Mar 29, 2017 ยท 12 minutes

Last week, I read an amazing article in the Economist about China and soft power.

It described the origins of China’s obsession with developing “soft power.” It’s a decade-long obsession on behalf of the Communist Party that it’s spend some $10 billion per year on according to the story.

As the Economist details, it came from an American academic named Joseph Nye. He essentially argued the power of “attraction” not just compulsion. Not only fear, but love. Honey, not vinegar.

It wrote about how— in part— it’s made strides. Young people, for instance, have a more favorable view of China. Africans love it— in large part— because Chinese capital is rebuilding the continent’s infrastructure.

But largely China’s efforts to build Soft Power have stalled because, well, facts. Reassuring in 2017 Trump America isn’t it?

In particular, China can’t shake its (well deserved) reputation for severe air pollution. From the piece:

But China’s air pollution undermines its soft power: it is widely seen as evidence of a callous government that cares more about making the country richer than the health of its people or the planet. Many foreigners now associate the country with smog—an important reason why 37% fewer international tourists visited China in 2015 than in 2007.

As I read this piece, it struck me: Greed seeping through a veneer of rosy rhetoric? Swap out the details, and this story could be written about Silicon Valley right now.

Silicon Valley nailed Soft Power unlike almost any other American industry, save, Hollywood.

It’s hard not to be seduced by the idea of a kid knowing better than the “adults” in the industry. It’s hard not to want to pilgrimage to a place where people give you millions of dollars because you had an idea that may or may not work. And even if you lose all their money, they may give you more if you have another idea! You don’t have to wear a tie, closed toed shoes or even have to be nice to people.  Pedigree, smredigree: You don’t even have to have gone to college. In fact, there’s a guy in Silicon Valley who will pay you not to go to college.

And here’s the best part: You could become richer, faster than you could in nearly any other industry.

I was gonna, write next: “And it’s all legal….” but a lot of it isn’t legal either! And that’s still fine!

It’s with good reason cities around the globe have become obsessed with building their own “Silicon (fill in the blank local geographical feature.)”

And yet, facts are starting to get in the way.

Europe is leading a full on revolt against Silicon Valley, holding companies like Google and Facebook to account in ways no other place has ever been able to. And there’s a growing backlash against Uber there too, most recently a campaign to force the company to pay millions of dollars in back taxes.

Even where there isn’t a backlash, the current “darling” of Silicon Valley is causing problems. I did a podcast with India’s phenomenal tech blog FactorDaily about their concerns over Indian entrepreneurs copying the wrong elements of the Valley’s brogrammer culture. Maximizing valuation and growing via insane burn rate: How’s that working out for you, Flipkart and Ola?  

It seems some of the brightest startups in the Indian landscape have “Silicon Valley pattern recognition’ed” themselves into real trouble.

The problem is increasingly the truth in Silicon Valley doesn’t match the “soft power” narrative. And that will only cause larger problems down the line. Silicon Valley leaders erroneously think because people are still using their products, it’s all fine. But if products like Uber and even Facebook and Twitter go so far in their accountability only to egos and valuation (Uber) or the data (Facebook) or WTF knows what (Twitter), they start to become the new cigarettes. Things you use because you are addicted that you aren’t particularly proud of using.

You think I’m exaggerating? Pull up any story on the rates of depression post election and read about people who killed their social media accounts, only to log back in sheepishly through their dog’s account to keep informed. (This is literally a story I heard on NPR.)

Therapists are treating people for the effects of social media.

And that’s before we get into the reality that we’ve allowed ourselves to be bugged by tech companies in an administration with no respect for user privacy.

And then there’s the backlash to the Gig economy. The New Yorker published a devastating piece on just how fucked up the whole Silicon Valley complicity in the “side hustle” con is.  

At the root of this is the American obsession with self-reliance, which makes it more acceptable to applaud an individual for working himself to death than to argue that an individual working himself to death is evidence of a flawed economic system. The contrast between the gig economy’s rhetoric (everyone is always connecting, having fun, and killing it!) and the conditions that allow it to exist (a lack of dependable employment that pays a living wage) makes this kink in our thinking especially clear. Q

CEO of HireAthena, Kristen Koh Goldstein, put it another way in a recent podcast. “When you think about Main Street, there used to be community of people who added value,” she says. “[Professionals] were the pillars of the community; the doctors, the lawyers, the CPAs, the insurance brokers, and in a couple generations [they] are just getting by. It’s the tech industry that’s done this. We are the primary beneficiary. What has happened is the products and services we’ve created have eliminated entire industries off mainstreet. They are lucky to get a job at Target.”

Software has eaten their livelihoods and, in the process, helped put Donald Trump in office.

I’ve written before about the disconnect on labor in the Valley relative to the Valley’s history. Back then, Robert Noyce sought to eradicate a conversation about unions before they started by putting management and workers on the same team. Stock options are the most obvious. So many of the things we take for granted in Silicon Valley came out of this desire. Managers dressing casually, open door policies if managers even had formal offices, management by walking around. There are accounts of Fairchild’s East Coast executives coming to town and pulling up in limos and the Fairchild semiconductor guys kind of laughing about it.

Even when he co-founded Intel, and ran factories, he sought to incentivize workers so much that a union would only seem divisive, and against their company’s interest, which meant it was against their interests.

And it worked beautifully for decades. In the dot com era, employees got the same lavish perks that executives might have in a Mad Men era. Free lunches, nap pods, massages. They were treated better than Kobe beef. Google was a hard charging environment, sure, but Kim Scott also described it as the best place to have a high risk pregnancy because of all the pampering.

And then that got “disrupted,” largely by Uber’s Travis Kalanick, but also the cult-of-the-founder, disruption era that propelled him to be its star.

Not only do many of the entrepreneurs of this era go against the stereotype: Travis “Please allow me the space to grow up” Kalanick is in his 40s, Brian Chesky was a former competitive bodybuilder who went to art school, Evan Spiegel was a spoiled frat boy — none of the the immigrant, drop out, rags to riches stories that sold so many manages in the dot com and earlier eras.

Not only are these billion dollar companies built off the back of “partners” who have all the rhetoric of people who benefit when a company succeeds but none of the… actual benefits. Literally, they don’t even get benefits, let alone stock options. In the case of Uber, the company has been forced to pay federal fines for promising drivers one amount of money and then delivering a different reality.

This Bloomberg story about drivers sleeping in Safeway parking lots show a dystopian side of all those cheap rides on demand. I’ve heard accounts of New York hospitals treating so many drivers with bladder issues from pushing themselves too hard that they’ve named the condition inhouse after Uber.

And companies revel in this! The New Yorker story details a story of a Lyft driver picking up fares after she was in labor, on the way to the hospital. How’d they hear this story: Lyft reveled in it as a fun example of hustle! Lyft! The “nice” one!

Mary’s story looks different to different people. Within the ghoulishly cheerful Lyft public-relations machinery, Mary is an exemplar of hard work and dedication—the latter being, perhaps, hard to come by in a company that refuses to classify its drivers as employees. Mary’s entrepreneurial spirit—taking ride requests while she was in labor!—is an “exciting” example of how seamless and flexible app-based employment can be. Look at that hustle! You can make a quick buck with Lyft anytime, even when your cervix is dilating.

We should have known when Uber created a different headquarters for drivers and everyone else at the company. Google — from an earlier era, closer to the Noyce point of view in history— is said to only be interested in self-driving cars for this reason. Its reputation for employee perks are so renowned that the last thing it needs is the optics of another “class” of “partners” who get treated like shit by contrast. Even Waymo’s  Waze-enabled ridesharing pilot is clear to stress this should not be your income— the fees are only meant to offset the costs of picking someone up and giving them a ride if you are already going that way.

But that part is more obvious. Less obvious is the growing rift between C-level execs and senior management and everyone else at startups. We saw this come into clear display during the anger around Donald Trump’s travel ban earlier this year. It was tech employees who stood up to their managers and demanded the company uphold its stated values. Uh oh. Two sides. Robert Noyce would call that a slippery slope.

At Uber it’s more extreme— as most things are culturally speaking. Press report after whistleblower account has detailed a protected class of executives who can get away with anything they want. That flows from the top: Travis Kalanick and his co-founders control the board and he cannot be fired. Investors are ripping their hair out watching month after month as more scandals emerge and they’re wholly unable to act.

The cult of the founder is possibly the most defining characteristic of this post-dot com era of Silicon Valley. And if you think about it, it necessarily is Anti-Noyce-ian. Because it isn’t about everyone being on the same side in building “the company” together. It elevates one person— or a small group of people— above not only everyone else in primacy but over the company itself.

Consider Kalanick’s comments to his ex-girlfriend as reported by The Information last week: “He told her that perhaps 2,000 employees in his company might want him to leave, but the others (10,000-plus) needed him.”

Even if his numbers aren’t off, he thinks it’s wise for him to continue to run a company where two thousand people do not want him there.

The Valley has veered towards these cultural excesses of greed over substance before, but a correction— like the dot com crash— has shaken the Valley back to it’s roots. That hasn’t happened thanks to record low interest rates and a glut of foreign capital looking to go somewhere.

In less than seven years, we’ve gone from a movie about Facebook that had to be mostly made up to provide any mainstream appeal or drama to a Theranos movie in development and the potential for an Uber movie getting juicier by the moment.

This is a shift. This is a big shift. Like the smog around Beijing, the Valley needs to reckon with the reality that our products are hurting people to the point of potential assault or therapy. That other governments look at the unfettered capitalism surrounding them and react with their own regulations, because, Jesus— someone has to. That the people building the value in these companies are — best case—disillusioned by what they thought their leaders stood for or are worst case, developing serious bladder diseases because they are driving hours on end to make their bonuses and goals.

Either we correct this, or Silicon Valley’s soft power continues to erode around the globe as people see that all things we say simply aren’t true. It isn’t a meritocracy. We don’t value immigrants if it means getting in the bad graces of a sitting President. We don’t necessarily want to make the world a better place. And it’s not merely a wonderland for young mathematicians anymore.

It’s an extension of a fraternity party at companies like Zenefits (pre-reboot), Uber, Airbnb, Dropbox, Snap, WeWork and so many of the major players.

Ironically, my advice on the podcast with Factor Daily was that Indian entrepreneurs should look to China instead of The Valley for role models. The one company that has beat Uber? It isn’t Lyft. It’s Didi. They ran the same playbook in terms of aggressive competition, a cozy relationship with government and a truckload of capital. But they stopped just short of immoral. There is a gulf of difference between a-moral and immoral. If the Valley keeps celebrating, following and validating companies like Uber, it’ll become immoral. And I don’t know how we come back from that.