Is it possible to be too rich? And if so, what does it mean?
Big companies like Amazon, Apple, Facebook and Google can sometimes seem like they’re wasting their time and money on lavish office complexes and barely useful inventions. But why should the man in the street care?
Amazon has more than 800 people working on what sound like videoconference gadgets on wheels, but it isn’t sure that customers want them.
Apple has spent nearly a decade and untold billions of dollars starting, retreating from and repeatedly reworking a project to develop a car that may never hit the roads.
Google and Facebook continue to spend billions buying and building fancy complexes when no one is confident about the post-pandemic needs of in-person office work.
We want successful companies to tinker with expensive projects, even if they don’t pan out. Wandering and stumbling is how invention happens. But that may not be all that’s happening in the research labs and corporate suites of America’s tech giants.
Part of what we may be seeing now are companies that are so friggin’ rich that they sometimes throw money around – hey, why not?! – in ways that hold back other companies and themselves from breakthrough innovations.
Yes, I’m really asking if it’s possible to be too rich. (And yes, this is a problem that I would like to have.)
Let me explain why we should care if a handful of tech giants are wasting their time and money.
Not having enough money can strain a company or entrepreneur, but it can also foster focus and inventiveness. There’s an axiom about technology startups that the ones founded in dire financial times often turn out to be the biggest successes. Young companies and their leaders learn to do more with less and devote their attention to only their best ideas.
And like a wealthy friend who installed gold toilets in each of his 25 bathrooms, having so much money can compel companies to pursue half-baked ideas.
The Wall Street Journal reported that Amazon is testing concepts for a department store with digital clothing tags that customers can scan with their phones to try on items and may later add robots… for some reason. Tech doodads are probably not the way to improve the shopping experience for humans, but Amazon can experiment with overly complicated concepts because hey, why not? It might work.
When Amazon throws money at a problem, other companies often respond with their own high-tech countermeasures. Not long after Amazon bought the Whole Foods supermarket chain, Kroger cooked up a plan for futuristic stores with digital shelves to alter product prices quickly and help people shop more quickly. Walmart and other stores deployed robots to detect when items were out of stock and tested systems to automate the checkout process.
Some kinds of technology for retail, particularly automation of the parts that shoppers never see, may turn out to be major advances. But the trap that the retailers and Amazon fall into is a fixation on the flashy over the genuinely useful. Did anyone stop to ask: Is a fussy digital touch-screen or a robot the best way to do this? Walmart last year gave up on its shelf-scanning robots because simpler alternatives were just as good.
Amazon can try all this because it has seemingly endless money. But what else could Amazon, Kroger or Walmart do that is more likely to improve shopping rather than chasing expensive dreams of The Jetsons?
Many smaller tech companies also fear that tech giants are hoarding talent because they can. Imagine the midlevel software engineer making bank at Google who might otherwise start a driverless car company, or a Facebook manager who might instead be steering a second-tier e-commerce company to become the next Amazon.
The people who own America’s technology giants – stockholders – mostly trust Google, Facebook, Amazon, Apple and Microsoft to follow the right routes to riches. (Sometimes stockholders do worry that these companies are wasting money, and it has resulted in executive changes or other company actions.)
We want Big Tech to continue investing to come up with fresh products and services. But we all know that having so much money can make people, and companies, undisciplined and impulsive.
By Shira Ovide © 2021 The New York Times Company