The Kettle and Pot Ethics of the Tech Startup Universe



I have been reading with great interest and enthusiasm the latest tech blowup. It’s all drama, angry mobs, biting commentary, and social media nastiest. It is even better than startup reality TV shows or that comedic cable series about startups. What pray tell am I referring to?

Someone had the gall to create a service that sells reservations at hip, hard to book restaurants by booking said reservations under an assumed name. He then charges for said service. While it does not reach the parasitic nature of apps that sell public parking spaces or the moral bankruptcy of apps (and tech startup bro attitudes) demeaning to women, this entrepreneur received scorn from the tech community.

Why all the brimstone and fire? It seems rather over the top for how minor of a concept it is. What you have is a first-world person solving a first-world problem of the 1% crowd but is irreverent to the rest of the first world. If we are getting real here, people are getting hot and bothered about an app for trendy restaurant reservations, the type of places that are not exactly hurting for business, yet somehow people are calling this extortion?

Now he is the pariah of the San Francisco tech community and the latest in a string of insensitive douchebags leeching off the greatness of their fair city.  But no more leeching than say well-salaried techies working in the Valley, willingly paying exorbitant rents to live in cool yet edgy parts of the city while taking the corporate bus back and forth from work every day. I suppose the economically displaced peoples in those neighborhoods don’t really mind getting priced out of their homes and neighborhoods they have lived in long before tech was even a thing in the Bay Area.

What we have here is the whole kettle calling the pot black dilemma. We go crazy when we see the foul and forget about the plank in our own eyes. Calling out a lack of “ethics” is a really tenuous argument. We decry one thing but then turnaround and act in similarly ethically ambiguous ways when it fits our own personal model of right and wrong. For example, everyone is quick to jump on the fact that it is a business built on using assumed names because it is institutionalized lying. There are legitimate reasons however why people would provide assumed names for reservations, such as for celebrities or for certain business dealings. The name in this sense is merely a code to unlock reservation. So yes, lying is not something that should ever be encouraged, but it is not as terrible as something like tax evasion.

Whoa, what did I just say there?

Let’s say you book a room through Airbnb, did you check if your host paid taxes on the fees collected from your stay (they only collect in two municipalities currently)? If not, you may be supporting institutionalized tax evasion. Or how about the sales tax on those purchases you made online from ecommerce stores? If not, you may be committing tax fraud when you file your state taxes. Why else have states pushed to enact laws on ecommerce sales? Because good and honest people have flagrantly ignored the law as inconvenient.

There are plenty of other ethical conundrums to consider as well beyond the fun world of tech startups. Did you ever own a fake ID or drink at a local bar or restaurant while under the age of 21? Then you lied. Sure you may think it is a stupid law, but it is a law. If the bar or restaurant owner gets caught serving underaged patrons however, they get fined or even shutdown. You have just put an small business owner at risk just because you needed that drink. Did you ever drive over the speed limit? Sure, it may be a major inconvenience, but that is the rule of law on the roads. The same goes for driving while texting. It is all about your convenience over the safety of others that could be harmed for your actions.

What we have here is the angst and bitterness of a San Francisco tech industry that is afraid to admit what it has become. Suddenly it is shameful to have money or to live a life afforded by the largess of the tech industry’s bounty. They have become the equivalent of the Wall Street bankers of NYC. Now San Francisco has to deal with an influx of people it cannot accommodate under the strain of an outright class war. This upsets the tech industry set because they are mostly young and liberal-minded, and now they must confront the reality that they have become what they most loath.

The point here is that people are leashing hate either for completely wrong reasons or because there is some perceived unfairness in the system. Yes, services like ticket scalpers seem wrong. Injecting middlemen to make a profit on free access feels unjust. But there are many businesses and models built that do just that without anyone batting an eye. Ever use a concierge service and get to cut in line? Signed up for a premium credit card? They often provide access to events, services, and restaurants that would otherwise be impossible for the general public to access. Go to an amusement park recently? You can buy faster access to rides by cutting the lines if you are willing to pay a significantly higher price. You see, unfairness in many ways is simply perception. When one lone person does it, he or she is scum. When it is a multi-billion dollar company however, most of the tech industry tends to ignore those obvious ethical quandaries. For those of us that accept the trials and tribulations of a free and fluid capitalistic society, we are less conflicted by these minor issues. It is someone trying to create a market where one did not exist before, much in the same way many of our hot Internet startups are doing. If the service provides enough value, it is customers that will be the final arbiter of worth. That is exactly what the market said loud and clear when it comes to businesses like Uber and Airbnb, both of which flaunted local regulations, raised questions about tax treatments and insurance issues, and continues to battle plenty of legitimate challenges to their business ethics and responsibilities in policing their ecosystem.

So you might think I support the guy that created the site. The answer is no. There are better ways of building this type of system that are more credible and friendly to businesses. Cooperation is always a better a principle to work from for any business. I think the market will agree and find that charging for such as service is not a great value and that they would rather do business with a service that works in concert with restaurants.

My bigger concern however is about the long-term implications of a society where access is determined by means.  Democracy is not just a system of government, but a thread that weaves through the institutions of our businesses and economy allowing anyone the opportunity to freely patronize stores and services.  Restaurant reservations might seem unimportant, but they have always been representative of our barrier free and open society. Anyone could book a reservation and dine at the establishment. You may not have the means, but as I have always said, you can still browse even if you cannot afford the merchandise.

Maybe it is overkill to write such a long essay on the controversy of a middling service or even on a commentary about the hysteria of the tech industry’s bipolar politics. What is important however in this discussion is that there are actual ethical and moral considerations to contend with as our world becomes more digitally connected, technology becomes more “intelligent”, and our industry becomes more critical to powering the global economy.

Just consider the last twelve months when it comes to groundbreaking news in tech. We have learned of the NSA’s spying on our online communications which we continue to uncover more information about. There are also more public and damaging hacking debacles like the Target episode, further examples of institutionalized antagonism of women in the tech industry (such as at recent allegations of sexism at Tinder), the consequences of the ability to “erase” one’s online history, and the ongoing Net Neutrality battle to keep the Internet open and free to all traffic without discrimination. Then there are even more esoteric, long-view debates about the meaning and nature of work in a digital society where computers and robots are capable of performing most human work. What about the growing databases of personal information that are constantly gathering every minute detail of our day-to-day activities and how that has impacts healthcare access and economic freedom?

These are deep, long, and difficult conversations that unfortunately take longer than the attention span of most people. These are topics that cannot be judged, solved, or dismissed in the span of a tweet. It is easy to piss on some reservation service and oddly gratifying for some to thrash someone over social media. That requires no effort. It takes more thought and consideration to have an informed opinion about the things that will ultimately have a bigger impact on our lives and the world. Maybe we can give more than a passing interest to those questions and pay less attention to things that really do not warrant an ounce of our time and attention. It is about time we put the crowdsourced potato salad, Yo apps, and shady reservation services in their proper place.

Reprinted by Permission.
Image Credit: CC by hobvias sudoneighm

About the author: Mark Birch

Mark is an early stage technology investor and entrepreneur based in NYC. Through Birch Ventures, he works with a portfolio of early stage B2B SaaS technology startups providing both capital and guidance in the areas of marketing, sales, strategic planning and funding.

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