Inc. – What Twitter, Google, and Politics Have in Common

Read this interview at Inc.com

By Helaine Olen

When Americans go to the polls next week, they will be finalizing an electoral cycle characterized largely by resentment–and Doug Rushkoff, for one, mostly blames the changes spawned by the internet.

Instead of the once-promised glorious new age, one that would free us from the tyranny of the corporate state, we got income inequality, the housing bubble, increased corporate power, and, now, a presidential election like none other in our history. And Rushkoff, a longtime media theorist and author, says the tech industry is partly responsible.

The problem, he says, is not the digital economy itself, but the fact that it adopted an economic model that no longer works. “The conflict here is not really between the 99 percent and the 1 percent. It’s not even stressed out employees against the companies they work for or the unemployed against Wall Street so much as everyone–humanity itself–against a program that promotes growth above all else,” he writes in his most recent book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity. (The title is a reference to San Francisco protests in 2013 and 2014.)

I recently reached out to Rushkoff to discuss the book and how the economic problems he identifies are playing out in both politics and private business–including at Google and the currently much-beleaguered Twitter. (This Q&A has been edited and condensed for clarity. And in the interests of full disclosure, Rushkoff mentioned my book Pound Foolish, which he blurbed, in Throwing Rocks at the Google Bus.)

You write about Twitter’s problems in your book. What has it done wrong?

I feel like I’m watching the slow death of Twitter. I liked Twitter because it’s super simple. It’s an utterly transparent, easy-to-understand messaging system. People that subscribe to me see my messages in their feed. It isn’t asking anything of me. Every once in a while there was an ad in the feed. I knew what it was. They are making money off this service. This is good. Everybody’s happy, right?

It turns out no. There’s not room for that. Wall Street right now considers Twitter an abject failure because it turns out that they can’t figure out how a 140-character messaging app can make more than $2 billion a year. That’s not the way to make money with a company like that, a company that has a great sustainable revenue stream. Twitter could last a long time as a $2-billion-a-year business. It’s not allowed to because the investors want home runs. They want 100 times that. They want $200 billion dollars a year or bust. A single or a double’s not possible.

Why does your book throw metaphorical rocks at Google?

At first, Google represented the good guys. There were two kids in their Stanford dorm room who were going to take down Yahoo, which was the big Wall Street company. Now, Google has become not only one of the biggest companies in the world, but now even a holding company. They’re appropriated the sharing, good-for-the-world ethos of San Francisco as a brand image, while actually working against all of those values.

You think Google fell victim to something you call the growth trap. Can you explain that?

One day they took too much money. What if Google had grown a little bit slower, but then got to stay one of the good guys? It would have been way better. There’s no reason to grow that much, but that’s really the growth trap.

When you talk to the CEO of a Fortune 100 company, they’ll say, “My shareholders are demanding 7.2 percent growth this year. The only way I’m going to be able to show that growth is by selling off one of my productive assets. It’s like amputating one of my good arms in order to show growth on the balance sheet or by firing 10,000 competent employees.” What the CEOs are realizing is that the long-term sustainability of their companies, or the long-term sustainability of the markets on which those companies are relying, is being surrendered to show growth because that’s the prime, core command of the economy for the last 700 years.

Our economy is doing exactly what it was programmed to. It’s just that when you do this, on digital steroids, it starts happening in more extreme ways. That slow suck that sometimes people and nations were able to recover from now is a super-fast suck that we don’t know how to deal with.

So what do we need to do instead?

What I’m talking about is pre-distributing the means of production before the fact. What does that look like? Take WinCo, the West Coast chain that’s eating Walmart’s lunch. It’s the same business model as Walmart, except the workers are the shareholders. The workers are paid more. They own the company. They treat their regions differently because they live in the towns where they’re working and they own the company that’s impacting their towns. They have just as good prices as Walmart and so they beat Walmart. They have better customer service and better employee retention. That’s distributive.

How do you convince nascent companies to go along with this?

You have to show people that the probability of having a total monopoly unicorn business is very low. It’s 1 out of 100,000 that you will get to be Facebook, Google, or Exxon. It’s really hard to be one of those. I think more people are looking at that and saying, “You know? Fifty million dollars is not so bad. No, I won’t get to go to certain parties and I won’t get on the cover of certain magazines, but I’ll have $50 million.”

Right, but all we see are the companies and people who won the lottery, as you put it. How do we convince people to change when that’s the model?

I recently went to Silicon Valley, and I was trying to argue to young developers that tens of millions of dollars as your exit is enough. Be happy with that. But there’s a certain ego thing. They want to be Mark Zuckerberg. They want everyone to know who they are. On the other hand, there are a lot of people out there that are realizing being a millionaire and working for a living is more fun than trying to be a multi-billionaire and never working. They’re kind of seeing that.

Basically, if you set your sights–and I hate to call it lower, but let’s call it that–if you set your sights lower, you’ve got a company. God bless. You should be really happy with that. It’s partly the digital culture that makes you need to have 10 million followers. You have to be Elon Musk or Travis Kalanick in order to feel OK about yourself.

There are ways to do it. You just have to think about doing it small rather than at large scale or by creating a community of people who share in the value creations. Patagonia did by going private. Michael Dell did by going private so he could retake control of his company. His name is on it. It’s a family business in a certain way, so he wants to think about how can this business survive rather than not.

Once you take a lot of money, your investors will insist that you hit a home run. That means that you pivot away from your very viable and highly probable, profitable business strategy and adopt instead a scorched earth one-in-a-million unicorn strategy.

How is this all playing out in the politics of 2016?

People do have a sense that the system itself is rigged against them. That something is wrong and it’s wrong on a fundamental level. It’s depending on the operating system that’s killing us all. They get that an establishment candidate in one way or another is going to be supporting this existing system. What many of them want, just like the people who are throwing rocks at the Google bus, is someone to break the thing. Donald Trump, if nothing else, is consummate with the digital media environment. He’s an internet troll manifesting in the real world. He’s born of the angry comment section after any article.

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