Work

Amongst self-identfied conservative and fans of what they term “small government”, it is almost an article of faith that the private sector is more efficient than the government.
(ASIDE – there is a good reason why I used air quotes in the above sentence, since I long ago noticed that many self-confessed fans of “small government” are only fans of that idea when they come across the government spending money on Stuff They Do Not Approve Of, otherwise they are perfectly OK with governments spending money. Lots of money).
One of the classic ways in which people instinctively opposed to government try to bolster their arguments is by pointing to the ineffiencies and waste that occur in IT projects within government. If they are better-informed, they usually throw in one or two notorious examples of pas failures that made it into the public domain.
There is only one problem with the argument.
The private sector is just as inefficient at IT solution delivery. In fact, based on my being involved with both the government and public corporations over the last 38 years, I can state anecdotally that waste, inefficiency, duplication, bungling, cost overruns and out of control projects are just as common in corporate IT. Some of the worst and most expensive failures that sort of made it into the public domain (such as the Confirm travel industry program), consumed hundreds of millions of dollars for next to no result or value.
There is, however, one big difference. Failures in corporations are more often and easily swept under the carpet or into a box marked “amnesia”. I have seen multiple instances of failed delivery programs being carefully spun as successes, “re-scoped”, or subjected to any one of a number of soothing outbreaks of corporate Doublespeak, in order to pretend that the whole damn thing never really happened.
In the case of government, especially at the state and federal level here in the USA, that tends to be less easy to manage, since elected representatives like nothing more than to rake government officials and leaders over the coals in public about a waste of taxpayer’s money. It is a form of ritualistic blood sport, allowing said elected representatives to preen, strut and intimidate in front of the media, as they engage in virtue signaling to their electorates that they are Relentless Stewards of The Public Purse.
Whether those public ritualistic floggings actually yield any positive results is doubtful. Excoriating in public is never a positive motivational strategy; it is about one half step removed from the old saying “the beatings will continue until morale improves”.
The underlying point here, however, is that when people complain about “waste” in government IT, they are conveniently overlooking that the levels of waste are just as bad in the private sector. The truth is that the issues with large-scale IT delivery are many and difficult to solve, no matter where the projects are being executed. Software development and delivery as an activity stream just does not scale well.

A number of years ago, I was fired off a consulting gig.
Anybody who is a consultant knows that this is always a possibility. Consultants are hired guns, and can be un-hired, sometimes on a whim.
I tend to think that, to use an old sports coach joke, there are two types of consultants; those who have been fired, and those who will be fired.
The manner in which I was fired from this assignment (no, I did not get fired from my employer – the client simply rejected me) was a story in itself, mainly because of the bizarre way in which it was communicated.
However, one of the reasons that was given to me was that I was “too non-committal”. Apparently this was because, when asked if my team could do something that had not been previously agreed, I would say “let me evaluate that and I will get back to you”. To me, this was commonsense. I had a full plate of transition for a Testing tower. If I had said Yes to everything, I would have been an integrity-challenged fool.
The problem was that many of the people working on this transition from in-house IT to a service provider (my employer) were from India, and their cultural instinct was to say Yes to anything they were asked to do. So, the client would go to another group, and ask “Can you do X?” and the Indian delivery teams would say “yes of course”. Then they would go away and try to work out exactly what it was they had said Yes to (I kid you not. Myself and a work colleague actually overheard them around a coffee machine trying to decide what they had just said Yes to after one meeting. Amusing and frightening at the same time).
So, according to the client, I was not helpful, because I was non-committal.
I was reminded of this when reading this essay about how doubt build trust. To me, the basic idea is somewhat obvious. Especially when you consider the historical contempt that people profess to hold for “yes men”. However, many people say Yes to loaded or leading questions when they should demur or ask for time to reflect. I routinely say “let me think about that for a moment” when asked questions. If people think that makes me slow, or dim-witted, well, I guess they can think that while I go on my merry way.

I arrived in the USA in the Fall of 1998, at a time when a revolution was being plotted in start-up rooms, and pitched to eager venture capital firms and private wealth funds.
What was to become known as the Dot Com era was beginning. With the appearance of usable web interfaces around 1996, the Big Idea that germinated in boardrooms was that all manner of business interactions, instead of being conducted face-to-face in what were termed “brick and mortar” locations, or via telephone, would occur via web sites.
The premise was that disruptive innovation was coming to business with consumers via internet-based interaction.
A lot of people loved the idea. In my industry sector at the time, airlines, hotel chains and transportation service providers were rubbing their hands in glee at the thought of being able to sell direct to the public. They were, as they saw it, impeded financially by having to sell via intermediaries such as GDS vendors and travel agents, who all took a percentage of their revenues. With this new model, who needed the grasping middleman? Suddenly, another words was on a lot of people’s lips. Disintermediation.
From my new IT perch in the USA, I watched over the next 2 years as the Dot Com era showed up, grew exponentially, crested, and then imploded. Like all bubbles, it burst spectacularly, with most Dot Com startups being shuttered, sometimes after burning through horse-choking piles of cash before failing (hello WebVan).
There were a whole host of reasons why Dot Com turned out to be a bubble, ranging from ludicrous over-optimism, a total lack of realism (who knew that building scaleable web sites could be..well, kind of difficult), and the presence in the mix of a fair number of bullshitting charlatans all uttering variants of the mantra “if you build it, they will come”.
The Dot Com era is now far enough away in many rear-view mirrors to have been almost forgotten by many people in and outside of IT and Tech. This is not surprising, given the well-documented (and somewhat necessary) tendency of humans to remember Good Stuff and mysteriously fail to remember Bad Stuff.
It is certainly far enough away for start-ups to be able to collect large amounts of VC cash and proceed to burn through it at a merry rate. Just like the Dot Com era, many VC-backed businesses today may never be profitable. I am still trying to fathom if Twitter can ever make money, given that it cannot regulate content, and as I keep saying, all free internet sites eventually suffer from UseNet Syndrome.
One of the most-funded startups toaday is Uber. Like many Dot Com-era businesses, Uber’s value statement is based on disruptive innovation – the ability to call up a taxi ride online, have it arrive quickly, and pay either online or in person. Uber has been expanding rapidly for a few years now. As is normal for what looks like a disruptive technology (certainly disruptive if you are a cab driver in a big city), Uber’s expansion has run into roadblocks, some of them related to the reality that legislation does not have the ability to handle disruptive innovation. Just like the drone/UAS industry, many cities and states are not set up to facilitate an internet-based ride-hailing business, and some of them are hostile (see Austin TX).
However, at the end of the day, Uber has to make money, or it is ultimately doomed. The problem is that it may never be able to make money. Uber’s strategy clearly involves transitioning in the future from owner-driven cars to autonomous vehicles, thus eliminating another intermediary source of cost (the driver). However, given the comment I made about legislation not keeping up with technology, it is not clear how soon that can happen.
This article makes the claim that Uber is actually doomed with its current business model, and may end up as another WebVan. The money paragraph is this one:

…Uber lost at least $2 billion in 2015, a shocking deficit it followed last year with a loss of $2.8 billion — a number that didn’t even include its star-crossed attempt to break into the Chinese market. Much of those losses had come in the form of subsidies: Uber was paying bonuses to drivers to get them on the road and keep them there, while subsidizing rides for users by charging well below the true cost. The idea was to get people so addicted to the Ubering lifestyle that the app would be baked into their lives, to such a degree that no one would much care if and when the subsidies went away and the price went up. Or Uber would simply drown its competitors in cash until the advent of autonomous cars got rid of its biggest cost: drivers.

It’s the Dot Com era all over again – a start-up flush with VC cash is clearly willing to endure massive short-term losses (the amounts of money that Uber is prepared to lose are making WebVan’s losses look like chump change), in the hope of establishing a dominant market position. Baked into the whole current business model is one of the oldest tricks of an aspiring business monopolist (predatory pricing), coupled with an optimistic belief that a disruptive technology (autonomous vehicles) will ride in and Save The Day.
My humble opinion is that Uber cannot succeed as a buisness because it relies on too many cards in its poker deck falling its way. Uber’s claimed market capitalization of up to $60bn is a polite fiction for a business that is losing $2bn a year. Anybody who believes that probably also believes in rainbow pixieland and unicorns, and deserves to be parted from their money.