Ben Thompson: evaluation

Transcript context

…Yes. What you find out is a lot of people — they don’t have anything beyond “Because they’re stupid.” The reality is, if you know these companies, you know the people in them — they are anything but stupid. They are very brilliant people that have brilliant backgrounds and all sorts of great things in their résumé and whatnot. That’s where it gets interesting, to look at companies, look at their culture, look at their business model, see what’s driving that sort of decision-making. You have a company like, say, Microsoft, for example, that achieved dominance in the consumer space by virtue of their network effect that emanated from the enterprise side. But they started thinking they were good at consumer products, so they would make these consumer products that had no chance in the marketplace because they didn’t have that network effect to build on. And it failed, but you could think about, like, the company had achieved so much success to that point. How did that influence their decision-making and create blind spots where they would do worse stupid things? You can do a similar analysis of all these companies. I just mentioned the context of Facebook. They’re so convinced that they are a force for good and changing the world that they can’t even fathom that they’re not, which leaves them unprepared to answer very legitimate questions about their effects on the world because they don’t have the — I don’t know if empathy’s the right word — but they don’t have the empathy for the possibility that they might not be, which doesn’t allow them to even create the right response. If we’re talking about tech, where there’s high potential for convex or asymmetric returns, is not the real puzzle that we don’t see a lot more mistaken strategies? Because companies arguably should be taking a lot of chances, which maybe have poor modal outcomes but high expected value. You might think, “Well three-quarters of the time, we’ll just be seeing mistakes, mistakes, mistakes.” And actually, so-called bad strategy is, in a sense, profit maximizing. Do you agree?…

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