Saturday Post: Silicon Valley's Liquid Amorality - Water Will Find Its Way
Ten years ago in mid 2004 I left the Financial Times and started publishing Silicon Valley Watcher. Silicon Valley was starting to wake from a long downturn from the dotcom deflation and Google's August IPO was a good sign after several years of bad news.
The culture of Silicon Valley was different then. The software engineering community was more radical than today, and far more socially conscious. The open source software movement was very strong among engineers and there was overall an anti-commercial attitude and a respect for protecting an open commons.
It shared much in spirit with the radical English groups from the mid-seventeeth century such as The Diggers, and also with the The Diggers of the 1960s in San Francisco, who ran free stores and served free food from their kitchens.
The business bible of 2004 was The Cluetrain Manifesto and it came directly from that culture. Here's an excerpt:
...People of Earth
The sky is open to the stars. Clouds roll over us night and day. Oceans rise and fall. Whatever you may have heard, this is our world, our place to be. Whatever you've been told, our flags fly free. Our heart goes on forever. People of Earth, remember.
Google was a rebel...
Google was very much a part of this radical culture. Its IPO was shocking at the time because it tried to stop the Wall Street bankers and their insiders from profiting from the one-day flips on opening day. Its "Dutch" auction was designed to give small investors the same access to shares as anyone else.
Its passion towards social responsibility was front and center, its "Letter from the Founders" was the first thing you saw in its IPO filing.
Google was a mystery black box...
I was working at the Financial Times when the much anticipated IPO documents were filed with the SEC. Until then, Google was a black box -- no one knew how much money it was making. We raced back from lunch to comb through the hundreds of pages of financial statements.
The numbers were fascinating and told an amazing story of how immensely profitable "search" had become. But it was the "Letter from the Founders" that stood out. It was extraordinary, I had never seen anything like it in any IPO filings.
Here was Larry Page and Sergey Brin telling future shareholders that making money was not the prime goal, that building a business that improved the world was their motivation. The founders explained how a dual-share structure, that gave them ten-times the voting rights, was essential to its mission.
Here's an extract:
Don't be evil. We believe strongly that in the long term, we will be better served-as shareholders and in all other ways-by a company that does good things for the world even if we forgo some short term gains....
We aspire to make Google an institution that makes the world a better place. . . We are in the process of establishing the Google Foundation. We intend to contribute significant resources to the foundation, including employee time and approximately 1% of Google's equity and profits in some form.
We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems.
Corporate social responsibility
Google became an important thought leader in the burgeoning social corporate responsibility movement, which was kick-started earlier by Salesforce.com founder Marc Benioff.
Corporate Social Responsibility was important because it was important to the software engineering community. It was essential in recruiting the best engineers. A company bus and a company lunch didn't cut it with that generation of coders.
Today's Silicon Valley culture is dominated by a peculiar amorality, a narcissism that claims Ayn Rand for its aspirations, even though few have read her books or even their dust jackets.
It's as if everyone has forgotten, "What the right thing to do is." And Google has worked hard to play down its "Don't be evil" rule.
The culture of Silicon Valley today sits somewhere on the autistic spectrum and exhibits the elemental qualities of water. Water will always find its way, it will find the unseen cracks, and find ways through obstacles and even tear them down, as a tiny leak can bring down a mighty dam.
Water is an amazing disruptor -- materializing from thin air, it can torrent and push aside mountains, or it can patiently work at opening up tiny cracks in solid stone, freezing and expanding, thawing and flowing.
Water doesn't need ethics or morality it is a force of nature. It will always find its right level. It's an appropriate metaphor for Silicon Valley's culture of amorality. For example, the "Double Irish Dutch sandwich" tax accounting scheme used by (Bermuda based) Google, Apple, and others, to reduce corporate taxes in Europe and the US.
These loopholes in tax laws require extraordinary measures by large teams of accountants and lawyers to exploit, but like water finding its way through obstacles, if the holes are there water will flow through. Or as Eric Schmidt, Google's Chairman told angry British politicians last year: plug the holes if you want more tax revenues.
This culture of amorality extends to lobbying in Washington where Silicon Valley companies don't see a problem in giving money to re-elect politicians working against measures to control climate change, or restrict marriage to heterosexual couples.
And the amorality of winning at all costs even when you are winning.
Look at the secret conspiracy by Silicon Valley's most successful and richest companies, Apple, Google, Intel, Intuit, Adobe, against their own workers, to hold down their salaries and restrict their career moves; Zynga's admission of nasty revenue scams; Uber's uber-sleazy growth strategy; Twitter's demands for tax relief simply for locating its HQ in San Francisco's poorest neighborhood -- an economic burden for the city.
Silicon Valley companies have discovered the simple fact you can have your cake and eat it because there's always more cake. You can be shitty and behave despicably and never have to eat humble pie because there will always be more cake.
And like water, this culture of amorality doesn't set out to be evil, but it also doesn't set out to do good -- it sets out to see what it can get away with, what holes it can find to win and keep winning.
Ten years ago Silicon Valley aspired to be more than this.
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[This is the first in a series of essays marking my ten years as a "journalist blogger."]