Mike Judge on set with the cast of Silicon Valley

When Google’s founders held investor meetings ahead of their float a decade ago, their lack of interest in the ways of Wall Street rubbed some up the wrong way and they were labelled “arrogant”. The same happened when Mark Zuckerberg turned up for the investor roadshow ahead of Facebook’s 2012 stock market debut wearing a hoodie.

The arrogance label is an easy one for outsiders to attach to Silicon Valley start-ups that refuse to play by the rules. Among other things, it is a convenient cloak for the anxiety and envy stirred up by a group of companies whose wealth and power are starting to be felt much more widely.

If that was all there was to it, it would hardly matter. Investors who allowed themselves to be put off by Google’s disdain or Mr Zuckerberg’s wardrobe would have missed two of the best investments of the decade. But the simplistic accusations of arrogance distract attention from a more important question: whether start-up cultures and ways of doing business that worked well while they were scrappy outsiders can evolve to support the next generation of corporate leaders.

The latest company to draw fire over its perceived arrogance is taxi app Uber, one of whose executives apologised this week for proposing that the company investigate hostile journalists. Leaving aside the ethical issues this raises, it was a reminder of the aggressive, take-no-prisoners culture that Uber is known for.

Companies that treat business like warfare tend not to respond well to outside criticism. The Uber executive’s frustration with the media brings to mind the thin skin shown by Andrew Mason, the former chief executive of another aggressive, hyper-growth tech company, Groupon. Reacting to the sometimes hostile scrutiny during the run-up to his own initial public offering in 2011, he whined, in a company-wide email, about how Groupon was “getting the **** kicked out of us in the press”.

This is also a reflection of what happens when the symbiosis that has developed between the tech industry’s start-ups and its media breaks down. Both sides benefit from the adulation that is heaped on start-ups deemed to be “next big thing”, with the tech press acting as both cheerleader and megaphone in the early days. When the same media decides it’s time to take a more sceptical stance, it can feel like a betrayal.

The challenge for the tech industry’s next generation of emerging groups is to know when to ignore the accusations of arrogance and when to take the criticism to heart. A failure to kowtow to the establishment or to Wall Street hardly counts as an indictment.

Often, arrogance is almost part of the business model: it takes an extreme level of self-belief to have the sort of ambition displayed by Uber, whose plan relies on overturning taxi monopolies in the world’s biggest cities. But as services such as Uber become more influential, perceptions and politics matter.

From the insularity of Silicon Valley, it’s easy to see all external opposition as a reactionary attempt to stand in the way of progress and the interest of customers. In fact, learning how to win over groups with opposing interests is an important skill for companies that hope to have such a deep and lasting impact on the world. That means moderating their more zealous tendencies. There are more appropriate ways to neutralise opposition than digging up dirt on journalists.

In the past, the preparation for an IPO has been one of the things that forces successful entrepreneurs to think more about how the wider world perceives them. Boards of directors are strengthened. Good governance assumes greater significance. The interests of other outside constituencies, such as Wall Street, are accorded a larger role – although dual-class stock arrangements that keep control in the hands of founders have blunted some of this.

These days, the discipline of an IPO is often put off until a much later date. Mr Zuckerberg became a model for today’s tech entrepreneurs when he delayed Facebook’s stock market debut until it had already become one of the world’s dominant internet companies.

Since then, changes in the law and the development of the private capital markets have made it possible for companies such as Uber to put off going public until even later in their lives. With any luck, by the time Uber is ready to go public, the unwelcome attention it is attracting now will have played a part in shaping a more mature corporate culture. Only, don’t expect it to escape the inevitable accusations of arrogance.


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