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Bradley Tusk is a venture capitalist, political strategist and writer.
A story in The New York Times last week managed to sound both ominous and promising. "A Global Tipping Point for Reining in Tech Has Arrived," the headline proclaims, detailing efforts by governments across the globe — the United States, Australia, China, India, Russia, the EU and others — to bring the world's largest tech companies to heel.
Citing that the 10 largest technology companies have a combined market capitalization of more than $10 trillion — which would rank them as the world's third-largest economy if Apple, Amazon, Tencent and the others ever formed their own country — the article celebrates efforts to finally start applying basic, sensible regulations to those companies. Anyone reading this already knows that some level of government regulation of mega tech giants is long overdue. But obvious as that is, there are still two key points to take from this story that should matter to anyone working in tech today.
First, while maybe we can't fault the tech giants for not reading every political tea leaf correctly, a lot of this was avoidable. Take Facebook for example. For years and years, Facebook resisted all attempts by the U.S. government to come up with any basic standards to moderate content. Facebook insisted it had everything under control, it could handle the challenge all on its own, no need for anyone else with different perspectives to participate or weigh in.
Anyone who spends more than a few minutes on Facebook knows that the company has very little ability to keep its content from turning toxic quickly, and everyone who has successfully managed to avoid Facebook learned that lesson on Jan. 6 when angry mobs, organized on Facebook, stormed the U.S. Capitol, looking to overthrow the government. Pretending to be able to independently moderate content was a mistake and instead of this being a societal problem that the government, academia, nonprofits and technology companies were all working together to address, Facebook instead owned all of the culpability. Any third-rate political consultant could have told you a decade ago how this would turn out.
The harsh lessons that giant tech conglomerates are now learning are all Politics 101: Don't underestimate your opponent, publicly get out ahead of problems before they occur, anticipate the criticism coming at you and try to pre-empt it. Basic stuff. It's not that the leaders of those companies weren't smart enough to realize this, it's that they felt like they could continually outsmart regulators and never be held accountable for anything (and they either ignored their political advisers or their advisers were too intimidated to tell the emperor to put on some clothes).
But the second point is perhaps more important and more concerning: We cannot conflate all tech as one single-minded entity. My venture capital fund invests in seed and series A startups. While we hope that some of our portfolio companies will ultimately become big and important enough to one day merit antitrust scrutiny, right now, most of them have as much in common with Microsoft or Amazon as my sixth-grader's Little League team. If anything, the dominance of the top 10 or so tech giants put early-stage companies — and all the innovation they bring — at risk.
The same regulators trying to rein in mega-conglomerates should be doing far more to help new startups succeed, especially in the United States. Immigration policies in the United States over the past four years have limited the ability of startups to attract the talent they need to compete. The lack of U.S. investment in early-stage research and development puts domestic startups at a severe disadvantage. The attitude adopted by many U.S. cities and states that all tech companies are somehow evil and should be regulated out of existence is counterproductive and foolish. The lack of coherent federal policies around key issues like autonomous vehicles, artificial intelligence and cryptocurrency are only holding us back.
So, while the takeaway from the Times article is that global regulators are finally getting their act together, we still live in an environment where most tech companies (big and small) fail to appreciate what it takes to deal with government and politics and where most governments (big and small) fail to appreciate that their job requires more than wagging their finger at a dozen or so now sheepish-looking billionaire CEOs.
It's time we all recognize that, because until we do, we're going to keep seeing the same story where a handful of startups make it really big at the expense of having tens of thousands of successful tech companies innovating, creating jobs and wealth and living within the rules of a sensible society. Just like it wasn't rocket science to anticipate the political problems that the Facebooks of the world would encounter, neither are the steps needed to encourage competition and build a successful ecosystem. We just need to try.
Bradley Tusk (@bradleytusk) is a venture capitalist, political strategist and writer. He is the founder and CEO of Tusk Ventures, the first venture capital fund to work with and invest solely in high-growth startups facing political and regulatory challenges.