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Memories of George Floyd’s murder are fading, and so some of the promises made in the aftermath are evaporating. But some organizations remain committed: I wrote about Advantage Capital’s new fund, and a new accelerator in Brooklyn, BK-XL. It’s more important than most people realize to give all entrepreneurs a fair shot — because business ownership is one of the only routes to building wealth across generations. And by the way — both of these organizations cast a wide net for disadvantaged founders: Black, Brown, Asian — and others. Sign up for applications for BK-XL at the bottom of this email.
Meta and the Wolves
There’s a folktale that I first read in a complete version in the book My Antonia, by Willa Cather. She grew up on the Great Plains, in Red Cloud, Nebraska. In the summer, it’s beautiful territory but in the winter, the powerful wind blows the heavy snow straight across the flat land.
Winter is the season of the folktale, which is often set in Russia. In the story, a pack of hungry wolves closes in on a sledge carrying four people: a driver and his companion, and their friends, a bride and groom. The two men in control of the sledge throw the newlyweds out to save themselves. It’s an ancient motif. In English idiom, to throw someone to the wolves means to save yourself by sacrificing someone else. That someone is often the weakest member of the party.
Watching the collapse of Meta’s stock (it was down about 70% over the past year), I’m wondering if Silicon Valley will throw their social media brethren to the regulatory and media wolves. At the same time the economy is worsening, regulators in the European Union are flexing their regulatory muscles on issues of data privacy and cyber security. In the United States, the Biden Administration is reversing a decades-long monopolistic free-for-all, with “Big Tech” squarely in its sights.
But watch the definition of “Big Tech” as it’s used in the media in the next few months – Big Tech may not end up being the monopolies we ought to worry about; but rather the ones that have the weakest business models – social media and other platform companies. And those that are led by the most dislikeable CEOs. (Few things are more dislikeable than rich, bloviating CEOs laying people off.)
I’m not suggesting that the power players of Silicon Valley or New York are puppet masters non-pareil. But they have the money to hire the savviest public relations firms and sharpest lobbyists. And it’s pretty easy to define a term like Big Tech in ways that serve your own interests, given today’s over-stretched business media and idealistic Washington staffers.
So where does this line of thinking lead us?
Right now, Big Tech is getting defined as social media and other platform companies, like DoorDash and maybe Uber and Lyft. The question at hand is whether there are even bigger cracks in business models of software companies in general – whether the rising concerns of the regulators and the public over security, privacy and pay scales are literally impossible for many of today’s big software companies to solve. Over the summer, I thought we were at the end of social media’s big growth run (and good riddance, by the way). Now, I’m wondering if there’s an even deeper business shift going on. Software had hidden costs that are now more readily apparent, which might affect more companies than we realize in a radically changed business environment.
We’ll send out a special short Thanksgiving newsletter next week. Enjoy your holiday preparations, everybody!