Billionaires, Startups and the Climate Change Conundrum

N.B. I wrote this before Branson and Bezos had their space race, and it only seems to have become more apparent since.

There's a real cult of the billionaire at present. Whilst many of the ever-growing billionaire class are hidden from public view, those that are visible take up an ever-increasing proportion of our airwaves. As a result, we see more and more what these people are like, and I'll be honest, it isn't a pretty picture.

We live in a world of increasing wealth inequality, particularly in nations like the UK and US. A smaller and smaller subset of people hold ever increasing wealth, and with that wealth comes power. I have wider issues with this dynamic and the impacts it has on society, but it's a complex problem, so let's focus on a narrower remit for today.

A good number of the most public billionaire figures – Musk, Bezos, Zuckerberg and Gates – have emerged from the (software) startup ecosystem. Startups have a highly founder-centric viewpoint, and thus I think looking critically at the figures this system creates and idolises is worthwhile when considering a wider question – are startups a useful tool in creating the disruptive change needed to tackle climate change, or merely a vehicle to perpetuate the status quo?

The nice billionaire

First of all, let's get something out of the way. There are no good billionaires. Gates is perhaps most known for a gentle, benevolent image, but Bezos is also making efforts to shift perceptions of late with philanthropic efforts (somewhat undone by ill-judged comments after his recent space flight). Zuckerberg, in his own, slightly alien way, also has made grand philanthropic gestures, aiming to 'cure all disease'. Even Musk, who is famously brash and aggressive, aggressively markets himself as someone out to save humanity by sending people to Mars, or to revolutionise cars, mass transit, high-speed travel or brain-machine interfaces.

This is very much billionaires using their wealth to improve their image, make no mistake. Bill Gates was well known for his egotistical and smug behaviour up to and including the massive antitrust case against Microsoft in the 1990s, but thanks to sustained effort through the Bill and Melinda Gates Foundation, he has rebuilt himself as a benevolent figure dedicated to helping the world become a better place. He likely does want to improve the world, but it says a lot both how he came to his wealth, and the aggression and individualist mindset he fostered along the way (his reputation for repeatedly hitting on women he worked with also fits into that image).

The Gates Foundation pursues a very particular, private and powerful agenda on the world health scene. Have they done good? Undoubtedly. However, they've also become a major power player in influencing world health policy, meaning effectively Bill Gates, one rich white man from the US, can influence how world health policy is created and changed. The Foundation is in many ways an extension of his own world view, one that emphasises a market-based approach over all others. Last year, they were implicated in a decision by Oxford University to not open-source their COVID-19 vaccine, instead signing an exclusive deal with AstraZeneca – giving the company sole rights and no guarantee of low prices.

This is a classic pattern — Rockefeller, Carnegie both used philanthropy to improve their legacy to great success, now largely known as great men who did many good deeds, with little focus on their aggressive business practices. Indeed, the goals and objectives of the tech billionaires are similarly focused on legacy. Elon Musk, for example, doesn't just want to take humans to Mars, he wants to be known as the man who took humans to Mars. If it were not attached to his name, I suspect he would be far less interested in the goal.

Technology will solve all problems

The other interesting aspect of particularly tech billionaires is their focus on technology and engineering to solve problems. This manifests in two ways – any problem is tackled in an engineering fashion, and the only problems tackled are those with engineering solutions. Gates is perhaps an outlier here, but even he touts breakthroughs in medical technology for his health philanthropy, and in climate-focused investment, focuses on technological breakthroughs like modular nuclear reactors and carbon-free steel.

This attitude is one that permeates throughout the startup space, and is only strengthened by these vocal public figures, often lionised by the tech world, which shares similar views. It sees the world through a lens where social and humanitarian issues are trivialised, something that distracts from the pure, straight-forward world of physics, engineering and technology. It's a privileged viewpoint enjoyed by people largely unaffected by many of the social ills that define our society.

From such a perspective, racial, wealth, gender and other inequalities might seem like complex, messy distractions, but it is a huge privilege to be able to ignore these fundamental, complex dynamics of the world we live in. The climate crisis is one interlinked story of inequity writ large, of the privileged taking what they want regardless of consequence.

The tech view

This subject has eaten away at me for some time. I come from a technology background, and am now working in the climate change space. The changes needed to prevent catastrophic damage to planet and people are vast, systemic, and need to happen in record time. Government and incumbents are changing, but far too slowly to have meaningful impact. From a tech perspective, this screams out 'startup!'. As such, I've tried to look at major disruptive companies, looking at the types of problem they solved, how they grew, how important a role founders played, and what impact they had. Whilst not all climate problems might be solved in such a way, surely some can?

However, startups are tied super strongly to personal wealth. As I mentioned earlier, most of the current crop of tech billionaires gained the majority of their wealth through founding companies, and startup culture is laced with the attitudes of the tech elite. Many founders aspire to that status, and startups are also strongly infused with the individualist, libertarian values found in America and particularly in Silicon Valley.

The oft-quoted adage of many Americans seeing themselves as 'temporarily embarassed millionaires' fits startup-land very well – there's a deep-seated resistance to the criticism of unfettered wealth acquisition even in climate-tech circles, which I find rather troubling. Even those who maybe criticise wealth inequality in the abstract will leap to defend a poor downtrodden tech billionaire when someone dares to suggest that such enormous wealth is somewhat obscene.

What I want to consider though, is this: is there a true innovative, disruptive force behind the Silicon Valley startup hype, and can it be separated from its parasitic relationship with power and wealth acquisition to serve a more beneficial cause: tackling climate change?

Horses for courses

It is worth noting at this juncture that only certain kinds of climate problems will be able to be tackled this way. Climate change is a vast, multi-faceted issue, and likewise climate solutions take many forms – there are worthwhile tracks that feature activism, for-profit and non-profit organisations, policy, politics, advocacy, arts, science and research, to name a few.

Startups are a very particular vehicle, designed around scaling ideas within a market-based system. Whilst there many be learnings that can be applied more widely, it's likely that the core concept is only going to apply to a subset of areas and issues – those that have a more commercial framing and would benefit from rapid scaling. However, the flipside of the scale and breadth of climate change is that we need to do all of it at once, so even ideas that only fit that narrow mould are still worth pursuing as long as they don't intrinsically preclude other paths.

Money, money, money

A big initial challenge is money. Startups are (largely) funded by private investment, mostly VC. To over-simplify, VC is a collection of wealthy individuals (or individuals representing a pool of wealth) who make bets on small, early stage companies. The idea is to take a large pool of money, and spread it over many, many companies. The amounts per company will be small to the investor, but game-changing to the business.

Many of the startups will fail, for all manner of reasons, but thanks to the aggressive growth strategies of such companies, those that win out will more than make up for the losses, returning a net profit to the VC. There's a lot of messy, emotive language around startups and VCs, with both founders and VCs talking big about disruption, changing the world, and so forth, but ultimately, it's all about money. If you don't make profits (ideally outsize ones), then no-one will invest, and your company will fail.

This presents a problem for climate change — much of the climate change problem is one of climate damage not having economic value, and thus being ignored by a market-driven global economy. However, there are elements that can be monetised, so it's not beyond the realm of possibility that some aspect of climate change could be commercialised.

The issue is the degree of monetisation, scale, and motivations. VCs are mostly (though perhaps not entirely) motivated by returns. Sure, some angel investors are in it for more personal or philanthropic goals, but VC funds are designed to return a profit to those who invest in them, and so that is their bottom line. Given what we just mentioned about most startups failing, if you succeed, you need to make it big for them to take you seriously. By taking VC money, you gain funds to scale a business, but at the cost of giving up a sizeable chunk of your company to someone who is ultimately most focused on the business making outsize returns. That means any decision that deviates from hyper-growth or profits may well end up as a fight against investors. There are structures emerging that encode more balanced goals into a company's founding principles (B-Corps and the like), but it's a tough line to walk.

This doesn't just come up with existing investors. Attracting new investors involves pitching and selling the idea of your company to potential funders, and by and large, investors are a conservative bunch. They're OK with innovation, but only to a small degree in a narrow area. In tackling climate change, it feels like there is an opportunity to rethink how companies and startups are structured and motivated, but investors are likely to shy away from non-conventional organisational structures and ownership models unless there is a very compelling reason not to.

Growth, but at what cost?

A related element is that of growing and scaling the startup. Let's say we have a solution, it works well, and it just needs to scale. Fortunately, startup-land has many answers — the questionably named blitz-scaling of Reid Hoffman, hyper-growth, and more. Much of the startup world is based around a near messianic founder scaling a company at absurd speed, bringing on new people at record pace, and working them extremely hard, throwing aside many of the normal rules of sustainable growth practiced by slower-growing firms.

By all accounts, it seems to work in terms of generating a high hype, extremely fast growing company. The big question for climate startups is, then, do the ends justify the means? Such hyper-growth companies are often (maybe always) highly disfunctional, in structure, in people dynamics and more. They are highly toxic environments, ultra-competitive, where employees endeavour to outdo each other in burning out faster. I started by focusing on billionaire founders because they so often embody these qualities. They are usually narcissistic, ultra-competitive, dsyfunctional human beings. They work insane hours because they literally don't know how to function doing anything else. They expect everyone else to keep up, and when people can't, for whatever reason, they are cast aside for the next starry-eyed candidate eager to bask in the glow of founder-proximity.

Tech firms are renowned for scooping up huge numbers of smart, single, middle-class male university grads. This demographic have minimal social lives, enough money to pay others to handle non-work aspects of their lives (travel, food, rent, etc) and other privileges that enable them to work the insane hours expected. And even then, many burn out and quit. Startup environments are famously toxic for women, non-white folks, LGBTQ+ people, those with families — basically anyone outside of that white, single, cis-het male stereotype. The companies that have successfully reached scale (Google, FaceBook, etc) have spent years trying to remedy this culture, with limited success, and are only able to try because of their more stable situation and vast pools of accumulated wealth.

The question in this case is then: does rapid scaling inherently build a toxic environment, and if not, how can we most strongly steer clear of this type of situation?

Do the ends justify the means?

Ultimately, what I keep wondering with climate-tech startups, is – is this the post-climate change world we want to create? If we can use such a dysfunctional system to create systemic, disruptive change for good, should we? And if not, what are the alternatives? Can the system that creates billionaires work without the toxic billionaires? Can we have the same results without the destructive process used to get there? Are there ways to scale such solutions in a more humanistic, inclusive manner?

Maybe such a solution could also revisit the profit and investment dynamic, offering alternative mechanisms to fund solutions that don't necessarily generate monetary returns (even if they produce a net good for humanity). There are hopeful signs – I mentioned B-Corps and alternative organisational or ownership structures – though whether these are enough remains to be seen. An increased focus on diversity and inclusion of late in startups is also a definite boon. With a more diverse range of viewpoints and backgrounds present in a company (ideally including the founding team), hopefully many of the more problematic behaviours can be headed off at the pass.

However, any such efforts do not exist in a vacuum. The startup ecosystem is a vast machine, and it has huge inertia. The further one rocks the boat, the harder the journey will be, and the lower the chances of success. Moving into climate tech is often a big leap from the norm in many cases, and if you mix in novel company structures and more diverse teams, that can often be enough to nix a company's chances before it even begins.

It comes down to the eternal question in climate change — do we fix the symptoms of climate change within the current system — the CO2, the heating, the sea level rise — or do we fix the system that created these problems in the first place? The latter offers the potential to help correct inequalities of so many kinds and create a more equitable world for all. However, replacing a system so entrenched makes the already formidable task of slowing and halting climate change yet more vast. The ultimate answer is unclear. It seems likely, given the messiness of the complex world we live in, the final answer may be a little of one, a little of the other. But not to think bigger, to try and figure out what that alternative world might look like — that would be madness.

There are many other problems touched on here, and discussions and arguments to be made on so many aspects of capitalism, wealth, startup structure, growth, companies, competition and more. However, hopefully this proves a jumping-off point for further questions and discussions. Yes, we need to act on the climate. But I think there's also value in making sure we act in the right way, and don't end up perpetuating harm in the name of preventing it.