A

| SEVEN |

Dr. J

s the calendar turned from 2009 to 2010, America remained
mired in a deep economic malaise. Over the previous two
years, nearly 9 million people had lost their jobs in the worst
downturn since the Great Depression. Millions more had been hit with
foreclosure notices. But in the 1,500-square-mile area south of San
Francisco that forms the boundaries of Silicon Valley, animal spirits
were stirring again.

A new luxury hotel on Sand Hill Road called the Rosewood was
always full, despite room rates that reached a thousand dollars a night.
With its imported palm trees and proximity to the Stanford campus, it
had quickly become the destination of choice for venture capitalists,
startup founders, and out-of-town investors who flocked to its
restaurant and poolside bar to discuss deals and be seen. Bentleys,
Maseratis, and McLarens lined its stone parking lot.

While the rest of the country licked its wounds from the devastating
financial crisis, a new technology boom was getting under way, fueled
by several factors. One of them was the wild success of Facebook. In
June 2010, the social network’s private valuation rose to $23 billion.
Six months later, it jumped to $50 billion. Every startup founder in the
Valley wanted to be the next Mark Zuckerberg and every VC wanted a
seat on the next rocket ship to riches. The emergence of Twitter, which
was valued at more than $1 billion in late 2009, added to the
excitement.

Meanwhile, the iPhone and competing smartphones featuring