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Marc Benioff joins critics of tech industry 'stinginess' in S.F.

SAN FRANCISCO -- If you want to know how bad the tech backlash has gotten in this city, consider that the man who happens to run the city's largest technology company has now joined the chorus of those criticizing the industry.

Marc Benioff, chief executive of Salesforce.com, is a native San Franciscan who has deep roots here. But after years of being a trailblazer for the industry in this city, he looks around and finds himself appalled by the scenes of luxury buses for techies clogging city streets, evictions soaring and a general indifference among his fellow techies to their impact on San Francisco.

In becoming a major philanthropist, he hoped that this would provide an example of community involvement that the rest of the tech industry would follow.

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Instead, Benioff sees too many tech companies disinterested and disconnected from the city. Dismayed by what he calls his industry’s "stinginess" in giving to local communities, he's decided to speak out on the issue to get companies to change their attitudes before things become even more confrontational.

"With more anxiety among citizens about the changes going on, this is more important than ever," Benioff said. "If you're coming to San Francisco, you've got to do better."

The scenes of the tech backlash in the city have gained international attention thanks to stories about protesters blocking commuter buses and pickets outside Twitter’s offices on the day of its initial public stock offering. Start-ups have poured into San Francisco in recent years. And younger employees of companies like Apple and Google are choosing to live in the city and make long commutes to offices that are more than 30 miles away.

The result of this migration is to put pressure on what remains a small city, geographically.

There’s a lot at stake for an industry that has made San Francisco the start-up capital of the world. Growing unrest could eventually force an ever-evolving industry to move elsewhere.

All this has made Benioff a kind of man in the middle as he's seen tempers simmer over the past year.

Born in San Francisco, it was his love of the city that led him to found his company here in 1999, a time when most start-ups located further south in the heart of Silicon Valley. His parents and grandparents had both called the city home.

"I was born in San Francicso on Divisidero Street," he recalled. "I feel very much that I am a San Franciscan."

Benioff's grandfather was a supervisor in San Francisco for 11 years and is considered one of the fathers of the BART commuter transit system. There’s a memorial plaque of him in the Embarcadero BART station that Benioff says he used to go admire during breaks at work to give him inspiration.

By locating the headquarters of Salesforce.com in the city, Benioff felt he was following in the footsteps of many other entrepreneurs who had called San Francisco home over the years. Not only would he be able to create jobs in the city, the company would donate 1% of its profits to charity.

Benioff believed he was creating a company that reflected San Francisco’s ideals.

"When I started Salesforce.com 15 years ago, I decided to put the headquarters in San Francisco," he said. "That was a very contrarian thing to do. The urbanization of technology had not really begun.

"When we started the company, we believed that if we were successful in our industry, we'd have a requirement to give back."

In recent years, the trickle of start-ups into San Francisco has become a steady stream. There are now more than 2,000 tech companies based in the city.

For many years, the influx of techies seemed to be in keeping with the city's long history of experiencing various waves of immigration that continually reshaped it and renewed it.

The city has always been an extraordinarily creative place where people believed they could come and reinvent themselves and perhaps even change the world, Benioff said.

"San Francisco is a city of innovators," he said. "And it's also a city of immigrants. People are constantly coming to San Francisco, and that's not any different today. Now, we have a new tech boom in San Francisco. This is very much an extension of what’s been going on in San Francisco for 150 years."

All the while, Benioff says, he continued to try to lead by example in terms of giving back to the community.

In addition to establishing the Salesforce.com Foundation with the company's profits, employees have donated 500,000 hours of community service. The foundation has made $50 million in grants to groups that work in causes such as improving healthcare in local communities and providing scholarships and education to girls in Africa. And the company has donated its services to 20,000 nonprofit organizations.

Benioff in particular made a big splash by donating $100 million to establish the Benioff Children's Hospital at a new campus for UC San Francisco. He also donated $1.5 million to build a shelter for homeless women and children.

But over the last year, he's been disappointed that the rise in tech employment in the city hasn't translated into a corresponding increase in giving and involvement by the new inhabitants in solving the social and economic problems facing San Francisco. Indeed, many of the city's problems, such as lack of low-income housing, high rents and evictions, have been getting worse.

"The tech industry has a history of stinginess," he said. "We've not been known as an industry that has given enough back to our communities. As an industry, we haven't seen a return of the wealth we've created to our communities as strongly as possible.

"What I think is happening now in San Francisco is that this is an amazing place to live and an amazing place to start a company. It's great that they're coming to San Francisco. But they need to come part and parcel with a commitment to give back. There have been some great examples like Yelp and Zynga. But we haven't seen this as a major trend among tech companies even though we have evangelized this.

"Certain companies that run buses are starting to dominate San Francisco. Those companies better show that if they're going to clog the streets of San Francisco and take advantage of the public stops, then what are they giving back? This is where I feel a lot of empathy with people in the Mission who are dealing with the invasion of these buses. These buses are not small buses. They are starting to dominate and this needs to be addressed."

The lack of attention from the tech industry to the growing unrest is one piece of the problem, Benioff said. The other is the lack of an aggressive response from city leaders, he said.

"The angst you're starting to see is because our leadership needs to address this," Benioff said. "That doesn't mean we're going to be doing this at the cost of the ability to innovate here. We have to be stewards. We have to guide how and where it will go. We can't have these massive vehicles coming into our streets and doing nothing about it.

"That’s why you have the Google bus being stopped. They have no other voice."

To get his colleagues' attention, Benioff and angel investor Ron Conway, who has become increasingly active and influential in San Francisco politics, called a meeting last month at Salesforce.com's offices of tech companies and Mayor Ed Lee. The San Francisco mayor has been a big supporter of the tech industry, but finds himself walking a fine political line as the backlash grows.

At the meeting, the need for tech companies to do more was discussed.

Following the meeting, an organization of tech companies cofounded by Conway called sf.citi said it would collaborate with other local organizations, including the school district, to create three committees to advocate for more affordable housing, philanthropy and technical education for residents.

Our recent story in the Times also looked at a number of other ways the tech industry is trying to reboot its image. Since my conversation with Benioff in late December, the tech industry has reached an agreement to pay into a pilot program to use public bus stops. Some companies receiving tax breaks have also agreed to increase cash donations to community organizations.

Benioff would also like to see tech companies get behind a campaign to reform the Ellis Act, a state law that many landlords are using to evict long-time tenants from rent-controlled apartments.

"This idea that people can get thrown out of their homes is terrible," he said. "And this, combined with what's happening in the tech industry is going to cause problems. It's got to stop. We can't be throwing residents out of this city just for the sake of a couple more dollars of rent."

While much of his frustration is directed at members of his own industry, he's also upset with some of the local grass-roots organizations involved in the anti-gentrication movement. He sympathizes with many of their complaints, but believes a minority of these groups are taking advantage of the situation.

He's hoping they'll tone down the anti-tech rhetoric and find ways to work with the industry to solve the city's larger problems.

"San Francisco is the city of love. It's the city of gay rights. San Francisco is also a city that's been known for its flamboyance," Benioff said. "These kind of things make San Francisco a great city.

"But there are organizations that are taking advantage of this for their own good. They are manipulating some of their own people for their own political gain. That has to be kept in check. Some parts of the San Francisco ecosystem are using this as their sword. I don't think they're really helping. We're looking for people to help us solve the problem, not amplify them. We want to create a better city."

The pressures that have brought the backlash to a head have been building for a long time, and Benioff doesn't expect an easy fix. He's confident, though, that the industry can find a way to peacefully co-exist and demonstrate its value to long-time residents.

"We have a long road ahead of us to get people [in tech] to change their behavior," Benioff said. "I don't think stopping innovation or slowing the growth of the tech industry is the answer. It'd be like trying to stop the gold rush. You have to let capitalism bloom. But there have to be safety nets for our citizens. We have to consider the fate of the every man."

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