BuzzFeed recently reported how Brian Acton, the cofounder of WhatsApp, encouraged students at Stanford to delete their Facebook accounts.
Tech's inability to regulate itself is why the #regulators are coming: “answering to Wall Street, is what’s driving the expansion of invasion of data #privacy and driving the expansion of a lot of negative outcomes...I wish there was ways to rein it in.” https://t.co/uqtOp1s0SB— Roberto Veloso (@digimkr) March 19, 2019
Although I read the article because of the attention-grabbing headline: The WhatsApp Cofounder Who Sold To Facebook For $19 Billion Tells Students To Delete Facebook, I found the most interesting aspect of the article to be what Acton said about the pressure of entrepreneurship. The article detailed how Acton’s decision to sell WhatsApp to Facebook was influenced by the pressures he felt to satisfy employee and shareholder expectations. From his perspective, the only rational choice was to sell because of the enormous amount of money that his employees and shareholders would make.
I find it hard to second guess his decision but believe that if capitalism is going to be a sustainable economic system, change is going to have to come to how we do business. There’s no doubt that business, and especially tech business, is in a phase where everyone is looking to make a quick profit with what amounts to a short sell. If capitalism is going to serve as a vehicle with the potential of lifting people up out of poverty to a better life, this era of the short sale must come to an end. Either business leaders are going to have to start placing greater emphasis on long term sustainable profits or risk regulatory intervention by the government.
In his talk at Stanford, Acton bemoaned how chasing profits was driving the erosion of data privacy and hoped:
I wish there were guardrails there. I wish there were guardrails there to rein it in.
Although I’m not sure that any guardrail would have helped in a deal as big as the WhatsApp sale, I see a glimmer of hope that American business is about to turn the corner. I’m hopeful that, as more states authorize and young business people learn about benefit corporations, this trend to chase the quick profit, despite harm that it may do to society can be reversed. Otherwise, I have no doubt that once the public outcry reaches critical mass, the government will create guardrails.
These guardrails will likely result in the imposition of new taxes or regulations with the aim of ensuring that cannibalistic capitalism doesn’t end up destroying the economic engine which drives our country. I think it’s time that enlightened business leadership try a little harder to keep businesses in the “in it for the long run” lane, without the guardrails. Not only will it be good for society, it will be good for business.
Copyright © Roberto Veloso, Attorney at Law. All rights reserved.