A quick note: I’ll be blogging here more, now that I’ve got some time and headspace after my weird adventure. Hopefully, this’ll become a place not just for contemplating and chronicling post-academic life, but for speculative extensions of the writing I do elsewhere.
I’ve been thinking about something for a while, and yesterday’s announcement about Google’s restructuring helped me focus it a bit. Gizmodo gets the basics right – that Alphabet is about putting innovative and world-changing products like driverless cars, connected homes, and whatever the next iteration of Google Glass is. The revenue-driving stuff – basically, search and associated advertising – will become a segment of a more obviously diverse company.
But that doesn’t change the fact that little of that speculative stuff tends to make money. And certainly, not compared to advertising. This strikes me as part of a larger, long-term trend that I still need to contextualize historically, but that I’m not sure anyone has really identified. That is, there are motives much more complex (though not necessarily more subtle) than profit driving a lot of the activity at certain future-oriented technology companies, including not just Google, but also Elon Musk’s enterprises.
These organizations spend a lot of money, well, not making money. It’s tempting to be cynical – that a company like Google is being simply strategic when it experiments with driverless cars, wearable computers and the like. They might be just, a) experimenting to see if something hits. Google Glass, in theory, could have been the next Android. Who knows. And Tesla certainly seems on track to make money.
But way more interesting, on the cynicism front, is the idea that this is some kind of ‘techwashing’ – that the profile of Google is being consciously cultivated by these experiments, which can be thought of as, more or less, a marketing expense. Certainly, search dominance is about mindshare. We all think Google when we think search. And how much of that is due to the constant headlines generated by Google’s more experimental work?
But finally, I think the most interesting interpretation of all is one that moves beyond cynicism. Certainly, Elon Musk seems unquestionably to be a manically creative guy with huge dreams and ambitions for reshaping the world. And I’ve recently been writing about some companies with similarly public-spirited, not terribly profit-driven projects – bike shares, and, coming up soon, carpooling.
In all of this (and here I’m being really, really general) we’re seeing at least a little bit of takeover of what in a different time would have been public government projects. And these aren’t nonprofit companies, or even, by and large, Benefit Corporations with explicitly social goals.
Depending on your perspective, these are companies making really, really long bets – or they’re just experimenting and innovating for its own sake, because their principals think it’s cool.
I’m not sure to what extent it’s novel for a revenue stream as powerful as Google’s, or a fortune as huge as Elon Musk’s, to become a platform for fierce experimentation and innovation. Old-school titans of industry (aka robber barons) often sunk their profits into public works – libraries, universities. At least intuitively, I don’t think it was as common for them to use their leverage to continue developing new and highly speculative technology.
The only really clear example I can think of is Howard Hughes. I’m sure there are others, but it’s illustrative that Hughes is the one that pops into my head – and he’s well known for being nuts. By the standards of a previous era, when resources were more scarce, the kinds of risks being taken by an average startup (and its funders) would have been (rightly or wrongly) considered foolhardy.
There’s another aspect to this, which is investment. Investors, partly because they’re having a harder and harder time getting good returns, are increasingly willing to throw money at people with big ideas, whether those ideas are best judged as innovative, half-baked, or outright crazy. And after that, they’re willing to keep throwing money at people with big ideas that get a little bit of traction, but haven’t turned a profit (yet).
It’s a weird, pervasive, but probably productive mindset. We have individuals willing and even eager to take big risks. And we’ve got people who want to be part of that, the same way producers used to pay a high price of admission to be part of the movie business. And I’m beginning to suspect that, on some level, nobody is really all that focused on profits. Profits are somehow less important than creativity.
Maybe we’re living in a world of convenient (and even productive) fiction – we have ‘stocks’, we have ‘earnings reports,’ we have ‘projections.’ But what if that’s all some kind of fig leaf, and Amazon is basically just one big crowdfunding project?