Tag: Anthro

Business Leads Change in Georgia, Encryption Goes Upscale, and Where To Work

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This Is What Businesses Making a Difference Looks Like
Anyone who’s grown cynical regarding the impact business can have on the lives of citizens should look toward Georgia, where governor Nathan Deal said he will veto a bill that would have excused critics of same-sex marriage from various anti-discrimination laws. The bill the Governor will veto was fought by many dozens of multinational companies with a Georgia footprint, among them Apple, Delta, Disney, Home Depot, Intel, Microsoft, Salesforce (whose CEO Marc Benioff led the charge), Unilever, and at least two sports leagues. Some merely expressed opposition; others publicly threatened to reduce investment in Georgia if the bill became law. This is a vivid example of companies acting like humans and leading toward purpose as well as profit. And it may signal a trend: A similar movement is underway to thwart a related law in North Carolina that has been signed already.

Encryption as Luxury Good
Even before its recently resolved (for now) tangle with the FBI, Apple was using encryption as a way to differentiate its phones from those running on Android. That’s no doubt a strong selling point, but it also makes The Atlantic wonder whether encryption is becoming something only those at the top of the ladder can enjoy. Cheap Android phones cost less than $50; iPhones go for 10x that. Google is stepping up security and making encryption the default on all but its lower-end models, but it still leaves inequality: “users who can only buy the cheapest possible smartphone are the most vulnerable to surveillance — and simultaneously the most likely to be surveilled.”

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Evgeny Morozov’s Takedowns, Andy Grove’s Ideas, and Olive Garden’s Mess

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Evgeny Morozov, Alec Ross, and the Tech-Business Takedown
Ever since there have been people who thought big ideas about tech, there have been those eager to cut down those ideas. The current master of the art is Evgeny Morozov. His recent Baffler takedown of Alec Ross goes after the former State Department official and current Silicon Valley-friendly techno-utopian for his glib pronouncements on How the Internet Is Changing Everything. Morozov’s longform dismissal of Ross bounces between ace policy dissections and ad hominem attacks. And at 5,000 words, it’s positively compact compared to his 16,000-word mugging of Tim O’Reilly a while back. Morozov’s distrust of Valley do-gooderism (“solutionism,” he calls it) is deeply felt, and it’s instructive to see how well he wields the Internet to point out weaknesses in his foes. But there’s a pattern here: The Ross takedown begins with Ross asking Morozov for advice; the O’Reilly takedown ends with O’Reilly offering to get together with Morozov to talk. In both cases, Morozov shows that he’s unwilling to listen. Just as with those he accuses, he’s got his mind made up already. Sure, some of his targets deserve the Morozov treatment. But years after he started pointing out the flaws in everyone else’s architecture of ideas, it’s still unclear what, if anything, he might want to build up.

Andy Grove’s Lasting Lessons
It shouldn’t come as a surprise that the death of Silicon Valley giant Andy Grove is more than a one-day story. Ben Thompson’s most recent Exponent podcast dissects Grove’s influence as a leader (for good and bad) and Teresa Tretch’s Andy Grove’s Warning to Silicon Valley is a sharp Times op-ed that recalls an influential 2010 essay Grove published in Businessweek about creating jobs. Grove’s ideas about scaling and free markets are idiosyncratic and, at their peak, inspirational. Grove may have symbolized Silicon Valley for many, yet he often used his position not to celebrate but to question Valley orthodoxies springing up around him. In particular, he often pushed back against the assumption that the only point of profit was profit. Grove was a complicated figure; don’t let his position as a symbol of the Valley make you forget that he was able to stand apart from it, too.

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Because Calling It “Profiting From The Financialization of Death” Won’t Make the Phones Ring

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If you listen to sports talk radio in California, as I do, you’ve heard the ads. A firm called “Reliant” promising “10–12% returns” with “no market risk.” Sounds way too good to be true, right? That’s the range of return that Bernie Madoff promised. But, heck, who isn’t interested in great returns with no risk? So, after hearing the spots a few times, I Googled the company to learn more. No luck. Finding anything about the firm is hard — the name is so generic it’s impossible to figure out who’s really behind the scheme. And the ads have no detail on what the company actually does, just an 800 number to call. That’s a red flag — who runs expensive radio ads without an SEO strategy?!

The fifth or sixth time I heard the ads, curiosity got the better of me and I called the number (it’s 800–788–1000, FWIW. It only works when the ads are running, natch). What I learned was fascinating.

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New Uber Protests, Amazon Faces Competition, and Starbucks Gives It All Away

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Uber’s Jakarta Woes
Uber may continue to pivot toward better behavior, but its welcome in Indonesia reminds you what the company still has to live down. A protest against ride-sharing services in Jakarta yesterday ensnared the city and then turned violent (NYT). There was a Luddite tinge to the protest (demonstrators yelled “No more apps”), but it’s still a stark reminder that pioneers must live with arrows in their backs — especially when disrupting a closed and protected industry. A sign of Uber’s new approach: The company suspended surge pricing in the Indonesian capital during the protests.

Enough Cloud for Everyone
Amazon Web Services may be eating the world, to use the term of the moment, and it does enjoy a commanding 31 percent of the cloud infrastructure market, but another high-profile company is taking its cloud elsewhere. Following Apple and Spotify, which are switching some services to Google, and Dropbox, which has built its own system, Home Depot is signing up with Google (Reuters). There’s serious competition here among the players and billions at stake, but it’s far from a zero-sum game. Google is a distant fourth in the market, but it sees big opportunities: It’s opening a dozen new data centers in the next year or so (TechWeek Europe).

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And The Award for the Best Marketing Execution At SXSW Goes To …

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The Vince Young Steakhouse before IBM got to town for SXSW …

… and the same place after IBM had its way with it.

Most of the 35,000 attendees of SXSW were in grade school when the annual interactive event launched 20+ years ago, but I’ve been going since the Wired days, and I can remember when the conference drew barely 500 people. Now, of course, SXSW takes over most of downtown Austin for the better part of two weeks, turning “the capital of live music” into an undulating and relentless trade show. Entire buildings are commandeered by marketers and repainted as living testaments to brand promises. Most of them are forgettable. But this year, one of them stood out.

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Work Is Life, Getting Past the Short View, and Microsoft’s Clever Encryption Move

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Work = Life. Discuss
 Why do we work so hard? Is it because we like it? Or is it because we’re trapped? Ryan Avent says it’s both. In a lengthy, steady essay, Avent, an economics columnist for The Economist, digs deep on the topic, with both personal and historical examples (yes, Keynes and Marx appear). When he shares the complications of explaining his work to his parents, Avent shows how when we talk about our jobs we’re talking about how our work and the rest of our life integrate into a messy, complicated whole: “They are asking about a job. I am thinking about identity, community, purpose — the things that provide meaning and motivation. I am talking about my life.” For more and more people, a job isn’t what we do to fund our lives; it’s an essential part of who we are and what we want to be in life.

The Capitalistic Kibbutz
 In keeping with the idea of not knowing where work ends and the rest of your life begins, unicorn office-space provider WeWork is hoping its WeLive residential service will house millennials during the few hours a day they’re not WeWorking. This Fast Company piece on cofounder Adam Neumann reads like a celebrity profile; it’s unquestioning and breathless, and it misses key ingredients in WeWorks’ business plan (we’d love to know more about WeWork’s efforts to focus on long-term rentals to established companies, for example). But it does zero in on Neumann’s big idea about the future of work. “A capitalistic kibbutz is not a bad idea,” he tells his interviewer. “You need both.” That’s an angle we’d like to learn more about.

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Dysfunctional Boards, Slack Abuse, and Premature Eulogies for Twitter

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This week in the NewCo Daily, we’ve started something different. We’re committed to publishing detailed stories of business and positive change at stories.newco.co, and we’ll let you know about them as we do. In the Daily, we’re aiming to do what many of our favorite newsletters do best: share a curated view of the last 24 hours with our own unique, NewCo point of view. We’re eager to find out what you think, especially in the coming days as we figure out how to make the new format work best for you.

Pull Up These Boards
 You won’t be shocked to learn that independent boards pay their CEOs less (Wall Street Journal) than companies whose boards are packed with their chief executive’s golf buddies. According to a new study by proxy advisory firm Institutional Shareholder Services, CEOs reporting to an independent chairman make $2.9 million less a year. Makes sense. But you might be surprised to learn that relative coziness is pretty much the only variable that makes any difference in determining CEO pay, including a company’s stock price. Remember when owning stock was supposed to align CEOs with “shareholder interest”? Jensen and Meckling’s influential “Theory of the Firm” from 1976 (Journal of Financial Economics, PDF) played an enormous role in tying executive pay to stock options, a trend that in the long term has wreaked enormous damage to corporate giants like Kodak, HP, GM, Xerox, and many more. Boards that don’t hold CEOs accountable to more than stock price broaden the principal agent problem. By aligning stock price to compensation — and because an overly chummy board also holds lots of stock — both CEO and Boards are often incented to act against a firm’s long term best interests.


The Downside of Slack
 No one would argue that communication inside companies is a bad thing. Oh wait, someone would, and that someone is in the business of helping companies communicate. Jason Fried runs Basecamp (nee 37 Signals), one of the early collaboration software platforms. In a Medium post, Fried lays out the pros and cons (mostly cons) about what happens to organizations that think primarily in chat. While Fried acknowledges that “group chat used sparingly in a few very specific situations … makes a lot of sense,” he continues “what makes a lot less sense is chat as the primary, default method of communication inside an organization.” His insights have broader ramifications than just using Slack smarter. He reminds us how software should enable employees, not exhaust them: “Whatever tools you use, keep in mind how they affect other people, not just what they appear to help you get done. Done doesn’t matter if people are wrecked along the way.”

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When Companies Should — and Shouldn’t — Back Down

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If you want your company to create positive change, you have to pick fights worth fighting. In recent days, we’ve covered genuine scandals, like Zenefits’ scheme to hoodwink regulators, and we’ve shared the lessons from companies that have had to grow past scandals and mature in public. But sometimes a clueless response by a company can elevate a kerfuffle into a genuine scandal — and that can yield useful lessons. One such lesson comes from an unexpected source: Lands’ End.

The venerable catalog marketer learned that standing for something isn’t easy, especially if what you’re standing for doesn’t connect to your core mission and might not even be intentional. Lands’ End CEO Federica Marchionni interviewed Gloria Steinem as part of a series called “Legends” in its spring catalog. It was a friendly, deferential conversation, not particularly deep and with no revelations or provocations. Steinem is a feminist and publishing pioneer, but a number of groups and individuals with anti-abortion views called out Lands’ End on the interview (even though there was no talk about abortion in it). Some called for a boycott. Shortly thereafter, Lands’ End released a statement:

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Does Your Company Break Things or Add Value?

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Good online essays start conversations. That’s how I feel about Growing Up Is Hard To Do, my colleague John Battelle’s tough-minded look at how companies need to change as they move across the continuum from insurgent to incumbent. Here’s my attempt to continue the conversation.

It’s hard to not be optimistic about the idea of NewCos and OldCos learning from one another. Their dialogues have already spawned partnerships, which in turn may yield breakthrough products and services. But what are the “established insurgents” — those NewCos that have moved from startup to dominance in their markets — teaching up-and-coming NewCos? It’s easy to look at the behavior of Uber or Facebook and determine that your company should move fast and break things — but only until you’re so big and visible that the risk of doing so becomes greater than the potential reward. The reasoning goes: It made sense for Uber to ignore laws that prevented its very existence or for Facebook to smash through privacy norms as it reached scale. But once they become grownups, with much more attention and responsibility, companies have to start acting like, well — grownups.

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Zenefits Proves It’s Easy to Grow, Harder to Mature

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Watching Zenefits slide down the business end of the Valley hype cycle, it’s easy to write off the company as one more smug unicorn shorn of its rainbow valuation: Schadenfreude’s a bitch, let’s move on. But the truth is more complicated. We’re entering an era of unicorn rationalization, so now the hard work begins. Making a company that can last is far more difficult than making one built to grow without regard for burn rate or regulatory frameworks.

Once “the largest SaaS company in history,” Zenefits successfully disrupted the human resources industry. Now it’s being treated as a cautionary tale, the kind of company elected officials bring up as the worst examples of “ask for forgiveness, not permission,” right up there with Uber or Airbnb.

News reports claim more than 80 percent of Zenefits’ salespeople in California and 60 percent in Washington weren’t licensed to sell the insurance that provides the company’s core revenue. Did Zenefits cheat its way to unicorn status? An investigation is underway, but the company appears to have used software to purposely deceive California insurance regulators.

By the company’s own account, problems run deeper than that. In the heady fast growth phase of Zenefits’ ascent, it lost control of its culture and its ethics. “The problem goes much deeper than just process,” new CEO David Sacks said in a blog post criticizing his predecessor Parker Conrad. One of the first changes made by Sacks: No more alcohol in the office. Sex in the building stairwell was an issue, too.

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