Top Dog, Part II

“We’ve been destroying jobs in the heartland, and we’re not focusing on putting up money to fund entrepreneurs in those places.”

Top Dog, Dan Lyons, 2018, p. 168.

“…tech founders always talked about “changing the world” and “putting a dent in the universe” and “making the world a better place.” We were kind of cynical about it, and rightly so, because most of the techies who talked like that were full of s**t.”

Ibid., p. 174.

“When I told him that I was writing a book about companies that treat workers well, he (a tech CEO) dismissed the idea as unrealistic: “You can’t do any of that stuff when you’re a venture funded company,” he said. The venture capitalist investors would not allow it. Once you go public, Wall Street won’t either.
“For half a century, bankers and venture capitalists have been told that they are the only ones who matter, that companies exist solely to deliver the biggest possible return to them. That’s the gospel of shareholder capitalism, the doctrine created by Milton Friedman.”

Ibid., p. 169.

As per my last post, the basic premise of Lab Rats by Dan Lyons was that shareholder capitalism is not working for most people, the tech industry is an ugly part of it, and the above quotes pretty much encapsulate the source of the problem. Yes, I have finally finished the book, after much agitation, and now I return to post about the positive section of the book where Dan Lyons finds some people out there trying to change capitalism. Apparently, there has been a quiet revolution going on, pushing back on the uglier aspects of shareholder capitalism.

The author presented three examples of people or organizations working on improving work for the 99%. Let’s go meet them.

Basecamp

The first example offered was the company Basecamp, or rather the founders. The interesting thing about example is that the founders are also the author of Rework, a book that I was periodically doing a post on (and I need to do a new one). I won’t go into too much details here about their “work” rules because I will be doing further posts on parts of their book which lays out their philosophy about work. Just know that they don’t believe in workaholism and growth at all cost.

Here’s a selection of a few good quotes from the book about Basecamp founders’ thinking and experience:

“There fifty-four employees work about forty hours a week, maximum. In summer, everyone cuts back to thirty-two hours, so they can all have three-day weekends, but they still collect their full paycheck. Working fewer hours means less work gets done, but Fried and Hansson (the founders) don’t care. They’re not in a big hurry.”

Ibid., p. 175.

Whoa, who has ever heard of that? Most companies that I’ve worked in have extolled the virtues of working long hours. There were definitely no shorter summer working hours, with the exception of my very first position with Mobil Oil in Dallas. I kind of miss those days.

Here’s an interesting story the founders told that illustrates what’s wrong with tech capitalism:

“…Keith Rabois, a well-known venture capitalist and minor Silicon Valley oligarch who insists workaholism is the only way to be successful…Rabois spends a lot of time on Twitter, often bullying people and hurling insults, a Trump-style tough guy. When Hansson published an essay arguing that workaholism is pointless, and also a con – a way for rich VCs to get richer by telling young kids to work themselves to death, Rabois pounced: “For lazy people who want to accomplish nothing, his post is perfect.” ”

Ibid., p. 183.

“By drawing out Rabois, they exposed the kind of preposterous, egomaniacal a**holes who hold power and influence in Silicon Valley, and offered a warning to young entrepreneurs: take money from a venture capitalist, and you’ll end up working for some smug, sarcastic, know-it-all prick like this guy, who will constantly tell you that you’re not working hard enough while he spends his days getting into arguments on Twitter.”

Ibid., p. 184.

There are also some snarky comments about the hustle culture, which is kind of a relief because I was seeing so much about how you had to hustle, and everyone was hustling, and I was just kind of like: isn’t this just another version of workaholism?

Here’s a couple of choice quotes on the hustle culture:

“Silicon Valley hucksters had started selling young people on a kind of prosperity gospel in which anyone – yes, that’s right, even you – could start a company and get rich, as long as they were willing to give up their friends and family and personal lives, and work themselves to death.”

Ibid., p. 184.

“Michael Moritz, a famous venture capitalist at Sequoia Capital, recently wrote a piece in the Financial Times urging American tech workers to keep up with their counterparts in China, who work fourteen-hour days, six days a week, while taking hardly any vacation time and seeing their kids only a few minutes a day.”

Ibid., p. 185.

“The best-known hustler is Gary Vaynerchuk…Vaynerchuk tells his acolytes that if they want to get the “bling” and fly on private jets, they need to be working eighteen hours a day. No personal life, no relaxing, no vacations. What’s more, they must do this for years.”

Ibid., p. 185.

I happen to have a few books by Vaynerchuk on how to use social media and yep, he’s pretty hyperkinetic. He also looks tired and old for his age. I wonder how’s his health?

“…VC’s who do nothing and yet reap the lion’s share of the benefits when the company succeeds.”

Ibid., p. 186.

“They’re glorifying death marches. It’s all about serving the VCs. But trust me, the VCs are not working 120 hours per week.”

Ibid., p. 187.

Yep, there has been plenty of hucksterism around the topic of workaholism.

Managed by Q

“The biggest difference has to do with how Q treats its workers. Unlike almost every other gig-economy company, Q categorizes workers as W-2 employees. The company provides health insurance, a 401(k) plan, and stock options. Starting pay is $12.50 per hour, and there is a generous paid-time-off policy.”

Ibid., p. 189.

I did a post on this company a couple of years ago: it’s a janitorial service company that actually calls its janitors and maids employees rather than contractors. At the time when I did the post, it was uncertain whether the company would last because of its business model for janitorial services. So, I’m glad to read a few years that this company is succeeding and branching out.

The company has now branched into other services such as maintenance, IT service, office temps.

“So far the bet seems to be paying off. Q’s customer retention and employee retention are higher than the industry average.”

Ibid., p. 190.

This is really good news.

Kapor Capital

“Over the past ten or twenty years the industry has gone off the rails. The smash-and-grab, get-rich-quick, screw-the-workers business model has become deeply entrenched.”

Ibid., p. 202.

Kapor is Mitch Kapor of Lotus 1-2-3 fame. He and his wife are trying to do their part to change the culture in Silicon Valley through convincing tech companies the virtue of diversity. They initially began work with the larger companies such as Google and Facebook but they found it difficult to change the cultures. Their latest gambit is to work with smaller companies, earlier in their life cycle, before they get polluted by Wall Street, in the hopes of instilling a culture valuing diversity from the very beginning. As more and more of these young companies succeed, it is hoped that the culture of diversity spreads throughout Silicon Valley.

They are trying to do what they call “gap-closing” investing. Here’s an example of what they mean:

“Kapor Capital doesn’t require that a company have a founder who is a woman or a person of color. They focus instead on the product or service the company creates. It has to be one that they consider “gap-closing” rather than “gap-widening”. Here’s a hypothetical example. A company that sells a really expensive service that helps rich kids do a little better on the SATs would be gap-widening; a service that helps poor immigrant kids get access to a good education would be gap-closing.”

Ibid., p. 204.

I laughed at the next quote but it is also a sad comment on our capitalism:

“Traditional venture capitalists don’t care about this (gap-closing). If anything, they prefer start ups that sell stuff to rich people, for obvious reasons. That’s why the tech industry has been producing so many “mommy start-ups”, meaning companies started by young guys who want services to do things their mom used to do for them – like do their laundry (Washio, Cleanly, Rinse, FlyCleaners, Prim, Mulberrys) and bring them food (DoorDash, Instacart, Blue Apron, Maple, Sprig, Plated…)”

Ibid., p. 204.

So, here’s to the Kapors and their gap-closing investments.

A Movement Called Social Enterprise

“I took a course in finance, and literally the first thing the professor said in the first class session was that the purpose of business was maximizing profit.”

Ibid., p. 219.

The last example is a hodge podge of players, including some wealthy billionaires such as Bill Gates or Paul Tudor, trying to create something between capitalism and non-profits. Generally, the goal is to figure out how to create good jobs that pay well and provide benefits and job security. It is thought that this movement will be driven mainly by the youth since they won’t have been brainwashed by the shareholder capitalism that had been washing through our education, politics and culture for the last thirty or forty years.

So, yes, there is some seeds of hope out there. Will I see it flourish in my lifetime? I don’t know. Maybe this current crisis will become an inflection point and will accelerate all of the movements toward a more equitable and sustainable working environment, but we’re going to have to work hard for it. Most of the wealthy will fight hard to keep what they got and to increase what they got during this time of crisis, so this a both a moment of great potential and a moment of grave peril.

And now I’m done with this book and can put it away.