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Delayed maturity. Many of these companies have created real businesses that generate real and growing incomes – which many of the small business firms in the last boom of the 1990s lacked – but none of them has generated consistent profits. This concerns not only the new consumer businesses mentioned above, but also most start-up businesses. (The Zoom videoconferencing company is a rare exception.)
Betting on growth rather than profits is not necessarily a bad investment strategy – many successful technology giants, including Amazon, Salesforce and Netflix, have lost money or have had very small margins for years . However, many of the most recent companies have not explained the way forward to achieve sustainable and profitable growth. It should also be remembered that Microsoft, Apple, Google and Facebook have all been made public with profits.
Over the past seven years or so, venture capital has been so important that the current generation of IPOs has managed to stay private longer – Uber has been around for almost a decade – forcing employees and small investors to wait for cash while holding private investors. to participate in the rise.
A profound lack of diversity and the problems that come with it. Almost all of the heavily funded Uber-era start-ups were created and run by a particular type of entrepreneur: white, male, money-born, and educated in a private American elite institution. These leaders have often favored the same traits in their employees. This lack of diversity has not only excluded employment opportunities for workers from different backgrounds, but has certainly also contributed to the spread of sexist and racist incidents in the industry. The culture of Uber has sparked so many complaints that the company has hired an independent investigator. The results contributed to the ousting of Travis Kalanick, the CEO who oversaw the bulk of the company's growth.
To be honest, these features are ubiquitous in the technology sector almost from the beginning, and it's not clear if the current generation of start-ups is worse than previous generations, or if more and more voices draw attention to the current disparity.
An attitude of "asking for forgiveness rather than permission". This famous adage, often attributed to Kalanick but going back at least to the former pioneer of computing, Grace Hopper, was at the forefront at Uber and taken over by other companies of that time, such as Airbnb and the start -ups Bird and Lime scooter. These companies thought that waiting for local governments to give them permission to operate would have slowed their growth, and they are probably right.
But in their haste to ignore the regulators, they rejected the idea that they could cause wider problems to the communities in which they operated. According to a recent study published in Science, Uber and Lyft have worsened traffic in San Francisco while reducing transit ridership, according to a study by researchers at the University of Kentucky. Airbnb has removed the housing stock from the market and has no doubt contributed to rising rents, according to a recent study by the Institute of Economic Policy. Scooters have strewn the streets of San Francisco before the city bans all unlicensed streets and is still crammed into public places in other cities like Santa Monica.
Visible representations of income inequality. Income inequality is a national problem, which is not specific to the technology industry or Silicon Valley. But the expressions of this inequality in the region are particularly obvious. Housing in San Francisco has become almost unaffordable, while homelessness remains highly visible and seemingly insoluble. "Economist" workers, like carpool drivers, enjoy stagnant wages and minimal benefits, while the technicians they serve serve free gourmet meals in the office. Buses populate neighborhoods in the early morning hours, bringing technicians to drop them off at Google or Facebook headquarters, while local transit systems are underfunded and often down.
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