Stop Asking Tech to Fight Your Battles Microsoft is suing the Department of Justice, a bold move you might not suspect from a company that is still smarting from a crushing defeat back in 2001. In his weekly column, NewCo founder and editor in chief John Battelle shows why Microsoft’s action is important to all companies, not just its comrades (and likely allies) in tech. His message to industry: Get involved and stop outsourcing the future of your business to the tech industry.
The Two Stories of NewCo Detroit There are two stories in conflict in the Motor City: the optimistic story and the realistic story. Both of them are true, yet at NewCo Detroit last week we saw one of them hold sway over the other. We left the festival with a sense of a city with a rich history in all kinds of making that’s zeroing in on the future. Here’s what we saw.
The first ever NewCo Boston goes off in less than two weeks, and I’ve been studying the schedule and making my picks for the companies I most want to visit. The lineup is insanely great — Boston is brimming with innovative NewCos, 79 of which will open their doors on April 27th. Thanks to our partners at MassTLC — you guys really know how to do it right!
Tuesday, April 26th, 6 pm:VIP Kick-off & Reception @ Hatch Fenway NewCo Boston kicks off at Hatch Fenway, a NewCo incubator that was once an industrial hub. Mingle, swill, and get inspired by host company CEOs, city leaders, and VIP ticket holders alike.
I’ve spent the better part of three decades writing about tech, launching publications devoted to tech, and investing in or starting tech businesses. I devoted almost every waking and working hour of my life to the technology narrative. I did this because I believed society’s adaptation to technology was the most important story of our age, and for years that story was either willfully ignored, poorly told, or deeply misunderstood by the mainstream press.
As one of Wired’s founding editors a generation ago, I was seized with a missionary fervor — to us, the story of tech’s impact on society was painfully obvious, yet precious few leaders in politics, business, or culture were even paying attention. That ignorance fueled our zeal. We had to get the tech story out — the world’s future depended on it!
If your business focus is in technology or the Internet, as mine has been for nearly three decades, it’s quite possible you’ve never heard of the GLOBE Series, a global conference dedicated to sustainability in business. Until I was invited to participate this year, due in large part to NewCo’s core mission, I certainly hadn’t. What I saw opened my eyes and left me pondering the role of tech in the future of our planet.
The longest-running event dedicated to global environment and business, GLOBE draws more than 9,000 delegates to Vancouver from more than 50 countries around the world. There’s no shortage of government ministers, nonprofit leaders, and sustainability officers from huge companies like Nestlé, Lowe’s, and Citi. But if you peruse the speaker and sponsor lists, it’d be fair to conclude that sustainability simply isn’t a core issue for technology companies. They’re pretty much no-shows.
The business story of the decade is one of insurgency: Every sector of our economy has spawned a cohort of software-driven companies “moving fast and breaking things,” “asking for forgiveness, not permission,” and “blitzscaling” their way to “eating the world.” For years we’ve collectively marveled as new kinds of companies have stormed traditional markets, garnering winner-take-all valuations and delivering extraordinary growth in customers, top line revenue, and private valuations.
But what happens when the insurgents hit headwinds? In the past year or so, we’ve begun to find out. The unicorn class has had its collective mane shorn. A quick spin through the “unicorn leaderboard” finds a cohort strewn with cautionary tales: Uber’s under continual attack by regulators and increasingly well funded competitors. Square and Box, both of which managed tepid public debuts, have consistently traded below their private valuations. Turn, SnapChat, Dropbox, and many others have been marked down by their largest investors. And of course, there’s the cautionary tale of Zenefits.
While this news has evinced a whiff of schadenfreude throughout the tech press, I think the reckoning is more fundamental in nature. The hardest part of running a company, it turns out, is actually running a company. Put another way: Growth can be bought, but growing up has to be earned.
Take Uber, for example. Once a poster child for a culture of “ask for forgiveness, not permission,” Uber is now taking a more traditional approach to new markets, meeting (and working with) local regulators, hiring seasoned pros, and learning how to play politics just like any other big company. It even gave itself a new grownup “haircut.”
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.
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.