Signage outside Silicon Valley Bank headquarters in Santa Clara, California, US, on Thursday, March ... [+]
I first became aware of Silicon Valley Bank (SVB) during the Fall of 1999. It was the Internet era — the Internet boom! I had begun my career nearly two decades before, working for an old-line Boston banking institution, The First National Bank of Boston, founded in 1784 and the 10th largest commercial bank in the United States. At that time, the prestige jobs at the bank were in personal trust and commercial lending.
I had been hired into the newly established Information Technology (IT) organization, previously known as Electronic Data Processing (EDP), and was trained as a Cobol and Assembler language computer programmer. Within a few years, the banking industry was undergoing deregulation and the Glass-Steagall Act, separating commercial and investment banking activities, was dead. A new era in banking was underway. The First National Bank of Boston was rechristened Bank of Boston and being in IT during the emergent years of Steve Jobs and Bill Gates suddenly made tech the place to be.
By the mid-1990’s, something called the “information superhighway”, empowered by this new thing called the World Wide Web, suddenly emerged, resulting in a euphoric sensation akin to what the California Gold Rush of 1849 must have felt like to an earlier generation of pioneers. Overnight, tech professionals from traditional Wall Street companies began a rapid migration to the West Coast, and a place which became known as Silicon Valley, for opportunities to work at brand new start-ups — in hopes of creating the next Netscape, Apple Computer, Microsoft, and Sun Microsystems.
This is how I came to learn of Silicon Valley Bank (SVB) and embark on a long and fruitful relationship with the firm. In 1999, I was part of a small team that launched a venture backed CRM startup known as Wheelhouse, which was backed by Kleiner Perkins with SVB as the primary banker. My experiences with SVB were invariably positive. In contrast with the more traditional banks, the SVB team was young, warm, welcoming, and refreshingly innovative.
Following the NASDAQ market collapse of 2001, and the closure of Wheelhouse, I founded my own firm, NewVantage Partners (NVP), which served as a management consulting firm in data and analytics to Fortune 1000 clients until its acquisition twenty years later, in 2021. From the outset, SVB was a strong business partner. Although we were self-funded, SVB allowed us to use their offices in Newton, MA to host client and industry events, and routinely invited us to participate in SVB client dinners to share our expertise and insights about data and analytics with SVB clients. During this time, I got to know SVB leadership and senior bankers well.
SVB was also a sponsor during those years of an annual venture capital industry event known as The Nantucket Conference which I participated in each year, and which hosted about 100 participants with invited guests from Silicon Valley such as Eric Schmidt, among others. Every venture backed company and company leader that I worked with at that time had a strong and constructive relationship with SVB, which excelled at being a friend to the venture community.
Over the years, as my firm moved away from regular engagement with the venture community and focused on work with our Fortune 1000 clients, my interactions with SVB became fewer, although I did participate in periodic SVB events, such as an SVB-hosted event that I wrote about in a July 16, 2015 Wall Street Journal article, Mainstream Corporations Poised for Big Data Investments.
In that article, I noted that “Silicon Valley Bank recently held a Big Data Summit to highlight some of the challenges facing mainstream corporations as they struggle to seize an advantage from the opportunity presented by Big Data”. I included quotes from American Express and AT&T, and concluded, “If SVB is correct, mainstream companies will drive the future of Big Data investment. It may not all be classic disruption or glamorous stuff. However, when measured by investment and business value, expect the impact to be massive and at scale.”
It was just over a year ago, that I had the opportunity to reengage with Silicon Valley Bank, now in the context of their adoption of the Chief Data Officer (CDO/CDAO) role, and their plans to leverage data and analytics to take further steps in becoming data-driven leaders in the industry — through gleaning insights which would help the firm further enhance the services they provide to their customers, and by identifying new opportunities for growth in the business.
By most accounts, SVB had been performing well, continuing to service the biggest and most successful start-up ventures in the world. However, its stock peaked in November 2021, and Friday’s shocking collapse came on quick and unexpectedly. As chance would have it, I happened to be speaking with a former Chief Data Officer of SVB on Friday afternoon in a previously scheduled meeting when it was announced that the FDIC had assumed control of the bank.
It is a sad and unfortunate end to a financial services innovator who helped fund the dreams of many an entrepreneur with grace and humility. Silicon Valley Bank was an innovator during an important era in American business. The company and the energetic and purpose-driven people who worked there will be missed. Silicon Valley Bank was a pioneer. Not all adventures have happy outcomes.
