• Nick

Tech giants: too big to be good?

Updated: Mar 30, 2019

I told you I was trouble - you know that I'm no good

"Don't be evil" doesn't get so much airtime at Google nowadays. Last time anyone saw the mantra it was languishing towards the end of an employee induction manual. Not exactly front and centre. Not the guiding light, the true north. More a slightly embarrassing bit of history best not talked about.

Google is a giant. So is Facebook. So is Amazon.

Elizabeth Warren - one of the most interesting candidates for the Democratic presidential nomination in a very crowded field - wants to break them up.

Their scale is a problem she says - they have “too much power over our economy, our society and our democracy.” They stifle competition, they exacerbate fragmentation and division, they warp election results, and they exploit users for their own gain.

Warren, and plenty of others, think the world would be a better place if Facebook, Google, Amazon and co were all a lot smaller. Self interested and extraordinarily powerful - they are too big to be a good thing.

Bad for the economy. Bad for privacy. Bad for society.

Anti-social business model

Not everyone agrees that the problem is size. The EU's competition ninja, Margret Vestager, is going after their business model. She doesn't like the way they exploit user data for their own gain - so is introducing ways to shift power over our personal data back to you and me.

There's GDPR - a data protection protocol that is being copy pasted elsewhere. At its heart is the principle that you and I, not Google, and Facebook, get to decide how and whether our data gets used.

This drives a stake through the heart of the business model - the platforms make their money from selling our data to the highest bidders. They auction the rights to show ads to the users (us) by getting different advertisers to bid for our eyeballs. They do this by gathering loads of data on what we're doing on Facebook, on searches, buying online, etc and making inferences about what we're into. It's like the Stasi on steroids. Read this for a peek into Facebook's warped growth obsession.

The richer the data they have on us, the more value the platforms can get from the advertisers. So they have a built in incentive to snoop as much as possible on everything we're up to. Hence all those cookies. Hence their need for humungous scale - the more they know about us the more they can flog our data to the highest bidder.

(Gratifyingly the machines aren't so smart with their inferences - my "job" means that I search for all sorts of weird stuff online, most recently pensions, refrigerants used in air-conditioning, wine in Georgia as well as my ongoing obsessions with the late stage careers of the Spice girls and the tax arrangements of my local MP - so I get served up all sorts of weird ads)

And quite apart from the snooping (we've given Facebook permission to track what we do even when we're not on Facebook - check out what they know about you....) the inferences are dangerous. The platforms might look at my Spice Girl obsession, my trawling of the Panama papers, my pursuit of random technology and infer all sorts of things about me: my sexual orientation, my political leanings, my susceptibility to anarchic groupings.

And that inference gets packaged up as personal data on me for sale to the highest bidder.

That's the business model. One designed to extract value from you and me in order to make it easier for people to exploit us.

I find it astonishing that these businesses, supposedly so future focused and cutting edge, have at their heart a business model that is based on exploitation. Until that's fixed they won't and can never be a force for good.

So any policy that reduces the platform's power over our data - whether GDPR, or open banking - has got to be a good thing.

The problem is size and the business model

Neither the US legislators such as Warren, nor the EU competition folk want to tackle both the size and the business model. But they should.

Just breaking them up into smaller chunks without forcing a change in the business model will mean that the Googlets and Facebabies grow into the next generation of monsters.

Just shifting the balance of power without addressing their distorting scale is playing at the edges.

These businesses are big not for our benefit - but because the antisocial business model at their heart compels them to be. If you're going to intervene - intervene properly and fully.

I reckon they'd be happier too

Although the legislators aren't specifically trying to make the folks at Facebook etc happier, a by product of being smaller is that they would have better, more human, happier workplaces.

When organisations systematically exploit their users for their own gain you can be sure things ain't rosy for the staff either - they've lost their humanity.

Facebook workers in their coop

Big organisations operate on industrial lines. As Google has grown its HR systems have become more labyrinthine. Ex-Googlers talk of a culture tending towards unhealthy and there's evidence that it's not the happiest of places. Uber has had well documented troubles in how it treats staff. As organisations grow processes and systems inevitably replace the humanity that underpinned the way they operated when they started out.

Some of the people who study this stuff reckon an organisation loses its humanity at over 30 people. Beyond those numbers they are forced to put in place systems and processes to try to regulate the humans inside the machine. Enlightened employers go further in providing pacifying measures like fussball tables and cakes. But these are facsimiles of how really human organisations work - it's the matrix at work.

Look at the starlings - you don't need to be big to realise the benefits of scale

Scale isn't necessary nowadays. You only need it if you need to be a big beast in the value chain. As we develop our model we see more examples of the problems caused by having an oversize player in the system.

In the food chain there are very well known brands who espouse all things sustainability - but they are huge. Nestle, Unilever, Kraft can evangelise all they like but their sheer size means they act - without even knowing it - out of self interest.

In food there are players in the chain who wield enormous power simply through their scale. And there are producers who are wholly dependent and powerless by comparison. A minor policy change from a big connector in the chain can wipe out their livelihoods.

Last month we went to see the murmurations on the Avalon marshes. It's incredible - hundreds of thousands, maybe millions, of starlings fly in formation just before settling down to roost for the night.

The murmurations allow the starlings to enjoy the benefits of scale (protection from predators) without the downsides of having to feed the beast.

I've always had a fascination for the network model of organisations like PwC. It's like the starlings, with the ability to come together and be massive when it needs to be, but PwC is not actually a massive behemoth. It's a network of smaller units that can be small when they need to be, and yet can come together to be big as well.

This idea of smaller units that can share resources and come together when need be is one of the key design features of the Good Growth platform we're developing. If we can help our businesses get the benefits of being big without having to get big - then they have a much better chance of avoiding self interest and staying true to their purpose.

Size really does matter - no business needs to be so big that it cannot help but act out of self interest. If we want businesses to be good, and to do good, we have to design them to do so from the start - with business models and scale ambitions that deliver good.

We're learning how this works by doing it - more soon.

#goodgrowth #google #facebook #elizabethwarren

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