Friday, May 16, 2008

"Privacy is a red herring"

When I was living in Palo Alto I would, from time to time, stick my head in at a meeting of the Churchill Club. These usually felt like gatherings of the Silicon Valley mutual admiration society of technology evangelists, all so full of hollow rhetoric that I had a hard time associating any of them with a former English Prime Minister known for both his oral and written command of the English language. I was so convinced that this organization must have been named after some other Churchill that I finally checked out the Club History Web page, where I was able to read the depressing truth:

The Club was founded by Rich Karlgaard, now publisher of Forbes magazine, and Tony Perkins, now Chairman and Editor-in-Chief of Red Herring Communications. Together, Tony, Rich, and a group of friends from the Ed Zschau senate campaign, built an organization dedicated to producing programs where "important people say important things". As a Churchill Club speaker, then Arkansas governor Bill Clinton suggested that America needs a nation of Churchills-leaders rather than followers.

Why Churchill?

Perhaps there is no historical personage who would more heartily approve of this endeavor than the Club's namesake, Winston Churchill. Reared in the tradition of parliamentary democracy, Churchill's character and career personify the democratic values of open discourse and freedom as well as what is now called the "entrepreneurial spirit"-attributes epitomized in Churchill's own qualities of intelligence, creativity, risk-taking and boundless energy. His vision, perseverance, and wit provided the bridge necessary to bring together great leaders, opinions, ideas, and events. In fact, Churchill is just the sort of freely achieving personality that highlights democracy at its best. In America, we will gladly adopt him as our own and more particularly as the namesake of the Club.

The only comfort that I can now take is from a growing crop of historians who are taking a fresh look a Churchill and chipping away at his pedestal. Geoffrey Wheatcroft has examined four recent books on Churchill in the latest New York Review; and he describes the revisionist position as displaying him as "a warmonger or an incompetent blunderer." (I am not sure how meticulous Wheatcroft is with his formal logic, but I am willing to take this as an "inclusive or!") I do not think I encountered any warmongering on my visits to the Churchill Club; but there was always an ectoplasmic feel of the presence of the Ghost of Incompetent Blundering in the meeting room, if not up on the stage.

I have to wonder if anyone else has ever lumped The New York Review together with Ghostbusters in a single paragraph!

Thus, when I read about the Churchill Club from the safe remove of San Francisco, I am usually drawn to reports delivered in a cautionary tone. The most recent of these was filed last night by Charles Cooper as a post on his Coop's Corner blog for CNET He was reporting on a familiar Churchill Club bill of fare, a panel of "some of the A-List venture capitalists in Silicon Valley" discussing "the top ten tech trends." Despite my aversion to "top-dog thinking," I was interested in how Cooper chose to focus on a single contribution:

Most of what got offered up was unexceptional, but one comment in particular from Josh Kopelman may turn out to be one of the most prescient forecasts of the year. I'm actually hoping he's wrong because Kopelman's prediction scares the pants off me.

Kopelman presented a scenario for the rise of the "implicit" Internet. I'm simplifying, but he was referring to the vast web of personal data that until now has existed relatively undisturbed in different corners of the data world. For example, you may have made a reservation over the Internet one day, or bought a book from an online reseller on another. But that that data is going to get collected from heretofore separate "silos" as companies that figure out ways to break through the barriers and deliver information based on that implicit cyber data.

That shouldn't strike anybody as a pipe dream. It's already happening in small ways and it's an idea that VCs will be in a hurry to fund. Some, though perhaps not all. Roger McNamee, who also participated in the panel, pointed out the obvious elephant in the room. Not only might Facebook know what I'm doing, he said, "but the Chinese government also knows." True enough. And not just the Chinese. Any government.

Vinod Khosla, who also took part in the discussion, was less impressed by the obvious privacy objections. Sounding a lot like his former partner in arms at Sun Microsystems, Scott McNealy, he described this as a big opportunity, giving short shrift to nitpickers like me. "Privacy is a red herring," he said. "There are rules and laws and ways to address the privacy issue."

I definitely share Cooper's fear of Kopelman's vision, but I am even more dismayed by Khosla's casual dismissal of Cooper's misgivings. I was reminded of the last time that I had been rather painfully slammed into Khosla's proclamations, which was a little over a year ago when the MIT Club of Northern California organized a forum on the topic of solar technology. As I previously wrote, the event, which was sponsored by Pacific Gas and Electric, was highlighted by the friction that ensued between Khosla, with his venture capitalist orientation, and Hermann Scheer, with his decades of experience in both the technical and social issues behind nuclear energy. Here is how I described the initial situation and its aftermath:

To understand the origins of the friction, we should first recognize that any event sponsored by Pacific Gas and Electric will have, as its first priority, the business of energy. To warp my recently-cited Mencken adage, no one ever rose through the ranks of an energy company by obsessing over the consequences of a clearly sound business decision. (When the energy companies put out those advertisements that try to convince you otherwise by showing really cool nature footage, it helps to remember another adage: Whenever anyone says, "It's not about the money;" you know it's about the money!) So, when we read about what happened at this forum, we should put aside anything Al Gore may be trying to tell us about the future of the planet and recognize that this was a discussion about making good business decisions.

In that context Khosla, with his reputation for making some of the best business decisions in the history of Silicon Valley, was perfect for the forum. The fly in the ointment was Scheer, whose combination of technical and social expertise has earned him a seat in the German parliament, where he now feels more beholden to the German public than to any business institution. Thus, the heated dispute that ensued was not so much about energy policy as it was about the classic question of whether an enterprise is more accountable to its customers than it is to its shareholders, with Scheer serving as advocate for the customer and Khosla assuming the role of "shareholder par excellence."

The good news is that the debate has spilled over from verbal exchanges to text; and CNET has provided a "venue" for the resulting texts. Khosla provided his position statement last week. His rhetorical strategy was to frame the argument as one between environmentalists and pragmatists. Personally, I think this put him in a weak position, since everything else he said then begged the question, "Pragmatic for whom?" After all, this would not have been the first time in history where what was pragmatic for the shareholders was not at all pragmatic (and perhaps even damaging) to the customers! This forced Scheer into the position of defending his own pragmatism from the customers' point of view, and that is basically what he did in responding to Khosla this morning.

I find it somewhat ironic that we should be revisiting the question of whether or not what is good for the shareholders is good for the general public at a time when the most forceful shareholder voice is coming from Carl Icahn; and, if I thought that the fate of my personal privacy lay in the hands of Icahn (as it might if he acquires the power to bend Yahoo! to his will), then I really would have the pants scared off of me (in Cooper's language). While I do not think that Khosla is as much of a brute as Icahn has demonstrated himself to be, I still feel it is dangerous to assume that "the privacy issue" can be dismissed with talk of "rules and laws and ways." Privacy is but one facet of the social world that the Internet has become, which means that the future of the Internet will depend as much on the innovation of "empowering technologies" as it will on the far more nebulous question of the behavior patterns that emerge from that empowerment. Thus, if "no one ever rose through the ranks of an energy company by obsessing over the consequences of a clearly sound business decision," I would hazard a guess that no successful venture investment was ever made based on obsessing over the behavior patterns it could or might induce or trying to identify, as I have done, which of those behaviors are "bad," "malicious," or "pathological."

There we have the paradox. If Khosla devoted as much attention to Deadwood as he did to the portfolio of venture funds that he manages, then I would not be surprised if the performance of his portfolio suffered. On the other hand, when voices informed from social perspectives (such as the one that the script of Deadwood developed about frontier mentality) raise objections, he should probably not take such a confident posture of dismissing them out of hand. Those voices are inquiring into a future beyond any specific return-on-investment goals; and, as Gore demonstrated in his own vivid way, if that future impacts the nature of our life styles and the planet on which we exercise them, then we ignore it at the peril of our own and future generations. After all, as I have previously put it, what is the good of having all the marbles, if you can't play with them?

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