When customer obsession goes wrong
By Mark Hurst • April 8, 2021
"There's not a lot of self-reflection in Silicon Valley." That's tech veteran Mary Berk speaking with Evan Selinger in this interview, which I'd recommend. Berk gives a clear-eyed diagnosis of the lack of ethics in Big Tech. While that's not an unusual observation, what makes Berk's assessment especially powerful is that it comes from inside Silicon Valley: her career includes stints at Amazon, Google, Microsoft, eBay, and Facebook/Instagram.
Berk's thoughts on Amazon are particularly revealing. As I wrote in Why I'm losing faith in UX, for a long time the company was the gold standard for treating customers well. But then Amazon changed, says Berk:
When Amazon was a younger company, every single mission statement of every division of the company was crafted to further the overall mission of being "earth's most customer-centric company." ... One of the things I appreciated immensely about Amazon at the time was its genuine customer obsession. If something wasn't best for the customer, meaning individual buyers and sellers, the message from Jeff Bezos all the way down was to go back to the drawing board. But over time, and I say this from an outside perspective and reading between the lines, it seems like Amazon has changed a lot.
Now, Amazon is serving new customers. For example, the "customer" used to be the buyer on Amazon.com. Now, Amazon has entered the ads business, and the original "customer" is in another context the "user," and ad tech has a long history of seeing users as things to be manipulated.
How did Amazon's "customer obsession" go wrong? It seems like an important question, since so many teams today claim to be focused on their customer. That claim often rings hollow, as many teams ship digital products littered with dishonest tricks: dark patterns for addicting users, surveillance and tracking for resale to shady third parties, and opaque algorithms for subtle manipulation. Looking at the digital landscape today can be depressing. If Amazon couldn't stop its own descent into unethical practices, it seems unlikely that other teams could manage to act better. Is there, in the end, any way for a company to continue to treat people well?
The answer is "yes," but it requires a particular commitment. It's simple to describe and painfully difficult to carry out. I'll explain. At some point in the life of a company, and maybe at multiple times, the team will have to decide between two paths: either serving the company's interests (profit and growth), or the customer's interests (long-term health and flourishing). That's it, just two options. An either-or choice, without any cliched "win-win" outcome available. Like I said, it's simple to explain, but difficult to choose the good, for any team that claims to have an ethical sense.
The right choice is to serve the customer's interests, even if it means achieving less growth or profit.
And that appears to be an impossible choice to make in larger, capitalized companies, even if they started with a strong "customer-obsessed" culture, even one driven by the CEO. As Berk says, "If I thought anyone could resist the pull, it would have been Amazon." But eventually the growth imperative won, which spurred on Amazon's ethical descent.
Teams are facing this decision all the time. Rick Klau, a Silicon Valley veteran himself (and now California's Chief Tech Innovation Officer), just posted this today:
Just discovered a company who's encrypting backup files in order to prevent users from migrating to other services. I was sure I must be misunderstanding. I know their CRO, sent him an email. Not a misunderstanding! It was "a hard decision to make with its downsides."
See that? The team knew they had to make a decision. And it was a "hard decision." But like so many other tech companies today, they made the decision in favor of growth - in this case, by unjustly locking in customers through a "roach motel" strategy.
Am I naive to suggest an alternative? Cynics will say exploitation is inevitable: "It was always thus." And I'll grant that there's never been a golden age of ethics, a blessed era when people always treated each other (and companies always treated customers) with consideration and respect. But structurally there have been different times, when - for example - companies were more likely to be family owned, or local, or small, or otherwise have more opportunity to get to know their customers.
When you you're part of the community, you're more likely to treat people better. Not only because it's good for business - the reputation around town and all that - but because you know these people. Conversely, it's so much easier to sign off on deceptive, exploitative policies when you've never met the victims, and never will. Real-life relationships make a huge difference.
My favorite recent example is the success story from West Virginia, which by some measures ran a more effective vaccine rollout than any other state. What was West Virginia's secret?
• From the New Yorker (March 5, emphasis mine): "In West Virginia, the vaccine was initially distributed by independent community pharmacists rather than through CVS or Walgreens. This effort owes its success, in part, to the pharmacists' accessibility but also to their deeper personal relationships in their communities."
• From the New York Times (January 25): "The federal plan teamed up with Walgreens... but many communities in West Virginia are far from the nearest big box store, and about half of pharmacies are independently owned. ... As a result, West Virginia finished its first round of vaccinations at nursing homes last month, while many states were just getting started." (Related: How Chaos at Chain Pharmacies Is Putting Patients at Risk from the NYT, January 2020.)
• From Matt Stoller (January 27): "Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out. Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. ... CVS and Walgreens aren't really even chain drug stores at heart, they are financial institutions set up to gain market power in the drug store market."
The West Virginia example is a perfect counterpoint to Big Tech's values of scale, hypergrowth, and obscene profit. There's another set of values oriented toward people - both individuals and communities - and their long-term benefit. Amazon early on seems to have been aligned with these better values, but as Mary Berk points out, the "customer obsession" deformed into an obsession for money.
The choice, in the end, is one of allegiance. If money is the object - profit, growth, scale, power, dominance - then customers will eventually be treated as raw material for exploitation. But if the object is to serve customers and their communities, then the company - even as it makes somewhat less money - will treat people better. Just like the local pharmacies do in West Virginia.
[Update: April 9, 2021.] Here's another example in a story today by Bloomberg's William Turton: a video showing employees of Silicon Valley startup Verkada chanting: "Mo-ney. Mo-ney. Mo-ney." The money comes from the exploitation in Verkada's surveillance services. (Which were also hacked last month.) Verkada employees are literally chanting their allegiance.
Mandatory fun item
My Techtonic show this week was devoted to data: how to engage it, understand it, and use it to make sense of the world. My guest was bestselling author Tim Harford, whose new book The Data Detective: Ten Easy Rules to Make Sense of Statistics is a clear, friendly, helpful guide. I recommend it.
• Listen to my interview with Tim Harford
• Download the podcast (the whole episode)
• Links and comments from the show
Finally, with that context, I hope you'll enjoy this: it's my all-time favorite meme about data. (Or Data.)
Until next time,
- Mark Hurst
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