Is Silicon Valley Too Powerful?

“People need a role in governing the content on their technologies.”

READ ON TO DISCOVER:

  • Why Apple may not be as angelic as they seem
  • The shockingly low percentage of women and minority venture capitalists
  • How to demand better of Silicon Valley’s leading tech companies

Ellen K. Pao is a tech investor, a diversity and inclusion activist at the Kapor Center for Social Impact, the former CEO of reddit, and a cofounder of the award-winning diversity and inclusion nonprofit Project Include. Her book Reset chronicles the discrimination case that forever changed the conversation about the status of women in the workplace. Brian Merchant is the senior editor of Motherboard, VICE’s science and technology outlet, and the founder/editor of Terraform, its online fiction outlet. His book The One Device is the secret history of the iPhone, which has become the most profitable product in the world. Both shortlisted finalists for the 2017 Financial Times & McKinsey Business Book of the Year Award, Brian and Ellen recently sat down to discuss the surprising inside scoop on power, bias, and success in Silicon Valley.

Brian: Do you think that Silicon Valley has become too powerful for the good of society?

Ellen: I think it’s complicated. In society today you’ve got all these problematic, powerful people in the entertainment industry, and in financial services, and in tech. The pace of growth and wealth creation has been so fast that it has created this echo chamber with a very small number of people who have this inordinate amount of power. [They] figure out who gets wealthy and who doesn’t, and also what uses that technology serves.

Brian: Until a few years ago, Silicon Valley enjoyed this aura of do-gooderness. “Disruption” was still coded as uniquely positive, or as, “Oh, they’re fixing things.” People had this level of trust for them, and I think it acted as this enabling force. Fortunately, we’ve started to see some of that come down to earth.

Part of that feeds into the larger-than-life mythologies of folks like Steve Jobs, who served as this template for aspiring tech CEOs, startup founders, and investors. In part because of people’s devotion to that idea of inherent goodness, Apple has become huge, and we see Tim Cook exercising Apple’s moral voice from time to time.

That can be good, and that can be problematic. It’s great when Tim Cook will tweet about diversity, or opposing one of Trump’s more onerous policies. But it can also crowd out other voices, and overshadow some of [Apple’s] less-than-good practices. They got away with a lot because of that aura of inherent goodness. Now I think we’re entering a new era where questions can creep in. Do you think that’s a fair assessment?

Ellen: Yeah. In this earlier era, everything was shiny and new, and [there was a] controlled image of these tech companies as bringing services to the masses. You could be one person, and have this great idea, and go build this amazing product, and become a billionaire. That was a strong mythology in tech, and now we’re realizing that only certain people have these opportunities, and that some of the decision-making is incredibly biased. People form generalizations about what a successful entrepreneur should look like, then validate it by only investing in that type of person. So of course, only that type of person ends up being successful.

It’s moved from this mythology of meritocracy to reality, where there’s been a lot of bias and unfairness in these decisions. I think it’s become worse since 2008 when people stopped going to Wall Street and came to Silicon Valley to make money fast. That element of greed, that element of, “I don’t care what it takes to gain wealth and power,” became more prevalent in Silicon Valley culture, and in the cultures of the startups that were being built. That further defined the type of person who was going to succeed, and the unfairness in the system.

Brian: I thought that one of the really interesting things in your book was your earlier workplace experiences on the east coast, and in law firms. The old corridors of power, so to speak. What was remarkable was just how similar those environments were [to Silicon Valley]. Tech replicated the same office politics, the same discriminatory practices, the same hierarchical roadblocks that had been so toxic for decades, or longer, on the east coast. We think of these companies as inventing the next revolutionary technology, but inside the office, they’re often just as regressive as the industries of old.

Ellen: These are people who pride themselves on being innovators, and yet they haven’t been very imaginative when it comes to thinking about the workplace. In 20 years or less, half the population will be people of color, and [since] at least half the population won’t be men, you end up with three-quarters of your [potential] workforce being underrepresented. How are you going to hire them if they are seeing an organization that does not look like them?

“People form generalizations about what a successful entrepreneur should look like, then validate it by only investing in that type of person. So of course, only that type of person ends up being successful.”

Brian: [We’ve had] yet another year that’s been rife with revelations about discriminatory practices, or worse. At Uber, and the latest round of companies from Silicon Valley, we’re sometimes seeing the worst practices of all. With Project Include [for example], there are good efforts to address it now, but it is kind of amazing that it took so long.

Uber hasn’t suffered any real punitive consequences. Travis Kalanick had to resign, but he’s still involved. Like a thousand employees wanted to have him back after this outrageous string of toxic personal behavior and company-wide decision-making.

It’s disheartening to see that there’s still a subset of powerful men who think that they can get away with this. I worry that we have all these seedlings of progress, but the overarching message is still that there’s a path for [those] in power to protect themselves.

Ellen: I agree with you. I think we are still far from change. We’ve identified the problem, but whether people change is going to depend on lots of people speaking up, and holding people accountable.

I thought your book was interesting. You covered how there were so many bad practices in Asia in building the iPhone. And things improved a little bit, but once people stopped paying attention, it stagnated, and there’s still a lot of really bad practices. But it’s not clear that anybody is going to do anything about them.

Brian: Especially in this moment, when there’s so much chaos from national politics to local stuff, it’s hard to zero in on some of these industry-specific phenomena. But yeah, Apple has gotten a pass on things, like the manufacturing and mining conditions that appear to be in stark violation of their own code of conduct. They have this code of conduct that blatantly states that, “Anybody working in our supply chain is entitled to an ethical workplace.”

And yet I identified miners that were mining tin for Apple products [and] working in some of the most dangerous conditions known. Child miners, working and supplying tin. I found this by asking a few questions and making some phone calls. And Apple, who allegedly has this big audit team, should have been able to find that, too. Since I alerted them to this, they told me that they’ve stopped using that particular smelter, but it should be more than playing whack-a-mole when journalists come to them.

And Apple has so much power. They have hundreds of billions of dollars stashed in a bank in Ireland, and they can certainly afford to be the industry leader in things like protecting the workers in its supply chain.

The love we have for the iPhone distracts from these very real, toxic problems that tech has prided itself on saying that it’s going to attack, whether it’s workplace discrimination or questionable labor practices abroad. Silicon Valley is abdicating their power to make it go away.

Ellen: Look at the money they’re bringing in—you’re talking billions, right? Do you really need to squeeze the last penny out of the cost, requiring the sourcer to use child labor? Are you being thoughtful about how far you’re pushing your partners?

Now, as you look at Facebook and Twitter, you’re starting to see the manifestation of these issues in the products, and how the products are being used. The toxicity is bubbling up.

“6% of venture capitalists are women, less than 1% are black, and less than 1% are Latino. How can you break into that when people are so closed, when they refuse to move with the times?”

Brian: That’s right. These social media networks, especially Facebook and Twitter, need to continue to grow users, continue to accumulate clicks, and they’re beginning to adopt some pretty toxic practices. I can’t believe that Facebook hasn’t been in more trouble, given the number of things that it’s been caught doing. It’s argued that, “We’re so big that we can’t regulate everything. We can’t necessarily stop people from targeting their ads to Neo-Nazis.”

Well, you should be able to if you dedicated a team to monitoring that stuff, instead of your latest VR demonstration. It’s entirely possible for them to become the product that they’ve always said they wanted to be—this uniter, this disseminator of information. But because Silicon Valley’s halo effect is still lingering, they are still getting a pass.

Ellen: And I think people are reluctant to criticize because it’s not easy to dig in. You just talked about having to travel overseas and make phone calls to dig into one part of the iPhone. Digging into Facebook is probably as hard, because they are as secretive about their technology as Apple. That cult mentality in these companies prevents people from being transparent, and sometimes from thinking for themselves.

Brian: Yeah, and Apple makes this physical product, so you can look into the supply chain. But Facebook, they’re all software, and they can be proprietary about just about everything they do. We don’t really know what their algorithms are doing. We don’t know how they are, for instance, training their algorithm to promote or hide content from hate groups, or from extreme media. It’s one way, I think, that Silicon Valley has maybe accrued too much power. Facebook and Google could see more regulation going forward.

I wanted to ask you about diversity and inclusive policy-making. We’ve seen some Scandinavian countries that mandate equal boardroom gender parity, [for example]. I was wondering what your thoughts were on [those] more radical policy solutions.

Ellen: I think there are some simple ones that would help—getting rid of the forced arbitration clauses, getting rid of the non-disclosure requirements in settlement agreements, allowing people to talk about their experiences and providing transparency into what companies are doing, and how their leaders are behaving, and how managers are treating people within the company. I think it would also be helpful to have people report on their statistics, like what level of diversity they have, and what levels of intersectionality exist, if any.

Those would help drive transparency and also some free market effect where people don’t go to the companies where they’re going to face discrimination and bias. [Instead] they go to the companies that are doing better, and hopefully because of that flow of workers, companies start shaping up. Because I do think, especially when employees are from underrepresented groups 75% of the time, you’re going to have a lot more demand for companies that are inclusive, and can show it through their numbers.

There are so many problems with quotas, but 6% of venture capitalists are women, less than 1% are black, and less than 1% are Latino. How can you break into that when people are so closed, when they refuse to move with the times?

Brian: We’re seeing actual regression in some cases. As you noted in your book, there was a point when, since you had joined Kleiner Perkins, their diversity had actually regressed. That’s pretty crazy to me. Our population is changing, and there’s such a wide group of people with a diverse set of experiences. To actively turn away from that seems not just toxic, but dumb. A dumb business decision. I feel like you’re just going to miss so much.

Are enough companies sharing diversity data? Is it comprehensive enough to provide minority and women workers with the information they need to make informed decisions about where to work?

“Hopefully people will realize that these products need to be more thoughtful, and people need a role in governing the content on their technologies.”

Ellen: It’s all very fuzzy right now. I’ve heard some companies include executive assistants in their engineering numbers. They’re [technically] on the engineering team, and it usually looks better because there’s more diversity in that group of employees than there is in the overall engineering team. So there is some fudging of that information in these diversity reports. Often the numbers are pooled, and you don’t see the homogeneity of the leadership [positions], or who’s getting promoted.

You also look at these gender pay gaps that people keep calculating, and those are completely opaque. I have no idea how they’re calculating them. If you ask some of the people in the companies, they don’t know either.

There’s so little clarity and so little progress that these reports end up being more PR-oriented and tepid than the real solutions that people need, which would require true inclusion of everyone, not just women. Let’s look at the overall company, not just hiring rates. Let’s make sure that the metrics are detailed enough to hold people accountable for whether they’re really making progress or not.

[In particular,] I have hope that startups and their CEOs are more earnest and interested and engaged. At Project Include, we work with groups of CEOs who are committed to diversity and inclusion. With them we’re gathering metrics and data that we hope will [establish] benchmarks, or standards for companies, so they can say, “Okay, I don’t need to look at Apple’s numbers, or Google’s numbers. I’d rather look at these startups that are more like me, where people really seem to care.”

We’ve both taken a very realistic view of the tech industry and shown how the sausage is made. What makes you optimistic?

Brian: I feel like [my] book is a little bit of a Rorschach test. Some people are like, “Oh, this is a great story of innovation.” And some people say, “Oh, this is a hit piece against Apple.” I really did not think it was that.

Ultimately, I thought it was a look at the wonderful and powerful things that technology is capable of. The core of the iPhone can be a wonderful thing. The fact that we have this powerful supercomputer in our pockets at all times, and that people have made these incredible, connective apps, and the amount of media and reporting that people can now do so conveniently—these are all wonderful things. I think it’s a matter of some cases being pulled in toxic directions.

We’re seeing distracted driving, surreptitious pictures being taken, people getting sucked into Facebook. [But] some of Apple’s designers and engineers have told me that they think Apple could do a better job at steering the ship away from some of those more toxic uses, and opening up its platform to people who have more interesting [ideas]. So I actually have a lot of hope. I think the iPhone could take us to really interesting places if Apple were to make some calls, and if there were curbs on its more malicious apps.

Ellen: I agree. There are many wonderful things that have come out of technology. It’s very cheap for kids to learn how to code on their phone, [for example]. You don’t need a $2,000 device. You can do that anywhere, any time. But I think the people who built the devices were not thinking, “What are the bad things that could happen?” And they’re part of the chosen few that don’t get targeted for harassment and abuse.

So, people can learn. And hopefully people will realize that these products need to be more thoughtful, and people need a role in governing the content on their technologies. It’s an interesting time, and we have this opportunity for companies to step up and take control or, as you mentioned, potentially get regulated.

Brian: Yeah. If we don’t see changes both to platforms themselves, and to the company cultures, I think it’s inevitable that the outcry is going to grow, and that resentment is going to grow, and it may force an uglier fix than is necessary. People may start to get actively angry about technology, the way that we’ve seen with the banking industry and others that have demonstrated too much overreach.

Ellen: We live in interesting times.

 

This conversation has been edited and condensed. To learn more, visit ft.com/bookaward and follow the conversation at #BBYA17.