Although We Know How to Make Start-Ups Successful, Do We Know How To Make Start-Ups Ethical?

Alex Gorton

January 8, 2020

Apple, Facebook, and Google. These companies have become synonymous with technological innovations, money and power. Their beginnings are rooted in start-up folklore. These companies were born in apartments, garages and dorm rooms. Their founders embodied a unique blend of vision, creativity, and at times a recalcitrant attitude towards anyone standing in their way. History tells us that these select companies grew at a rapid rate, surpassing many other similarly situated businesses. They grappled with controversies, faced off against regulatory agencies and were subject to the court of public opinion. Analysts, commentators, critics, professors, authors, and consultants proffer theories for why these companies succeeded: they scaled up at the right time, they pivoted, they innovated. Ultimately, the folklore that has emerged from these giants has gone on to shape an industry. Fledgling start-ups have become convinced that if they model themselves after these companies that they will also achieve multi-billion-dollar valuations and worldwide acclaim. 

But something has happened while we’ve been enamored with the glitz and glamour of Silicon Valley and the technology industry at large. We’ve neglected to ask the question, “Although we know how to make start-ups successful, do we know how to make start-ups ethical?”

We’ve become so obsessed with the Stanford drop-outs and eclectic visionaries that at times we’ve turned a blind eye to the trail of ethical conundrums and social unrest these companies have left in their wake. Elizabeth Holmes emulated Steve Jobs when she was building Theranos, but ultimately created a company that was just smoke and mirrors. Facebook has profited off of questionably obtained data from its customers and is constantly embroiled in the debate regarding “fake news” especially in regards to the 2016 and upcoming 2020 presidential elections.  Uber has faced questions regarding customer security following multiple reports of sexual assaults on passengers.  In sum, we’ve become so obsessed with how to get “there” at any cost, that we’ve lost sight of what it means to get there while also doing what is right.  

In the television sitcom Silicon Valley, the fast-paced ruthless nature of the technology world serves as a key theme in the show. Although humorous, this parody is more accurate than not and draws attention to our assumptions about what “making it” in the technology sector requires. We do live in a capitalist economy. The first to market is generally rewarded, weaknesses are hidden and only the strong survive. As Facebook said, “Move fast and break things.” This motto has shaped the industry and has helped create successful companies, but arguably these are successful unethical companies. So, how do we create ethical companies? We should start with civility.

John F. Kennedy poignantly said, “Civility is not a sign of weakness.” Today we live in a society that has embraced a dog-eat-dog mentality. Although we reward altruism in the non-profit sector, we deem it to be fundamentally at odds with increasing one’s bottom line in for-profit industries. But that doesn’t necessarily have to be the case.

The need for civility isn’t exclusively between businesses. Civility is needed between employers and employees, companies and their competitors, businesses and their customers, and the private sector and the government. Civility isn’t just about being polite, it’s about taking time to contemplate and respect someone other than yourself. This responsibility should be borne by every participant in the technology sector, individuals and companies alike. Employees aren’t just cogs in a wheel, and customers aren’t just dollar signs. By holding each individual accountable, we elevate all of us to a higher standard of conduct.

Companies outside of the technology sector have found success while simultaneously implementing corporate policies and practices that embrace civility. For example, Costco Wholesale’s Code of Ethics states that it will conduct its business keeping in mind that Costco will “[T]ake care of [its] members, take care of [its] employees and respect [its] suppliers.”[1] Costco has   adopted several policies to ensure its employees are taken care of including providing both full-time and part-time employees with benefits. Furthermore, Costco has made it a point to adequately compensate its employees. In March 2019, Costco announced that it would raise its minimum wage to $15 per hour.[2]  For opponents that argue civility in business is fundamentally at odds with maximizing a profit margin, Costco’s industry presence for over 43 years and sales topping $116 billion in 2018 are compelling counterarguments.[3] Another example of civility in practice is Nordstrom. The retail giant once famously accepted a return of car tires despite no longer selling them, all in the name of customer service.[4] These stories demonstrate that adopting a corporate culture and policies that embrace civility is not impossible, in fact, it has been done by some of the most famous companies in the world.

I’m not saying that corporations should lose sight of their economic goals and the industry should grind to a halt due to a fear of acting swiftly. I do maintain that while being “nice” isn’t always easy or convenient, it can be necessary to ensure that the world around us is a place that we all are proud to call home. Corporate practices that embrace civility can be adopted at early stages in a company’s development. Being nice isn’t only for mature companies, it can and should be for any company, even start-ups.

Civility isn’t the be-all and end-all answer to the ethical issues facing the technology sector by any means. However, it is a good place to start. Perhaps by taking a step back and realizing that “civility is not a sign of weakness” we can reframe what it takes to be successful and ethical in the technology industry.

References

[1] Costco. Customer Service (web page). https://customerservice.costco.com/app/answers/detail/a_id/829/~/what-is-costcos-mission-statement-and-code-of-ethics%3F

[2] Natasha Bach. “Costco Raises Minimum Wage to $15 an Hour.” Fortune, March 8, 2019. https://fortune.com/2019/03/08/costco-increases-minimum-wage/

[3] Costco. Investor Relations (web page). http://investor.costco.com/static-files/b5294947-8164-432c-b5c6-5e122a0f5c29 

[4] Robert Spector & Breanne O. Reeves. The Nordstrom Way To Customer Experience Excellence.  John Wiley & Sons, Inc., 2017.