Sometimes Good Guys Do Finish First

from the google-did-it dept

My friend Reihan Salam has an interesting piece in Slate that nicely pulls together much of the discussion at Princeton's Computing in the Cloud workshop last month. He argues that web startups that have cultivated a squeaky-clean image start to have difficulties when they start trying to monetize all the traffic they've generated. The most obvious example is Facebook's Beacon fiasco. Reihan suggests that the "immaculate capitalism" of early-stage startups gives way to ordinary profit-seeking once companies face pressures to turn a profit. There's clearly something to this, but I think Reihan's time horizon might be a little bit too short. Keep in mind that even the mighty Google faced questions about its profitability as it stubbornly resisted the pay-for-placement schemes that many other search engines adopted. Google's refusal to compromise the quality of its search results for short-term profits helped it build market share, and it ultimately found non-disruptive ways to monetize all of those eyeballs. Facebook and Wesabe are much younger companies, and so it's not too surprising that they haven't found the right model for monetizing their users. Ultimately, their reputation with users is their most valuable asset, and so it's smart business to safeguard that reputation, even at the cost of foregoing some short-term business opportunities.

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Capitalism And Doing Good Are Not Mutually Exclusive

from the tie-them-together dept

Over the last few years, it's been great to see more people realize that capitalism and philanthropy are not mutually exclusive concepts. When Google launched its philanthropic foundation, the biggest news was the fact that it was designed as a for profit entity, rather than the typical non-profit. The NY Times is now writing about this trend for new philanthropic organizations to also be for-profit organizations, recognizing that many of them have found they can do much more "good" by also focusing on a way to make a profit. As we pointed out when Bill Gates called for "kinder capitalism," a full understanding of capitalism would suggest that there's plenty of kindness baked in. There is benefit in doing good, and just because there's a profit motive behind some things, that doesn't mean it's at odds with doing good. It's great to see that more philanthropic organizations are recognizing that as well.

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