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Can startups make the world a better place?

Can startups make the world a better place?
By Cristian Guerrero • Issue #2 • View online
The key promise of the XXI century: philanthropical capitalism. Is there such a thing? Should we keep believing?

Back in the late 2000’s and the early 2010’s the startup ecosystem was flooded with people wanting to make the world a ‘better’ place through technology and its disruptive effects. I’m convinced some of it was genuine, because I was one of them. Most of the work I did during my early career had two beliefs as pillars at its foundation:
  1. Technology can improve the lives of people, and
  2. Making the world a ‘better’ place is not at odds with being rich or successful.
Sadly, as I write this piece, I feel the cringe of my past naïveté pouring through. I thought I was being part of the birth of an age that’d shift power from evil businessmen and corrupt politicians to engineers and scientists, but I ended up witnessing the complete opposite: a new world where good intentions became corporate greed. I’ll explain why by starting with the basics:
A 'better' place?
I was trained an engineer, a problem-solver, a nail-seeking hammer; convinced that the world needed fixing and that humanity held the key to achieve that. But… who’s to say what’s better for 8 billion people and trillions of species and lifeforms that share the planet with us? No one. Think of the most beneficial technology mankind has developed, then dig deep enough into its history/future and you’ll surely find huge environmental impact, increased social inequality, people stepped over and/or some old-fashioned bloodshed. Some examples:
  1. Machine learning (aka AI): increased inequality, racism 2.0, Orwellian nightmares, and ridiculous energy consumption.
  2. E-commerce: awful employment practices, ungodly amounts of trash, and monopolistic practices.
  3. Smartphones: deadly mineral extraction that kills people and enslaves children, inhumane manufacturing practices, the end of privacy, and the rise of new spyware networks.
  4. Social media: tearing the social fabric apart, revitalizing hate and intolerance groups, boosting populism and the death of democracy.
  5. Bitcoin/blockchain: feeding organized crime, enabling arms trafficking and human rights violations, speeding up climate change, just to name a few side-effects.
It can’t be denied that all of these technologies and companies definitely made lots of people crazy rich and some of that money trickled down into the world; yet, how different is this from mining operations, oil-drilling or arms-dealing? It seems like wars are now fought in social media and the weapon is disinformation and fake news (just look at the damage done to the USA or Myanmar). The world can’t handle any more destruction, but the flame of consumerism still burns hotter than ever and its appetite for resources doesn’t hold back. We used to think that digital products couldn’t do harm, but it seems that they can punch just as hard and when we least expect it.
Regardless, denying that these technologies have had positive impact would be lying. I’ve benefitted greatly from these developments myself: both on the personal and professional level (I’ve built dozens of digital products on top of those platforms and made a living off of that). But, we’re missing the point. Thing is: startups and tech companies have promised to deliver a better world but they have only done so to their shareholders and inner circles. If we were to measure impact somehow and subtracted the negative from the positive it’d be either a zero-sum or we’d end up in the deep reds (especially if we consider the problems that are yet to come).
What to do with 'successful' startups?
This situation might be disheartening and a little enraging even. It’s completely natural and feeling it just means that you broke the spell of unsustainable capitalism, which is a great start. Now, this article will go further than just a simple critique, anyone can tell what’s wrong. So, how do we attempt to fix this?
Let’s start by saying that not all startups are having a net negative impact, some a doing a great job at fixing some of the inherent problems of capitalism; take for example the CEO that cut his salary for years in order to raise everyone else’s. It was entirely voluntary and it was the ethical thing to do, but its not the most popular place to apply for work (like Big Tech) nor does the company receive tax cuts or government stimulus to keep doing it. Truth is, contemporary capitalism doesn’t reward doing the right thing and making ethical decisions. I’ve tried to make capitalism work in a sustainable way on my end and it’s very though, you are swimming against the current: against people that criticize you for not growing fast enough, against the government that raises income taxes as you pay better salaries, against your competitors that lower their prices as you increase your costs and reduce your income by saying ‘no’ to unethical opportunities, just to name a few issues.
Ethics and principles are not valued in the current economic model and, even worse, greediness and predatory behavior is rewarded (Example: companies that rely on sweatshops to produce at high profit margins see their valuations go up, making them even richer). So, why should Big Tech or anyone do ‘the right thing’? Well, we need to either motivate them or force them to do so. This could be achieved through an overhaul of the economical system that includes:
  1. Achievable through legislation: Eradicate the idea that companies have the obligation to maximize profits. One of the biggest threats to humanity is this erroneous notion that corporations only task is to give the most money possible to their shareholders by ignoring any impacts on society. Not only are these highly toxic practices but, paradoxically, end up reducing the profits of the company in the long run.
  2. Achievable through legislation: Make companies and their shareholders liable for the environmental, social, political and economic disasters that they cause. We shouldn’t be bailing out companies that cause recessions, they should pay with the assets and resources that took them there.
  3. Achievable through legislation: Create incentives for companies to behave ethically. Let’s give tax breaks to companies that are taking people out of poverty (instead of the current tax model that incentivizes keeping wages awfully low) or that are reducing inequality. Let’s support companies that are working on reducing their negative environmental impact.
  4. Achievable by collective effort: Stop praising Big Tech and some of the most ‘valuable’ companies in the world. If they have some much money is very likely that they got it though exploitation (of humans and/or nature) and/or by ignoring the negative collateral effects of their disruption. We should celebrate and work with smaller companies trying to make capitalism a bit more sustainable.
  5. Achievable by collective effort: Transform the definition of successful. Capitalism currently rewards those who do everything they can to amass the most resources, those who step on other to achieve their goals and behave like a dragon. Even though some of these role models try to wash the guilt away by becoming ‘philanthropists’ later in life, there’s no way of erasing the damage that has been done. This shouldn’t be our definition of success, we should integrate the wellbeing of other living beings into it and create a concept that puts ethics at its core.
In conclusion, startups are NOT making the world a better place, but they could. In order to do that the system needs to foster it through new socio-economic mechanisms that boost ethical leaders instead of egotistical psychopaths. However, someone reading this might be asking “This sounds all fine and dandy, but isn’t this overhaul something like socialism?” to which I’d reply: we’ve become so brainwashed by Cold War era propaganda that anyone asking for a more just and sustainable world where the oligarchs lose some power and resources somehow become evil Socialists/Communists. Look, I’m on neither side of the fence here; I just think that Capitalism can be improved and that we can fix some of its most pressing issues before it’s too late. Because if we don’t, we’re all going to suffer -doesn’t matter if you are poor or a billionaire- once the Earth becomes unlivable those dollar bills won’t be very nutritious. And, let’s not forget what happens when the poor get desperate, just ask Marie Antoinette; so let’s start to redistribute that wealth, shall we?
Did you enjoy this issue?
Cristian Guerrero

Learnings of the past for a better future: trying to fix capitalism and slaying its demons one article at a time. Insights from a startup insider, digital product specialist and engineer uncomfortable with the status quo.

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