Tech firms’ complexities
Dec 7, 2022
Solutions need a solution; that is the typical case for technology firms now. The absurd equation of enterprise valuations, unmanageable oversizing, and overly ambitious management, besides technology changes keeping no pace with the times, make technology companies no more troubleshooters than troublemakers themselves.
Technology companies face a range of challenges, from financial to meeting new requirements almost every second. At the same time, we believe all tech companies are trying to change the world. But not even God knows what will happen to these companies tomorrow. How would the changes that tech companies are working on affect the average person?
Many IT companies were founded with huge investments. Observing what is happening in the media today, it is clear that money is flooding into all kinds of IT startups and multinational technology companies. Interestingly, we can also see that there are no bases or investments in these companies. And obviously, they don’t have a logically acceptable equation for the enterprise valuation. They are still expanding their size and inviting more investors without any clear understanding of what they do with huge funds or how they are going to generate profit. However, investors still blindly invest. Three to five years after the investors bet with private equity on companies without any valuation, they offload their holdings at a huge premium through the stock market. They eat away all the creams and leave the sediments to the retail investors! Still, they also get angel investors to ensure the money flow. If you look at the issues with some of the so-called innovative tech delivery platforms, you get a clearer picture. Who becomes rich, and who becomes poor? Some are making a profit out of the losses of others. That itself is a strange technology.
There is no regulatory system to check for money laundering. At the end of the day, public money is wasted. And the promoters become super-rich, while their companies rarely make a profit. There are popular technology companies that run on mere hype without making profits. Byjus could steal a larger-than-life image despite customer discontent. Yet it has celebrities as ambassadors. None had ever paid attention to how much the Byjus spent on its spontaneous advertising blitzkrieg. Maybe close to two-thirds of what a student pays is spent on advertisements. The money required to develop such an online education infrastructure and talent is minimal considering the volume of sales. The fall of such a company may not be surprising, but it is inevitable; after all, the core of the business is an innovation that challenges the principles of nature and conventional wisdom. Money spent on advertisements never builds a tangible asset. The intangible asset of brand equity is not a long-lasting asset. Before the fall, smart investors make a bounty, finding no reason to worry about where the company’s revenue is spent.
Unlike that of a conventional business entity, the fortune of a technology establishment can go topsy-turvy overnight. Similarly, the vision and mission of technology companies can change in no time. It is the money that makes it happen. The money power of an entrepreneur makes it happen more easily. Even the global size of a technology entity is not resistant to a fall or an overhaul overnight. What influences the global community can have a new establishment equation. Of late, that’s what has happened to Twitter.
Twitter has been a relatively decent social media platform, giving no chance for the masses to hurl abuse at public personalities. It has been a free platform to share the users’ views and what the users are thinking with their followers. Twitter used to fix the loopholes of trolls, unlike the other popular social media platforms. Who the person is does not matter to Twitter. Once it blocked the former President of the United States, Donald Trump, it showed that it dared to even block the US president, as it did with many other leaders.
Without proper verification, Twitter doesn’t give the tag to its followers or tweets. When the world’s richest man, Elon Musk, was planning to buy out Twitter, there was stiff resistance. Later, Twitter had to do away with its earlier decisions. Elon Musk celebrated the first day of the takeover by unceremoniously removing the CEO of the company. This might be the first time in history that a CEO has been removed so unceremoniously and publicly. That is an exception to the much-celebrated western culture of professional formality.
Then he declared he would make Twitter more user-friendly. But he faced his first experience of how the platform could be misused. Someone created a fake ID in his name. His announcement followed a decision to levy subscription fees of $16 a month for verification. Later, he decreased it to $8. By that time, he had removed much stuff from Twitter and Facebook. He centralized the power to bring it under his direct control.
All of a sudden, he lost his integrity along with the value of Twitter’s stock. The fortune of Twitter stakeholders hence dipped steeply. started to reduce like anything. He asked so many staff to leave the company. Now there is not enough staff working for Twitter, which is a good example of how someone’s ego can demolish everything.
At last, Twitter may also collapse after taking huge funds from outside, and for Musk, leaving only one profit-making company, there is only Tesla making profit to support other organisations. There may be no astonishment if the downfall of Elon Musk becomes a reality.
The online retailer Amazon has also reduced the size of its workforce, sending home 100,000 workers. That is not a good indication, as it shows the world’s largest retailer running on cutting-edge technology is in trouble.
Facebook, which changed this generation, is also facing many problems. It used META and developed technology ahead of time and now wants to delay the new technologies, as Google does.
All tech companies are swimming in troubled waters. While some are slower than the time, some are ahead of time. Some players, who are unmanageable due to being oversized, lost control of their operations. The complexity of managing what the company has built has made the changing management take unstable decisions. One could see it in Twitter’s decision to change its overall strategies. Once it was said, technology played an important role in the integration of management operations and thereby overall efficiency.
Today, technology firms are passing through operational complexities without the technology to fix them. It is like endless human activities are the mother of all human problems. Hence, the problem is naturally endless, and technology is now infected with multiple complexities. The custodian needs a custodial service.