One of the things that in recent history set the technology complex apart from finance and other industries has been the ability to simultaneously be financially successful and maintain broad-based admiration—sometimes bordering on adoration—from the public.
That nexus of love and success was threatened in 2016, for the first time in a long time, thanks to everything from the job loss implications of self-driving technology to the fake news debate.
The big theme of 2017 is going to be technology companies working hard, and even possibly collaborating, to maintain the industry’s moral high ground globally. It will put them to the test.
Why Being Loved Matters
One might reasonably ask, why does it matter if technology companies are “loved.” Isn’t being successful good enough?
The short answer is that over the last 10 years technology companies have benefited massively from having the moral high ground over other industries.
Combining success and love has allowed the tech industry to win the war for young talent against other industries by promising financial rewards and the social validation craved especially by millennials. It is undeniable that technology companies have encouraged the social concept of doing “important” and socially validating work, to their advantage. It’s been to the disadvantage of competitive industries like finance that can’t tell as compelling a story.
Love is also a critical component to staving off global regulation in an evermore complicated landscape. It is far easier for regulations to be passed in the U.S. and globally against companies that are seen as parasitic or are not liked by the population versus companies that deliver products and services loved by all. It is much easier for regulators to push a bank or a power company than it is for them to push Google.
The Last Decade of Love
To be loved as a company there are basically three major things you need to do. First, you need to deliver new products and experiences people appreciate—the more magical the better. Second, you need to share the love and deliver serious financial returns to a broad base of shareholders. Third, you need to “do no obvious harm” to other institutions that people rely upon or like. Your revolutions must be bloodless.
Historically, technology as an industry has been good at this nexus. The internet, search, smartphone, social networking and ride-sharing has produced a consistent stream of loved products that are widely used.
The public technology companies have been financially spectacular. Anyone who has any savings (which I recognize is not everyone) has had the ability to benefit from the meteoric rise of technology stocks as a basket—and it is hard to hate the best-performing stocks in your 401(k).
Finally, and probably most importantly, the rise of technology companies has largely been bloodless—not visibly hurting other industries. There are exceptions, like search and social media gutting the newspaper industry (but that’s a small industry and no one liked newspapers anyway). Other exceptions are ride-sharing and taxis and Airbnb and hotels. And there are less-obvious effects, like Amazon severely hurting local retailers. In that case, though, Amazon was protected somewhat because Walmart took some of the blame a generation earlier.
But broadly, the rise of access to information and content has benefited a few people wildly, most people a lot, and minimized negative impact.
What Happened in 2016
2016 was a really rough year for technology.
First, there were a lot of promises out there, but practically there hasn’t been that much new good stuff delivered by the industry on a mass level in the last year. Smartphones have been fully adopted in the First World for a while, so even if they are providing growth globally, they don’t feel new to U.S. consumers. The wearable wave failed. We broadly don’t have smartwatches. VR was supposed to have a moment this year but failed to make it. Bots were supposed to have a moment this year but failed. Self-driving cars are popping up everywhere but are not something that most Americans got to experience. So, at the end of the current wave of mobile technology and apps, people aren’t getting the dopamine of new toys from technology companies—which is disastrous in our “what have you done for me lately” culture.
Financially, most of the big technology companies are up on the year, but it was a wild ride for most of the major stocks and previous years have been better. Stock price momentum isn’t something people like to talk about, but I think it is pretty hard to be loved if you are losing people money, and hard to be hated—with rare exceptions—if you are making everyone richer. With the most exciting companies being private (Uber, Airbnb, Snap, etc.) and a lot of future growth and promise priced in, this was not a year where technology got a lot of extra points on the finance side.
Setting aside the first two issues, however, the real problem of 2016 was tech’s negative impact on the rest of the world and industry. Rightly or wrongly, there were some bad narratives floating around in the last year about tech’s impact on the world.
The biggest problematic story is the huge and looming apprehension around tech’s impact on jobs—in the form of the self-driving car narrative and things like Amazon Go’s new “checkout-less’” experience. This can’t be understated as a big issue that technology is going to have to wrestle with. It is hard to be loved when explicitly eating someone’s lunch.
There was also obviously the narrative of Facebook’s negative impact on the election (which other technology companies chose to dig in on). Regardless of reality or not—and where you are politically—there is no question that this took some of the sheen off the mission-driven viewpoint that making the world “open and connected” is good for the world.
There is a growing and real concern in the First World over technology addiction which, while not at a fever pitch, casts a negative light on the next generation of communication and entertainment tech.
The upshot is that, for the first time in a long time, technology companies aren’t looking as benign.
2017 and Beyond
If I worked at a big technology company, I would be spending time thinking this New Year’s Eve about how to moderate the message in 2017 to regain some love and the benefits that flow with it.
That means delivering some products people like. It also means not overselling technology that isn’t quite there yet. There is nothing quite so sad as being continually promised virtual worlds, self-driving cars and pink ponies and then not delivering. That is worse than not floating the ideas in the first place.
It would also be very helpful if some of the private technology companies, like Snap and perhaps Uber or Airbnb, would go public and start making a broader set of people richer. That would help the whole tech industry (though there is also risk if they have rocky IPOs).
Finally, the industry has to broadly get their story right and work together on how to talk to the public about issues like job loss and the impact of social media. Everyone is collectively at risk if these messages go off the rails.
Companies, especially the transportation companies, are in a rough spot here. They need to sell a vision of the future to support their valuations and the viability of their businesses. But big company brashness about the impact of technology on people is irresponsible and going to hurt everyone long-term.
My expectation in 2017 is that it will be a year where the whole industry has to grow up, pull together, and get their story straight—or risk becoming the next Wall Street—profitable, insular, hated and regulated.