The Arrogance of Tech

As someone who makes his living from the coffers of tech companies, it may not be the wisest move to criticize the hands that feed you, but I feel something needs to be said.

Many technology companies, and the tech industry as a whole, have gotten incredibly arrogant. In some cases, obnoxiously so.

Everywhere you turn, there are people in tech describing how they are completely reinventing businesses or business models or ways of doing business. We have VCs and other tech investors who have convinced a good portion of the world that it’s not only okay to lose a lot of money, it’s almost of badge of honor to do so. It’s all about growth; except now, for many, it’s not….

Similarly, only when tech folks have brought their particular form of magic to other industries, such as transportation and logistics, are they deemed worthy of thinking, talking, or writing about. (Uber, anyone?)

The common assumption behind these, and many other, examples seems to be that only people in tech can really figure these things out.

To be fair, technology really can be magical (I wouldn’t be part of this industry if I didn’t think so), and there are some other businesses that, on virtually any objective scale, are not really that interesting. But when the thinking extends to the point where people start to believe that the smartest people are only in tech, and only the things that they touch can actually turn to gold, well, you get my point…

The latest example of this hubris comes in the world of automobiles. Cars have been around for over 100 years, but it’s only been in the last few years, it seems, that they’ve taken on a new aura of importance.

Why? Well, it’s all about tech-enabled smart cars, connected cars, and eventually autonomous cars. Now that the tech industry has shown a fascination with cars, our four-wheeled friends have become cool all over again.

As a tech guy and a car guy, that’s actually an exciting development. But what I find rather disconcerting is that the assumption, once again, seems to be that only the tech industry can “fix” what’s “wrong” with the auto business.[pullquote]What I find disconcerting is the assumption that only the tech industry can ‘fix’ what’s ‘wrong’ with the auto business.”[/pullquote]

So, for example, it seems to be increasingly common thinking that big tech companies like Apple or Google would be able to get into the auto business with little difficulty, as long as they throw the right number of people and resources at the issue. The fact that Apple has supposedly hired 600 people to work on a smart car or other automotive project is given as an example of how these developments might occur.

No one, however, seems to consider the possibility that a GM or other large car manufacturer, with decades of automaking history, could hire 600 people to make electronics and software products that are better for smart cars and autonomous driving than what tech companies could build. (Oh, and in the process, ensure that they don’t give away to tech companies the value and critical importance that electronics now play in today’s cars.)

Admittedly, car makers don’t have much of a track record when it comes to software user interfaces on their cars, but how much of a track record do tech companies have to make enormously complicated pieces of machinery that comfortably move us down the highway at 65 miles an hour?

To put it another way, mechanical engineering has a different set of challenges than software engineering, but that does not make it any less difficult a task, nor require any less intelligent people.

Obviously, there are critical roles to play for technology components and software companies in today’s (and tomorrow’s) cars, as well as many other different devices. In fact, as we start to see the Internet of Things and other related trends start to really develop, we’ll finally start to see the entire tech industry focus less on being a stand-alone entity and more on being a true enabler for virtually every other industry. (Yes, even the less glamorous ones.) Who knows, we’ll probably even see new business models start to develop outside of tech, hard though that may be for some to believe.

In order for this industry maturation process to move along, however, the tech business may want to take a step back and start thinking more collaboratively instead of combatively. After all, the best rewards often come from helping others.

Published by

Bob O'Donnell

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.

780 thoughts on “The Arrogance of Tech”

  1. Between VC money being at least as important as sales/profits, and hype being as much a driver of early sales/reviews as the actual product, don’t tech (well, actually, all) companies have every reason to behave/communicate that way ?
    The Trumpization of business ?

  2. I think the issue is moreso that incumbents in the car industry are seen as having little incentive to change the status quo. They are in a position of wealth and power and influence so why change that?

    The onus then falls on outsiders to force through the changes they want to effect because very often, it’s people looking in from outside that see what the problems are.

    Do you think a smart watch could have come from Tag Huer or Rolex? Would the taxi industry have come up with their own app like Uber? You can’t have a new status quo without upsetting the previous status quo.

    1. I think that you are neglecting to acknowledge that hybrid vehicles and even plug-in electric cars have been brought to market by incumbent car manufacturers. Although Tesla may have contributed to forcing them to accelerate their efforts, incumbents surely felt an incentive to improve their cars.

      Even in the area of self-driving cars, incumbents have been hard at work using various sensors and software to make their cars intelligent. They have been working with auto-braking, auto-pilots as well as technologies to understand the alertness of the driver. Although they may have not been as audacious as Google, it would be totally false to say that the incumbents didn’t see intelligent vehicles as a means to significantly reduce traffic accidents.

      Even regarding taxi apps, you are wrong to assume that incumbent taxi companies would not have come up with a taxi hailing app. True, they may not have come up with the idea of normal people becoming spontaneous taxi drivers, but the idea of an app for hailing taxis predates even the iPhone. Although I do not have a definitive article, Nihon Kotsu, the largest taxi company in Japan used the GPS in feature phones to provide a taxi hailing app. Nihon Kotsu released an iPhone version in Jan. 2011, which is before Uber really took off globally.

      So really, I think you have to come up with better examples to make your point. Your thesis itself may be true, but I don’t think your choice of examples is sufficient.

      1. I am speaking from personal experience at least. Here in Singapore, trying to book a taxi from their call centre or their default app is an exercise in frustration. Long waiting times, and more often than not, you will not get a taxi. The various taxi companies have themselves acknowledged that their backend infrastructure is outdated, but the underlying message is “Yeah, but we are not going to do anything about it because it will cost a lot of money, and really, what choice do you have?”

        Then Uber came (which has yet to really take off due to very stiff regulation), and shortly after, a new app called “Grabtaxi” hit the market. This app sends out my desire for a taxi, together with my destination to all drivers in the vicinity and they can decide whether to take up the job or not. This has significantly improved the speed and efficiency with which I would call for a taxi, and the creator of the app is not in the taxi industry at all. He is just a normal everyday civilian with a little bit of time on his hands.

        That’s why I am rooting for companies like Uber even though I find then despicable as a company. I both admire and despise their willingness to completely ignore and circumvent the law. On one hand, you are blatantly disregarding the rule of law in a country. On the other hand, you are doing what other people will not, and doing what I secretly wished someone would do.

        As for cars, yes, we have improved sensors that make it easier to park or navigate a turn, but none that fundamentally changes how we drive our cars. I think the main concern by the incumbents here is about who will take responsibility should an accident happen. You can install as much tech as you like to make me a better driver, but as long as human beings are behind the wheel, there’s no confusion. The buck stops with me.

        It’s like Fight Club all over again. The people who form the status quo often have very little incentive to upset that status quo. Why risk what already works and is already profitable for you?

        So once again, it falls on companies like Google to try and challenge this status quo. Yes, perhaps Google is indeed being arrogant and ignorant in not knowing the stakes involved, and that’s precisely what I as an Asian admire about you Americans. Your willingness to break the rules first and ask questions later and assume that it will all work out in the end. That’s precisely why you can have heavyweights like Google, Microsoft, Apple and Amazon.

        1. Thank god I’m not American but Japanese 😉

          I think Uber and Google are really exceptions in their eagerness to ignore the law. Uber ignores local laws regulating taxis, and Google ignores copyright laws but somehow manages to score legal victories. Having said that, Google would not have been legal if they had stored their data in Japan because we do not have a “fair use” exception.

          On the other hand, I am not aware of Apple, Microsoft, Netscape, Dell, Salesforce, etc. ever breaking the law. It is certainly possible to be disruptive and still be compliant.

          I think it is very important to make a distinction between “sustaining innovations” and “disruptive innovations” as used in disruption theory terminology. Electric cars and auto-driving per se is sustaining and this is why incumbents are investing in these technologies. Similarly, taxi hailing apps are “sustaining” unless they break the law. That’s why Nihon Kotsu has had these apps even before Uber. If they break the law, they would be “disruptive” because no incumbent would do that.

          The wish to maintain the status quo will not hinder “sustaining innovations” but will often even promote them. Maintaining the status quo does not hinder innovation per se. What the incumbents fail to invest in are the “disruptive innovations”.

          1. What ?
            Apple have lost multiple lawsuits: the ebook one in particular.
            MS are a convicted monopolist.
            Netscape didn’t have time ^^
            Nothing comes to mind about Dell and Salesforce indeed, but they haven’t pushed many boundaries… I’d argue they’re more about execution than product/market innovation.

            I’m not sure I agree with your definition of disruptive vs sustaining. Self-driving cars for example totally disrupt a lot of businesses: insurance, car parks, taxi services, probably car ownership, driving schools, probably traffic policing…

          2. Yeah, I suppose I shouldn’t have said “ever breaking the law”, but antitrust is really a different animal.

            Regarding disruptive vs. sustaining, I’m only looking from the perspective of the company that would invest in the innovation. In this case, the car manufacturers. Hence the only issue would be if and when self-driving cars would negatively affect car ownership. I think it’s too far out to make an accurate prediction on this.

          3. Re disruption, let’s say something is disruptive when it has the potential to change the players and/or the size of a market significantly.

            Indeed, I don’t think smart cars instrinsically make it easier for new entrants. There’ll be a bit more value-add in the IT slice of the pie, but probably not that much, and carmakers are used to subcontracting huge slices of carmaking. So not disruptive in terms of actors.
            But disruptive in terms of market size for sure: your car no longer dies when you leave it; it can go do something else as long as it’s back by the time you need it again. It can pull double, triple, quadruple duty. That’s bound to make intra-family car deduplication more prevalent (especially because you’ll also be able to get the occasional extra car easily), and even globally dedupe car ownership, by lowering taxi costs to simply consumables + amortization + profit, taking out the wages part which is the biggest cost. Finally, since a smartcar knows your route (duh !) it makes ridesharing the least painful possible.
            All that combined is bound to make the utilization rate skyrocket. I doubt people will travel commensurately more as a result, so.. lower car sales.

        2. I think the taxi vs Uber situation is hard to understand because taxi
          )quality, I think even the definition of what a taxi is, varies so much
          country by country.

          In my country (France), they’ re utterly safe and reliable, you can book them over the phone (and the web) in a minute (they even remember your last starting place), days in advance or last minute, you can special-request handicap equipment, kid seat,
          credit card, people-mover size… and the cars are upper mid range
          (Mercs or BMWs, usually). And the drivers know their stuff (there’s an exam !) and… their language. Their a special section of the police specifically to check on taxis.
          I think in the US, French taxis would be called limos, because the US cabs I’ve been in over there were low-end, uncomfortable, rather dirty, and the drivers didn’t know the city nor, really, the language.

          In France, Uber is about price only. In the US, it’s about price maybe too, but also quality, practicality, availability, …

          As for using regular people as taxi drivers… I think most of the world has had that idea decades ago, judging from my travels… the hard part at airports and large train stations in most countries is to get to an actual legit taxi, behind the sea of grey-market drivers.

          As for smart cars and electric/low-emission cars… right now most everybody’s all talk. The few products out there… Tesla seem to have a 15-ish ¨share, the rest is “old carmakers” (Nissan Toyota and Chevrolet) in the us ( http://insideevs.com/u-s-plug-electric-vehicle-sales/ ). If there’s disruption in the cards, it’s not there yet…

          1. Totally agree on the situation with taxis. And when Uber competes on price, you have to remember that their price is not the price dictated by the laws of supply and demand. Their price is dictated by the astronomical amount of venture capital they have received, and the expectation of rapid expansion that their investors place on them. In other words, their price is totally artificial and could be toxic to the market and local economy.

          2. Well, their price is set by supply and demand more so than regular taxis. In large supply/low demand, they can’t be more expensive than regular taxi’s. At best they can only be more ubiquitous. In tight supply/high demand they jack their price (“surge” pricing) which regulated taxis can’t do. In this regard their pricing is more subject to supply and demand than regulated taxis, for good or ill.

            Ancillary to the topic at hand, I know. Carry on.
            Joe

          3. I agree that Uber does have a supply and demand model, which is actually one of the reasons why it might be outlawed in Japan. For example, Japanese taxis are not allowed to choose customers based on their destination (unless it is outside of their operational region). They have to treat every customer equally, regardless of economic value to the driver, unless there are clear reasons as described in the law. Taxis are “public” transport after all.

            However, the issue that I bring up is not this part of the model.

            I’m sure you’re aware of Uber paying an Indian driver Rs. 300 for a ride which the customer only pays Rs. 100. Uber is losing lots of money per ride in an effort to destroy/block competitors, and what funds this is their huge reserves of VC money. This is what hugely distorts the supply/demand equation, and this is what I have an issue with. Of course, I believe local antitrust laws should be what prevents this kind of predatory behaviour, but I think it is also so blatantly wrong.

            http://capitalmind.in/2015/10/the-economics-of-using-uber-in-india-for-drivers-passengers-and-the-company/

          4. In the US there is a city to city regulation issue as well. For instance I can hail a legit taxi using Uber in Chicago, but not in NYC or Atlanta.

            Plus in most large cities in the US a taxi cannot be “reserved”. That is a different category of service, regulation-wise. So when one “reserves” a cab via phone or online, you aren’t really reserving a cab. You are only automating the call you would make when you are ready for the cab. You will still be at the mercy of what taxis are available, if any, in your geography of need.

            Joe

    2. ?
      – Tesla are 15% of electric/hybrid cars in the US, the rest is Toyota, Chevrolet, Nissan.
      – Google are getting all the press, but a lot of other companies, including traditional car makers, have projects about as advanced: https://www.cbinsights.com/blog/autonomous-driverless-vehicles-corporations-list/
      – Several taxi companies had apps to summon cabs, but within the context of the law (certified cab + certified driver… at “certified” prices ^^). Uber did’nt invent jobbing, nor its use in the taxi business. Their main innovation is going illegal in a big enough way that they overturn laws ?
      – If you look at the history of smartwatches, the first ones *were* from watchmakers ( https://fr.wikipedia.org/wiki/Smartwatch#Historique ), but those were displaced by first sports bands, then computer watches. Current smartwatches are wrist computers, not watches, so no, I wouldn’t expect Seiko to make then, not anymore than I would expect Louboutin to make roller blades. Wholly different product, wholly different skillset, even though it’s worn on the same body part.

  3. To indicate and highlight that “tech” is not just Silicon Valley I offer you the opening of the “physicist’s prayer”

    “Dear Lord, All Knowing, and Almighty, please forgive me the sin of Arrogance, and by arrogance I mean….”

  4. It’s really just Uber that’s in a different category of “arrogant”. In fact the better description for them is a noun that refers to a certain anatomical orifice. The rest are just the plain old cockiness and confidence typical of people who think that they have the answer, which if they don’t, then what’s the point of being in business?

    As to the automobile business, we are looking at an opportunity that rarely comes up, where an innovation just might drastically reconfigure an industry’s list of big players. A change in primary motive source from internal combustion engines to electric motors completely flattens the old-line auto industry’s biggest barrier to entry: the immense complexity of the tech behind the modern internal combustion engine (that has to satisfy fuel and emissions regulations that were intentionally set at levels meant to force innovation). Who was the last successful major entrant in the car business? Hyundai. How long and how much money did it take? A lot.

    And no, GM cannot hire 600 people to make smart car electronics and software that can beat the tech industry. There aren’t enough of them lying around twiddling their thumbs, and they don’t have the money, and more importantly, the corporate culture, to lure them.

  5. This article reminds me of Steve Ballmer and also those guys at Palm and RIM dismissing the iPhone because Apple didn’t have enough experience to make a phone. Tesla made a far better car than GM has ever made with “no experience”. GM is probably the worst run company in history except for maybe Chrysler. If Apple and/or Google make cars, we’ll evaluate those cars on their merits.

    1. I totally agree. No wonder China is protective of its market.

      I do wonder how the perception of the East India Company differs between the countries that colonised and the countries that were (or narrowly escaped being) colonised.

      1. What bugs me is closer to home: the careless attitude to security, support, and compliance with specifications. “You’re holding it wrong” is pure arrogance, there’s no way to hold it in the user’s manual, and even if there were, the idea is preposterous. The same goes for security issues/updates, glass phones, …
        Tech is abusing the fact the legal system takes a long time to catch up. Gross lapses in security need to be punished as a matter of law, not customer pushback.

        1. When the CIA director’s personal email account gets hacked by high school students, and the director uses that account for sensitive information, I have to wonder what would happen if security lapses were prosecuted. I also wonder if it’s the tech guys that should be punished, or the non-techies that make the stupid mistakes.

          But yes, legislation would be a good idea to move things forward.

          http://www.theguardian.com/technology/2015/oct/19/cia-director-john-brennan-email-hack-high-school-students

  6. The article seems to miss the key point that the difficulty in car manufacturing is not making the car, it is the complexity in designing and implementing the car manufacturing process itself and setting up the supply chain, subcontractors and outsourcing the development of components.

    I am not expecting a wonderful computerised car from any of the incumbents (IT is just not in their corporate DNA), but their manufacturing expertise is not to be underestimated.

  7. Was the article about the arrogance in tech or the arrogance of tech people to be a car designer/manufacturer?

    Every profession has arrogance, every profession believes if not for them – no future to speak of, and every profession only has a handful that can afford to be arrogant and speak for the future.

    IMO, design and usability seemed to have been the game changer for rapid adoption. The technology has been there, but the convergence of two discipline has really changed not only the game, but behavior of industry. So, with that, I would say that designers are extremely arrogant.

    1. The formulation is a bit extreme, but indeed, extrapolating antennagate and the weekly bug/intrusion reports to the car industry is a bit frightening. Especially since even current relatively low-tech cars have been hacked every which way (locks, even drive systems).

      The technical and legal framework will have to evolve to encompass new situations before anything large scale happens. With luck, automotive security standards and responsibilities will feed back to pure IT scenarios ?

  8. The bit I find annoying is all the tech geeks who think self driving cars on the regular roads are happening real soon now. I ask them about what level the software will need to be certified at to avoid bugs and glitches or how it will adapt to failing sensors and actuators, and they just glaze over and it’s all, nope, tech will be perfect with no problems. Or I just get called a Luddite for asking honest, engineering questions.

    They also paint a picture of human drivers that, if it were true, my daily commutes would resemble Mad Max: Fury Road. The misanthropy and nihilism is rampant.

    Think of every whiny manbaby you grew up with being handed billions from the VC types. This has weaponized their vast arsenal of personality disorders. It’s not a pretty sight.

  9. As long of the governance and ownership structures are founded in a board of directors, and not a board of workers and users (if reliant on user communities to make a profit, such as in the case of uber and airbnb), the magic of tech companies is only on the surface.

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