Can Business Be Philosophical?

Recently I shared with you my passion for philosophy. You probably know I also have a profound passion for business.

And music, The Beatles, The Dodgers, wine, literature, children’s needs, social justice, and other stuff.

Back to philosophy and business: can they intersect?

This is where a lot of cynicism enters the picture.

Mark Zuckerberg says he is all about free speech and building global communities. He would have us believe a business—at least his business—should not be editing political expressions, even for accuracy. He asserts this is up to individuals to assess, or for the government to regulate if it can figure out a reasonable and fair way to impose guidance.

Should we believe Zuckerberg the visionary or Zuckerberg the voracious competitor? It doesn’t take a lot of analysis to know his goal is to keep selling ads, that any restrictions on free expression create a slippery slope for the addiction of his site contributors (i.e. all of us powering his pages with free content). It’s pretty clear he wants a level playing field around restrictions, meaning if the government regulates Facebook, he wants it to regulate all his competitors where he maintains a competitive advantage and is likely to win with ubiquitous rules.

Are free speech and “leave me alone to make money” compatible ideals, or the best possible excuse for self-interest?

Let’s try again.

Google’s stated mission is “to organize the world’s information and make it universally accessible and useful.” They are all about creating a definitive archive for global knowledge, about ensuring the best customer experience, and once upon a time about not being evil. That’s some philosophy!

Have you done a search on Google lately? Remember when organic search returns were clearly separated in columns from sponsored search returns? Yeah, that was before mobile made that largely impossible with much smaller screens. Today you practically have to be Sherlock Holmes to know what’s a paid ad on Google and what’s global knowledge. The keyword ads are everywhere. There’s a reason. They figured out how few bills the world’s information actually pays when displayed. They know which clicks are bankable in that trillion-dollar valuation.

One more for the road?

Apple wants us to believe it is at the heart of protecting our privacy, right to the edge of protecting the login codes of suspected dangerous criminals. Maybe that’s a big idea we have a hard time embracing because its scope means the tiny basket of bad eggs has to enjoy equal privacy if we want to protect the gigantic basket of good eggs.

Yet if privacy as a strategic mandate is a paramount position at Apple, how does the company abstract itself from all the apps that transmit our personal information to the data-mining servers of the world as fast as we type it in? Apple says it makes secure devices that are safe to use; that’s all they do and they do it brilliantly. If those devices open tunnels between those seeking data and those leaking data (again, all of us), that’s our tunnel to barricade or avoid, and it would be illogical to ask them to detour us otherwise.

Can a company have a point of view on elevated ideals, or are these polished notions just a bullhorn cry from the PR department?

I guess it all comes down to what we want to believe is a pure, important idea, and how far a company will go to spin a concept to its own advantage.

The issue is one of authenticity. Does a company truly embrace beliefs that are worth evangelizing, or are its statements around absolutes justifications of convenience?

Proclamations are not philosophy. A mission statement is not philosophy. Company values are not philosophy. All of these are constructs meant to unify the purpose of a business, but the business entity’s constant struggle with ambiguity, competition, and the demands of ownership too often compromises ideas when financial interests are at risk. We can say we want to act in a certain way, but will we always?

I have to admit, I have been guilty over the years of trying to inject philosophy into business practice. I have not been terribly successful. The conflicts of interest abound, and the enormously hard work of maintaining consistency can be exhausting. I used to have my employees read a book called Freedom and Accountability at Work by Peter Kostenbaum and Peter Block. It is about existentialism in the workplace. All but one colleague told me they couldn’t get past the first chapter. At least they were honest about it.

How do we avoid hypocrisy and cynicism in a world where we want to be better? We are often told Millenials want us to rise to a higher standard, that cause-based marketing resonates strongly with their brand loyalty. I think it is possible to “do good while doing well,” but I don’t think we accomplish this if we pretend we’re something that we’re not.

Instead of declarations that render themselves hopelessly artificial, companies can humble themselves in restraining their platitudes around the possible. Instead of attempting to hide behind crumbling categorical imperatives, business might be better suited to achievable standards that are consistently authentic.

Tell me the truth all the time, and I may trust you. Don’t tell me why your definition of truth is defined in the unreadable footnotes at the bottom of the page.

Be aspirational, and I may join in the celebration of your mission and values. Don’t tell me that your company has discovered or defined a nobility that somehow makes you better than your competition.

Be well-meaning in the goods and services you provide, whether ensuring quality or seeking a healthier supply chain, and I may respect your brand. Don’t proselytize and expect me to believe you are pursuing a higher calling—profits be damned—when transparency betrays your more obvious motivations.

A business can be great, even legendary, without being philosophical. Let it be honest, consistent, and authentic—that’s plenty to tackle and enormously difficult on top of being outrageously good at something. The agenda of business is measurable, culminating in success.

Leave philosophy to the philosophers. Who would that be? That can be any of us—the storytellers around the campfire, the quiet voices in a coffee shop, the ardent dialogue in anyone’s home. The agenda of sharing, exchanging, and challenging ideas is immeasurable and ultimately boundless.

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Photo: Pexels

Gone So Soon

Recently I gave an interview about one of my favorite career projects, Carmen Sandiego. It was being researched by an archivist! I hadn’t been asked in years about the mysterious thief in the red trench coat and fedora. As big as she was in my life and on the national stage, save for a new motion picture in development, few people remember dear Carmen as much more than nostalgia. For that matter, who remembers the massive multimedia magic of CD-ROM computer games with all of 700mb of storage?

There she is. There she isn’t. Nothing lasts forever. Very little lasts long at all. That is the stuff of our culture. That is the stuff of our careers. Hold on too tightly to anything and you find yourself grasping ancient pixel dust.

Creative destruction is increasingly real and accelerating faster than ever. A new company comes, an old company goes. Brands emerge and evaporate before our eyes. In the start-up world, the notion of permanence is almost impossible to envision. Look forward with alacrity or don’t bother looking up from abandonment.

Contemporary taste is fickle. Technology trends are more fickle. Customer loyalty is most fickle.

Earlier this year I watched the National Geographic Channel limited series Valley of the Boom. I couldn’t tell if it was a dark walk down memory lane or an idealist’s time capsule of lost promise. Netscape—the big bang of the internet age—went from conception to extinction in all of about four years. The Globe—the biggest IPO of its time—was practically eviscerated at birth. Pixelon—a scam extraordinaire foiled by its own iBash—today doesn’t even make a decent trivia question on a game show.

Those were just three emblematic stories, real-world cautionary tales of boom and bust. You might remember the history of other exploded rockets, from Pets.com to Webvan. Maybe you don’t want to remember. Of the big consumer-facing internet companies that emerged from dotcom v1.0, it seems Amazon, Priceline, and eBay are the only lauded brands continuing to operate at large scale.

Google emerged in the second wave of the internet, capitalizing on all the failed portals’ inability to understand the essential nature of search, most notably the excruciating death spiral of Yahoo. Can you think of another important round-one bubble survivor? Which will be the next to vaporize? Jeff Bezos has already said Amazon won’t last forever. He knows inescapably it will be replaced by something fast moving and better.

Today there are reportedly 300 or so companies affectionately refered to as “unicorns.” These are start-ups largely in the technology sector with a valuation of more than one billion dollars regardless of revenue or earnings to justify the bragging rights. You are undoubtedly familiar with many of their quirky names: Uber, Lyft, WeWork, Airbnb, DoorDash, Slack, Pinterest, Instacart… these are widely regarded as some of the good ones.

How many of these brands will today’s schoolchildren recognize when they become adult consumers? You know they won’t all still be around. History assures us of that—unless of course this time is different (and when someone tells you this time is different, keep your hands on your wallet).

Early last year I wrote an article titled Is Facebook the Next AOL? At the time I wasn’t sure. Later in the year I wrote about it again. By then Mark Zuckerberg had testified before Congress and I had become sure. Facebook is going to fall hard. The level of cynicism over there is no different from the hubris of America Online. Today cash is pouring in and it has no serious competitors, so hey, it must be invincible, a forever brand!

Facebook only has one major problem corroding its innards: customers don’t trust the people running it. No product or service can last long that way. It’s hard to be a forever brand when your promise is held in contempt. You can pay lip service to addressing the failings in your business model, but if the core concept is fundamentally conflicted, you can’t beat the reaper.

Even General Electric has fallen from grace. GE, the one original Dow Jones industrial average company dating back a century, is no longer in the Dow 30 index. How can that be? Yes, it is still an enormous enterprise, too big to fail, one might say. Does that mean the brand matters a fraction as much as it did a decade or two ago?

Nothing lasts. Creative destruction is consistent that way.

Google will last a long time because it has built a mighty moat, but it won’t last forever.

Apple? Depends on how it deploys its seismic war chest of cash.

Netflix? Hard to imagine, but it seems like a transitional platform. It could be bumped off.

Microsoft is evolving again, truly embracing the cloud, so maybe it will be the new GE. It has lots of runway to continue reinventing itself, but like GE, no runway is infinite.

What’s the point? Think about your own Carmen Sandiego, that gig you love that will be gone someday, and plan your career accordingly. Are you ready to lose the inevitable and discover what comes next? The ship you are on may appear to be built out of steel, but steel eventually rusts. Are you looking beyond the bow?

Creative destruction wins every single time, but don’t despair. Where old jobs become obsolete with antiquated value propositions, new jobs emerge requiring fresh ways of looking at the world. I doubt that will change. While so many companies have come and gone in the last quarter century, the planet has lifted two billion people out of abject poverty. There are new pockets of middle-class workers emerging all over the world in an increasingly shared global economy. That seems like a decent enough tradeoff for a few trampled unicorns.

Maybe someone will even capture Carmen Sandiego. You never know what can happen when you let go of everything you don’t need anymore.

More Fallout from the Zuckerberg Files

Should the unintended consequences that emerge in the course of a company’s evolution be a primary concern of management?

Is the exponential creation of shareholder value still the overriding force when a wildly successful company grows even faster than its own outsized vision?

Are the naive philosophical aspirations of under-experienced entrepreneurs a get-out-of-jail-free card from the ramifications of otherwise noble intentions?

In answering these and similar questions, is Facebook somehow a different animal?

These are some of the issues examined by a new Frontline documentary recently aired on PBS that frames a deeply damning critique of Facebook and its leadership team. While purposefully steering past the warm-and-fuzzy aspects of Facebook’s innocent exchanges of family photos and recipes, The Facebook Dilemma dives into Facebook’s structural roots.

The critique presented is strident but not unfair: Why didn’t Facebook as an enterprise heed the many early warnings of the pervasiveness of its influence and more strongly consider mitigation strategies, and now that the political chaos has been unleashed, is there any possibility of getting the bad genie back in its bottle?

When Facebook launched, founder Mark Zuckerberg braved a bold and curious global community manifesto:

“Our mission is to make the world more open and connected.”

That sounds good on the surface, and it sounded so good to so many of Facebook’s early employees that they rallied around the life-affirming purpose. They believed they were building a platform toward the betterment of humanity.

Simultaneously, the size of the audience embracing the platform created a media opportunity unlike any other in history. No company has ever thought about achieving monetization of a billion (heck, now two billion) individuals. To make sure no money was left on the table, Zuckerberg hired Sheryl Sandberg from Google to build that side of the equation.

The inherent conflicts soon became apparent. Facebook claimed to be a technology company, not a media company, even though its business model was selling advertising, which is what a media company does. To be the most valuable media company it could be, it needed two things: the world’s most in-depth data warehouse, and a rule set of utilizing that data with the fewest possible restrictions.

As a business, this all made sense. As you can see every day in the public company’s enterprise value, it worked beyond all expectations. The problem remains, it was initially fueled by another slogan:

“Move fast and break things.”

This ethos is not unique to Facebook. One of the tenets of Silicon Valley is to drive value from what is called an MVP, a minimum viable product. The point is to get a functional offering in the market quickly, find where it is successful, worry little about its failings, and start to iterate while building cash flow. Success is defined first by penetration (audience reach) and second by monetization (lifetime customer value). When things go sour, startups try to fix them, but because success is winner take all, most teams unapologetically expect there will be a lot of sourness to sweeten.

The question Facebook has encountered is unsettling: Is its very business model antithetical to fixing the byproducts of its success?

The Frontline documentary illustrates many of the ways Facebook has gone sour. Arab Spring. Fake news penetration in the 2016 U.S. presidential election. Russian intervention in media buying in the same election and outrageous exploitation of privacy by Cambridge Analytica. Violence in Myanmar.

Even Roger McNamee, a celebrated early investor in Facebook, took it upon himself to act counter to his own financial interests and ask Facebook management to step back and rethink the implications of its mindset. They did not heed his warnings. They were either too optimistic, too idealistic, too hooked on winning, too greedy, too ambitious, too arrogant, too busy to see the light of day, or a combination of all of those.

Facebook management has been reactive on all these fronts and done what it can to play whack-a-mole as crises emerge. Executives and managers there admit repeatedly they have been “too slow” to address the ramifications of their global viral adoption. The “too slow” apology parrots Zuckerberg’s appearance before Congress. It was a well-played chess move. It reveals no ethos of a fundamental commitment to a proactive playbook of innovative solutions. It’s a cost center, not a profit center.

Traditional media companies work under the direction of a qualified, responsible editor. When a journalist makes a mistake, the media brand runs a retraction. Facebook doesn’t want to be a media company, and it doesn’t want to be an editor, but any way you slice it, the algorithm that sits under News Feed is a robotic editor more likely to show you what it thinks you want to see than what is true or real. Then a perfectly targeted ad is inserted. That is how the game has been won at Facebook. It’s a winning formula. Any risk to changing that is far riskier to the company’s stock price than a few incidents of political unrest.

The real question remains: If Facebook’s mission requires that the company remove most obstacles to the free flow of information, the result of which is to facilitate unfiltered speech, the result of which is chaos, can it both stay true to its values and smooth over the chaos? And if the company is selling some of the most valuable ads in the world because the vast archive of privacy data is what makes those ads click, how can it impose limits on the interests of its ownership?

It’s a greater good question, one that capitalism believes is best left to the free market to solve, but in this case, it’s almost impossible to see how that gap is bridged.

Zuckerberg likes to say that Facebook is an “idealistic and optimistic” company. He said it when we was hauled before Congress to address the breach of privacy trust. When he was a younger man, it was a quaint proclamation I could have believed were it not for the true origin of Facebook as a college hook-up site. When he says it today, it sounds cynical. People who work for him might still be drinking the Kool-Aid. He’s selling advertising, justifying it, and trying to dodge regulation. To wit, he’s doing his day job as CEO.

Part of the problem might be social media itself. Its greatest strength is its greatest weakness. While pure democracy of publishing without a filter is liberating, audiences can easily be misled and mislead each other in chaotic exchanges of raw opinion. Add in bad actors buying access for covert agendas and the danger can become uncontainable.

Shortly before Zuckerberg testified earlier this year, I wrote a post entitled Is Facebook the Next AOL? At that time I wasn’t sure. Now I am. The byproducts of Facebook are so pernicious and likely unresolvable, I do think at some point the vast audience will abandon the platform. The cost of trading one’s privacy for family photos and recipes is too high. I don’t know when that will happen, and Facebook has a ton of cash so it can last a long time, but I expect the devoted masses will eventually exit their loyal addiction in self-defense. I don’t think this invention can adequately address the inherent conflict of interest it has created to thrive. Creative destruction will replace it with a better, more respectful product.

A brand is a promise. When trust is eroded, a brand dies.

I remain active on Facebook, but the broad notion that the world would be better as an open and connected place has always troubled me. Maybe it’s because I grew up as a kid learning of Nixon’s enemies list. Privacy to me always seemed to matter. Today’s political climate almost makes the Nixon era seem welcoming.

I’ve long subscribed to the notion that technology is advancing much faster than our ability to understand its implications. I saw that in my early career with the addictive nature of computer games. We see it all around us with people’s attention glued to mobile screens as they bump into each other and fall into fountains. We don’t really know what this stuff is doing to us. We buy it and use it and another tech company goes public.

Silicon Valley moves fast and breaks things because it’s good for business. Collateral damage is expected and as long as a company survives and grows few real tears are shed. Expecting it will change is unrealistic. It’s a form of realpolitik. Expediency wins over ideology because of the vast money at stake.

Since you’re probably staying on the social media playing field indefinitely, protect yourself. No one else will.

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This article originally appeared on The Good Men Project.

Image: Pixabay

Is Facebook the Next AOL?

 

I used to like AOL. Back in the day we called it by its full name, America Online. Prior to the broad penetration of the Internet, it was how we connected with each other. It was the company we paid on a subscription basis for both access to digital connectivity and content. For the ownership of AOL, it was a very, very good business, so explosive that it frightened the old guard in media and was merged into an even bigger entity, AOL Time Warner. If you were born after that wildly failed merger, it is difficult to convey just how powerful and influential AOL had become. Truth be told, I still have an active AOL account and get teased about that by friends. I wound it so tightly into my life it is still hard to completely unwind despite its deterioration.

I also like Facebook. As an individual enamored with words, I find it an irresistible way to communicate with a circle of acquaintances on everything from politics and social causes to MLB, The Beatles, wine, and business opportunities. As an author of fiction, I find it an essential tool to communicate with readers, let them know a new book is coming, tie that book into news of the day, and connect all of that with the monthly postings on my blog. Another confession: I was one of the earliest adopters of Facebook over the age of 40, invited for business reasons to create an account back when it required a .edu email to become a member. Companies I’ve led have been active buyers of advertising on Facebook at every stage of its evolution. Yet even with all that passion, I have been an ardent critic of Facebook. It reminds me of AOL. I hope it won’t suffer the same fate.

Is it alarmist to think that Facebook could collapse at the level of AOL simply because of its latest data breaches? Yes, I think that would be overstating the calamity of its current situation, and if Facebook does implode, it will likely be a slow and painful process much like AOL with a long-tail legacy business lingering into the digital future. I am not predicting that will happen. I am suggesting that it could if Facebook does not radically rethink its business in real time and take immediate action to course correct.

I am not specifically reacting to the gross abuse of Facebook’s members by Cambridge Analytica, but if ever there was a wake-up call to Mark Zuckerberg this bell is tolling awfully loudly. The sound of that alarm is the crying out of customers reminding the leadership of Facebook that they are not users as the descriptor goes, but human beings who have chosen to enter into a relationship with a brand. As I have mentioned here many times before, a brand is not a logo, a brand is a promise. When that promise is violated, all bets are off for the future of the brand. I believe AOL broke its promises way too many times and then sadly faded away. Facebook is now breaking many of its promises, real or presumed, and if the leadership there doesn’t do something material about it soon, they are rolling the dice against fate.

Here are the three most obvious areas of overlap I see between Facebook and AOL, and how addressing them now aggressively might change the course of history for the social network that changed our lives in the last generation much as the online access ramp that carpet-bombed the nation changed it in the previous generation.

DUMP THE MVP

I am at odds with many of my colleagues on the topic of “minimum viable product,” but I have always vastly disliked the MVP acronym and concept. I know how much Silicon Valley treasures the notion of The Lean Startup, and I suppose if a fast path to cash generation is primarily a company’s goal, a crappy first-generation product bounced off a wave of early adopters who will offer critique could make business sense. Because I favor brand development over fast monetization, I have never bought into the whole idea of “moving fast and breaking things.”

How did Facebook get into this fix with inexplicable amounts of customer data being exploited? Top management didn’t take the time to fully think through the implications of their product decisions. Likewise, AOL was legendary for releasing updates that crashed our computers and often made it impossible to even log onto the system. MVP is a shortcut that disrespects customers. Build excellent products tested thoroughly before deployment, and customer trust will compound rather than be wagered.

LEAVE SOME MONEY ON THE TABLE

AOL came to love hammering our screens with advertisements. We got them at sign-on, with our email, with instant messaging, with our stock listings, with our sports scores. The ad insertions were ceaseless and endless. When it was the onramp to connectivity we were already paying a monthly fee for the privilege of being an advertising target, but this additional banquet of media cash was a renewable feast of dots and spots. With so many eyeballs and so little competition they also assaulted advertisers with ever-increasing campaign rates.

Today on Facebook it isn’t quite that aggressive, but it’s getting there. What’s worse, the advertising depends on crawling through our personal profiles to target ads with astonishing performance response. The media business is certainly a game of haves and have-nots, but company leaders have to keep their eyes on the prize. Does the company think its demise is inevitable and thus seek to exploit its visitors with endless badgering? Or can it modulate the experience to show us a reasonable number of ads that are relevant but not beyond our comfort levels of intrusion?

SUSTAIN AN AUTHENTIC MISSION

Here we return to the luster or disposability of a brand, to the ability to make a promise and deliver on it consistently in the face of day-to-day business realities and financial opportunism. AOL’s stated mission was “to build a global medium as central to people’s lives as the telephone or television… and even more valuable.” AOL actually didn’t do that—the internet itself obviated its driving purpose—but rather than build on the goodwill of its access brand and attempt to enhance the customer experience through creativity, the company sought to keep customers in a “walled garden” and intervene in easy access to the open internet. Customers soon enough revolted and left in droves.

Facebook’s initial mission was “to make the world more open and connected.” That mission more recently has been revised “to give people the power to build community and bring the world closer together.” Those are both lofty ideals. The question is whether Zuckerberg had the maturity to comprehend the implications of what path his company’s technology cut through the landscape as a result. Of course it seems like a great idea to be closer to our friends and meet new people along the way, but if that compromises our privacy and personal security, is it worth it? Who gets to decide that? I can’t navigate Facebook’s privacy tree and I work in the medium. If its brand offers us a lasting promise of sharing and collaboration, does it also offer any guarantees of protection? If not, then we arrive at the cynical conclusion: “If we aren’t paying for the product, we are the product.” If a company wants to build a brand for the long-term, that’s simply not a sustainable value proposition.

I would guess if AOL founder Steve Case had it to do over again things would have been different at his once pioneering enterprise. It was a younger audience that first championed AOL, but his demographics didn’t stay young as the massive brand quickly lost its cool factor. Facebook is already seeing a similar demographic shift as its relevance with younger customers is waning, ceding that excitement to newer brands. I wonder if Zuckerberg will someday have the same regrets as Case or if he will find a way to shift gears with thundering resonance and reinvent his company to achieve a greater destiny.

The answer isn’t in testifying before Congress, any more than it is about inescapable government regulation. The answer is in balancing business success against the real human needs of customers, about making a promise and keeping it, about building a brand that stands for something more than the dollars it attracts. Innovation is both challenging and valuable. Trust is much harder and worth so much more.