In the lead-up to our PSFK 2017 conference, we look back at key speakers from past years. Media critic warns companies against recreating the 'Walmart Problem'

Leading up to our PSFK 2017 conference on May 19, we are looking back at some of the key speakers from years past. Get your tickets today!

Frequent technology critic and author of the recently released book, Throwing Rocks at the Google Bus, Dr. Douglas Rushkoff spoke at PSFK’s annual flagship conference to shed light on how many of today’s most successful technology companies are creating more societal problems than they solve. Although a corporation-driven economy is not a new model, its problems are aggregated in this digital era. Corporations must make a conscious effort to create an environment that creates value for all, not just themselves.

Rushkoff starts off by speaking on the role of venture capitalism in today’s society. He believes that there is no real sustainable revenue model in this digital era. Instead, there is a narrowed mission to simply expand a business as much as possible. The downside to this model, he explains, is that “businesses grow by extracting value from people.” Numerous platform monopolies are starting to form, which limits the growth of other companies and takes away benefits from people. He strengthens his argument by reciting a Deloitte study that states that corporate profit as opposed to corporate size, has been going downhill for 75 years. “Corporations are good at taking money off the table but bad at deploying money once they have it,” he states.

“This is just how business works,” is the belief. However, this is an extractive model that takes and does not give enough in return.

The ‘Walmart Problem’ is the analogy Rushkoff uses to explain this phenomenon. He gives a general example of how Walmart goes into towns, undercuts local employers and becomes the main source for jobs. As a result, locals are hired part-time and eventually the town goes bankrupt after two or three decades. People simply do not generate enough income to purchase goods. Then the Walmart goes out of business and moves out of town, leaving the town ruined. Rushkoff relates this to digital businesses by explaining, “you end up bankrupting the markets on which your company is depending to sustain itself.” The main problem with digital companies is that this whole process is happens in just a few years.

He concludes by asking the audience to keep three words in mind: ‘Make. Them. Rich.’ Companies should start thinking about how they can benefit their users and create a platform cooperative, not a monopoly. Decisions should assist the user in creating and circulating value. He eloquently states, “rather than optimizing for the extraction of capital from a community and its storage in share price—what you can do is optimize your business for the velocity of money and the velocity of transactions through a community?”

Douglas Rushkoff

Leading up to our PSFK 2017 conference on May 19, we are looking back at some of the key speakers from years past. Get your tickets today!

Frequent technology critic and author of the recently released book, Throwing Rocks at the Google Bus, Dr. Douglas Rushkoff spoke at PSFK’s annual flagship conference to shed light on how many of today’s most successful technology companies are creating more societal problems than they solve. Although a corporation-driven economy is not a new model, its problems are aggregated in this digital era. Corporations must make a conscious effort to create an environment that creates value for all, not just themselves.