By Gary Griffiths, CEO
In many ways, Silicon Valley is a land of contrast. From the sprawling estates of Woodside, Atherton and the Los Altos Hills to the graffiti-laced neighborhoods of East Palo Alto and East San Jose. It’s a necessary pilgrimage destination for tech elites and wannabes, but also the home of the Rosicrucian Museum, a replication of ancient Egypt, complete with real mummies and a reconstructed tomb. And for a region noted for its creativity and technology breakthroughs, Silicon Valley actually sets new standards for conformity, groupthink and following the crowd. Once a technology becomes noteworthy – usually signaled by the endorsement by an A-list VC – every other venture fund has to take a stake in the space, whether it’s a breakthrough like internet search or a less successful mania like nanotechnology.
Compounding these ironies is the fact that in a land where bazillions of dollars are made, and unicorns flock like pigeons, so many in Silicon Valley eschew the evils of making money, instead only trying to “change the world.” I don’t know when this altruism began, perhaps when Steve Jobs allegedly asked Pepsi President and Apple CEO candidate, “Do you want to sell sugared water for the rest of your life, or do you want to change the world?” Whether this was the catalyst or not, generations of entrepreneurs and investors have held to the noble – if arrogant – view that it’s not about the money, rather making the world a better place.
This selflessness, genuine or not, has melded with the Valley’s militant sense of political correctness, spawning a movement of corporate social responsibility that has seen companies adding staff to manage community relations; investment in activities viewed as environmentally friendly, aimed at eradicating poverty or feeding the world; and even the creation of funds that only invest in companies that are considered “do-gooders.” But before burning me as a heretic at the stake of making-the-world-a-better-place, consider the shareholder: are corporations truly responsible for saving the world? And if so, how do these investments, diverted from activities that could arguably grow the top line or reduce expenses, contribute to creating shareholder value?
Look, I love whales. And trees. I’m a conservationist – I have a solar-powered home and consider myself quite generous when it comes to charitable contributions. But that’s me; those are personal decisions, on my nickel. Not decisions I would make on behalf of the company, of my shareholders. Those shareholders have only asked me for two things: 1) return to revenue growth, and 2) stop burning money (get profitable). Pretty simple. None has asked why I’m not providing subsidies for employee purchases of electric cars, or required that my employees devote some portion of their week to community service. No investor has ever asked me to hire a “Chief Inspiration Officer,” with the task of “motivating the world” (whether the world wants to be motivated or not).
This is not a callous view of the world. We’re not talking about Ebenezer Scrooge begrudgingly giving poor Bob Cratchit the day off on Christmas. But it is about understanding what you can control and influence – and what you can’t. This is simply practical – it is business. It is understanding a company’s core competence and targeting investment in the things your company does best, outsourcing the rest to a company that considers that a core competence of its own. And how many businesses – especially in the high tech world of Silicon Valley – count management of charitable causes among their core competencies?
Ultimately, with maniacal focus on and full attention to a business’ deliverables and values, everybody wins. The company grows, creating more jobs. Profits grow, which can then be invested in activities that result in even greater growth. Employees see their salaries increase, and, of course, shareholders see a return on their investment. And what is the end-result of this newly created capital? More whales, greener trees, happier communities, peace, love and the end of world hunger. For individuals with more disposable income will share some of it with the causes they find most worthy. And governments, with the bounty of more tax revenue, will funnel some of it into social causes.
Net: if you want to change the world, make your shareholders happy. The rest will take care of itself.