Most companies are aware of issues concerning how they use
and handle “personally identifiable information” (PII) of their customers. In
general, web-based businesses (which is to say, nearly all businesses) disclose
their uses of PII with some specificity in their privacy policies and terms of
use (goodcounsel is often called up to draft these for its clients). PII in the
healthcare context is tightly regulated under the Health Insurance Portability
and Accountability Act, and the
use of PII more generally by the Internet giants has come under increased
scrutiny in the last two years.
Many startup founders don’t really have to sweat board of directors meetings all that much; typically, at the earliest stages, the founders are the only people on the company’s board. If the board meets at all, it’s a “family affair” or otherwise, official actions are handled by written consents outside of meetings. However, once you have outsiders on the board – and especially, outside institutional investors like VCs – there is more pressure to perform.
It’s striking to me how the media hypes certain companies to
ridiculous heights with fawning, uncritical coverage, only to join in the feeding
frenzy of negativity when the same companies inevitably encounter problems. In
that respect, I suppose, the media plays a central role in the tech-era bubbles
that we’ve lived through over the past two decades.
What else could be prompting this observation right now than
the story of WeWork? This story hits home for us at goodcounsel, literally,
since we work at WeWork.
In my last post, I enthusiastically recommended Tim O’Reilly’s piece in Quartz, critiquing the prevailing winner-take-all ethos of Silicon Valley investing.
In this post, I want to recommend a piece animated by a similar spirit: an interview with Bryce Roberts, founder of Indie.vc (and one of O’Reilly’s partners in the O’Reilly AlphaTech Ventures fund) on the Recode Media podcast.
The piece insightfully reviews and critiques LinkedIn founder Reid Hoffman’s new book of the same name. More than that, it takes the reader on a fascinating journey through the history of technology entrepreneurship and investing, going back to Microsoft in the 1980s. O’Reilly convincingly argues that the winner-take-all approach to technology investing is neither the only model nor necessarily a sustainable one, from the perspective both of a particular business and of our society as a whole.
Whether you are an entrepreneur, an investor, or simply a citizen who is interested in understanding the growth of technology companies that profoundly shape our world, I advise you to spend some time reading and thinking about this article.
In my next post, I will describe the alternative to blitzscaling that O’Reilly lays out – “sustainable scaling” – and explore the alternative forms of financing that sustainable models require.
Update 11/19/19: Wired magazine columnist criticizes Softbank’s chief Masayoshi Son as “blitzscaling’s enabler-in-chief” in light of the WeWork collapse.
I have written recently about my increasing concerns about the practices of the internet monopolies – Google (including its YouTube service) and Facebook especially – as I have done more reading of works by prominent critics such as Roger McNamee and Tristan Harris, and seen the real-world effects of these platforms, which are terrifying across so many dimensions.
I’ve been keeping up on the Boeing 737 MAX 8 story/debacle, which has many fascinating aspects to it, among them: how a storied company like Boeing, whose brand is entirely dependent on the perception of safety, could sacrifice safety for short-term gain, and what happens when regulators can no longer keep up with the companies they regulate, and must therefore rely on the companies to regulate themselves.
Diminishing returns of complexity
A recent article in the IEEE’s Spectrum magazine explored Boeing’s errors in judgment and software design that led to the tragic loss of 348 lives. One point from the article struck me as directly applicable to legal drafting (which is not surprising, given the oft-discussed parallels between contracts and computer code):
I have recently been listening to the tech investor Roger McNamee (most recently of Elevation Partners) on radio interviews and podcasts publicizing his new book, “Zucked,” in which he chronicles the evolution of Facebook, and which he argues, along with Internet and mobile giants Google and Instagram, threaten the integrity of our democracy and are tearing the fabric of our society.