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12 min read

The church of tech

The church of tech
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Is tech a cult? And if so, what are we worshipping? I've been working in tech for so long it is sometimes hard to see what all the excitement is about. To start off with the obvious: in technology companies and technology departments, the spotlight is very much is on the non-human part of the equation. This makes sense of course, given that it is the only part of the equation we have any control over. There are tech companies such as Humane, who claim to be factoring the human into their technology as much as possible, but in general I would say humans occupy maybe 5% of the mental capacity of people working in tech. There is always another technology, another framework, another project, or another promotion to get to before we can think about impact, adaptation, and usability.

That is not to say I haven't worked with great product leaders, product managers, UX designers and frontend engineers that try to do everything they can to factor in the human. Unfortunately, these are the exceptions rather than the norm. There seems to be an unbridgeable gap between the languages of design, emotion and feelings and the languages of technology, product, and progress. I don't have any experience developing hardware products, but I can image long iteration cycles often make it even harder to figure out what the human at the end of the factory line needs (for a good introduction I highly recommend Build by Tony Fadell).

The future is the past and all that (cc: Macbeth)

It goes to say, figuring out what people want is not an easy problem. Do you know what you want right now (a coffee? some tea? keep reading? cake? a holiday?)? Extrapolating this into the future, when a product or service will be ready to ship, for entire groups of humans, is even harder. This problem of balancing lead time with customer demand, once the exclusive domain of fashion, brokers, and communist central planning parties, has become a core task of advanced analytics departments. They use one set of technologies (bundled under ML – machine learning) to help companies make educated guesses about the commercial success of a product or service (food, clothing, experience, etc..) using data of past market and human behaviour. The problem is that a lot of technologies are evolving at such a pace that the CCP and your resident data scientist have no useful data on which to base their predictions. So what do we do instead?

Tech roulette

We run a high-stakes game of tech project and VC roulette, where money is being poured into technology development and implementation ideas with the hope of striking binary gold. To give some examples with extensive media coverage, a lot of money has been poured into unhealthy and (in 2023) unsustainable companies like Uber, into a few cases of blatant fraud (yay FTX), in industry monopolies (the 'Magnificent Seven'), but also into several hundred (2023) healthy tech companies. As a result of all those investments the technology sector is growing in most economic dimensions that matter–share of the labour pool, share of economic value created, and share of stock market valuations (~30% of the S&P 500 in September 2023). It is also the dominant force in stock market returns. In the first six months of 2023, the 'Magnificent Seven' alone accounted for more than 80% of S&P 500 returns, and the tech sector for well over 90% of all returns.

The magnificent seven protecting a village (from the magnificent seven).

Markets being what they are, a lot of that valuation stems from the hopes and dreams of investors returns (investors are human after all). Are their expectations and the tech sector revenue multiples they came up with inflated? The solid economic underpinnings of the technology sector seem to point to a macro trend that is more than mere market-generated movement. It looks at least a little less bubbly than dot.com (even if the 'more than 90% of all returns' is quite spooky). Just as Andreessen pointed out in 2011 that "software is eating the world", in 2023 every company is a technology company. That is quite funny, since technology in and of itself doesn't create value–at least, not for humans, or at least not until we have fully autonomous AI agents with their own P&L responsibility and some form of legal status. At the moment technology is used to automate manufacturing and business processes, speed up accounting, improve decision making and so on but none of those innovations directly impact human lives other than through greater reach and responsibilities or job loss.

I'm deliberately polarising of course, and like at lot of people in Silicon Valley I'm all for setting up UBI until we figure out what the post-tech world looks like, but that is not what I'm getting at. I'm actually questioning the sense and sensibility (looking at you, Jane Austen) of us as a species collectively investing all this effort, time and money in information technology. Why are we driven down this path? Who or what does it serve? Maintaining levels of welfare we in the West have gotten used to? There is ample evidence the pervasive spread of communications devices has contributed to people in the West being more depressed and anxious than ten, twenty or thirty years ago--probably more depressed than ever in the history of our species, because when you're being chased by a lion you don't have time to be depressed about it. So are we driving our species forward one pixel at a time? I'm not sure I'd qualify the ability to instantly share cute cat videos to millions of people progress on any metric. Is it competitiveness? There is good evidence that properly implemented technology can help a business beat its industry rivals by a wider margin, but is that it? It doesn't sound like we're producing anything new, but that we are just doing old things faster and more efficient... and even there, the productivity gains are mostly limited to workplace activities, so that most of the financial gains of these innovations end up in the hands of the founders, owners and shareholders of technology companies.

Two second order effects

So we (as in citizens and countrymen) are not seeing much direct improvement in the quality of our lives as a result of the growth of the information technology sector – unless you're working for a technology company, which as we said more and more people are doing these days. In fact, for non-tech Nancy it's quite the opposite. I've already hinted at a few second order effects of tech in our daily lives. Increased depression, anxiety, misinformation and polarisation are a few of the more obvious ones. I'm lucky enough to have grown up in the 90s when you could do stupid shit without the risk of getting splashed all over the internet, and I certainly don't envy kids today–peer pressure was bad enough when it was limited to your local high school, but with the near-absolute reach of technology it has become worse in so many ways. There are of course also some big upsides, such as MOOCs and other forms of digital knowledge sharing that give the brightest and best in underprivileged countries and communities access to the state-of-the art in science and technology, spurring human development across the globe. Those best and brightest have the potential to shape the future fate of nations, but in the present a whole generation in the West is growing up addicted to smart phones with little or nothing to show for their time online, except for maybe a nice case of brain rot. Since they are the ones who will be voting the leaders of the future into office, to me this is ample cause for concern.

Tech worker, ca 2023

The second second order effect is on the people working in tech. A lot of them–myself included, I'm not a hardcore techie and more or less rolled into it through my interest in economics and human development–are attracted to the growth mindset that has become prerequisite for most areas of tech work (there are a few weird holdouts–the COBOL mainframe programming language is still going strong 60 years in). Whether you are developing new cheaper and faster microchips or fighting with the latest greatest frontend framework, new is better and it better be new. This conveniently leads to an endless supply of work for people in tech, since each new hype requires us to reimplement existing solutions with the new and–of course–better framework, technology, protocol etc. The times a truly disruptive technology has comes to the fore have been few and far between in my limited experience–generative AI could be, but in hindsight big data never truly lived up to the hype, and neither did the metaverse, blockchain, and countless others. For most of these technologies (going back to the the Palm PDA of the 1990s), personal productivity gains were one of the key hype points. None seem to have delivered on their promise to date–except for maybe the internet as a whole, or as a get-rich-quick scheme for some of the lucky ones that jumped the gun. In terms of changing citizen lives for good, maybe the contribution of the entire tech sector to date should just be a footnote in the glorious history of Fred W. Wolf (the inventor of the home refrigerator).

Technology & value creation

That doesn't mean that technology companies don't create economic value–in 2019, Erik Brynyjolfsson, Avinash Collins and Felix Eggers found that the median value placed by respondents on foregoing a year of search engine access was set at USD 17.5k (EUR 16.6k) in 2017 money (as a side note, not having a toilet in your home for a year was the most pricey proposition in this massive online study). If we use that dollar amount and peg it at USD 20k PP in 2023, in a very unacademic and hand-wavy way we find that search engines alone will generate a little short of USD 7 trillion in economic value for the US economy (which would also make Alphabet massively undervalued with a USD ~1.7 trillion market cap in October 2023). The survey also indirectly showed, to get back to my argument, that the value technology companies are creating is relative to their contribution to actual work being done–the higher value placed on search engines vs social media (USD 322 for a year of no social media compared to USD 17,500 for search engines) was allocated to a large extent because people use search engines for work–for personal productivity gains, and as B2B and B2C channels. Today (2023), a higher median value would probably be allocated to social media access since more and more sales (and therefore revenue) from SMEs is driven through social media channels.

So what exactly is going on here? Information and communication technology–a facilitating, intermediary service, something that can either get more or less in the way of actual economic value being created, has become the biggest value and growth driver of developed economies. Does this mean that we (a collective we, we the species) have everything else figured out and can just rest on our laurels–all we need is better teleconferencing and more cat videos? With so many people in the world still living in extreme poverty, it doesn't seem like it. From a commercial perspective, the tech sector is building a digital version of the strip mall, with the promise of bigger reach and infinite (up to 8 billion) scale. That in itself isn't a bad thing – the rise of e-commerce has led to more customer convenience, and brick and mortar retailers and services have had to step up their game, leading to higher-quality experiences in the real world. It does beg the question of what the knock-on effects will be. The rise of strip malls led to the decline of city centres across the US, which resulted in a slow erosion of local communities that the strip malls never were able to replace. Will the shift to e-commerce have a similar effect? I don't know, and I'd probably need write a follow-up post just to answer this question... However, what I do know is that one of the first things I was taught in marketing analytics probably also applies here–never optimise a system on a single metric (thanks Remco!:)). Which in a sense is exactly what we have been doing in tech for the last fifteen or so years, going after reach /user growth at all costs, before nailing basic business fundamentals. Growth hacking–once a badge of pride and the defining characteristic of the tech bro–luckily seems to have lost some of its allure, at least partially due to a realisation that creating sustainable, healthy businesses cannot be done by indiscriminately burning investor money on marketing and operations growth (cc Uber, Lyft & co.).

An open mind

But if we ignore the focus on growth, what do we have left in tech culture? Can we still feel united with our brothers and sisters in sales without a growth mindset? Should tech bring back the cult of the open source hero, or perhaps adopt citizen activism values? After all, open source software has been the crucible and glue of the digital world since the dawn of the internet. The digital communities from which many of the core digital frameworks and technologies of today originated are one of the purest expressions of this side of tech culture–the technologist driven by curiosity to tinker with existing technologies and stumble onto new exciting possibilities and paradigms by just by playing and applying their mind.

As with most things in life, xkcd said it better (source: https://xkcd.com/2347/)

So, after running through the usual suspects and epithets slapped onto tech in society and the media, I think that this is the defining trait of the tech mindset–an open mind. The openness to adapt and adopt technological changes, of course, but also the openness to look beyond org walls, country borders, beyond existing technologies, and collaborate with people around the world on projects and pet peeves that motivate you personally and create value for your community, however you choose to define that community. If that is the church of tech, I'm willing to attend (to) another service.

Some final thoughts..

It also means that if we ignore user growth and revenue growth, there isn't actually that much tech does terms of social impact except keep all the incredibly smart, nice, positive and resourceful people working in the industry happy. The problems they (we) are working on–helping organisations thrive, improve customer and user experience, driving the P&L etc–are maybe a little less transformative than we've been led to believe. There is a lot of business as usual, and a lot less actual disruption than Silicon Valley marketing pamphlets, VC newsletters and our over-stroked egos would have us believe (case in point: the current genAI goldrush).

What I want to do in this blog going forward is explore some of the areas where tech could make a real impact. If you want to follow me on that journey, feel free to subscribe below and get notified when the latest edition hits the interwebs (yes, I'm that old :))!

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