And then, Egypt shut down Internet access and wireless connectivity for its citizens. To see communications shut down was frightening to VC Fred Wilson. The power of technology and, by extension, business was given a nasty shake. As wonderful and terrible as the times are in that part of the world, those who are at a distance can indirectly benefit by learning some lessons through the experience of others.
Faustian bargains come back to bite you
Companies often tell themselves that it's better to strike a bargain with a government than to miss the chance of influencing a country and its economy for the better of all. During the boycotts against South Africa in the days of apartheid, it was a common argument. You see the same today in a company like Google (GOOG) when it walks away from China over censorship issues. Even then, it completely waffled, so strong was the desire to do business. (Looking back, I suspect this represented tension between Sergey Brin on one side and Larry Page and Eric Schmidt on the other.)
Google also remained in multiple countries that Reporters without Borders named enemies of the Internet because of their online censorship practices. Two of the countries? Egypt and Syria, the latter of which looks to be next on the protest list.
When push comes to shove, though, engagement means nothing. The Internet turns off, and just about any government can do so. (Those in the U.S. might like to know that Internet kill switch legislation is back.)
In life as in literature, a Faustian bargain usually begins with someone convinced that they're clever enough to evade the negative, devil-takes-your-soul outcome. And that usually requires a blind spot big enough to guarantee the opposite.
When people complain, listen
Many companies ignore the complaints of customers, employees, or business partners because, after all, the world is full of yammerheads. When executives plug their ears, they make the same mistake as the Egyptian and Tunisian governments made. You may be able to stifle or ignore complaints for a long time. But eventually customer displeasure can grow strong enough to compel people to strike back.
Facebook has seen multiple customer revolts, mostly over privacy issues. Creative Labs (SGX) had a memorable uprising in 2008 it still refused to provide Vista drivers for its existing sound cards and tried to keep an independent programmer from offering one. Intuit (INTU) had a similar experience the same year when it wanted TurboTax users to pay for each additional return created with the software. Last fall, the Gap (GPS) had to drop a changed logo because so many customers disliked the new version.
If you can get that sort of reaction over a simple logo, imagine what could happen when things get really serious.
Ultimately, no one keeps control
Executives make a great mistake when they think that nothing will change. It's easy to assume that they'll have their jobs forever, that customers won't swarm to an upstart's better product or service, that the economy will keep workers locked into place, and so forth. Even taking measures that you think appropriate won't always work. In time, people or conditions don't react as you'd think, or you simply choose the wrong move.
Staying power doesn't come from trying to pin everything down. Instead, it is the result of flexibility and responsiveness.
- First Tunisia, then Egypt -- Will Syria Be Next?
- Google to China: Take Your Firewall and Shove It
- Should Unrest in the Middle East Disrupt Your Travels?