By Haroon Sethi
Work culture in Silicon Valley startups has come under scrutiny recently following the departure of Uber CEO Travis Kalanick and revelations of harassment and sexism in the tech industry made by The New York Times.
This is a welcome development and frank discussion of these issues should hopefully lead to self-critical introspection by founders, managers, and investors in tech startups. As many columnists have already commented, the toxic, “frat-boy” cultures in well-known startups are a result of the organizations taking on the personality traits of their founders.
There is a need for introspection and action when it comes to sexism at the workplace.
There is no question that investors, too, are culpable—either in having allowed this sort of unacceptable behavior to continue as long as it has or deliberately turning a blind eye to the improprieties being committed. In any publicly listed company, a CEO as pugnacious and controversial as Mr. Kalanick would have been ousted long ago.
But, as blame is being meted out, there is a fair share that the public at large must also own up to. Startup founders and tech CEOs are the new millennium’s celebrities, commanding millions of social media followers and fans whose loyal support can perhaps only be described in comparison to groupies at rock concerts.
This is a new cultural phenomenon – for most of corporate history, customer loyalty has been considered in context of retention. It is only more recently, with shrewd political acumen, that Uber has pioneered channeling customer loyalty towards activism.
In any publicly listed company, a CEO as pugnacious and controversial as Mr. Kalanick would have been ousted long ago.
History gives us examples of great customer loyalty. As Warren Buffet famously noted, the customers of Harley Davidson go so far as to tattoo the brand name on their arms. And then there are examples of activism, as with consumers of guns in the United States.
But the use of targeted local level agitation and lobbying by consumers directly in support of a company and its policies is new. Uber has used this to have its way with governments and regulators and forcing changes in local laws to suit its business needs.
It is only more recently, with shrewd political acumen, that Uber has pioneered channeling customer loyalty towards activism.
In what has come to be known as Travis’s Law – the notion that if enough people demand something, government will have to allow it – Uber, Airbnb and other similar sharing-economy firms have operated in regulatory gray areas, and sometimes in direct violation of laws, all under the banner of disrupting ailing and inefficient industries and bringing convenience to their users. In doing so, these firms have greatly enriched their founders and investors.
Inefficient industries should be disrupted. Poor laws should be reworked and changed with time. But popular opinion, often formed with incomplete information and without thoughtful consideration of broader implications, is not ideal as a driver of sweeping regulatory change. The experts bemoaning Britain’s Brexit decision and the economists opposed to Trump’s protectionist and anti-immigrant policies would tend to agree.
The use of targeted local level agitation and lobbying by consumers directly in support of a company and its policies is new
Yet, just as political views can cloud informed debate, so too can an otherwise discerning marketplace be blinded by the celebrity, charisma, and magnetism of the new generation of tech icons. Rather than questioning the wisdom behind values such as “Always be hustling” and “Step on toes” enshrined by Uber, adulatory consumers have accepted them as the new way of doing things.
With mistaken causal attribution, articles on the “10 Practices of Successful Startups” or the “5 Things Top CEOS Do” have assumed that these companies have been successful because of their values and not perhaps, as may be more likely, in spite of their values. And this hero-worship has given license to tech firms with toxic cultures and questionable values to grow in size and financial might and influence other emulating startups.
As consumers and users of technology, for us to tolerate brash, sexist or ethically dubious practices by companies simply because their product is good or cheap is no more acceptable than for us to consume cheap clothes made in sweatshops. The “Let builders build” mindset of Uber may certainly help companies grow rapidly into titans.
Just as political views can cloud informed debate, so too can an otherwise discerning marketplace be blinded by the celebrity, charisma, and magnetism of the new generation of tech icons
But when this comes at the cost of eroding the norms of good governance, condoning sexism and harassment at work, and making it acceptable to cultivate sharp-elbowed, aggressive or parasitic work environments, the business case doesn’t stand.