Amazon has more than 800 people working on what sounds like video conferencing devices on wheels, but it is not known if customers want them.
Apple has spent nearly a decade and untold billions of dollars starting, pausing, and reworking a project to develop a car that may never hit the streets.
Google and Facebook continue to spend billions of dollars buying and building luxurious complexes when no one is sure what the post-pandemic needs of a face-to-face office job will be.
We want successful companies to tinker with expensive projects, even if they don’t work. Inventions occur after wandering and stumbling. Yet perhaps that’s not the only thing that happens in the research labs and corporate suites of America’s tech giants.
Part of what we might be seeing at the moment are companies so, but so rich, that sometimes they waste money – why not!? -, hindering other companies and themselves in the search for successful innovations.
Yes, I am really asking if it is possible to be too rich (and, yes, that is a problem I would like to have).
Let me explain why we should care that a handful of tech giants are wasting their time and money.
Lack of money can push a business or entrepreneur to the limit, but it can also encourage concentration and creativity. There’s an axiom about tech startups: Those founded in tough economic times often turn out to be the biggest hits. Young companies and their leaders learn to do more with less and focus only on their best ideas.
And, like a wealthy friend who installed gold toilets in each of his 25 bathrooms, having that much money can force companies to scramble for hasty ideas.
On Wednesday, The Wall Street Journal reported that Amazon is testing concepts for a department store with digital clothing labels that customers can scan with their phones to try on items, and maybe then add robots … for some reason. Doing tech tidbits is probably not the right way to improve the shopping experience for humans, but Amazon can experiment with overly complicated concepts because, you know what, why not? In one of those it works.
When Amazon wastes money on a problem, other companies often respond with their own state-of-the-art proposals. Shortly after Amazon bought the grocery chain Whole Foods, Kroger hatched a plan for futuristic stores with digital shelves where product prices are quickly altered to help people shop faster. Walmart and other stores deployed robots to detect when products are not out of stock and tested systems to automate the checkout process.
Some types of retail technology, particularly automating the parts shoppers never see, could be big breakthroughs in the long run. However, the trap retailers and Amazon fall into is an obsession with the flashy rather than the actually useful. Has anyone stopped to ask if a reloaded touch screen or a robot is the best way to do this? Last year, Walmart ditched its shelf-scanning robots because there were simpler alternatives that were just as good.
Amazon can prove all this because it seems that its money is inexhaustible. Yet what else could Amazon, Kroger, or Walmart do to improve shopping other than chase after the costly dream of “The Jetsons”?
Many smaller tech companies fear that tech giants are hogging talent just because they can. Imagine the mid-level software engineer who is making a lot of money at Google instead of starting an autonomous vehicle company or a Facebook manager who instead of being in his position could run a second-level e-commerce company that becomes the next Amazon.
The owners of America’s tech giants – shareholders – for the most part trust that Google, Facebook, Amazon, Apple, and Microsoft are on the right routes to riches (sometimes shareholders do worry that these companies are wasting money and this has resulted in changes of executives or other actions in the companies).
We want big tech companies to keep investing to create original products and services. However, we all know that having so much money can make people, and companies, undisciplined and impulsive.