Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us

Amazon, highlights

50-something journalist Dan Lyons wrote Disrupted back in 2016 about his experiences working at a startup (Hubspot, tl;dr: lots of toxic techbro culture and ageism). In Lab Rats, his colorful writing and outsider perspective insight into the tech industry is back and it’s a fun read that seems to capture the zeitgeist: recent VC-fueled movements in tech/capitalism aren’t as good as we’ve been led to believe. Case in point, consider huge recent branding efforts by Facebook/Uber — as Lyons points out which is like what tobacco companies were doing post-Surgeon General warning, a kind of “here’s my mea culpa, so business as usual.”

His book is like Piketty’s Capital toned down for millennial/plane digestion, and is interesting in its scope and copious references to modern tech titans for both good (more equality) / bad (because selfish motive: scared of revolution) reasons.

Overarching message: shareholder capitalism is no longer working, and, seriously, why is still everyone treating Milton Friedman’s 1970 The Social Responsibility of Business Is to Increase Its Profits as the bible in 2018. And duh, your employees will do their best work when they’re at their best, not constantly surveilled and fearful they may lose their job at any time.

Specifically with regards to how SV is making work miserable for the rest of us, he outlines 4 factors:

  1. money, by slashing wages and retaining corporate profits, companies are taking $2T away from workers every year: (a) wages down 52->46% of GDP in past 4 years, (b) bottom 99% of workers take 78% vs. 92% of all wages;

    1. Why does Amazon make so much and pay so little? They killed a $275/head Seattle tax meant to pay for homelessness intervention, link, which would have cost $12M; recently raised wages to $15 for warehouse workers, but took away their ESOP, link; also seriously backlog ESOP so most people quit /leave in 2 before they can get 80% (5-15-40-40); 200 ambulance calls/y to UK warehouses, most dangerous place to work

    2. if minimum wage tracked productivity growth it would be $22, if it tracked 1% income growth, it would be $29; atm federal minimum is $7.25

  2. job insecurity, thanks to a new idea of employment: gigs not career; inspired by 2009 Netflix’s McCord’s (head of HR) and Hastings’ SlideShare (team, not family) contravening previous ‘HP Way’ (family, not team), and later LinkedIn’s Hoffman’s idea of (2 year) tour of duty

    1. Exacerbated by rising global competition (India/China) for fewer jobs (tech) and democratized access (Google, Coursera), tech companies can really grind their employees who are handcuffed to their stock options

    2. McCord’s ideas are popular though: Sheryl Sandberg said “[her code] may well be the most important document ever to come out of the Valley.”

      1. More McCord: employees should no longer expect their managers or anyone at the company to help them with career development or acquiring new skills. The company doesn’t have time for that. “Managers should not be expected to be career planners. In today’s fast-moving business environment, trying to play that role can be dangerous.”

  3. change, having to constantly deal with new workplace tools and business ideas (Agile, Holacracy, both of which Lyons rips the sh*t out of)

    1. it’s traumatic (more trauma) and ineffective (relatively: n=1500 executive survey, 30% of change initiatives not producing lasting improvement)

    2. mainly, Lyons says, large old companies trying to be new/dynamic; some sh*t on Ford

  4. dehumanization, this seems super topical with the rise of AI (see notes on AI Superpowers), starts with crazy example of France Telecom trying to stress engineers into quitting (by making them work in call centers)- executives in lawsuit right now, link

    1. tech = more surveillance and more KPIs = more pressure to perform (like a robot) WHILE knowing that the more automated / less creative your work is the more likely it will be taken over by a robot

      1. “Hoping to save money, companies now automate every aspect of their organization, from sales and marketing to customer support. They are even automating HR, a department that actually has the word “human” in its name.”

    2. working at Amazon? Apparently feels like being plugged into a “continual performance improvement algorithm”

    3. Uber and psychologically manipulating drivers, link

    4. HireVue… owns “A complete psychographic profile of you exists—the blueprint of your brain, every inch of your wiring—and you have no control over it. Apply for another job, and the system adds to your profile. Over the years, your profile becomes richer and more granular. Can you imagine what that information would be worth to a political party, or certain government agencies? And what they might do with it?”

    5. Bridgewater and Dalio’s PriOS, link, hopes to be running fully 2020; working there like being part of an experiment, constant assessment

And the VC argument basically goes $$$$$ has attracted toxic tech bros to SV who use the gig economy (1099 > W-2) as an excuse to under-treat employees. Also, concurrent popular narratives of hustling and overworking, but which are primarily financially self-interested vs. old Ford/HP way. Some notes on lack of diversity in tech too, see recent Facebook has a 'black people problem,' says former employee who quit this month.

It does end on a good note though, with references to Basecamp’s super enlightened founders (32 hour work weeks in the summer!!! and more).

Summing up the book’s references:

Good people

  • David Hansson (created RoR) and Jason Fried, Basecamp; strict 40 hour work weeks, no chat function in Basecamp because of goal that every employee (at least at Basecamp) should be able to get 8 hours of uninterrupted work (please), simple flat pricing model that doesn’t profit-max: “Why is software pricing so complicated? Because people are trying to extract maximum value. I’m not interest in maximizing anything. Are we leaving money on the table? Yes, every day we are. But we don’t want to be nickel-and-diming people. It all flows from what kind of company you want to be.”

    • success means staying in business, “People tell me, ‘Steve Jobs could not have made Apple if he took Fridays off.’ Well, I’m not trying to make Apple. And I don’t care what Steve Jobs did.””

  • Dan Teran, Managed by Q (like Handy), all employees are W-2 with health benefits if they work >30h, and promotes from within including from field agents; knows his people

  • Howard Schultz, Starbucks

  • Yvon Chouinard, Patagonia, stakeholder capitalism including employees, customers; office closed every other Friday so employees can spend time with family / go outdoors (like REI?)

  • John Mackey, Whole Foods (pre-Amazon): “business can elevate humanity” Conscious Capitalism

  • Jay Gilbert, sold AND1, behind B Labs, certified companies as B Corporations, an assessment of employee welfare; getting more popular: 2500 today vs 205 in 2009, incl. Warby Parker, Ben & Jerry’s, Patagonia

  • Zebras Unite, funding companies that can make a profit and improve society; Kapor Capital, gap-closing investments

  • Hilton, all executives have to work at least one week as housekeepers / dishwashers / bellhop

Neutral people (self-interested)

  • Chris Hughes, FB co-founder, new economy is “going to continue to destroy work,” wants UBI

  • Nick Hanauer, sold aQuantive to MSFT, 2014 TED “The Pitchforks Are Coming for Us Plutocrats” link

Bad people

  • IBM, GE, Verizon, AT&T, raiding/reducing employee pension plans via myriad ways: use it to pay health benefits, sell business units and include pension money, switch cash plan to 401(k); IBM in 1999 $7B pension surplus, in 2017 contributed $500M and still in deficit

  • Mark Pincus, Zynga, forcing employees to return stock pre-IPO; then at IPO, binding employees into a lock-in period

  • Keith Rabois, apparently Twitter rants

  • Tesla, trying to fire factory workers for unionizing, link

  • Amazon

New classes of people:

  • automaton class: Uber drivers and other gig-economy workers who are “treated as literal cogs in transportation and delivery machines.”

  • precariat: those who lack secure employment or predictable income, and suffer psychologically as a result.