How to Repair the World
I've just finished an excellent book by Theo Baker called How to Rule the World.
Baker begins his book in the Fall of 2022, when he was a newly-admitted freshman at Stanford University. He opens with an on-campus meeting with a Silicon Valley CEO teaching an invitation-only, not-in-the-course-catalog class for Stanford undergraduates called How to Rule the World. The CEO, Justin, proposes to teach him and the rest of the cohort how to amass power, accrue enormous wealth and become one of the tiny number of individuals who direct industries and economies and governments.
In fact, Baker's book is mostly a fantastic story about journalism. By happenstance and hard work, Baker discovered research malfeasance by Stanford's then-President, Marc Tessier-Lavigne. Over the course of his freshman year, he tirelessly pursued the story, publishing it in a number of articles over the course of the year in The Stanford Daily, the campus newspaper.
Most of the ink and most of the drama in the book are about Baker's relentless pursuit of that story. It's worth your time just to understand what reporting looks like and why it matters.
But there's plenty of book to back up the title, though, and that's what I want to write about today.
Justin's class, How to Rule the World, is one instance of a campus-wide phenomenon: Silicon Valley executives and venture capitalists who descend on Stanford to find and seduce undergraduates. They host dinners, cater yacht cruises on the San Francisco Bay and organize events to build direct relationships with these young people. The aim is to convince them to drop out of school and start companies, accepting money from the investors who hope to make money off of them.
This isn't a new phenomenon. Some years ago, Peter Thiel launched the Thiel Fellowship to pay hundreds of thousands of dollars to college students to get them to abandon their University educations. I wrote about it at the time. Others offer to pay young people money up front in exchange for a share of their future earnings. My friend Bryan Cantrill hates the idea.
I came to Berkeley, and to Silicon Valley, in the late 1970s to be in the place where cool people were building amazing things. I loved technology, but even more than that, I wanted to create and deliver technology that did important work. Apple! Intel! The Valley was the center of the universe!
I wanted to build the things that people needed – that would make the world better. Stuff I worked on, like the Berkeley Software Distribution, Postgres and Berkeley DB, were intended to do useful work.
Granted, people made money off those projects! I did! But none of us doing that work in the 1980s and 1990s were doing it primarily for the money. We wanted to work on interesting problems. We built stuff that mattered.
Making money is not, on its own, an interesting problem. Accruing power is not, on its own, an interesting problem.
But the hordes of adults that Baker describes descending on the children at Stanford aim only to make money and accrue power. Stanford should be ashamed to offer its students up for so tawdry a purpose.
And of course Stanford isn't alone in this. Economic inequality is surging, and concentrated wealth aims to concentrate itself further. Businesses serve shareholders, not customers, not employees. Cory Doctorow wrote a book about enshittification.
From my point of view, rooted in the Silicon Valley that I found here five decades ago, all of this is a corruption of the ethic and the opportunity that drew me here. Money is the corrupting force. It has overtaken, swamped, all other considerations. It outvotes the interests of employees, customers, the communities in which companies live.
Incorruptible
Just last week, I read a timely counterpoint – maybe even an antidote – to the trends that Baker and Doctorow describe in their books.
Eric Ries is a Bay Area entrepreneur best known for having formulated, along with Steve Blank, the Lean Startup methodology. It helps entrepreneurs design products targeted at the real needs of real users. It's an enormously powerful framework for building a successful product, and thus a successful company.
A few years later, Ries launched the Long Term Stock Exchange, or LTSE, fleshing out ideas from his work on the Lean Startup. The exchange prioritizes the interests of shareholders, but also of employees, customers and other stakeholders, creating companies that are more durable.
Just this year, Ries has published yet another book called Incorruptible. Where the LTSE aimed to support publicly-traded companies whose stock could be bought and sold, the ideas in Incorruptible were aimed at earlier-stage businesses, which wanted to build a durable framework that would take them through pre-public and into publicly-traded life.
Incorruptible offers concrete advice for the founding documents that govern a company from its earliest days. It recommends specific action – notably, identifying the purpose of the business clearly and unambiguously – to ensure that a board of directors has the freedom to consider the interests of all parties concerned.
And Ries points out that these ideas are not new. Through the 1970s, when a business incorporated, its purpose was explicit and generally embraced the interests of employees and customers as well as its shareholders. That changed most profoundly during the Reagan administration, which is also where we see the beginnings of extreme wealth concentration.
Ries' book reminded me of another book I loved: The Homeboy Way, by Thomas Vozz0. Homeboy Industries helps convicts who've completed their time to reintegrate into society. It's a real for-profit business with storefront food service operations. In order to do that, it provides a rich collection of services and training for employees who haven't dealt with the pace and frenzy of life outside of prison for years.
Vozzo makes the point in his book that Homeboy Industries is mission-driven, beholden to its employees maybe even before its customers. I love that it's possible to create such a company, and to run it so successfully for so long.
There are plenty of social ills directly traceable to favoring shareholders over all other stakeholders. Baker and Doctorow tell us why that matters. Ries explains why we need to fix that, and how to do it. I predict we're going to see a lot more Incorruptible companies in the coming decade.