Technology’s Broken Promises: Startups, Capitalism, and the Destructive Force of a Culturally Bankrupt Industry
My Own Youthful Naivety
It’s June 2013, and I’m cruising from SFO to The South of Market neighborhood (the pinnacle of startup driven gentrification in San Francisco) in the back seat of my future CEO’s car. I’m a little nervous. I graduated last December with my bachelors in computer science, and I have been working for two years as a programmer at a medical textbook publishing company based in my hometown of Salt Lake City. All of my equally naive classmates at the University of Utah had talked ad nauseam about the great ideas they had for their own startups: an agile dashboard, a better instant messaging app, a phone game… I never had a “great startup idea” of my own but I’m young and keen on “changing the world through technology,” so today I’m interviewing with a startup. They have raised a million dollars in seed funding, and I will ultimately become the seventh person to join the company. I’m nervous, but I’m a little giddy too.
When we arrive at the office we park around the corner. “Don’t leave anything in the car,” I’m told. We parked at 6th street and Folsom, if you know the area you also know not to leave anything in your car. “We’ve parked a couple blocks away from the office,” someone explains to me, “it’s a really cute live/work loft,” which I later learned means the twenty four year old CEO sleeps in the office. As we turn down the little alley where the office is located Rex, the resident homeless man, asks if anyone could buy him a Mountain Dew.
“Sorry Rex, not today.”
With hindsight, this was perhaps my first of many quintessential San Francisco Hyper Techno Capitalist moments. The four of us are not rich by the Bay Area’s standards, but as twenty-somethings all four of us are making more than the median household salary. The joke almost writes itself: four yuppies walk through a rough-and-tumble neighborhood in San Francisco looking for a technological solution to the global problem of otherization — they pay $6000 dollars a month for what could have been a family home and collectively ignore a local homeless man on the way to a trendy, organic, vegan, restaurant.
The company in question is a business-to-business middle man in the catering industry. The core of their business during my tenure was to find companies that regularly have catered meals for their employees and streamline the administrative aspects of regular catering. In return for finding “big fish” clients, they collect a percent of the profit from the catering companies.
During my interview, the CEO (as young and idealistic as myself) tells me, “long term, we want to bring cultures together through good food. By connecting people to great meals we can open them up to different cultures,” and then tells a truly heartwarming story about her own connection to, and passion for, foods from many cultures. An older and more cynical version of myself unleashes a tirade of righteous rage on my memory of the two of us.
“You can’t just deliver food to companies full of wealthy hipsters and pretend you’re changing the world! Your organization makes the life of an office administrator marginally easier while facilitating the further gilding of the cages of San Francisco’s tech workers,” I’m shouting from the future. “Is one of the top ten problems facing your community that Tim at Twitter doesn’t have a culturally diverse meal plan? You think Tim and his Twits are going to solve the housing crisis, or racist policing policies, if only they ate more Ethiopian food?! Rex doesn’t need a ‘meal from another culture’ he needs a fucking home, but our rich benefactors are paying insane rent for this shitty ‘live/work loft’. We are one small part of the forces responsible for driving the few remaining people who aren’t just like us out of this neighborhood. You can’t measure impact by intent alone!”
But in 2013 I smiled and agreed that we could totally fix the world’s empathy problem through catering and technology. I was sure this tight knit group of ambitious twenty-somethings could do anything we set our minds to. With explicit cultural values of community, passion, and integrity, whatever we did next, our hearts would be in the right place.
Six months later, two of my closest co-workers had been fired despite them both being (in my view) skilled and hard working; so much for a tight knit community. Passion turned out to mean long hours and a weekly invitation to “Sunday Funday” where you could go to the hippest local coffee shop and work on Sunday with the team. And while these particular founders truly did strive to live with integrity, my time in the tech startup scene has exposed me to a slew of cash rich, but morally bankrupt people.
A Rich Community Solves Rich Problems
From business-to-business catering to buses for rich people, the valley is full of ideas only the wealthy can love. There’s Sally the salad making robot, a vending machine that is filled with pre-chopped salad ingredients and spits them out onto a tray. There was the now infamous Juicero– the Capri Sun squeezing “robot”. Buses with a six dollar fare that charge your phone via Bluetooth are sure to keep the riff-raff out of your commute. There is a company co-opting the name Bodega while seeking to replace the iconic mom-and-pop corner store with a big, cold, sleek, “smart” vending machine. Who doesn’t want their corner-store consumption habits meticulously tracked so that another faceless corporation can “optimally” stock a central pay-per-item refrigerator with exactly the 10 items their apartment building buys most, and little else?
Why fold your own laundry when you can buy a robot to do it for you? Listed at an affordable $1000, FoldiMate can transport you back to a time before your mother taught you to be responsible for the messes you make!
The promise of the Internet has been to connect the world, but the power of technology is being used to slowly, but surely, reduce the number of times we need to change out of our pajamas to zero. In the future you’ll never need to leave the house; and if you do you won’t need to interact with any humans on your fancy bus, or at the store. Never mind the joblessness and hurting communities — a little more “progress” will make it possible to ignore those problems entirely.
Not all the advances of the Internet age are intentionally isolating us from our communities. In the early twenty-teens the Internet was connecting and empowering people from around the world. Twitter was emerging as the platform for revolutions like the Arab Spring in 2010. Facebook was still mostly about keeping up with your friends from around the world. Today Facebook and Twitter are battle grounds upon which government agents (both domestic and foreign), multinational advertisers, data miners, hackers, and so many others are waging information wars. With wide ranging goals from co-opting elections to selling you razors, there is big money in the collection and sale of big data — your data.
In an obsession to “connect everything” we’ve created a slew of devices that have no business on the Internet. A refrigerator that tweets videos of you using it, because everyone needs to know about my 1:00am ice cream cravings. The world’s “smartest” oven, about which the Wall Street Journal wrote, “Dining with June for a month gave me a glimpse of a future where we don’t need to be chefs to make restaurant-style meals.” As if enough of humanity hasn’t already forgotten how to cook for themselves. An Internet connected toothbrush allows my dentist to prove I’ve only been brushing once per day (shame on me). And, I kid you not, an Internet connected menstrual cup. It’s possible to view these inventions as simply frivolous, but they’re also attack vectors for hackers (who have already hijacked the “Internet of Things” in massive DDoS attacks) and a rich trove for data miners and thieves.
Through the magic of machine learning — and the burgeoning ability to track your every habit — organizations with cash and the right technologies can use these tools to sway elections, sell gadgets, and decide if you qualify for a mortgage. Similar tools are used to extract money from the stock market, out-fox world class poker players, and defeat world champion Go players. The tools are undoubtedly sophisticated, but I question the wisdom in giving these algorithms so much power in our world.
John M. Culkin once commented, “We shape our tools and thereafter our tools shape us.” With evidence mounting about screen addiction, social media addiction (academic study, book, article), and the “fake news” epidemic, what other unforeseen consequences are looming in our technology shaped future? How many of these breakthroughs are truly beneficial to society? How much money, creativity, and labor has gone into automating the extraction of wealth and the devaluation of human labor?
Juicero and Bodega represent wasted effort towards banal and mundane goals. Leap Transit is an archetype of tasteless excess and classism. Government propaganda and wealth extraction have their own long and sordid histories — technology is just the latest frontier in those ongoing battles. Self driving cars and factory floor robots are transparently focused on replacing human labor. There is no similarly concerted effort focused on what happens if all the blue collar jobs evaporate; in fact, in the United States we’ve been consistently dismantling the social safety net for those most at risk of losing their jobs to automation.
Meanwhile, global warming is denied by the the President of the United States. Hurricanes batter coastal cities around the world. Wars continue to rage. Wealth continues to consolidate. Opiate addiction continues to rise. In California, the heart of the technology industry in the US, housing prices go up, homelessness rates rise, and wages stay the same nation wide. The United States has the highest incarceration rate of any nation in the world, despite all this incredible technology. In the words of William Gibson, “the future has arrived, it’s just not evenly distributed.”
When the money is concentrated in the hands of the few, the game of capitalism requires the market to cater to those few hands. There is no money in preventing war; housing the homeless; or healing the earth. Society at large disproportionately reaps what the rich and powerful have sown, and unfortunately, there is a lot of money to be made in deforestation, fueling wars, and operating prisons. Technological advances bring new, similarly parasitic industries such as ransomware, algorithmic stock trading, and a level of surveillance so complete it makes Benthams’s panopticon look like Disneyland. Even the “telescreens” of 1984 were less effective spying devices than your phone, and in 2018 you actually pay someone for the privilege of owning the surveillance tool.
Some of the biggest business in technology is the continuing drive to eliminate the “wasteful” efforts of “inefficient” humans. While self driving vehicles contain the beautiful promise of independence for people with disabilities which prevent them from operating a car, these technologies are being developed primarily to replace the costs associated with human drivers. Long distance autonomous trucks can drive indefinitely, require no wages, and definitely won’t unionize. The work of technologists is being widely deployed explicitly to devalue the work of humanity overall.
Increasingly, companies view employees as cost centers. Why should I pay a knowledgeable HR manager when I can just outsource that work to TriNet? Why pay teachers when we can set students up on Khan Academy? Why pay checkout operators when we can buy a self-checkout machine? Why employ wait staff at a restaurant when customers can order for themselves on an iPad?
By now you’re well aware that wealth is consolidating into fewer and fewer hands. In fact, the wealthiest 1% of Americans own more than the bottom 90% own cumulatively; this is a higher consolidation than any time in the last 50 years. The net worth of the people in the 90th percentile is, by the way, just more than one million dollars; the net worth of a “one percenter” starts at ten million dollars. This means that the wealth of the few multi-millionaires and billionaires is greater than the cumulative wealth of every single American worth less than one million dollars. In 2017, the wealthiest 1% of individuals collected 82% of the total wealth generated.
Technology has been billed as a leveling force, or at least as a rising tide that raises all boats: bringing better lives to the least among us. Yet here we are in the most technologically advanced time in the history of the world, with a less equitable wealth distribution than at any time in the last 50 years. Replacing human labor with robots, kiosks, and algorithms is “good business” — it keeps the money in the hands of the shareholders and out of the hands of the laborers. While a small subset of technology workers are highly paid, wages in general have been stagnant for years. We already have serious and growing underemployment; without a significant cultural shift, we will continue to widen the gap between the rich and the poor.
Burgeoning tech hubs like Seattle, Austin, and Denver, are starting to see the same financial squeeze that Silicon Valley has been facing. As large populations of tech workers move in — replacing locals — rents, housing prices, and the cost of living all rise in unison. These communities are caught in a feedback loop of wealth consolidation. Costs rise; the less wealthy move out; affluent people move in (because they are the only people who can afford to); new wealth concentrates in the neighborhood; and the kinds of businesses that wealthy people want — like Whole Foods and fancier coffee shops — move in, which in turn drives the cost of living even higher.
A sublime example of the compassionless attitudes and tone-deaf delivery that exemplify these “rising” neighborhoods comes from ink!, a coffee shop chain in Colorado, who recently had to apologize for this atrocity of a marketing campaign:
Gentrification is part and parcel of the technology industry, and the startup world. The workforce of technology companies and tech startups are younger, more male, and more white than the population averages (and the averages of non-tech non-startup companies) at startling rates. 80% of tech startup workers are men. Asians frequently represent between 30–40% of the workforce at technology firms but face a so called “bamboo ceiling” and are underrepresented in the top ranks of these firms. Latinx folks weigh in at anywhere between 3–4% at big tech organizations, black people at only 1% at the same firms. If technology is a rising tide, white men seem to own all the boats.
When you combine the above demographics with the demographics of the jobs technology is primarily seeking to eliminate, it paints a clear picture of the continued consolidation of power. Teachers, restaurant workers, retail workers, manufacturing workers, bus drivers, taxi drivers… these are all industries for which there is great interest in automation, and wherein white men have a lower-than-average concentration. All of this points to a culture that simply doesn’t value humanity above profit margins.
Self Obsessed Patriarchs Of Industry
In 2015 I had switched jobs to another startup, this time with around 30 employees. I attended The Crunchies, an annual awards show put on by TechCrunch; the Oscars for startup CEOs. In my work situation, tensions were rising. There was a faction of the Business Development team trying to stage a coup against the CEO. I was excited to go because the host that year, T.J. Miller, makes a living playing Erlich Bachman in Silicon Valley– a satire of the arrogant, politicking, entrepreneurs I was caught in the middle of at work. I was hoping for a repeat of Stephen Colbert at the White House Correspondents Dinner.
When I arrived, there were protesters around the lines at the entrance. In 2007 when The Crunchies had started, people were hailing the moves of scrappy underdog entrepreneurs like Mark Zuckerberg. But by 2015 views of the elites of the technology world were less rose colored. Zuckerberg had been portrayed less than favorably in The Social Network in 2010, Steve Jobs had been given similar treatment in the 2013 biopic Jobs. In San Francisco there had been protests about the tech buses illegally using city bus stops. The protests at the Crunchies were borne out of continued tension about rising wealth inequality, poverty, gentrification, and the ongoing housing crisis. Sexual harassment and discrimination were also among the hot topics that year. It was February 2015, and Ellen Pao’s discrimination lawsuit against Kleiner Perkins would go to trial on the 23rd.
T. J. Miller did highlight the affluence and self importance of the crowd, referring to himself as a “court jester” and commenting about the event that, “this is Silicon Valley literally buying or renting the space at the most beautiful concert hall in the Bay Area to throw a fake awards show to give themselves awards.” The teasing got less gentle as the 3 hour event wore on. By the end of the act Miller was embroiled in a hostile engagement with Gabi Holzwarth, calling her a “bitch” multiple times, after mocking her then boyfriend Travis Kalanick: “And the Crunchie for not constantly stepping in shit goes to Travis Kalanick. So does the Crunchie for constantly stepping in shit.”
I personally appreciated the only-halfway-playful tear down of the self-aggrandizing CEOs in attendance, but not the casual sexism that permeates Silicon Valley and Hollywood alike. Making matters worse, the person who got the worst public shaming was an innocent bystander; the future ex girlfriend of someone who actually deserved it. Holzwarth was a victim at The Crunchies, and a victim of the sexism that permeated Kalanick’s world. In 2016, after she broke up with Kalanick, Holzwarth would comment that, “As a woman struggling with my own insecurities and body image, the best thing for me was to leave that unhealthy world of impossible standards.”
Holzwarth would also describe an event she attended with Kalanick and other Uber executives in South Korea where women sat in a circle wearing numbers, and Uber executives picked which woman (or women) they wanted to sit with. In recalling the event, Holzworth described Kalanick as being, “part of a class of privileged men who have been taught they can do whatever they want, and now they can.” This was before the #MeToo watershed moment. Before the fall of Harvey Weinstein. Before Susan Fowler’s blog post highlighting the sexism at Uber; before the world had heard the ugliest parts of Kalanick’s story. Travis Kalanick was Uber’s still-lauded CEO and would be runner up for Time’s person of the year in 10 months time.
The sense of entitlement that Holzwarth describes fuels the way CEO’s think about the cities and communities in which they do business as well. John Oliver recently gave voice to the frustrations of the protesters at the Cruniches: despite all the social ills being created by mega-corporations, city and state governments are falling over themselves to create tax incentives to favor those same organizations.
In discussing Amazon’s race-to-the-bottom bidding war for its second headquarters, Representative Keith Ellison tweeted, “Tax breaks to Amazon promised by New Jersey: $7 billion. Tax breaks promised by Illinois: $2 billion. Something is deeply wrong with our economy & democracy when local governments offer up their tax base to a corporation worth over $500 billion.” Lina Khan’s phenomenal 24,000 word legal Note, Amazon’s Antitrust Paradox, meticulously lays out the case that, “With its missionary zeal for consumers, Amazon has marched toward monopoly by singing the tune of contemporary antitrust.” Cities are now prey for Amazon’s latest power play, as they fall over each other to give a company worth half-a-trillion dollars additional tax breaks as a welcome gift to their city. Some Seattleites are warning the Amazon suitors: be careful what you wish for.
Precious few of these patriarchs needed or deserved a trophy. Between the event’s self aggrandizing nature, and the host’s misdirected hostility, I left the award show wanting to take a shower.
The Big Culture Lie
For years one of the defining features of Silicon Valley startups has been the cult of company culture. Ever since Google made waves with its “do no evil” slogan and posh office space with all the bells and whistles, there has been a race to have the most desirable “work culture”. Companies want to attract the best potential employees and they want to win PR battles for the public’s hearts and minds. Founders of eccentric companies like Airbnb write articles like Brian Chesky’s Don’t Fuck Up The Culture. Companies create “core values” and hire or fire people based on “cultural fit”. But as revelations about racism and sexism continue to creep out of the tech sector, we have to confront the truth: the male dominated tech sector is a patriarchal society rooted in tactics of domineering, exploitation, and making money without much thought as to the consequences.
Emily Chang described one of the many forms sexism takes among elite venture capitalists in Vanity Fair: sex parties. Chang describes a world where women are expected to provide access to their bodies in exchange for access to V.C. networks. Simultaneously, though, these women risk losing respect and credibility for participating in these types of events. From the piece:
Another female entrepreneur described the unfair power dynamic that’s created. “There is this undercurrent of a feeling like you’re prostituting yourself in order to get ahead because, let’s be real, if you’re dating someone powerful, it can open doors for you. And that’s what women who make the calculation to play the game want, but they don’t know all the risks associated with it,” she said. “If you do participate in these sex parties, don’t ever think about starting a company or having someone invest in you. Those doors get shut. But if you don’t participate, you’re shut out. You’re damned if you do, damned if you don’t.”
Chang’s piece confirms Holzwarth’s comments that V.C’s and other technology elites see themselves as a privileged class that can do whatever they want. Chang also describes a class of individuals who can justify just about anything through their acquisition of wealth:
Rich men expecting casual sexual access to women is anything but a new paradigm. But many of the A-listers in Silicon Valley have something unique in common: a lonely adolescence devoid of contact with the opposite sex. Married V.C. described his teenage life as years of playing computer games and not going on a date until he was 20 years old. Now, to his amazement, he finds himself in a circle of trusted and adventurous tech friends with the money and resources to explore their every desire. After years of restriction and longing, he is living a fantasy, and his wife is right there along with him.
Married V.C.’s story — that his current voraciousness is explained by his sexual deprivation in adolescence — is one I hear a lot in Silicon Valley. They are finally getting theirs. — [Married V.C. is a pseudonym for a person being interviewed for Chang’s article]
These cultural problems extend past the realm of office politics too. The zeitgeist of the Silicon Valley elite is delivered to consumers far and wide via the companies they’ve built.
Airbnb has drawn criticism for driving up rent, ruining neighborhoods, and enabling homeowners to run unregulated full time hotels. Uber’s reputation has become so bad it announced an apologetic “180 days of change” to close out 2017, promising to improve the driver experience and fix its now infamous “culture”. Even the lovable Google has had its share of problems, from the employee built salary spreadsheet exposing a gender based pay gap, to the “anti-diversity manifesto” an internal memo that (to Google’s credit) led to the termination of the author. (In a bizarre twist, Google found themselves simultaneously facing a lawsuit for pay discrimination against women AND a lawsuit over unfair hiring/staffing practices against men in 2017).
The ever present drive to make money fast underscores some of the most unsavory practices. Investors looking for their “unicorn” pressure otherwise sensible businesses to grow beyond their abilities. I once overheard a founder bemoaning his own blitz for tech glory at a local watering hole, “I had a nice little business, $800,000 dollars a year, 4 employees, but [my investors] told me we could quadruple revenue in a few years. I should never have gotten greedy.” Apparently things weren’t going well since he started his bid at “hyper growth”.
A majority of businesses fail, and common wisdom is that venture backed startups fail at a higher rate than other businesses. Between 75% and 90% depending on who you cite. While there are reasons to be skeptical of those numbers, the culture of The Valley is absolutely one that embraces failure and takes seriously the idea that “most startups fail.” One result of this commitment to failure is that layoffs are common.
Layoffs aren’t always a sign that a business is failing, per se. It was surprising for me to learn that bay area companies are frequently in the process of executing layoffs and looking to sell/go public at the same time. Employees who are often working longer hours, for lower salaries (at the promise of valuable stock), are summarily terminated to “fix the balance sheet” in the run-up to a potential sale. Others are let go because the business simply made too many mistakes along the way and is running out of cash. The human costs and the visceral reality of these layoffs is often ignored by the “move fast and break things” investor class, who don’t have to deal with the social and interpersonal fallout of the layoff. In fact they actually stand to benefit financially if a sale goes through.
Once, in a meeting which would ultimately result in sweeping layoffs (nearly 35% of the company), an executive asked a room full of fellow department managers to, “try not to think of the names and faces of your coworkers,” instead asking us to, “focus on the budget, the line items, and average salaries.” As if being asked to literally reduce my coworkers to line items on a budget wasn’t dehumanizing enough, many of those terminated were given zero days notice, and some were not even offered severance. The “staffing adjustments” came as a shock to the company at large. Some departments were hamstrung, causing the remaining employees to backfill with long hours, under the stress that their jobs were at risk as well.
Ironically the executive in question also quit in the following months. The layoffs were among her very first actions as Chief Operating Officer and in total she was with the company for less than six months.
Moments like these expose the lies and double standards behind cultural slogans like “Communicate With Compassion”, “Power Your World With Sunshine”, “Act With Integrity” and “Be a Family”. Although workers are inundated with this sort of propaganda, it’s rare to find an executive who is actually measured against a standard of integrity or compassion. If a business has to choose between acting in accordance with their “core values”, and hitting their quarterly financial goals, nearly all businesses will choose the latter.
Consider Etsy, the once eccentric community for mom-and-pop craftspeople. Etsy was widely renowned has having a wonderful company culture, and for their commitment to social good. Etsy was even a certified B Corp for many years. After successfully growing into a household name, Etsy went public. An IPO is usually the the ideal outcome for startup investors — the valuations have a reputation for being absurdly high. Once public, Etsy ended its tenure as a B Corp, and subsequently went through serious cuts, laying off hundreds of workers and replacing their CEO in 2017. Now Etsy is a platform that in service of its bottom line has wholeheartedly embraced mass-produced goods. A company that, according to some, “lost its soul” in the process of making it big.
Babies, Bathwater, and A Path Forward
The technology world isn’t completely lost. Amazing breakthroughs are being made with technology across a broad spectrum of industries. From cancer detection using computer vision to crowd-sourced protein structure prediction, new technologies have the capacity to advance the human condition. Wikipedia, Khan Academy, DuoLingo, universities, and many others are making knowledge more accessible than ever before. Drones are being deployed in reforestation efforts. Crows are being trained to pick up trash. People can bring national parks from around the world to their own home with explore.org.
Similarly there are numerous organizations working hard to fix the racial and gender disparities that plague the tech world. Code 2040, Women Who Code, Girls Who Code, ScriptEd, MissionBit, and literally hundreds of other organizations exist to help underrepresented folks break into the technology industry. Non-profits like Code For America and The Electronic Frontier Foundation are truly mission driven organizations focused on deploying technology for social good.
The most amazing things happen when passionate people set out to tackle big problems, but the culture in startup land has become so insular, small minded, and profit focused that we’ve lost sight of the big picture. We’ve built a whole host of business-to-business products that focus on automating away the need for “frivolous” employees: automated catering; automated corporate gift giving (apparently it’s no longer the thought that counts); another. f*ing. agile. dashboard.
It’s time to admit that the investors, CEOs, and entrepreneurs of Silicon Valley, as a class, have failed us. But it’s also time for engineers, product managers, designers, and other highly compensated employees to take a hard look at our own impact in the world and start asking ourselves hard questions. If you’re an engineering manager of an all male, all white, engineering team, why is that? If you’re an engineer, are you working for a company who you believe is really making the right impact on the world? If you’re moving to San Francisco or another area with housing shortages, did your apartment become available via eviction? Do you want to reward that landlord with a recurring rent check?
Taking a critical look at our own role in the bigger picture can be uncomfortable, but the world isn’t going to change itself. We all have the power to not support the companies we dislike by not buying their products and services. Many of us in the technology world have the power to not support these organizations by not working at them. For those of us who are lucky enough to pick and choose from several jobs — pick one that represents the change you want to see in the world.