Techdirt Podcast Episode 40: Is Silicon Valley Only Building Tech For The Rich?
from the focus-problems dept
Technological innovation is solving all sorts of problems, from major issues to minor inconveniences — but one criticism that often comes up is that Silicon Valley has a “by rich young white men, for rich young white men” culture, with most of its efforts focused on solving problems for a small, affluent minority. This week, Catherine Bracy returns as we try to understand this common complaint, how valid it is, and what can be done about it.
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Filed Under: catherine bracy, innovation, podcast, silicon valley
Comments on “Techdirt Podcast Episode 40: Is Silicon Valley Only Building Tech For The Rich?”
Said this a while ago to my friends
You only have a few good market strategies in a market where your customers do not have growing incomes or shrinking bills. You can go after people who make more money than they need (in this case rich white people) or you can try the much harder tactic and replace a good someone is buying today with your own good. (Try to replace Coke with your own brand for example).
The first one is basically building yachts, your target market is so rich that they can spend money on your product with little care or out of a desire to show off.
The second one is much harder as Coke will defend its turf because your brand will cut directly into Coke’s market, profit, and market share.
Now if customers had growing purchasing power (better wages or shrinking expenses) then you could build products to target people who are maxed out but now discovering some slack in their budget.
Unless we give more people more purchasing power people will take the quickest route to wealth by building Yachts or trying to replace current market products. People will have a hard sell building new innovative products targeting the masses living on maxed out budgets.
Re: Said this a while ago to my friends
Or you could do what Tesla is doing: pragmatically achieve B) by means of A).
They started out building elite “yacht” cars that would get them the money they needed to invest in developing a more affordable luxury car, which would bring them the money they needed to invest in developing an Everyman car. The first two steps have been a huge success by all accounts, and they’re currently well on their way to developing and bringing to market their Everyman car. Once they bring that to market, it will benefit everyone, not just rich people, and not just people who own a Tesla.
The stuff about allocation of capital reminds me of something I’ve mentioned on here before, an analysis of why silicon valley funds Instagrams, not Hyperloops. It’s a real problem with the way the VC system is set up and the way their interests are aligned.
At around 19:20, Catherine mentioned loan forgiveness. This is a very important idea. It’s been around almost as long as civilization itself, the concept of a forgiveness of debts as something necessary to the smooth functioning of civilization. In the Law of Moses, for example, the balance of any loan that was not paid off after seven years had to be forgiven, and every fifty years all debts were canceled. This keeps debt from piling up perpetually and from becoming too unmanageable in general.
Contrast that with the current system, where debt continues (and continues to grow!) in perpetuity, making things worse and worse. Just think back seven years, when an overload of debt (primarily on a class loan that lasts for a truly ludicrous thirty years!) crashed the economy, and the chosen solution was… prop it up with even more debt! And now we’ve taken that about as far as we can, and it’s just starting to crash again, and looking like this time will be worse than the last time.
If those debts had been nullified instead, imagine how much resources would be freed up for productive economic use rather than wasting it on debt service!
Around 32:00, “Name an example; what is a company that started out just serving a super-high-end need, and then pivoted and was serving the broad base of the economy.” Tesla. That was their stated plan from the beginning, and they’re currently in the process of performing that pivot.
The stated examples such as Uber and AirBnB aren’t about serving the masses; they’re about exploiting them. When you look at the demographics of people using these services, (from the provider side,) what you see is a lot of unemployed/underemployed people looking for another source of income out of need, not by choice. It’s no surprise that we’re seeing them spring up now, in the middle of an economic downturn (it would be politically uncorrect to say the “D” word) that’s been going on for 7 years now with no end in sight; these are “services” that would never have arisen–or at the very least would not have prospered–in a strong economy.
What they are actually building
What they are building is *jobs* that only the rich can afford.
If you can’t afford even a dinky apartment on what you make, what good is living in Silicon Valley?
There are massive class differences and inequality that are evil. That are intensely destructive of not just the poor, but society as a whole. But this is not a significant issue.
So people who spend their day behind a desk can wear a watch that reminds them to exercise. Meanwhile the poor are either out excercising on a basketball court, or running for their lives from cops who would like nothing more than to shoot them in the back, or beat the gut contents out of them.
There is more meaningful technology available today than ever before. The net is the largest library ever available to humankind. The greatest treasure is knowledge, not another phone with a capability that few will ever use.
Further, technology, like shit, rolls downhill. Early models are expensive, but prices drop not just rapidly, but radically. And after all, how many people are truly happier with an 8 core computer rather than a 4 core? How many even know the difference, except that the number 8 was on the box?
A decent education, a proper diet, medical care, fair treatment in the courts (and on the streets), opportunity, and other issues are of real significance — not the latest piece of techno-bling.
Privatisation
A few things. It sounds great having a “dynamic bus route”, but how does that work in practice? Either a bus carries one or two people at a time, or people on the bus take a circuitous route as more people are collected.
When governments control services they are beholden to the public to deliver the service. When these services are sold into private hands the service provider is beholden to share-holders and investors.
When those services that are privatised form part of the infrastructure backbone of a country, e.g. Rail, power generation/transmission, telecommunications , having a primary motivator that is profit driven tends to result in less, or no, investment in maintaining the infrastructure.THe New Zealand railway was privatised in 1993, in 2008 the Government bought it back in a state of disrepair.
Nonsense
NZ rail privatization was far more complicated than that and of course was competing against publicly provided roads. It’s also only on example and of course does not come near to justifying your absurdly broad claims about infrastructure investment. In the US, the private sector built one of the largest and most used rail networks in the world. Government control of passenger rail has nearly killed it and led to under investment in infrastructure, whereas private freight rail remains highly viable.
More generally, the level of economic illiteracy being spouted by Techdirt users is truly shocking.
To all of you citing examples, I say: [citation needed]
Uber Helps the Poor, Now
Poor people see Uber in a much different way then the middle class. I’ve been using cabs in my city for close to 20 years. I’m disabled and can’t drive. In my experience, most, or a majority, of cab riders in my city are “poor.” These are people who can’t afford a car and there are times when the bus just won’t get you were you want to go or get you there fast enough.
The taxi companies worked closely with the Taxi commission to drive up rates. The city has for years added hospitality and hotel fees to taxi fares. These taxes were passed with the idea that only tourists would pay them. But everyone knew these taxes would mostly be paid by locals and there was nothing we could do about it. Because taxi riders have no political influence.
With Uber, while we now pay the local sales tax, does not not make us pay the fixed rates from the airport or the tourist taxes. They do this while undercutting the taxi monopoly rates. Anyone with a Smartphone can now get a much cheaper ride because Uber defeated rent seeking by a legacy industry.
Our local newspaper has taken to running sad stories about local taxi companies going out of business. Their trying to make us feel bad about how Uber is running these machine politics companies out of business. I cheer whenever I read these stories. Because they feed off of me for years. I want them all gone.
The highest price for a Taxi Medallion in NYC was ~ $1M. The most recent sale was $750K. It is damn near impossible to imagine that the “right” to ferry people around is worth that much.
Uber is realistic competition to the politically powerful taxi companies. And the media will be paid in dollars, or favors for thei support. Perhaps it is just fear of retribution that causes these “poor, poor” taxi cab company stories.
But what kind of margin does a cab make that a medallion goes for such incredible sums of money?
Uber took a market that was segmented by rent seekers and users who lacked political clout and cut through the bureaucracy and monopolies to provide a superior user experience at a cheaper price. I call this social justice profit taking.
What other segments in our society are overpriced due to entrenched interests? Guilds are an obvious answer: health care and law. And segments were the government is the largest provider: prisons, education, public education, policing.
To be the next Uber, a company is going to have to figure out how to reinvent a service that’s been stifled by insiders and tradition. The next Uber will be even more controversial as it will taken on services that are considered sacred. Sacred but overpriced and underperforming.
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