, much like savvy tech VCs (which some of them are) looking for the next big thing.

Three forces had to come together for this to happen: the effect of campaign-finance laws in broadening the number and types of people who fund the political process; the emergence of Northern California as one of the biggest sources of Democratic money; and the recognition by a few Silicon Valley entrepreneurs and venture capitalists that the technology and business practices they had developed in their day jobs could have a transformative effect on national politics.

Among Obama's Silicon Valley brain trust are Mark Gorenberg, a partner in the San Francisco venture-capital firm of Hummer Winblad, who understood the inefficiencies of big donor fundraising when he worked on the John Kerry campaign and helped raise funds from a broader base in a successful effort to reclaim Congress from the Republicans.

More than anything else, "it was the idea of Obama and the world he speaks for seemed to excite something deep within the limbic system of the Valley brain," sparking as he does the hope for something new and different, the perptual pasttime of Silicon Valley. Gorenberg and his friends (entrepreneur Steve Spinner and John Roos of Wilson, Sonsoni, Goodrich and Rosati are also highlighted in the article) set into motion a social networking machine, first of the old-fashioned kind and then of the true Web 2.0 variety, giving Obama the unbelievable ability to almost effortlessly raise two hundred million dollars from millions of supporters, a true contrast to the big roller days of Democratic party fundraising.

It helped that Obama's campaign could count on some high-profile techies to run the web side of things. Facebook co-founder Chris Hughes took a leave of absence to work full time for Obama, no doubt shepherding the phenomenal MyBarackObama.com, which lures visitors into giving money, donating time, making phone calls or organizing campaign activities.

When My.BarackObama.com launched, at the start of the campaign, its lineage was clear. The site is a social-networking hub centered on the candidate and designed to give users a practically unlimited array of ways to participate in the campaign. You can register to vote or start your own affinity group, with a listserv for your friends. You can download an Obama news widget to stay current, or another one (which Spinner found) that scrolls Obama’s biography, with pictures, in an endless loop. You can click a “Make Calls” button, receive a list of phone numbers, and spread the good news to voters across the country, right there in your home. You can get text-message updates on your mobile phone and choose from among 12 Obama-themed ring tones, so that each time Mom calls you will hear Barack Obama cry “Yes we can!” and be reminded that Mom should register to vote, too.

Silicon Valley's key role in helping Obama become a money machine bodes well for the tech industry should Obama succeed in winning the presidency. But it is also a remarkable phenomenon that has forever transferred the power of political funding from the select few to the masses.

Posted by Cynthia Brumfield on May 14, 2008 8:51 PM to IP Democracy