Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Wednesday, May 21, 2008

What Good Beats Evil Means


"Umair is fighting the good fight, taking the capitalist investor at his own evaluation, that he creates value by doing good.

The fact is, the capitalist is just an exploiter making his profit any way he can, whether he does good or ill.

I believe Umair when he says there are opportunities to do good AND make money investing in solving big problems ... but that doesn't mean there aren't opportunities to make money fucking the world up and causing misery too ... and people will take those.

While VC and good *can* be aligned, Umair's wrong to think it's an "inevitable" law of economics. You need people with integrity and virtue to see and do the right thing. Not just those following their self interest."


Interesting comment from Phil - but it couldn't be more wrong.

If you follow bubblegen, you'll note that, in fact, I do very much think business as usual is more often than not deeply evil - capitalism is assuredly not always good.

What's different about the edge is that good beats evil.

Guys, at this point, I say this every day, and some of you still don't really get it - don't understand what this simple statement really means.

I think perhaps that's because it's such a radical reversal of the way we're used to thinking about business.

So let me make this as absolutely, totally, utterly simple as possible.

Don't complicate it. It means exactly what it says: not a moral judgment - but as razor-sharp economics.

Yes, there are opportunities to profit by evil - from misery. But there are now greater opportunities to profit by doing good than by doing evil.

That's not a belief. It's an economic fact. If you look at the numbers, they are unambiguous.

Google didn't just launch Google Arms Trading. They launched Google Health. See the point?

-- umair // 1:17 AM // 10 comments


Comments:

Umair, great post.
You speak of the numbers that are unambiguous. Do you have some examples to share? It would be great to see a few examples to quantify what you have been speaking of.
// Blogger Kyle // 1:48 AM
 

Funny, I was just about to respond to Phil thus:

"What Umair's saying is not that it is inevitable that good and investment will be aligned, but it is inevitable that when they are aligned in a way that is designed properly, they will create returns that are far in excess of what could be earned by choosing the evil strategy."

I would say that the logical extension of this is that, if this is proven out in ways that are more publicly available than Umair's models, it will become inevitable that investment will be attracted by "good" (in the Umairian econ/strategy sense).
// Blogger Ethan Bauley // 2:25 AM
 

Apple is closed, pimps DRM and is still growing hugely and taking advantage of a market that can't get its hands on their products fast enough. My theory is it's because they've set the design bar so high, so if someone wants to beat them by being good they need to meet their design effectiveness first.
// Anonymous Farhan Lalji // 3:04 PM
 

I'm just a simpleton, so can you explain:

Companies love scarcity power. That's the position they want to be in.

Methods don't matter: buy out, destroy, outsmart, out-espionage, out-advertise or out-lobby them.

As long as you control the market of something people want, you can set the price and people will have to pay through their noses.

Certainly, on the average and in the long run, many products and services tend to commoditize and as such fall in price due to the lack of scarcity power by any dominant player in the field.

However, companies, esp. with information technology are trying hard to fight this.

I could use Microsoft, OOXML trojan horse and such as as an example, but I will not.

I will use Web 2.0 companies.

Most web 2.0 companies work on the following principles:

1. Offer 'free service' (it's not really free and not really a service either, but that's a subject of another post/comment).

2. Start collecting personal data of the user and sell it to the highest bidder (aka. privacy rape).

3. Start sucking the data out of person's domain of control (i.e. desktop, mobile phone, etc) onto their system. Put it inside proprietary format, in a closed, non-exportable container.

4. Offer more data sucking services and leverage network effect to spread through social networks.

5. When everybody along with their friends use your service, with all of their data is inside your service (in non-exportable format) and people are accustomed to your closed/proprietary workflow UI, then you have them in a path depdendency.

No more competition, very high barrier of entry for competitors, very difficult for users to switch or even properly compare alternatives.

That is, scarcity power and near monopoly to the max.

This is the wet dream of all VC backed WEb 2.0 companis.

They are NOT in it to 'be good' or 'win-win', they are in it to make the maximum amount of money to their shareholders and investors.

Why would this be any different in BubbleGen or any other situation?

What is the first principle mechanism in the base theory that changes this completely?

I don't understand, but I would like to believe.

Please explain.
// Anonymous Anonymous // 3:14 PM
 

anonymous... very cogent argument, you have nailed the leading edge of business as usual

i would argue that all your points are the exact reason all companies relying on such strategies will fail, or at best, plateau

why? technology is enabling a higher order of human conscious functioning to enter into the manifest world. the dominant quality of this higher order is what we have called the higher virtues, or in the east they have called dharma

in short, what value is, is changing

(in long, it's a book, maybe the one umair is about to finish and rewrite)
// Blogger gregory // 5:12 PM
 

Corporations are as incapable of evil as they are of good.

Corporations are immortal (thus sterile having no need of progeny).

Corporations are psychopaths (no consideration for the human beings they ride upon nor the natural environment they inhabit).

Corporations pursue survival as an imperial parasite.

So, whatever DNA they have (not evolved out of natural selection, but codified by the legal environment that permits their birth) does not have the wisdom of aeons, nor can it be rectified by self-medicated gene therapy - no matter your exhortations that this is their only salvation.

Any such improvements that do occur are illusions produced by corporate shape-shifting, precisely to win market favour.

The corporation is incorrigible, as incorrigible as a machine.

I think you're very perceptive, but consider your perception an insight into an ongoing game of chess and the behaviours of all the pieces upon the board. Old pieces might be persuaded to change, and new pieces can be created with different rules of engagement, but all pieces retain their natures (to persevere and conquer).

Yes, human beings share the chess board to some extent, and corporations that exhibit good behaviour (though they do not grok what 'good' is) will win their favour, but that will be pursued only so far as it is in their interest.

Have you noticed how the corporation of government is now a queen bee to her worker corporations that feed and patronise her?

People are but pollen.
// Blogger Crosbie Fitch // 5:22 PM
 

Umair,

Some of us do get it. And it is very simple, but deeply profound and world changing.

Thanks for pointing it out.
// OpenID brooksjordan // 5:20 AM
 

My uderstanding of that mantra is like saying that 'being honest beats being a thief' - with the progres of low enforcement stealing is less and less lucrative. This does not rule out that in some situations you can steal and get away with it - but the situation has changed since, let's say, ancient Rome. Or, if we are at ancient times, here is another analogy: 'paying workers beats having slaves'.
// Blogger zby // 3:12 PM
 

@zby

You're right, but the thing that's different about now vs ancient times is that it's impossible to "get away with it" in the long run, and everyone who matters to you will know about it.

As Jeff Jarvis said recently:

"When the people can talk with, about, and around you [AND BROADCAST THOSE THOUGHTS TO MILLIONS OF OTHERS], screwing them is no longer a valid business strategy."
// Blogger Ethan Bauley // 4:09 PM
 

Then why are people still shopping at WalMart? Do you think it's because they don't *know* the side-effects of that? Or because they don't *care*?
// Blogger Bill Seitz // 10:13 PM
 
 

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