Can We Learn from the Big Tech Giants (Amazon, Facebook, Google, Apple, and Microsoft) While Being Scared of Them? (ft. tech reporter Alex Kantrowitz)

How’d you subscribe to this podcast in the first place? Was it Apple Podcasts? Or, how’d you discover FUTUREPROOF. In the first place? Was it through a Facebook post, or a Google ad? Or maybe you’ve been following my work since you bought one of my books on Amazon. These companies are part of Big Tech: the companies every competitor seems to fear, and yet they’re also the ones us consumers are most beholden to. That’s part of why some of these companies’ leaders were on Capitol Hill for hearings recently. 

One of the journalists who knows these companies the best is Alex Kantrowitz, who was most recently a senior technology reporter for BuzzFeed News and based in San Francisco. He’s now the author of Always Day One from Penguin Portfolio, where he discusses how Amazon, Facebook, Google, Apple, and Microsoft have encouraged moving fast and challenging the status quo - and how we can all learn something from how these companies innovate.

To subscribe to Alex's Big Technology newsletter: https://bigtechnology.substack.com/
To subscribe to Alex's Big Technology podcast: https://redcircle.com/shows/big-technology-podcast

As always, we welcome your feedback. Please make sure to subscribe, rate, and review on Apple Podcasts, Spotify, Stitcher, and Google Play. 

Transcript

please note: this transcript has not been corrected. It's still pretty good though.

Jeremy Goldman: [00:00:00] So Alex, welcome to future proof. It's great to have you here. And I wanted to ask you. Had a shift somewhat recently, but I like to ask everybody at the beginning who they are and what they do on a day to day basis. 

Adam Kantrowitz: [00:00:12] That's right. So up until a couple months ago, I was a senior technology reporter at Buzzfeed news and covered the tech giants and left in June to start my own publication called big technology, which is a newsletter on sub stack, which you can find, just do it go at, going on Google and typing in big technology sub stack.

And then also my own podcast, the big technology podcast, you can type big technology podcast and find it that way. And this is all about covering the tech giants in a way that I didn't think I was able to do, if I wasn't being independent. So looking at these companies in a way that doesn't exactly fit the cookie cutter definition of what a new story is for a mainstream publication like Buzzfeed.

And then I also just wrote the book always day one, which looks at the work cultures of Apple, Amazon, Facebook, Google, and Microsoft, and basically explains how they do what they do by looking, not at the symptoms with the physiology. And then. Giving you an understanding of the way the tech giants work.

So you'll be able to co-op their systems and use them in your own workplace. 

Jeremy Goldman: [00:01:08] And so I'm part of the way through, how a lot of interviewers, they'll say I read the book, it's fascinating. It's clear that they haven't. And I downloaded it two nights ago. By the time this episode airs, I will have finished it.

and I think. I feel like it's pretty breezy of a read for anybody. Who's very interested in this type of topic. I will say I'm listening to it. So maybe that makes it easier for me, but what inspired the name of the book? always day one, it's just basically Jeff Bezos, his philosophy towards a startup and innovation.

You go into that a bit. 

Adam Kantrowitz: [00:01:39] Yeah. So it's the way that the tech giants all operate, even though Bezos did coin the term, I'll start just by saying, if you try to create a company last entry, you could basically run that company, your entire lifetime on one idea, the average company on the fortune 500 in the 1920s lasted 70 years there today, companies last 15 years on the fortune 500, in terms of the average lifespan.

So in order to succeed in today's economy, you need to be continually reinventing your company to persist. You're going to have to come up with idea after idea. And that's what this idea is of always day one, inside the tech giants, none of these companies believe that they'll be able to succeed longterm on one flagship idea.

They're in a state of constant reinvention. And always day one sort of means inventing as if you're a startup, right? Most big companies, they get so big, but they don't want to reinvent because they have a legacy business to protect and they don't want to threaten it or do anything that would distract them.

Let's start up on the first day. Can do whatever it wants. It doesn't, it's not, it's unencumbered by legacy products. And so that's the key year for the tech giants is that they can act as if it's their first day and continually reinvent. And that's, what's kept them in the game for so long. 

Jeremy Goldman: [00:02:44] Yeah. I think it's really interesting because yeah.

There's this kind of assumption that everybody has, which is big companies, very big, and they're afraid of a creative cannibalization, but I think that you're right, that for these big tech firms, they don't really have to play by those rules. They can afford some creative cannibalization and still have a major lead on competitors in a number of different categories.

Adam Kantrowitz: [00:03:09] That's right. And the way they do it is by creating, you can't just walk up and say, we want to have an always day one mentality, and then you just have it like the way they do reinvent themselves as by re-imagining way that they actually operate inside the workplace. And so I think that the key for them is the actual culture side of it.

And the way that they're able to do that is by using technology to minimize the type of work that would support existing products. to make room for their employees to come up with new ones. and it's been pretty effective for all these companies throughout their existence to be able to do this.

Jeremy Goldman: [00:03:41] How do they, and then I think this is one thing we should probably clarify. So for your book, how do you define big technology? Cause you cover a few big tech firms in 

Adam Kantrowitz: [00:03:50] particular. That's right. So the firms are Amazon, Apple, Facebook, Google, and Microsoft, the five most powerful tech companies in the world.

Jeremy Goldman: [00:03:58] It's so interesting to me because I feel like in some ways the consumer at the very least has not focused as much on some versus others. So for instance, Facebook, I think on Amazon probably get the most Iyer right now. And I maybe it's just the people I speak to, but it seems that. Microsoft doesn't get any, but yet, if you look in terms of their reach, they are quite expensive and have a major impact on our society, but yet without that negative, buzz around their brand.

And I don't know, I've always found that to be interesting. Google obviously has detractors, but not nearly as much in my view, as the Facebooks and Amazons of the world. 

Adam Kantrowitz: [00:04:36] That's right. And Microsoft's definitely been through the ringer already with its previous antitrust go round with Congress and they also create some pretty boring products.

Like they're very much an enterprise world. In fact, I was actually going to leave them out of the book to begin with, but the culture so dialed in and such an example of the way that a company should be run today. Definitely compared to when they were operating under Steve Balmer. That at a certain point, I had no choice, but to include them, they're an incredibly important company.

And I think you could learn a lot about the way that's out yet. Nadella. a lot about the workplace by looking at the way that's at union. Della has transitioned that company from an asset protecting company, which they were under bomber when they protected windows to one that really builds for the future.

But if they're doing under site, but 

Jeremy Goldman: [00:05:19] how let's go into a little bit. In greater detail, how big tech priorities ties is reinvention and innovation over tradition, because I think that's really interesting. And I think that's something that a lot of companies aspire to do. And frankly, even if they're in a different type of business, I think that there are a lot of industries that probably could learn from that type of a methodology.

Adam Kantrowitz: [00:05:42] Yeah, that's right. So these companies, they have built into their DNA, the spirit of reinvention. And I think that like with most big companies, they're, this idea of just sitting down and protecting the Fort is learned where like employees will come in and they'll have ideas for the first six months of the way the company can be better and what it should invent and how they can improve certain systems and processes.

They have all this energy. And then after the first six months they've been told no, we don't really want you to do that. That's not important. Stay in your lane, that they stopped coming up with ideas, and then they understand that they're just there to do a job. And inside the tech giants, I would say it's the opposite where that like employee ideas are valued.

they're not just told their value, but actively sought out. And there are systems inside any of these companies where they take employees ideas and bring them to decision makers as soon as they can. So if there's an idea for a new product or service, it always has the chance. I've seeing the light of day when the system is working well, which has helped these companies pick out the good ones and build them.

And then find their way to the next evolution of their company. Pretty often, 

Jeremy Goldman: [00:06:46] I feel like that ties into your whole entire idea. how you talk about these big tech firms, put collaboration over ownership, which I think is a, a different way of thinking for a lot of people who work in firms that don't have that philosophy.

So how does that work based off of your research? 

Adam Kantrowitz: [00:07:03] Yeah, that's right. It's super scary thing to do, to be able to collaborate because you do need to give up a lot of power and control. And I, can I give you like a couple of examples from the book that might illustrate why it's so important? So why has Google built in it affective voice assistant in the Google assistant where Apple, which had a six year headstart still is struggling with Siri.

And the answer is the way they collaborate. Google is known as a company that has a hive mind. So ideas flow pretty fast inside Google. They have, if internal social networks, they have list serves if Q and A's with their leadership and say, Google, you can be working in one division, email, somebody in another division, and that's encouraged not frowned upon.

And because they're closed reading. So well, the idea of building the product like the Google assistant, which takes in not just, search, but mail and YouTube and maps and messaging and music, and puts them all together into one coherent service by collaborating, they were able to build that.

Apple on the other hand is a company that exists in silos, right? So they took the Siri team and essentially said, what we want you to do is sit in this cause it, and build a good voice assistant, but you can't do that if you're not able to go out into the company and actually go out and speak with all the different divisions and because Apple has neglected to build that collaboration culture inside the company.

Siri's terrible. The home pod, which was their answer to the echo and the Google home is so it was performing so poorly that e-marketer, won't even name it as a category. It's in the other category. Whereas Amazon is echo and the Google home have their own. This is all product of collaboration. And especially today where the work that we're doing is so multidisciplinary.

And dependent on divisions across the company where no knowledge, no one has a monopoly on knowledge in the company anymore. they way they might have in the past, this idea of collaboration becomes much more important. And I think that, folks reading the book, you'll see that there's a way to do this bodied by Google and there's way not to do this.

And that's embodied by Apple. 

Jeremy Goldman: [00:08:59] Yeah, I, and I think so we're recording this, the day after the big tech hearings on Capitol Hill and w we're talking about collaboration, but yet I think it's interesting, obviously the buck stops at, a few key leaders, for these organizations who have to be held accountable by the government in terms of their operations.

what did you think in terms of how those hearings unfolded? 

Adam Kantrowitz: [00:09:21] So I was in the room for the Zuckerberg hearing. And I would say that this was like a marked improvement over that one. The members of Congress came in. Most of them seem prepared, even if they wanted to grind an ax, they actually knew what they were talking about for the most part, questioning was tough and they didn't let these CEOs off the hook and there were follow up rounds.

So when they pressed aside questions and one round. Then other members could come in and try to follow up and pin them in places they want. But ultimately, look, we're living in a world right now where Congress doesn't work with each other. They're dealing with a massive health crisis, a massive economic crisis and the election crisis.

Jeremy Goldman: [00:09:58] Sorry, there's a health crisis. I 

Adam Kantrowitz: [00:10:01] it's that 

Jeremy Goldman: [00:10:03] there's a fun 20, 20 game called see how long you can go without Voldemort, rearing its head. And, we went 12 minutes. We're doing well. 

Adam Kantrowitz: [00:10:11] We did good. Yeah. It's nice to forget about the coronavirus when you can, but yeah, Congress, isn't going to do anything.

These companies, cause they're so preoccupied with things like that. Virus, the economic crisis and the upcoming election that this was like one of the top things on their agenda for 2020. Now it's towards the bottom. So ultimately if you're a tech giant, you're feeling pretty good about what happened in Washington, even if you took a few body blows, ultimately you came out on top.

Jeremy Goldman: [00:10:35] Yeah. And I think that you're probably right, that there wasn't that much, that they can do short of a major, not unforced error that would. Cause a regulation to happen faster. I think part of what you hit the nail on the head about, you basically have junior staffers who are prepping these people who are not that present and not, they don't understand these technologies that they are being tasked to regulate.

They think they understand them, but, and this is just in my conversations with people who work for, some of those, congressional leaders. it's a matter of. They know that it's important. They don't know necessarily what to do about it. And don't feel that comfortable, taking a major action if they don't, if it's not their subject matter expertise, basically we need Alex to just make yeah.

Call for, what to do here. 

Adam Kantrowitz: [00:11:22] Yeah. do you look at Congress? Like even in a good, a good moment, they were still yelling at each other. They can't walk by each other in the halls without cursing each other out. So I think that they're going to do a big antitrust overhaul is, is wishful thinking, unfortunately, because the tech giants do need to check on their power.

Jeremy Goldman: [00:11:38] Yeah. so that's what I wanted to ask you about is how big of a problem is it for society that these big tech firms keep getting bigger and bigger because I'm of the opinion that. There are certain things that no matter how big they get, and no matter how much monopolistic power they have, it doesn't really hurt society.

And then there are some things where if you wanted to create, let's say a competitor to Facebook, you can't, there's not a viable path to creating that product. You basically have to. Go into an entirely different industry or something that's underserved because Facebook has the ability let's say, and I'm picking on Facebook, but this is true for any of these companies that they can, squash you in your crib if they so choose 

Adam Kantrowitz: [00:12:21] that's right.

look, here's what I think more than having the ability for other companies to go in and compete with the companies. What our country really needs is a strong middle of the economy. We need strong, small businesses. We need strong mid sized businesses and. You know what the size of the tech James does is it creates marketplaces that these small and midsize businesses have no choice, but to play in, if you're an advertising, we talked a little bit about marketing before the show.

If you're an advertising, you gotta use Facebook or Google. You often need to use both, right? If you're selling online, you almost have to use Amazon. And if you don't, you can use Shopify, but then you have to use Google. So you're held hostage. If you're an app developer, you have to use Apple's app store.

And so what basically what you have a situation where these companies marketplaces have a tremendous amount of control over the businesses that are the lifeblood of the economy, and to have a healthy society, we need those businesses to thrive the problem with these companies being so big. As we know that there's been situations where they've used their power.

To make sure that the businesses, the small medium sized businesses, depending on them are able to grow to some extent, but beyond that, they can't really grow that sort of Amazon's margin that you're taking. So Amazon will then out price underprice you, or create a private label brand and come in and take your margin.

And that's why Amazon is worth one and a half trillion dollars. And small mom and pops companies are struggling throughout the entire country. Same with news companies, right? These companies they're at the mercy of Facebook and Google in terms of the amount of money that they're going to make.

Cause they both use them for as a traffic sources and they use them to monetize their traffic. Okay. So it's so that's what I think is the issue here. It's not necessarily the size, it's the marketplaces that they have power over. And the fact that we're all subject to them. And so that's what we really have to keep vigilant about.

When we think about reigning in these companies, it's not, should they go bigger or not as, are they using their power responsibly? 

Jeremy Goldman: [00:14:17] Yeah. And I think that this isn't necessarily my opinion. I think that they do a lot of things properly and and have positive impacts on the economy. Clearly, but at the same time, the challenges is, are you the type of person who believes like, this is what everybody has to think?

Are you the type of person who believes that a company like Amazon is growing to think about the longterm versus the short term? Because in the short term, like you just said, if. They need to protect their margins. Then they are incentivized to squash somebody who's a smaller player and then it's bad for the economy, but in the longterm.

Yeah. It would probably be a good idea for them to make sure that nobody else forces regulation on them. And I think that's one of the things that I wonder about, we talked about the hearings a bit. I'm wondering, what do you think, how much of the onus for regulation should come from government?

Versus big tech as a whole, even coming together and being responsible and having some type of self regulation, just so that others don't do it for them because, I feel like the further they go, the more likely they might be, to attempt government or Forrest government's hand to try to regulate in some fashion.

Adam Kantrowitz: [00:15:29] Yeah. I think you, you touched on the answer to your question, right? Which is that they need to be afraid of getting regulated. So therefore they will self regulate themselves and act responsibly. The question is, are they afraid today? I would say, absolutely not. We already know that a regulatory body is vastly underfunded.

They don't have the resources to go after the companies and the way they would need to the FTC she's head of enforcement came out and said it essentially, when they agreed to this $5 billion, fine with Facebook, that didn't slow Facebook down at all, where he said. If we went down this path a little bit longer, we would have gotten such a good, awesome.

Why is that? It's a resources question. It's cash question. So I do think that they need to build themselves up into a body that it can actually cause fear inside of these companies. another thing we should, the tech giants were already saying 17% of the SMP 500 before the pandemic started. Now they're 22%.

And I wrote about this a little bit and my big technology newsletter this week, but the fact that there's such a big percent of the S and P, which is supposed to be abroad collects 570, but he's that represent the economy. If I got 22% of it is made of the tech giants, it means something is off there. It means that our economy is so reliant on them that actually going in and actually trying to push regulation in this type of world.

It's exceedingly difficult because if you over-regulate, you're going to end up crushing your constituents network. So what I think these companies need is to help fear that regulation is possible and not this feeling of let's show up on a video conference and then the government will get off of our back for another couple of years and the way to do that.

Is without a doubt in my mind to fund the enforcement agencies, fund the FTC fund, the DOJ, and actually give them some muscle don't need to necessarily need to use it. But the fact that it's there will start to cause these companies to pause a little bit before they do go ahead and do nefarious thing again, harming that middle of economy that we need to be strong in this country.

And without it, we'll Continue to crumble into chaos. 

Jeremy Goldman: [00:17:19] It's interesting. I thought I feel like crumble into chaos is just a w we should have just ended there. Oh, sign off. But no, I think that what you're saying is really interesting because a lot of people are. like you said, a lot of consumers are so dependent on these companies that even at, I know a lot of people who might be critical of them, but then you ask them, are you using their services?

And you really get down to the nitty gritty and they might have a company that they begrudgingly say, I don't like that I'm dependent on it. And I imagine that government feels the same. When you think about the fact that. I don't know how, what percentage of all hiring yeah. In the U S is by these big company and he is, but the more dependent the government, when we have a very high unemployment rate, the more dependent the government is on.

listen, at least these companies are hiring human beings and then keeping the unemployment rate down and then we don't have to subsidize it. It becomes this. Vicious cycle, where it's hard to go after these companies. It's hard to criticize them because you are very dependent on them. just to hire your, your people so that they can pay taxes.

Adam Kantrowitz: [00:18:28] That's right. look okay. I'm going to read you something from the big technology newsletter today. If you're up for it, just think about how dependent the federal government is on these companies. Their own employees need them to grow in order to be able to retire California public employees, retirement system owns more than billion in Facebook stock.

The state board of administration of Florida owns hundreds of millions in Amazon. The state of Wisconsin investment board owns a chunk of alphabet New York. State's common retirement fund invest a small country's GDP worth an Apple. Okay. Once you add in the ETFs, our future's basically tied to these companies.

Which is not what you want because once you ties so deeply, you start to you can't become an effective check on their power. And that's where they can run rampant on the people that actually need their services to succeed. 

Jeremy Goldman: [00:19:15] I know, I thought in terms of the, how I'm reading the book, I think that you can read it from a number of different vantage points.

You can read it as somebody who's, working in a large firm. That's looking to see what are some of these processes and agility and nimbleness that you can adopt within your organization. I think that if you're starting. Something new. if you're starting a startup and you want to build something and, adopt these techniques, but you also want to make sure that you build something that doesn't get in the way of some of these big tech firms.

do you have any advice for people who want to build something, but also their goal is not to sell to one of these firms nor to be squashed within a two year period. 

Adam Kantrowitz: [00:19:59] Look, I think that if you're going to try to compete with these companies without co-opting elements of their culture, you're going to be playing from behind that's the bottom line for me.

But once you start bringing the culture aspect into it, you're going to turn your company into something that's inventive and it's something that's nimble. And as something that won't fall prey, certainly to the big tech companies, because. It's a shame right now that these giant tech companies, usually when you have a big company, they become bureaucratic and slow and they fall apart.

And these giant tech companies are more nimble than startups today. And that's a shame, you know why the answer is culture. So I think that once we have smaller midsize companies, start to co-opt some of the cultural elements that we see in the tech giants will end up, what we'll put ourselves into much better economy.

Then we're in today. And actually people who are in the driver's seat will start to have a chance. I'm a tiny, small business now, myself, having started big technology and I'm definitely using some of the things that I learned when I wrote the book. For instance, like Amazon, before it kicks out, kicks off any big project has all of its employees has its employees write down the entire project, start to finish what it's going to look like in the future.

basically it's a narrative that they write about what it's going to be. And then they work backwards from that document and they say, okay, this is what we're going to create. One of the employees told me, it's like being a science fiction writer, you write the future and then you build your way into it.

And whenever I need to figure out strategy or different things that I'm doing for, this big technology publication. I write them down and it helps spot gaps in your thinking and helps you plan better. And then ultimately it helps you execute better. And I think that's important. It's just one little element of tech, giant culture that I, as a one person business have been able to implement and has been successful for me.

I think anybody that reads the book will find little bits and pieces of this type of stuff that will be useful in their daily lives. 

Jeremy Goldman: [00:21:42] No. I agree. I think that, I know we have to let you go in a few, but I wanted to ask you in terms of, we're talking about, Google, Apple, Amazon, Facebook, Microsoft, which of these are the most quote unquote future proof and have the most defensible businesses.

And when, basically I'm thinking three years out, which I think is a reasonable timeline. How are those companies doing in terms of, financially and then being at which ones are being as impactful, if not more impactful than they are today, 

Adam Kantrowitz: [00:22:13] they're all doing great. But if you asked me who's the most future-proof, I would say Seattle over Silicon Valley.

I think Amazon and Microsoft really hold the power, to go forward. Amazon because it's so inventive because it has this, he really has this stranglehold on commerce, which isn't going away and, club businesses doing tremendous for them. Then you look at Microsoft, they are entrenched in the enterprise.

And so because they built these relationships with companies for so many years, they're going to persist in a pretty big way. And they've actually gotten their act together on cloud and on mobile, under Satya, and are set up for a really nice future. Google faces threat from Amazon. Facebook faces threat from everyone.

It's the most vulnerable of all these tech companies. tech is one example of why an Apple, Apple is an asset milker right now it's in a culture of refinement. It has the iPhone. It's trying to ride that ship, all the way to the finish line. And we know in today's economy, given the stats, I cited in the beginning of this, but talking about how the average life span of a company in the fortune 500 is 15 years.

Apple can't ride one product forever. And so we'll ultimately either need to do. Ultimately we'll need to fix its culture, make it more inventive, or it will find its way out of this top five, 

Jeremy Goldman: [00:23:20] say out of those things that you just cited, what's very interesting as quote, unquote insiders. If I'm going to put you and me in that category for a second, I think that people on the street don't necessarily realize how big Amazon's cloud computing.

Businesses. And it's immense and it's a major factor in terms of what it's supporting itself. So well, and I think that obviously when we talk about, a company like Apple, for all of their faults, and I think everything you said is true. They've been able to convert, like when you think about Apple music or people paying for additional storage cloud storage on a consumer level, they've been able to convert people over because they do have that large install base.

So it is nice that they launched a new product and all of a sudden it's in the consideration set of 85% or more of their. existing install base. So at least they have that going for them. But I think that generally your assessment, as is spot on. So it'll be interesting to have you on in 36 months and see how we did.

Adam Kantrowitz: [00:24:19] Yeah. look, just to dress this last one. Does anyone actually like paying for Apple stuff? you pay for storage cause you're locked into it. I don't know if TV or Apple news has really taken off well, people who use Apple music end up getting stuck and move to Spotify. So it's definite, this is asset milking behavior that they're doing, trying to make the most money out of the iPhone and not finding ways where they can build services that people actually want to use and move themselves into the future that way.

yeah, every, everybody that's come out and said, Stuff like this about Apple has been wrong. So yes, we should check in at 36 months and see if I'm part of that category or factually. Got it. 

Jeremy Goldman: [00:24:54] I think I'm paraphrasing from somebody else that it's a relatively easy to get the future, It's hard to get the time horizon. Correct. so there are all these people have been right before. I think they just estimated, it's going to happen and. This month, and then it winds up happening later in the future, and then they can just be like I told you but to be continued.

Great. 

Adam Kantrowitz: [00:25:13] Thanks for having me, Jeremy really enjoyed it.