Silicon Valley Bank was part of an ecosystem that sped up innovation

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I once tried to borrow money from a large commercial bank to grow my business.

The bank officer wanted collateral, so I offered my library of editorial content. He was confused and said he could only attribute value to the cost of the physical disk drives where they were stored. 

I was furious, demoralized and discouraged.

Later, I borrowed money from Silicon Valley Bank for several of my companies. They understood the digital age, supported entrepreneurs and understood our needs.

It was part of an ecosystem that helped make innovations possible. It certainly helped me.

I paid off the loans and remain forever grateful to SVB for taking a chance on me.

This bank failure was initially viewed as a regional story, but it’s much bigger than that.

Trash talk the San Francisco Bay Area if you need to, but like it or not, it’s still home to almost all of the major technology breakthroughs of the last 60 years. And it will continue to be so.

It’s also true that some of the Valley’s innovations have unintended consequences, as we witnessed last week.

The run on Silicon Valley Bank was aggravated by the ease with which you can wire money using your smartphone. During the Great Depression 9,000 banks failed after a run on the banks when people had to line up to withdraw their money. One friend of mine watched the throbber (the loading icon) rotate for three hours as he tried to wire money out of Silicon Valley Bank last Thursday afternoon. The transfer did not go through.

We live in the digital age, but most problems still have their roots in human error.

SVB management made some decisions last week that are questionable, but their upside-down balance sheet was unfolding for a year.

In our backyard, it makes you wonder if Zillow could have faced the same fate as SVB if founder Rich Barton hadn’t pulled the plug on iBuying. Look no further than Opendoor’s recent woes to imagine what Zillow’s outcome might have been.

It is challenging for all of us to be decisive, not reactive. A fine line.

For good or bad, thanks to the digital boom, events happen in a split-second and our actions live in the online fishbowl.

I used to tell my kids, when the going gets tough, the tough get ice cream.

My advice right now is stay calm and, if you are stressed, treat yourself to a Dairy Queen Hot Fudge Shake.

This too will pass.

Email Brad Inman