We’re in a time of radical change. It’s stunning how quickly major and fundamental facts of our age can alter. It may in part be a consequence of our media-saturated, full-time-screen lifestyles. The reasons so much is happening at once are, to me, unclear. But here are three transformations morphing in real time: the president’s standing, global attitudes towards climate change, and investor and public attitudes towards money-losing “tech” companies.
Climate is the one I find most amazing. The relentless moral and astutely political crusade of one 16-year-old girl is having a fundamental impact on peoples’ understanding of the urgency to combat global warming. I, like so many, find the shift led by Greta Thunberg heartening, and am committed to back it with my own and our company’s energies and resources.
But think about the fact that this girl has had such an impact. Only 13 months ago, she started her weekly Friday climate protest outside the Swedish Parliament. But in the last two weeks, she has spoken before Congress and the United Nations. She may soon win the Nobel Prize.
As I write this, Thunberg is protesting in Montreal outside a major meeting of leaders of the International Civil Aviation Organization. There, as everywhere, she speaks simply and urgently: “My message to all the politicians is the same, to just listen to the science, act on the science.”
She chose that location largely because she is so committed to drawing attention to the disproportionate damage jet air travel causes to the climate. That’s why, of course, she sailed from Sweden to New York. It’s one of several issues that her activism, almost single-handedly, has suddenly put onto the media and public radar. (For more about “flight shame” see this.)
Then there is the earthquake underway in tech. In that industry, it has for too long been acceptable for a company simply to grow rapidly in revenues, regardless of whether profits appeared to be on the horizon. Money has been flooding in from less-remunerative realms for the last decade, and greed has prevailed. It isn’t, in many cases, that hard to grow revenues when those sales can be fueled by vast pools of capital. It can make your offering unnaturally affordable, and irresistible.
As I wrote recently, because Facebook and Google and Amazon had done it, innumerable entrepreneurs convinced credulous investors that they, too, could be world-dominating companies, if only they were given, for now, unlimited resources. The phenomenon got so pervasive that it spread into all sorts of industries where management convinced investors that they were “tech” companies. Thus we had Uber, WeWork, and Peloton.
While Peloton at least got the public cash it was seeking when its IPO successfully priced this week at the top of its hoped-for range, the trendy exercise product company is far from proving it can make money. The other two companies are in a downward spiral.
Let’s be clear: These aren’t tech companies. They’re transportation, real estate, and exercise product companies. But if I had said so six months ago, that would have elicited raised eyebrows. In the past couple months, sentiment has radically shifted. That’s a large part of why Peloton’s stock is down roughly 15% since its IPO. The company got its money, but sharebuyers have lost, at least so far.
WeWork’s IPO was delayed, possibly indefinitely, after it became apparent that its losses were unlikely to be reversed and that its management had been allowed by careless investors to have become shockingly self-indulgent. The company is furiously working to right itself, pushed largely by its biggest investor Softbank. That company lately had a white light experience of understanding the importance of profit, after public markets shined a flashlight in its face.
Uber, another money-losing company indulgently backed by Softbank, went public at $45 in May, and on Friday was trading at about $30. Its smaller competitor, Lyft, went public in March at $72, and Friday traded below $42. It also has no near-term likelihood of profit. The turnabout in sentiment towards these two companies paved the way for the rejection of WeWork and skepticism about Peloton. But this shift has been sudden, and wholesale.
The president is another story altogether, and any of you are as good experts on that as I am. But in mere days his political position has been transformed.
We need awareness of our planet’s fragility. So this turnabout was a long time coming. It is healthy we are returning to a rational attitude towards the true purpose of business. (And the generally ecstatic reception to the Business Roundtable’s declaration that corporations should serve stakeholders besides shareowners is another comparable shift.)
Politics has become the ultimate shape-shifter. Who would’ve guessed we’d have a world of autocrats, only three years ago? That was before Cambridge Analytica, and the radical turnabout in how Facebook was perceived.
Hold onto your hats, if you wear one. Every climate is changing fast, figuratively and literally. Get used to rethinking everything.
