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Wealthy techsters don't buy in to conspicuous consumption

Flixster co-founder Joe Greenstein recently sold his company to Time Warner for about $80 million, but he says he doesn’t anticipate any changes to his life, which includes a Toyota Prius and a studio apartment in San Francisco. Greenstein says the windfall hasn’t made “a single material difference” in his lifestyle.

Los Angeles Times

Flixster co-founder Joe Greenstein recently sold his company to Time Warner for about $80 million, but he says he doesn’t anticipate any changes to his life, which includes a Toyota Prius and a studio apartment in San Francisco. Greenstein says the windfall hasn’t made “a single material difference” in his lifestyle.

PALO ALTO, Calif. — Aaron Patzer lives in a 600-square-foot, one-bedroom apartment in Palo Alto with an old couch and a TV. His favorite shoes are hand-me-down brown leather wingtips that, at 39, are older than he is. He gets $12 haircuts.

He drove a 1996 Ford Contour until he ran it into the ground at 150,000 miles. His new ride is a Subaru Outback that he bought for $29,000.

You'd never know that the 30-year-old entrepreneur sold his Internet startup for $170 million in 2009 or that he is now a top executive at Intuit Inc., the financial software company.

With a few notable exceptions, Silicon Valley's rising young stars are rejecting the traditional symbols of status: fast cars, yachts, luxury homes. To make their mark, they're putting their wealth into social causes and startup ventures.

"Wealth needs a purpose greater than big houses and flashy cars," said Patzer, founder of Mint.com, which helps people manage their money.

It's more about creating technology that millions will use than making millions of dollars, they say. Their aim is to keep up with Steve Jobs, not the Joneses.

At 27, Dustin Moskovitz is the world's youngest billionaire, according to Forbes. He was born eight days after his Harvard College roommate, Mark Zuckerberg, with whom he founded Facebook.

Moskovitz could afford any home he wanted, but he chose an $800,000 condo in San Francisco. He bikes to work at his tiny startup, Asana, which is making social networking tools for businesses. He leaves his Volkswagen R32 hatchback in the garage.

He says he flies coach, and he's socking away money to fund his philanthropic foundation. Like Zuckerberg, he has pledged to give away his wealth during his lifetime.

"Things can't bring you happiness," Moskovitz said. "I have pictured myself owning expensive things and easily came to the conclusion that I would not have a materially more meaningful life because of them."

Zuckerberg is another billionaire living below his means. For years, he crashed in a tiny apartment with a mattress on the floor and dialup Internet access. He recently bought his first house in Palo Alto for $7 million, a fraction of what he could afford.

Zuckerberg, who has listed "minimalism" and "eliminating desire" as interests on his Facebook profile, drives an Acura. His one major outlay: Last year he donated $100 million to help improve public schools in Newark, N.J., among the country's worst-performing school systems.

Skeptics may wonder whether all this conspicuous self-denial is scripted. Tech titans know they score public relations points by showing a common touch — particularly in austere times.

But the evidence suggests that it's not an act, according to Alice Marwick, a researcher with Microsoft Corp. whose New York University doctoral dissertation in media studies was about social status among the Internet set.

It's not that this new generation of tech entrepreneurs doesn't seek status, Marwick said. They just seek it in different ways.

"This is not a community that values good looks, visible wealth or having a hot body. Those are not the ways that they distinguish high status from low status," Marwick said. "Technology millionaires don't hobnob with celebrities or buy a fancy car. They travel to Thailand, or they fund an incubator. These things are just as expensive, but that's the classic hacker ethos that prizes the mind, not materials."

The hacker ethos is also classically male. "Being concerned with appearance, shopping for clothes and decorating your house are feminine values. Tech millionaires see that type of spending as silly and frivolous," Marwick said.

Silicon Valley measures achievement by what entrepreneurs build, not what they buy.

But wealth does have its privileges. Patzer may have a television that is so old it can't stream Apple TV, a Christmas gift that sits unopened on the floor. But he did shell out $25,000 to spend a week celebrating his 30th birthday with friends aboard a catamaran yacht in the British Virgin Islands.

Then there's Sean Parker, a driving force behind Napster and Facebook. Most people know him as the fun-loving playboy, portrayed by Justin Timberlake in The Social Network, who delivers the priceless line: "A million dollars isn't cool. You know what's cool? A billion dollars."

Parker, 31, co-founded Causes, a social networking service that encourages people to donate millions to nonprofits. He says it's his way of giving back.

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.

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 past 10 years.

Wealthy techsters don't buy in to conspicuous consumption 07/10/11 [Last modified: Sunday, July 10, 2011 5:30am]
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