President Obama schools SV CEOs on why government is not like business
latimes.com
latimes.com
if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences
Yet again we see the results of people outside of tech focusing on these technologies that get headlines.
Quality Tech does deal in affordability, fail safes, and unintended consequences. Tesla specifically took this approach, as does Apple, palantir etc... not to mention myriad companies focusing on verticals across income and accessibility levels.
I think this statement, especially in light of the recent document published by the govt on artificial intelligence, is likely political more than indighting tech for being myopic.
The problem with SV is that techno-libertarians are constantly imagining the government could be run as an spontaneous order of anarcho-capitalist service providers, as if the key to solving education, or healthcare was "disruption" with some applied science.
And it's interesting that you say he should appreciate the DoD being a large purchaser of "real technology development", because that seems to ignore the fact that SV history is built on publicly funded universities (the UC system) and government funded research. Part of the mythos of today's young tech bros is that SV is an example of pure capitalism working, ignoring the entire history of government subsidy of SV.
SV has done a great many amazing things, but it needs some humility, and tech bros need to stop thinking they can solve all of humanity's great problems by software.
Open for interpretation of course, I just think it's dangerous where some people think the president doesn't have to be mindful of money and business sense.
It's silly to think the government can be run as a business.
If you ran a company the way government is run, nothing would ever get done because there wouldn't be enough consensus. We do it in government because of "democracy!!", but the end effect is horrible waste and no one's happy because progress is sooooo slow. This doesn't mean we need to switch to an authoritarian model (because that does have real dangers), but it really should be possible to streamline things more and eliminate the micromanagement. Only give Congree the ability to pass high-level budgets, for instance, and don't let them micromanage funds: only allow career department heads to do that, so that smaller decisions are not (as) political.
For instance, Congress should have no ability to tell the military what weapons systems it's going to buy or fund R&D for. The military should make that decision itself. And Congress should definitely not have the ability to make decisions about what State military installations are placed in, or which bases are closed, etc. These decisions should be entirely within the DoD. (This is why we have stupid stuff like US Navy bases in landlocked midwestern states.) Congress should only be able to make high-level decisions, such as granting the military a certain budget for the next several years.
You haven't proven your assertion that government cannot be run as a business, all you've done is state a tautology.
Umm? The Constitution? You do realize that the United States isn't even supposed to have a permanent standing army, and that it has to be reauthorized every two years?
ARTICLE I, SECTION 8, CLAUSE 12: The Congress shall have Power To ...raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years....
ARTICLE I, SECTION 9, CLAUSE 7: No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
The appropriations clause of the constitution is generally interpreted as giving Congress the power to dictate how the money is spent. This was very specifically argued by the Founders, "The Power of the Purse" as a check on executive power by the people, and very specifically, assigned to the House of Representatives.
You're telling me it can be done, I'm telling you 240 years of history and the very structure of law makes it very difficult. The US is crafted to have a weak executive power.
Wait, the two companies with some of the most expensive products in their industry took the affordability approach?
> palantir etc...
Palantir has consumer products?
More importantly, Tesla's whole approach is to aim at the higher end of the market (people with $70-110k to blow on a car) to fund their R&D so that they can push to the middle portion of the market ($30-40k is the target price of the Model 3). So they haven't gotten there yet, but all indications are that this is where they're going in the next couple of years, so yes, affordability is a key component of their decision-making.
Even Apple isn't that bad: their phones are overpriced, but their direct competitors aren't that much cheaper for the main product (phones or tablets). Apple makes a bunch of money by trapping its customers into its walled garden and making profits off the apps they buy, the music they buy, profits from overpriced accessories like cables and headphones, license fees from 3rd-party accessories by using proprietary patented connectors, etc. So there's a certain focus on "affordability" there too: they try to price their stuff low enough that fashion-middle-class people aren't going to completely balk at it (monthly payment plans linked to carriers help a lot here), but high enough to get a good profit, while using the other tactics I just listed to get really obscene profits overall.
Almost every company has to worry about affordability to some degree. The only exceptions are ones which cater to truly wealthy people, companies like Vertu (horrifically expensive phones costing $20k!), Rolls-Royce cars, various handbag companies, etc. If you want the middle class to buy your stuff, affordability is going to be part of the design process somewhere, to some degree.
Apple does this: even though the 7 is the current line, they still sell the 6 and SE. You have to figure people are actually buying these older models, even though they're not that much cheaper (the SE starts at $400 and has the iPhone 5s design)
I'll add another example: Campbells makes soup in three tiers, from the cheap condensed stuff, to the premixed stuff, to Campbell's Slow Kettle Style which comes in nicer packaging and better design (I haven't tried it, maybe it tastes better too)
In terms of Tesla, their entire plan was to make affordable cars for everyone. They are using high end car sales to subsidize the lower end production.
Palantir has consumer products?
Do you consider sales to finance (where they started) B2C or B2B? I would say it's more B2B - but irrespective of that - the point is that private technology companies like Palantir have to make all of those same evaluations that the president stated weren't happening.
Only to the extent that these things are profitable. Tech companies, like all companies, exist to make money for their shareholders. All other concerns are strictly pursuant to that. At least, as a shareholder, I sure as hell hope they are.
Let's not pretend like the scope of a CEO's job is even remotely approaching that of the President's. That would be absurd.
Not currently. There have however been "CEO's" in the past that have.
The Presidency Armies come to mind first but there are others. The key distinction now is if they control nuclear arms.
-Said by the guy who doesn't understand business because he's only been in government.
Also, (aside from his non-governmental community organizing activities), he was a partner in a DC law firm for 3 years, and served on various foundation boards after that. So it's not like he's Elon Musk -- but it's safe to say he probably has more "business" experience than your average (which is to day: heads-down, "monitor tan") techie.
And it's fairly safe to say - orders of magnitude more money-managing experience.
Did you even read the article? That's pretty much exactly what he said.
"Government will never run the way Silicon Valley runs...,” Obama said.
I'm guessing Obama knows this because he's also run a few successful startups in SV....
“Sometimes I talk to CEOs, they come in and they start telling me about leadership, and here’s how we do things. And I say, well, if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences … then I think those suggestions are terrific."
So again we have the guy in government who's never been in business "schooling" the guy in business.
This seems to be the overlooked point here. In business, it can be profitable to disrupt and go after sweeping changes. In government, you can hurt real people in large numbers by doing so.
Also, the article isn't implying that companies can't or won't do good. Companies can certainly work well across income ranges. The point is, that's still a different goal than working well across all income ranges.