Weekend Briefing No. 351

Welcome to the weekend. Here’s my November playlist. Enjoy!

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Prime Numbers

25,000—The beloved NYC bookstore The Strand issued a plea for help since its revenues are down 70 percent from last year. New Yorkers flooded it with 25,000 orders.

4,600—Since mid-April, the average selling price of a newly constructed house is up $15,841, with a third of the increase—$4,600—coming from higher prices for Oriented Strand Board, or OSB.

57—On Sunday, Pope Francis named 13 new cardinals. Now 57 percent of cardinals were chosen by Francis himself, 30 percent of whom were selected by his papal predecessor Pope Benedict XVI and 13 percent chosen by Pope John Paul II.

JUST Disconnect

There is a key challenge of the stakeholder capitalism movement: All too often, corporate goodness cannot be adequately measured and assessed. JUST Capital, a nonprofit spearheaded by hedge fund billionaire Paul Tudor Jones II and celebrities like Deepak Chopra and Arianna Huffington, has created an oft-cited industry standard for measuring stakeholder commitment. But its approach typifies fundamental errors in identifying which companies are actually “doing good” in society. Environmentally sustainable initiatives, fair pay, corporate philanthropy and statements about fighting systemic racism are important and admirable. But understanding stakeholder focus through systems like JUST’s fails to fully consider effects of companies’ business models on society, ultimately valorizing large tech companies that abuse their market power (like Amazon, No. 66 on the JUST list) and allow the spread of disinformation (such as Facebook, No. 21 on the JUST list). Such factors must be included when assessing how responsibly a company meets stakeholder needs. After all, isn’t the public an important stakeholder too? JUST Capital methodology exposes two more fundamental errors in how it considers companies’ responsibilities to stakeholders. First, its definition of “just” derives from public opinion surveys of Americans. Second, JUST relies on information voluntarily supplied by corporations themselves. Fortune (9 minutes)

230

This week, the US Senate had another hearing about Section 230. The question over Section 230 and how the internet ought to be regulated is one of the most important debates facing the tech industry. Unfortunately, American politics being what they are, holding the hearing a few days before the election means there was little true debate on policy. The hearing’s barbed exchanges pointed to how the debate over online speech has become increasingly polarized, with the companies caught in the middle. Among Republicans, Democrats and tech CEOs, there is agreement that the law is showing its age and in need of updating. And if you sweep away all the bad-faith arguments (there were a bunch of them in the hearing) and even worse policy proposals, you’re left with genuine questions about power and responsibility. What speech should tech platforms be allowed to host and to amplify? When they err, what is a just response? When a citizen is terrorized by online harassment, what recourse should they have? Facebook, Google and Twitter have signaled varying degrees of support for amending Section 230. Facebook has gone the furthest, suggesting that Congress set performance targets for the speedy removal of illegal content and requiring platforms to comply with them. Google and Twitter, by contrast, have encouraged restraint, noting that the ripple effects of such a change could be broad. The victims of a change to 230 are likely to be sites like Reddit, which relies on volunteers to help moderate the site in a way that an amended Section 230 might no longer allow. “What would be super unfortunate is if we end up throwing out 230 in an effort to punish the largest internet players for their perceived or real abuse of their dominance,” Reddit’s general counsel, Benjamin Lee, told Protocol. “Unraveling 230 would basically further ensure that dominance, while undermining the ability of smaller companies like Reddit to challenge that dominance with alternative models of innovation.” Platformer (12 minutes)

Startups & Society

This week, a new group Startups & Society Initiative launched. They are a group of founders, investors and researchers who believe responsible tech is both a business and societal imperative. Over the next few months, they’ll be interviewing influential founders, startup executives, investors and Tech & Society thought leaders to collect best practices, case studies and concrete tactics for building more ethical and responsible technology companies that we will make freely available to founders and the broader tech community. Current “Ethical Tech” conversations tend to focus on the technology itself (and the development of AI specifically) when technology is generally subordinate to the mission, values, business model, processes, operations and culture of the organizations that bring it into the world. Phin Barnes at First Round Capital notably said, “Great startup CEOs recognize very early that their job is not to build a product, but to build a company.” Accordingly, they aim to support founders with responsible company design, as companies are the containers that enable, incentivize and sustain the creation of ethical technology. There is a growing set of entrepreneurs, investors and VCs who have been innovating away from the “growth at all costs” paradigm that has dominated startup and tech culture. We are seeing Ethical/ESG governance boards, use of risk-surfacing frameworks like Ethical OS and Consequence Scanning, third-party ethical audits, “World-Positive” term sheets, stakeholder-value frameworks, the embrace of Public Benefit Corporations and a wealth of DEI strategies, among other concrete ways founders are trying to build tech companies more responsibly. Startups & Society Initiative (8 minutes)

Bento

Historically the concept of rational self-interest has centered around what an individual person wants right now. But self-interest can also be broader. There is a theory called Bentoism, an acronym for BEyond Near Term Orientation. For decades, we’ve operated like only this moment exists. We’ve maximized comfort, pleasure and financial gain while actively avoiding sacrifice of any kind. We’ve kicked so many cans down the road that there’s now a giant wall of them that we’re barreling into head-on. The Bento is a map to our new world. Creating new systems and refactoring existing ones to reflect this new map is critical work. As the Bentoist approach to value emerges, talented people will become drawn to its unique challenges. Using your skills to maximize financial value seems like a waste when a whole new frontier of value awaits. The Ideaspace (14 minutes)

Geothermal

After many years of failure to launch, new companies and technologies have brought geothermal out of its doldrums, to the point that it may finally be ready to scale up and become a major player in clean energy. In fact, if its more enthusiastic backers are correct, geothermal may hold the key to making 100 percent clean electricity available to everyone in the world. And as a bonus, it’s an opportunity for the struggling oil and gas industry to put its capital and skills to work on something that won’t degrade the planet. Vox (18 minutes)

Branding Fails

Advertising and marketing have always been ripe for missteps and pop-culture absurdity, but the emergence of the internet, followed by the rise of social platforms, created seismic changes in how we consume and enjoy media, products and even communicate with each other. That has made for some historically fertile ground for brand failure, and here’s a tour through the 25 most notable failures since 1995—with lessons that endure for those wise enough to heed them. The worst is the Bank of America’s “One” video. I totally disagree with Tropicana rebrand. I thought it was awesome. Fast Company (8 minutes)

Picking Projects

Here is a list of questions to ask yourself when you’re deciding whether to take on a project: (1) Is the project a purple cow? Imagine having a conversation at the last cocktail party (or even better, actually have one). Do people’s eyebrows raise and say “cool"? (2) Do you respect your customers? Would you be happy to see one if you were walking down the beach on vacation? (3) Is the problem a “tooth-ache level” pain point? Will they do anything to get rid of it? Does it itch or does it burn? (You want something that burns.) (4) Does the project leverage your unique ability? Why are you uniquely qualified to do it? @TaylorPearsonMe

Bookshelf

Red Pill by Hari Kunzru. After receiving a prestigious writing fellowship in Germany, the narrator of Red Pill arrives in the Berlin suburb of Wannsee and struggles to accomplish anything at all. Instead of working on the book he has proposed to write, he takes long walks and binge-watches Blue Lives—a violent cop show that becomes weirdly compelling in its bleak, Darwinian view of life—and soon begins to wonder if his writing has any value at all. Wannsee is a place full of ghosts: Across the lake, the narrator can see the villa where the Nazis planned the Final Solution. In his walks, he passes the grave of the romantic writer Heinrich von Kleist, who killed himself after deciding that "no happiness was possible here on earth." When some friends drag him to a party where he meets Anton, the creator of Blue Lives, the narrator begins to believe that the two of them are involved in a cosmic battle, and that Anton is "red-pilling" his viewers—turning them toward an ugly, alt-rightish worldview—ultimately forcing the narrator to wonder if he is losing his mind. Amazon

Most Read Last Week

On Milkshakes & Sales—After decades of watching great companies fail, the late great HBS professor Clay Christenson came to the conclusion that the focus on correlation—and on knowing more and more about customers—is taking firms in the wrong direction.

40—First Round Review compiled a solid list of 40 questions that candidates should ask in an interview.

Sustainable Competitive Advantage—The key to business and investing success isn’t finding an advantage. It’s having a sustainable advantage—something that others either can’t or aren’t willing to copy once your idea is exposed and patents expire.

About the Weekend Briefing

A Saturday morning briefing on innovation & society by Kyle Westaway —Managing Partner of Westaway and author of Profit & Purpose. Photo by Sam Bark.

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Weekend Wisdom

It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest. –Adam Smith

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