Pando

Silicon Valley against Silicon Valley

By Sarah Lacy , written on February 5, 2018

From The Disruption Desk

Silicon Valley is in a weird place.

The valuations of private companies and amounts of (mostly Asian) capital they are sucking in is unprecedented. The large cap public tech companies look more unbeatable than ever.

And yet several of the largest ones are in crisis this year. Not a crisis of valuation, revenues or growth, but of morality.

In one corner of the Valley, the long awaited Uber and Waymo trial begins. There aren’t many cases like it in recent Silicon Valley memory. Last week, the Judge William Alsup actually felt he needed to say that the trial wasn’t about whether Uber was evil but whether they stole trade secrets.

That’s where we are at the beginning of this thing.

In addition to Uber itself being on trial, the fetishization of disruption is on trial. This was not always a place that funded entrepreneurs because they promised to break laws. And anyone who believed founders would only break certain laws was naive, as this trial shows. Also on trial is the growth-at-all-costs mentality, and the cult of the founder that has ruled Silicon Valley for the last ten years or more.

Given Softbank has ensured there are no financial repercussions from Uber’s astounding toxicity, it’s in the jury’s hands whether there will be any other repercussions.

Farther south, the angst surrounding Facebook and Google continues to roil. Unlike Uber, both companies were founded to be something almost utopian with rhetoric about making the world a better, more informed, more connected place. The one-off early founders and investors coming forward to express concerns about what they’ve built (and profited handsomely off of) has organized.

The New York Times reports today that former Google in-house ethicist Tristan Harris, Facebook investor Roger McNamee and other early insiders have formed a group called the Center for Humane Technology. It’s also launching an advertising campaign too called “The Truth about Tech” aimed at highschool kids, and their teachers and parents.

To be clear: This group who was enriched by Facebook and Google will actually lobby and advertise against “anti-tech addiction”, which means it’s lobbying against Google and Facebook. Addiction is so core to how these products work, it’s hard to believe otherwise.

Also in the group are early Facebook insiders like Dave Morin and Justin Rosenstein, who is currently building Asana with Facebook co-founder Dustin Moskovitz, who is not listed among the names. Renee DiResta, former Facebook operations manager Sandy Parakilas, and former Apple and Google communications executive Lynn Fox are also in the group.

This is potentially devastating, because -- as members of this group keep reminding us-- they helped build these companies. They are not some uniformed outsiders. They know how these companies work and how they think. It’s up to lawmakers and the public to give a shit and listen to them. (Not an insignificant if...)

Meantime, Facebook’s Mark Zuckerberg has said solving this toxicity is job one in 2018, and at the Upfront Summit last week, Facebook’s David Marcus continued to defend the company’s new social network aimed at six year olds.

As Kevin Kelleher wrote last week, Facebook is trying to have it both ways, and so far, former insiders are proving harsher critics than Wall Street.

It is easy to view this on going drumbeat of insiders calling these companies out now that they’ve been enriched from a cynical point of view. Rosenstein and Morin were able to build their companies largely because of Facebook riches and connections; Sean Parker was an industry pariah before he discovered a young Mark Zuckerberg and became a partner at Founders Fund as a result; and Chamath Palihapitiya was one of the main architects of Facebook’s growth hacking strategy.

They all used to revel in how “addictive” the company and its product was. That was long used as a compliment when talking about Facebook.

In other words: This wasn’t a 2018 shock to any of them.

Still, I’m heartened by the trend as pertains to Google and Facebook. I don’t think it was always clear how dangerous the addiction of social networks was, and it certainly wasn’t clear the role that these companies could play in allowing foreign actors to impact democratic elections.

It’s hard to face that something you built is making the world worse. Over the last six years, as Pando has developed at track record of calling out bad behavior, I’ve had this conversation… a lot. Some of the smartest people on earth have a powerful ability to ignore all data and reality and want to live in a fantasy that what they’ve profited from isn’t awful. Sometimes it has to get so bad, before any of it can get acknowledged, even to yourself, let alone publicly.

And that brings us back to the comparison between the moral crisis at Facebook and the moral crisis at Uber: With very few exceptions, Uber’s insiders and early investors continue to fall in line, saying little to criticize the company. They’re celebrating their recent winnings, enjoying their Uber-given spot on the Midas List, even when confronted with behavior that was far more intentionally dangerous and toxic than anything we’ve seen at Google and Facebook.

Say what you want about rich millionaires and billionaires belatedly growing a conscience. At least they belatedly grew one.