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The smartest kids in the room

A closer look at Silicon Valley’s public unravelling and Stanford’s role in the process

Facebook chief executive Mark Zuckerberg, who faced ten hours of Congressional hearings on privacy and Russian electoral interference early last year. Courtesy of Wikimedia Commons.

Last April, Facebook Chief Executive Officer Mark Zuckerberg sat, sweating before a Congressional panel. Under scrutiny was how a British political consulting firm had gained access to the private data of more than 50 million Facebook users while Russian operatives leveraged the platform as a tool to interfere in the election of a U.S. president.

In September, healthcare technology corporation Theranos Inc. notified its shareholders that the company would dissolve. It was the last act in a three-year drama that revealed founder Elizabeth Holmes to be at the center of what prosecutors now describe as an elaborate, multimillion dollar plot to defraud investors, doctors and patients, based on the false claim that her technology could test for hundreds of diseases with a pinprick of blood.

In November, e-cigarette company JUUL decided to pull its fruit-flavored products from distribution. The decision came after pressure from the U.S. Food and Drug Administration for its role in what the agency called an epidemic of youth nicotine addiction, which saw an estimated 75 percent increase in e-cigarette use among high schoolers in 2018 (vexed administrators have taken to installing vape detectors in bathrooms).

Such scandals have brought a heightened focus on how enterprises manage both company culture and the broader impact of their products and services. It seems that a more tempered view of the Californian wunderkinder is in order.

For Stanford, the discussion strikes close to home. The first outside-investment in Facebook came from venture capitalist Peter Thiel, who received his B.A. from Stanford in 1989 and his J.D. in 1992. Holmes started the company that would become Theranos in 2003 as a sophomore at Stanford, dropping out later that year on the advice of Channing Robertson: then Vice Provost and Dean of Research in the School of Engineering. Robertson later joined Theranos’ board. The founders of JUUL, Adam Bowen M.S. ’05 and James Monsees M.F.A. ’06, were graduate students in product design.

The list goes on. Brian Action ’94 co-founded WhatsApp: a cross-platform messaging app that has been recently criticized for the way its viral message forwarding mechanisms and end-to-end encryption have enabled the propagation of fake news during the 2018 Brazilian election and fomented mob violence in India. Jawed Karim M.S. ’07 co-founded YouTube, which has been in the news for surfacing extremist videos in its recommendations. Former Stanford Ph.D. students Larry Page M.S. ’98 and Sergey Brin M.S. ’95 founded Google, which acquired YouTube in 2006 and is now facing employee walkouts over a proposed Chinese search engine that human rights advocates say would facilitate further government surveillance and the repression of dissident voices.

Stanford has earned a reputation for being at the forefront of innovation. According to current and former Stanford engineering professors Charles Eesley and William Miller’s 2018 book “Impact: Stanford University’s Economic Impact via Innovation and Entrepreneurship,” an estimated 39,000 active companies can be traced back to the University between 1930 and 2011, including names like Hewlett-Packard, Gap, Nike, Netflix and Instagram. If Stanford-linked companies were to form an independent nation, Eesley and Miller wrote, it would boast the 10th largest economy in the world.

Now, the same resume has left the University with ties to a field in crisis. What follows is an account of Stanford’s relationship with entrepreneurship, as well as an examination of how the University intends to move forward.

After all, Stanford now faces a pressing question: In light of such scandal, how should it respond?

A moral education

Stanford was founded in 1885 with high-minded notions of education as the fashioning of bettered individuals and citizens. Yet, headlines in recent years have called into question the extent to which this mission has been realized.

Theranos defrauded investors. JUUL fostered addiction for profit. Google declined to send either CEO Sundar Pichai or Alphabet CEO Larry Page to congressional hearings on Russian electoral meddling this past fall, a decision some saw as skirting difficult conversations about its global impact. Pichai testified before the House for the first time in December.

There have been other ugly incidents as well. In 2014, the undergraduate emails of Snapchat founder and Kappa Sigma fraternity member Evan Spiegel ’18 — who took a break from Stanford in 2012 to focus on the app — went viral for their crass, profanity-laden jokes about sex, alcohol and sorority members. That was followed in 2018 by accusations from a former Snap Inc. employee that the company had permitted the growth of a sexist and toxic workplace environment.

The long-range vision for Stanford announced by University President Marc Tessier-Lavigne in the spring of 2018 lists ethics as the first item under values. Recent events are now testing how, and to what extent, this value will be enforced in education and in practice.

“Ethics is about how we ought to treat each other as human beings,” said political science lecturer Brian Coyne Ph.D. ’14, whose work centers on frameworks of justice. “It definitely is an everyday consideration, or it ought to be for individuals.”

Insofar as any institution has the capacity to influence the moral development of an individual, Coyne suggested that universities like Stanford have a unique opportunity — and responsibility.

“We inherit an ethical system from our parents and our families and the social milieu we grow up in,” he said. “But as we become adults, especially as we come to universities, we can start to interrogate the ethical beliefs that we have picked up before. And then we can either assent to them in a conscious way or change and revise them, if we choose.”

The university an individual attends can help to determine how that process unfolds, or whether it unfolds at all, Coyne explained. It is a perspective echoed by Geoff Sayre-McCord, who teaches philosophy and lectures on entrepreneurship at the University of North Carolina at Chapel Hill.

Sayre-McCord explained that the time to foster discussions on ethics is in the early years of college, which he described as a point when people are still making decisions about who they will be as individuals.

“Making clear to people that they’re not able to lead an ethically neutral life, that they’re not in a moral free zone, I think is really important,” he added.

The administration expressed a cautious view of its role, with University spokesperson E.J. Miranda noting that Stanford would hesitate to make public comment on the ethics of actions taken by individuals who are no longer direct institutional affiliates.

“Typically, the University only takes public positions on issues or actions that directly affect Stanford’s mission or operations,” Miranda wrote in an email to The Daily. “In general, the University does not speak against initiatives, businesses or projects.”

Nonetheless, Coyne sees the University as having a distinct ethical burden that it must and does recognize.

“It’s not hyperbolic when we talk about educating the future leaders of the next generation,” he said. “Stanford has a kind of special obligation by virtue of its prestige and power.”

There is also reason to believe that now, more than ever, the University occupies a place of particular importance for those who go on to become entrepreneurs, said Randy Komisar, who has been an entrepreneur and investor in Silicon Valley since the ’80s and has worked at the venture capital firm Kleiner Perkins since 2005. He recalled the early stages of the Valley as being markedly different from today.

“Success came to people later in their lives,” Komisar said. “They had more life experience when they took on the responsibilities of leadership.”

Now, he explained, the rapid growth of a startup often upends that timeline, placing young founders at the helm of companies with tens of millions of dollars of invested capital and the concerns of a much larger enterprise. Just over a year after its launch from a Harvard dorm room in 2004, Facebook reached a whopping 5.5 million users.

“They are so young, with so little expertise,” he said of such cases.

Komisar’s observation does not hold true across the board, with data from Eesley and Miller’s book indicating that, among Stanford alumni, the average age of founding is in the mid-30s. Still, there are enough notable cases of dropouts and recent graduates in executive positions for Komisar to make his point. Both Holmes and Zuckerberg were 19 when they founded their respective ventures. Spiegel was 22.

Amplifying the effect is what Komisar sees as an age schism in tech startups.

“They don’t surround themselves with experienced people of other generations as they did in the past,” he said of successful entrepreneurs, referencing an age bias in Silicon Valley hiring practices as one factor in this phenomenon.

He added that, unlike more conventional business structures, companies like Facebook and Google have seen control remain in the hands of the entrepreneur, rather than the board of directors, further pinning the decisions of the company to the priorities of a single individual.

“Boards of directors are neutralized by their inability to effect any change in leadership,” he explained. “Shareholders can hold or sell, but not change management.”

Coyne and Sayre-McCord both said that process of ethical development at the University level is focused on the kinds of values that students adopt and carry with them into postgraduate ventures, an approach that anchors the conversation to the level of individual morals.

Faculty and student sources did not suggest that Stanford students or the school’s entrepreneurship culture should be of special concern — and the leaders of the two major student entrepreneurship organizations on campus went so far as to offer positive perspectives.

“As with every community, there are people who are there for the right reasons and people who are there for the wrong reasons,” said Maurice Chiang ’19, co-president of student entrepreneurship group ASES. But Chiang maintained his belief that most students with which he had engaged were committed to and passionate about solving real need.

Andrew Blum ’20, co-president of the Business Association of Stanford Entrepreneurial Students, added that ethics is becoming a growing part of the discussion.

“On the student level at least, it does tend to permeate the conversations that I have with people,” he said.

At the same time, Stanford’s culture is what drove Komisar — who lectured at Stanford in the early 2000s — away from the University in 2008.

“I was weary of the pre-professional attitude that students at Stanford were taking towards entrepreneurship,” he said. “They were beginning to think about the course as a means for them to create a startup and get rich. And that was never the goal.”

Elizabeth Holmes (above), CEO of the healthcare technology company Theranos, has been accused of fostering a complex net of lies to maintain the appearance of success. Courtesy of Wikimedia Commons.

Teaching innovation

Instead, the goal was to teach entrepreneurship as a philosophy, Komisar explained.

There is a vast set of resources at Stanford for those interested in entrepreneurship, which has helped support the success of alumni-founded ventures. Of alumni who went on to found their own enterprise, 40 percent took some form of entrepreneurship course at Stanford, Eesley and Miller found. With course offerings in small business and entrepreneurship first available in the 1940s, Stanford has since developed into a bastion of entrepreneurship education, maintaining field courses in the subject at all seven of its schools.

Tom Byers, a professor in the department of management science and engineering, has had much to do with that. It was alongside Byers that Komisar lectured when he was at Stanford.

“In the mid-1990s, when Tom Byers came to Stanford, there was no pedagogical framework for teaching entrepreneurship in Silicon Valley — and the Silicon Valley style of entrepreneurship had no framework,” Komisar said. “There were some courses on entrepreneurship being taught at some business schools, but they were largely around family businesses. They weren’t designed around high-aspiration, innovative technology startups.”

Komisar described Byers’ impact as redefining the academic treatment of the field.

“Tom Byers basically created the entire curriculum for teaching entrepreneurship that is now accepted globally,” Komisar said.

Byers acknowledged his role in the development of entrepreneurship education, which he described as part of the larger project of the Stanford Technology Ventures Program (STVP), the engineering school’s entrepreneurship hub where Byers is the faculty director.

“It was nothing very scholarly,” he said of entrepreneurship education in the early days. “I mean, it was just stories,” he continued, referring to a lack of structure in the pursuit of what made ventures successful. Moreover, he said, courses were limited to business school students.

Now, any student can take a course with STVP. Byers encourages this, rejecting the notion that entrepreneurship fits within the boundaries of a single discipline. Rather than a subset of business, he sees entrepreneurship as a superset consisting of a toolbox of skills, including strategic thinking, creativity and the capacity to make rapid decisions with limited information.

“It can be taught,” Byers continued. “There is a case to be made that it should be learned by everybody.”

This ethos is shared by the Hasso Plattner Institute of Design, better known as the d.school, which welcomes students of all backgrounds to its coursework on design thinking.

“We are one of the few places on campus where students from all seven schools actually come together to take classes,” said Sarah Stein Greenberg, executive director at the d.school.

Just as Byers believes entrepreneurship extends beyond business, Stein Greenberg sees design thinking as a mindset outside of product design.

“We teach a set of tools and approaches that are about looking at problems in a really creative way and coming up with solutions,” she said, adding that the first characteristic of design thinking is skepticism. “We don’t take the problem statement as given. We really look first at whether we’re solving the right problem.”

The second characteristic is learning through failure. Each time an iteration misses the mark, Stein Greenberg explained, it should educate and refine the next attempt.

“And it’s through this process of iteration, it’s through that cycle that you actually get to something that’s worthwhile,” she continued.

Inherent in such approaches, as both Stein Greenberg and Byers recognized, is disruption and action — a sense of “go-for-it,” as Byers put it.

Komisar agreed: “[Entrepreneurship] is about doing things that don’t work,” he said. “It is a laboratory for rapid innovation and experimentation.”

But, he warned, that scope has changed the calculus in Silicon Valley.

“The thing is, if that is done at scale, the ramifications of being wrong are gigantic,” Komisar said.

‘Move fast and break things’

Akshay Kothari M.S. ’10, who created the news aggregator Pulse in the d.school incubator class Launchpad as a graduate student in electrical engineering, has felt the benefits that come with a bias toward action. When the first version of Pulse was ready, he recalled telling his professors that the app would launch in a few weeks, so as to leave time to test and refine it. His professors told him to reconsider, urging him to go ahead and put it out into the wild.

He did, and the app reached the top of the App Store in the news category within a matter of days.

“If we hadn’t done that, if we had been even two months late, it would have been a different story,” Kothari said, explaining that a flood of similar news apps hit the market shortly after Pulse. In 2013, Pulse was acquired by LinkedIn for $90 million.

Komisar nonetheless tied a version of these same principles to many of the issues faced by startups in recent years.

“We are seeing the results of a hyperdynamic, innovative environment,” he said. “We are seeing apologies substitute for accountability in innovation.”

Komisar’s words are reminiscent of a remark that Mark Zuckerberg made in the early days of Facebook.

“A lot of times, people are too careful,” Zuckerberg said, addressing a lecture hall in a clip from a recent PBS documentary titled “The Facebook Dilemma.” “I think it’s more useful to, like, make things happen and then apologize later than it is to make sure you dot all your i’s now and not get stuff done.”

This message evolved into one of Facebook’s early mottos: “Move fast and break things,” a mantra that came to permeate the approach of Silicon Valley on the whole and reflected the boldness of a set of innovators out to make change.

Now, it has evolved to mean something quite different and more serious. Counted among the things that Silicon Valley startups may have broken are federal securities laws, civil rights laws against workplace discrimination and labor and transport laws.

Stein Greenberg was quick to note that with action must come an active practice of reflection: “I think that it’s about that balance,” she said, explaining that innovators must recognize the appropriate time and place for disruption and the unexpected, as well as the potential long-term consequences.

“That is part and parcel of any kind of innovation, right, is really being able to think about, ‘What are the implications of what I’m designing?’” she said.  

It is also part of being an effective designer, Stein Greenberg continued.

“Your responsibility is to be thinking about that broader ecosystem, as well as the broader problem you’re trying to solve — as well as whose business or way of working you might be disrupting,” she said. “You are going to miss big pieces of insight if you don’t actually test across that broader spectrum.”

She further pointed out that design thinking is, at its core, about user satisfaction. No designer should start from the question of whether someone would pay for their product, she said.

“We’re trying to understand, at a deeper level, what people really value, so that we can design something that actually matters to them,” Stein Greenberg said. Then, she explained, come considerations of viability and feasibility.

A course at the Graduate School of Business helped inspire DoorDash, a popular food-delivery service. Courtesy of Wikimedia Commons.

However, Komisar’s comment still strikes at a key aspect of this discussion over action, speed and consequence: the recognition that businesses have the power to exert massive influence over the societies in which they exist.

Coyne explained that much of political theory assumes that only government has the power to set the terms by which we live our lives.

“That is, to a greater and greater extent, no longer an accurate assumption,” he said. “The demand for accountability goes to whoever has the power, in my view. And it is an empirical fact that these companies have the power.”

Coyne referenced the way that social media now determines the de facto rules of free speech. But there are other ways that companies shape the world in which we live: producing jobs, affecting economic growth and determining how and where we make purchases. Netflix co-founder Reed Hastings M.S. ’88, for instance, has changed not only the medium, but also the manner in which we consume television.

Then there are cases like Thiel’s secretive data collection and analysis firm Palantir, which was founded in 2004 to meet security needs for the global War on Terror and has since become a fixture of federal and local governance. First contracted by the Pentagon and the Central Intelligence Agency to work in Afghanistan and Iraq, Palantir’s services are now used to detect Medicare fraud for the U.S. Department of Health and Human Services, pursue criminal probes for the Federal Bureau of Investigation. and screen airport travelers for the Department of Homeland Security. It has also been used in Chicago, Los Angeles, New York and New Orleans to help police keep tabs on criminals — as well as the network of interactions that those felons have with other people, with or without criminal records.

A number of factors have contributed to the present ethical issues and challenges, including the most basic notion of what a startup is.

“There was a presumption that, unlike other aspects of business, technology innovation had a sense of amorality to it,” Komisar said. “The creation itself had value — and you put it out into the world and let people create with it.”

One might look to how Zuckerberg reacted in the wake of the 2016 presidential election, insisting that Facebook was not a media company — an assertion that no longer holds water with the public.

There are also some who suggest there might be certain moral hazards to which entrepreneurs are more prone by nature. This notion occurred to Sayre-McCord while speaking to friends and acquaintances involved in the entrepreneurship sphere. When he asked them what the particular moral hazard of their profession might be, he found a shocking level of consensus in their answer: lies.

“Entrepreneurs, you know, have a very, very low likelihood of success for any particular venture,” Sayre-McCord said. “But to throw yourself into an entrepreneurial effort, you almost surely have to convince yourself that yours will succeed.”

This process, he said, involves a good bit of self-deception — and it lends itself to further truth-bending.

“As has been explained to me, dealing with professional funders, they start shifting how they speak of things,” he said of entrepreneurs seeking to pitch their ideas.

According to Sayre-McCord, there were two common narratives among the experiences of his acquaintances. First, there were those who, in order to secure the money they needed, first made promises about what their product would do based on thin evidence — if there was any at all, he said. Then, there were those who, upon reaching success, assigned too much of the credit to themselves. He cited Theranos as one example of the former.

“It looks as if what happened is somebody thought they had a great idea and then became convinced that, to protect the idea, they had to keep lying about it,” he said. “The lying just kept going and going.”

Sayre-McCord is the first to say that his grounding is anecdotal at best, but he thinks that the existence of a particular moral liability faced by entrepreneurs is a concept worth engaging with, especially when it comes to identifying the particular ethical challenges for which they should be prepared.

“The real thing to focus on is when people are far enough along that they realize that they need to get more money or everything will collapse on them,” Sayre-McCord said, explaining the pressure that can push an entrepreneur to deception. “That’s the predictable structural incentive that you don’t face in so many other businesses.”

Institutional efforts

Back at Stanford, there are those looking to make change happen at the educational level.

A leader in defining entrepreneurship education, Byers is now at the fore of those working to study its interaction with ethics and develop improved ways to bring this conversation to the classroom. He is in the midst of a research project seeking to pinpoint the relationship between ethics and entrepreneurship. He also hopes to convene a conference in Minnesota in the next year to dialogue with other universities, which he says are excited to see Stanford take the lead.

Meanwhile, Jack Fuchs, a lecturer in management science and engineering, has inaugurated an STVP course this winter on principled entrepreneurial decisions. Each class will feature speakers from a different company, spanning industries such as investment, software development and healthcare, who will discuss with students a “difficult situation” from that company’s history.

Fuchs seems optimistic about the progress that could be made by the simple act of starting the conversation. In his view, a lack of clarity in ethical principles is often at the root of the issue when it comes to business malpractice. Such a lack of set boundaries puts individuals at risk of losing their way in moral grey areas — of taking those first few, easier-to-rationalize steps that can evolve into more serious transgressions, he said.

Stein Greenberg reported that the d.school is exploring how best to incorporate ethics into its curriculum as well. The school already works to ensure that students are given a space to consider moral hazards by building frequent user feedback, debriefs and reflection into the timeline of course projects.

In the course ME 206A: “Design for Extreme Affordability,” this also involves class activities that ask students to research conflicting perspectives on development work and bring them to class for debate, she explained. She described how past students had used the experience to interrogate the proper role of those with wealth in developing poverty-centered solutions.

“Our real goal is to equip our students with the ability to navigate through these difficult ethical questions over time,” Stein Greenberg said. “They are going to face those question in an ongoing way.”

At the GSB, Zenios runs Startup Garage, which, unlike the d.school and STVP, is a program more directly designed to foster and create businesses. Both for-profit and nonprofit pitches are welcome.

Zenios and the rest of the teaching team incorporate a series of activities at the front end of the program to help teams determine their values and how they will guide the venture. He said profit alone is not a motivation that the teaching team finds acceptable.

“We are pushing our students to find their deeper driver for starting a venture,” he explained.

To illustrate his point, he talked about DoorDash, a popular food delivery service that came out of Startup Garage in 2013. One of its founders, Tony Xu M.B.A. ’13, grew up helping out his mother at the Chinese restaurant she ran, which drove his desire to help small businesses. When he spoke with the owner of a macaroon shop in the first few weeks of the course, he discovered potential room for a service that would let small restaurants deliver without needing to maintain their own drivers.

Zenios tells his students that one of the best ways to create what they believe to be positive change is through a business model that works — one that can support itself.

“A financially viable model makes it possible to institute change,” he said. At the same time, he says, it is a mistake to become short-sighted, mistaking a balance sheet for all there is to a company.

Outside of Startup Garage, Zenios does research on the unintended consequences of business decisions and is working to integrate a dedicated discussion of such consequences into the Startup Garage curriculum. He also noted that every GSB student is required to take an ethics course.

“It’s something that we are actively thinking about,” Zenios said of ethics at the business school.  “There is no doubt that we can be doing more, and we can integrate things into our curriculum.”

The effort has been mirrored at the administrative level, with Tessier-Lavigne announcing as part of the long-range vision for Stanford an initiative “to infuse our role in the technology revolution with ethics and societal considerations.”

“Our president gets it,” Byers said. “In my conversations with him, he really wants this [situation] to not turn out like tobacco. Duke got started with tobacco money. A hundred years from now, do we want to be known as tobacco, now that we know that tobacco is deadly?”

It is a fraught question, given the marks that already stain Stanford’s past — including the underpaid, dangerous work of Chinese laborers from which Leland Stanford made his fortune and the Native American land on which it was built (the Stanford Indian was the school mascot from 1930 to 1972).

Coyne echoed the optimism of Byers: “Stanford’s leaders are folks who endorse the ethical mission of the University,” he said.

He named Debra Satz, this year’s new dean of Stanford’s School of Humanities and Sciences, who is herself a philosopher.

“At a personal level, I think the commitment is there,” Coyne said.

That is not to say that Stanford is the best model of ethical entrepreneurship. It is not even to say that the beliefs and practices discussed in this article are being executed in the way some might hope. Both Zenios and Stein Greenberg spoke of ensuring ethical exchanges in the user interactions they ask of their students and emphasized empathy as the foundational first step.

However, one undergraduate who took the course ME 115A: “Introduction to Human Values in Design” — taught by d.school founder David Kelley M.S. ’77 — said that her experience with design thinking as a problem-solving approach felt arrogant and extractive. She found herself facing one course project, involving the redesign of vendor marketing strategies at a local farmers’ market, with discomfort and guilt.

“You’re going to be going in as a Stanford student — someone with an elite education — to this environment that you know nothing about, after taking one week of an introductory course, and you’re going to be doing something for these people that they couldn’t have thought of,” she said of what she took to be the premise of the project.

“It’s disappointing to hear that even one student walked away with this perception; it seems they missed that the point of the class is about being human centered,” wrote d.school spokesperson Debbe Stern in an email response on behalf of the ME 115A teaching team.

“We draw on content from a range of sources in our field, including a year-long project regarding ethics in design research by a former d.school fellow and resources published by many design firms that confront these issues regularly,” Stern continued.

Further, Byers has already identified at least one potential pitfall in his own teaching. Most entrepreneurship courses like to talk about action, but ethics require talking about constraints, he explained. He says he must reconcile with the fact that bringing in ethics can seem to conflict with the atmosphere he wants to build.

“Because it really is fun: You’re creating new stuff,” Byers explained. That energy transfers to the classroom, he said.

“We’re up, we’re drawing, it’s all about expanding the mind, expanding the realm of possibility,” Byers continued.

But he has to remember when to reel it back. Talking about ethics in the context of entrepreneurship is still difficult, he said: “It’s not in the language.”

His point resonates. For all that Stein Greenberg emphasized reflection as a counterbalance to action, the Launchpad class from which Kothari saw Pulse emerge still describes itself online in terms that would not seem out of line with the charismatic, reckless spirit of Zuckerberg when he told his employees that it was okay to “move fast and break things.”

“Over the course of only 10 weeks, Stanford students take an idea for a product or service and start an actual company,” reads the Launchpad class website. “Maybe one of the reasons it works is because we put our emphasis on the entrepreneurs, not the idea. Or maybe it’s because we focus on doing, not planning, or maybe it’s because we don’t believe in failure, only evolution.”

Stern wrote via email on behalf of Stein Greenberg that the reference to “planning” describes business aspects, which ought to be approached after the initial idea has been iterated enough times with tight feedback loops. Each instance of feedback demands reflection on how to move forward, she wrote.

“No matter the pace at which you work — and independent of the methods you use to get your work done — personal integrity and acting ethically is essential,” Stern noted.

A murky future

Even with Stanford faculty members’ best efforts to address the issue, it remains an uncomfortable truth that ethics are not clear-cut, and there are questions that will remain difficult to answer.

Stein Greenberg talked about responsible innovation as considerate of the potential consequences, a notion echoed by others. But when asked about the extent to which businesses could be held responsible for externalities, as well as how much foresight could be expected of them, no source gave a definite answer.

Take DoorDash, the successful Startup Garage venture with a well-intentioned foundation story and no major scandals. It facilitates the consumption of takeout food, which some studies have suggested leads to less healthful diets: Does it have a responsibility to consider the impacts it is having on American health? Is this consideration mitigated by the fact that the company has partnered with Feeding America to take leftover food from restaurants to the hungry?

Zenios seemed surprised by the health question. He laughed, saying, “I don’t think they’ve looked into that. I think that their perspective was that people were eating out and they were going to make eating out easier.”

There is also research that indicates that, despite Tony Xu’s good-hearted mission, DoorDash and food delivery services like it are actually undercutting the profits of small businesses around the country. This raises the question of if, in Zenios’ value-centric view, DoorDash has attained real success.

“The term ‘success’ is a complicated term,” Zenios said. “It could be a success in one dimension and may have completely failed in a different dimension.”

He also saw the question as part of a larger one of economic constraints, which determine the extent to which companies can manage or anticipate the effects they have.

“Marketplaces are ruthless,” Zenios said. “Entrepreneurship always creates winners and losers.”

Yet, he continued, “Entrepreneurship means progress.” This is the premise of business, Zenios pointed out — that if a product adds enough value and is financially viable, it will create a net positive effect.

There are other questions. Stein Greenberg, who described a need to think about the end user within a broader system, paused when asked how one might reconcile conflicting priorities between different members of a community.

“It is very situational and this is exactly the kind of thing that we are trying to help our students develop,” she said. “This is not an environment where I, as the instructor, can tell you the right answer because you, as the designer, are doing the work to really understand that ecosystem.”

Meanwhile, when it comes to Stanford, time will tell how far the administration goes to demonstrate its commitment to ethics. If it holds its matriculated students to a certain standard, ought it hold its alumni to the same?

Citing again the founding goal of Leland and Jane Stanford to promote the public welfare, University spokesperson E.J. Miranda wrote, “The University cannot speak to the actions of individuals once they leave the University, but we encourage them to work toward the goals envisioned by the founders.”

Stein Greenberg said that, while they have not addressed JUUL in coursework, she has had students raise questions about the company to her on a one-on-one basis. Even then, she hesitates to condemn it outright.

“When I have had students ask me about the company or the product, that, for me, has been an opportunity to say, ‘Well, what do you think?’” she said. “And to have a conversation about, ‘What would you do if you designed something that started to have some harmful consequences?’”

Such an approach underscores another limitation, which is that Stanford faculty can do no more than encourage students to scrutinize their own values. They do not control the actions of those they teach. As Komisar described it, the goal is to empower individuals to take an ethical, holistic view — but that is no guarantee that they will. Business schools have been teaching ethics for a long time, he noted, but those schools still graduated the people who built the 2008 real estate crisis as well as those who started the energy company Enron, which filed for bankruptcy in 2001 after hiding billions of dollars of debt from shareholders and regulators.

All the same, the conversation is alive at Stanford. And there is cautious but real optimism about the possibility for change. Asked if this is a turning point in how Stanford approaches ethics, Byers’ response was quick and firm: “Well, if we have anything to do about it.”

He says he looks forward to seeing the changes come to industry as well.

“Can’t get much worse than the past couple years,” he said. “I think everyone has woken up.”

This is the moment to act, Byers said: “A crisis is a terrible thing to waste.”

 

Contact Carolyn Chun at cgchun ‘at’ stanford.edu.

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