Since its inception in the mid-20th century, Silicon Valley has consistently set the bar for innovation and entrepreneurship for the entire world. The companies created there and the products they have designed are instantly recognizable and have become integral parts of our daily lives.
However, there has been clear evidence in recent years of one area in which Silicon Valley deeply struggles. For all their innovation and technical brilliance, they have shown they are often incapable of handling political scenarios.
Examples of their political struggles are not difficult to find. Facebook has come under fire for running massive amounts of political ads during the election cycle, often containing inaccurate information. There has also been evidence these ads were purchased by foreign entities, who may have been trying to influence the election.
According to Patricia Zengerle and Dustin Volz of Reuters, several U.S. senators have drafted a bill to try to combat this issue.
Senators McCain, Klobuchar and Warner have introduced a bill called the “Honest Ads Act,” which would extend current U.S. laws covering radio and television ads to cover social media sites, such as Facebook and Twitter.
It would require the companies to make a serious effort to ensure foreign entities or individuals are not buying ads to attempt to influence on any type of American election.
In my view, leaders of these social media companies have been slow to recognize the threat and now the U.S. Congress is on the path to take serious action against them. Of course, suspicious political ads are far from the only instance of political naiveté on the part of Silicon Valley companies.
Back in 2016, Uber, under the leadership of then-CEO Travis Kalanick, went charging into the Chinese marketplace intent on conquering it like a capitalist crusader.
As one may have already guessed, this did not turn out well for the ride-sharing firm, as noted by Robert Salomon in Fortune.
Salomon said Uber was losing $1 billion a year and fighting a well-connected competitor in the form of Didi Chuxing. Interestingly, Uber ended up selling their market share to Didi Chuxing for a 20 percent minority stake in the Chinese company.
As confident as Kalanick was in his brand, he did not grasp how truly different the Chinese market was from the American.
The configuration of China’s unique political and legal system makes it difficult for foreign companies to achieve great success there. As Salomon explains, this has been the case for other American tech companies as well, including Amazon, Facebook, Yahoo and Google.
A final example of Silicon Valley’s struggles can be seen in areas where their idea of “disruption” is inappropriate.
According to Ross Baird of Medium, entrepreneurs in Silicon Valley often do not understand the world’s problems are more complicated than the ones they encounter in running their businesses—especially when it comes to venturing into industries such as energy, agriculture and financial services.
“It’s important to remember that startups in these industries will be more successful by understanding and partnering with entrenched institutions than by setting out to ‘disrupt the world’s problems,’” Baird said.
Basically, Silicon Valley has a hard time grasping issues for which they cannot engineer a solution or deliver a product for a keen consumer. The question is: what can they do to combat this problem?
To start, it would be helpful if the heads of some Silicon Valley companies would take the time to get a better grasp on the political arena. It can be tough to understand why foreign individuals or entities would want to target Americans via slanted and untruthful political ads.
Likewise, understanding the more personalist nature of the Chinese political economy might have been out of step for executives at firms like Uber, but it would have likely helped them to more effectively navigate their Chinese expansion.
Politics are fickle and filled with intangibles, and it is unlikely Silicon Valley will be able to “disrupt” their way out these conundrums. Until they embrace the fact they have some learning to do, Silicon Valley will continue to trip over themselves as they try to handle political matters.