I’m using the word “ideology” here not in the sense of political ideology but rather their view of tech innovation, in which successful innovations lead to big companies which become dinosaurs that get defeated by the next generation of plucky upstart mammals. Rich and powerful tech investors and executives see themselves as being the previous generation of upstarts and they’re painfully aware of the possibility that they’ve become the dinos. Paradoxically, the story they tell about their specialness as founders is embedded in a framework that implies future creative destruction at their expense, leading to an insecurity that drives them to do bad things.
It’s interesting because a standard role of economic ideology is to justify the positions of the wealthy. In this case, yes, the economic ideology justifies their existing position but it also implies future uncertainty. And, in an appointment in Samarra sort of way, every step they take to avoid the future reckoning just makes this uncertainty worse. Leading to tragedy for these tech executives and also for the rest of us.
I thought about all this after reading Careless People, a memoir by Sarah Wynn-Williams, a lawyer from New Zealand, about her several years as a Facebook executive. It follows her trajectory from idealism through enthusiasm, excitement, intensity, disillusionment, resistance, and departure. One thing I appreciated is that Wynn-Williams doesn’t present herself as a victim. In the book she’s a competent and resourceful person who eventually finds herself in over her head. And she’s got great stories. I don’t know what’s true, what’s exaggerated, and what’s left out–I don’t know any of the people involved, but it all sounds plausible. Her superiors in the organization seem like a bunch of liars, but I guess that some of that is helpful for attaining success in this ever changing world in which we live in. There were some scary bits like when they pressure her to take a long-distance flight when she’s in an advanced stage of pregnancy, and a funny bit where Mark Zuckerberg is playing Settlers of Catan with the other senior executives, they all go easy on him to let him win, and Zuckerberg doesn’t realize this is happening. I guess that he outsources his people-reading skills.
One thing that struck me is that, somewhere in the middle of the book, Facebook moves from a traditional big company that tries to use some mixture of competition-busting tactics and lobbying to maintain its position as market leader, to a powerful entity in itself that negotiates to keep governments in power.
It’s kind of like, first they’re playing the business game according to its de facto rules, then they’re playing the version of the game of monopoly where if you’re powerful enough, you can try to rewrite the rules. They’re playing the game of meta-monopoly.
And that seems dangerous. It puts the executives in the “fiduciary” position in which they’re expected not just to play hard and not just to push the boundaries of the rules–the usual calculation is that breaking the law is ok as long as the expected benefits exceed expected costs, and when benefits are in the billions and fines are sporadic and in the millions, you can see where this is going–but also to change the rules. This is too much power, and it also seems corrupting. I feel like even the Facebook executives themselves–even the creepy ones who may have enjoyed being able to change the rules–were not served by this.
To use a saloon poker analogy for a moment: you can think of Facebook as a successful poker player with a huge bankroll, playing a largely on-the-level poker game, with some collusion, some stacked decks, etc., but still mostly poker–but now someone comes in and hands Facebook a revolver. Cool! Now then can really make bank. But the poker game won’t last so long anymore. Nobody wants to play a game where they don’t have a chance. They move from lobbying the government, to being partners with the government and getting special advantages, to needing the government to keep the game going, maybe even infusing the game with tax dollars in some way. I’m not saying this has all happened yet, just that it’s the trajectory. I think they’d be better off if they were still playing in a straight-up poker game, but I can see that once they had the opportunity to grab more, it was hard for them to say no.
The ideology’s in trouble
The trajectory of Facebook gives me some insight into the inherent incoherence of the ideology of market-leading tech companies. I have the impression that their ideology has three components:
1. The company was founded from a combination of inspiration, brilliance, hard work, ruthlessness, and luck. The right people at the right time putting in all nighters and refusing to take no for an answer. The startup is the creative mammal thriving beneath the notice of the lumbering dinosaurs.
2. As the company gets big, it needs to avoid becoming one of those dinosaurs. So it should never lose its startup habits: openness to wild new ideas, thinking big, willingness to work long hours, and commitment to the cause. The challenge is to stay young and hungry even while the company is becoming middle-aged and fat.
3. The goal is 20% annual growth forever, or until the heat death of the universe, whichever comes first.
OK, you can see some contradictions here! On one hand, the storyline is that you’re gonna get overtaken by hungry young newcomers; on the other hand, you’re supposed to stay on top forever. The result, at least for Facebook, seems to have been a kind of desperation, a sense that on one hand they are the kings of the world and that on the other hand they are destined to fail and so they have to try harder and harder to grow and grow and preserve a near-monopoly status. And that’s how you get these executives who control unimaginable fortunes and yet are willing to lie and cheat (I wanted to say “lie, cheat, and steal,” but I don’t know if there was any actual stealing reported in that book), indeed they seem to feel that they have to like and cheat and manipulate the rules and all of this to stay on top.
This is where I feel like their ideology is killing them. Yeah, it’s good that they recognize that as businesspeople they’re nothing special–they just happened to be in the right place at the right time–and it’s good that they recognize that a company has a natural life cycle and you can’t stay on top forever. The bad thing here is that it gives them such a sense of existential insecurity that they feel that they have to keep reinventing themselves and their businesses. They seem to feel a kind of duty to keep the growth going, even while they recognize that there’s no reason they shouldn’t be supplanted by the new generation, and that motivates them to do bad things.
Again, I think they’d be better off if they weren’t able to change the rules in this way–they’d be better off if they were just selling widgets and following the usual corporate playbook. This growth-or-die attitude is just ruining these people.
