Elon Musk, Mark Zuckerberg and Sam Bankman-Fried… In a matter of weeks, tech executives have gone from modern-day heroes to unsympathetic entrepreneurs, guilty of spending billions of dollars of shareholder value, condemning thousands of jobs, even suspected of stealing from their customers. All the ingredients are there to feed movies and television series, such as the recent critical documentaries against WeWork and Uber. The books are even in the press. Michael Lewis has been following Sam Bankman-Fried for months, and Walter Isaacson is writing a biography of Musk.
The details of the FTX affair, whose bankruptcy leaves thousands of small investors in the straw, under the pass with the passive complicity of the investment funds and the media – who hastened to remove the portraits from their websites who flatters the young boss. Musk’s Twitter take is filled with an assortment of facts that Hollywood screenwriters would gleefully churn out: the director of human resources throwing up in a dumpster after being ordered to fire hundreds of people, the scorn meted out to teams with tweets, the email offering employees to work hard or quit, then the pathetic phone calls to try to keep them after seeing them flee the company en masse.
The way these individuals lead has drawn criticism from critics, from the $55 billion package awarded to Musk at Tesla to the shareholder situation at Meta, where Mark Zuckerberg controls 58% of the voting rights using only 13% of capital, with no real counter. -power.
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On the borders of hubris
What do these entrepreneurs have in common? Infinite pride. Faced with directives from Musk to allegedly violate an agreement with the US consumer protection regulator, Twitter’s compliance and security officials resigned. To which Musk’s lawyer replied that the latter was sending rockets into space, so that he would not be afraid of the regulator.
Elizabeth Holmes, the founder of Theranos, was sentenced on Friday to just over 11 years in prison, and the FBI is still looking for Ruja Ignatova alias Cryptoqueen, whose scam is worth about 4 billion dollars. When everyone has put away the popcorn, what can we learn from the story of these men and women on the frontiers of hubris? We’re definitely on the cusp of a second tech boom, kicked off in 2012 by Facebook’s mega IPO. Massive layoffs have been announced in 2022 by tech companies, including Meta, Twitter, Salesforce, Microsoft, Stripe and Amazon, giants that never seem to shrink.
In 2011, in an article titled Why software is eating the world, Venture capitalist Marc Andreessen explained that although Silicon Valley has mainly disrupted information industries such as music, books and films, it will now attack tangible sectors such as health, education or transport. Ten years later, many of these companies have become very low-tech, unable to deliver on the promise of sharply reducing marginal costs or strong network effects. Placing scooters on the sidewalks of our cities or subletting offices does not a tech company make. After a final shakeout in 2021 following liquidity injections from central banks, investors turned their backs on these companies, leaving them bloodless. And, for the most established companies, shareholders are beginning to demand accountability. For ten years, at Meta, the free options given to the company’s managers and employees ate up 77% of the company’s cash flow…
Ultimately, the waning second tech boom could be good for the economy as a whole. Engineers and developers, who are paid less at tech giants or at unsustainable start-ups, will flow to other parts of the economy, where there is a shortage of their talents. A Google, Meta or Uber employee will certainly create more value for the economy when he works for a manufacturing company, a distributor or a hospital group.
The narrative of Sébastien Abis
Christophe Donner’s narration