Andrew Hill wrote in the Financial Times “Like big banks, tech companies are protected by a bubble of their own making……and their representatives often exude a sense of entitlement and an overconfidence that technology can solve the worlds problems….”
He went on ”The risk is that technology titans undoubted success will breed complacency, which begets arrogance, and can lead to actual wrongdoing…”
We asked five entrepreneurs if they agreed?
Co-founder of Flooved Ltd
“Completely disagree this is like comparing Apple’s and Oranges. Big banks got into trouble because the individual actors were not subject to the downside of their own decisions and so acted in financially foolish ways.
Tech companies on the other hand are much more likely to be run by founders who have a substantial financial interests in the company and a board of investors who they are accountable to, thus the downside of any bad or overconfident decision is much more personal and will be quickly nipped in the bud.”
Managing Director Europe, Squiz and Funnelback
“The sheer weight of competition and speed of innovation in the tech industry means that it is nothing like high finance. I can’t think of a single website or service that if it went down would have the same impact as a big bank failure. So whilst there are riches in tech world, there is no one that wields the ‘too big to fail’ power that the CEO of a major bank has.”
“Overconfidence is a result of the opportunity given to tech representatives because of the complacency of all other industries for the last 5 decades or more.
While technology won’t solve all of the worlds problems, it can help with many. In saying that, it can and will create a lot of new problems. Just look at what is happening with home drone technology, the potential threats of 3D printing and we all know what happened with online piracy.
I have trouble associating the word complacency with technology companies. It’s the fastest moving and arguably most competitive industry in the world today. I don’t see this changing in my lifetime.
I would associate the word complacency and actual wrongdoing with the music industry, the film industry, banking, manufacturing, retail, transport and the public sector in general. These are sectors that technology has or is in the process of revolutionising.”
Co-founder and CEO Edxus Group
“Overconfidence in tech companies is a “necessary evil” as they fuel entrepreneurial ambitions as well as attracting investments and talents that are essential for innovation to flourish. With power and recognition however, overconfidence and complacency develops and the temptation to abuse a market position kicks in. This is not synonymous to Tech, but rather a capitalist temptation for any “winner takes all” industry. Nevertheless, complacency will inevitably lead to tech companies being surpassed by a smarter competitor and losing customer adhesion, just ask; Sony, Microsoft, AOL, Yahoo, Nokia, Blackberry etc. They all know about the pitfalls of overconfidence and have become humbler as a result.”
CEO of Eyetease
“Prior to setting up Eyetease, my experience as a new venture consultant required me to look at each client problem objectively and deliver a solution against tight specifications. You were trained to think of the most cost effective and timely solution, which I hasten to add was not always the most “technically advanced” option. All too often, companies (small and large) look to over complicate a customer or business problem by using technology to solve it. Today, Eyetease has created a ground breaking technology to solve a real world problem. Due to the unpredictable nature of taxi journeys, its impossible to know where the taxi will be at any given point in time. As a result, print (or vinyl) media becomes irrelevant 99% of its time on the road. Using digital signage (in a broadcast sense) on taxis merged with GPS and wireless technology, empowers media owners and brands to overcome this problem by deploying ads remotely and targeting ads by location, time of day and demographic. Perfect, problem solved! But if asked to apply the same technology to buses, I would probably say NO its unnecessary! Why? Because, unlike taxis, buses are restricted to a defined route. If you know the route, you can target the ad from the beginning. Also, unlike taxis, buses always return to a depot every night, where print ads can be updated easily by one person. Investing in technology in this scenario would be considered reckless and uncommercial. So the moral of this story is, technology doesn’t always solve the problem or (put another way) is not the only solution!
Its safe to say that the arrogance referred to in this extract derives from corporate culture and market status. Arrogance is not industry specific but a potential by-product of success under the wrong management – and I emphasis the wrong management – that can occur in any industry. Having said this, with consumers living and breathing the products and services of multinational technology companies, it goes without saying that these companies have immense market influence through this engagement, access to data and domination of consumer time. It is the role of our government and other governments to enforce compliance and turn the overused corporate term – “integrity” – into something a little more tangible, accountable and measurable.”
Thank you to Hamish, Stephen, Dean, Benjamin and Richard.
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