Meet the New Conquistadors: Silicon Valley Moguls
Two interesting items about the use and abuse of big data appeared on the same day, May 16. And while on the surface they were completely disconnected, underneath, well, they seem anything but.
First, the use: an article in CFO magazine described big data in almost physical terms. In the words of Henna A. Karna, chief data officer for the XL Group, data is a “feedstock.” As she put it, “Data, in the right hands, is often as valuable as land, buildings, and equipment.” Most evocatively, she referred to using data as “mining the gold.”
Second, the abuse: in testimony on Capitol Hill, Christopher Wylie, the Cambridge Analytica whistleblower, described how data could be weaponized. As Wylie told lawmakers, “In the wrong hands, it becomes a weapon.” He zeroed in on Facebook and Twitter, declaring that they “are not just social networking sites. They’re opportunities for information warfare.”
At first blush, there’s no obvious linkage between a data maven extolling the “golden” potential of big data in the right hands, and a data critic warning against its “warfare” potential in the wrong hands.
Yet we see that both points can be true. That is, data can be a weapon while also being gold. We’ve known for the last few decades about the wealth gained by cyber-tycoons, and we’ve learned over the last couple of years about the danger from cyber-warriors—hacking, for example, U.S. politics at the highest level.
Thus we see the two key words: “warfare” and “gold.” And if we think of them together, it’s hard not to think of, yes, the Spanish conquistadors of ages past. When it comes to war-for-gold, nobody did it better.
Interestingly, the 500th anniversary of Spain’s conquest of the gold-filled Aztec realm is coming soon: on April 21, 1519, Hernán Cortés made his fateful landing in Mexico. The Spanish had been in the New World since 1492, to be sure, and yet in their first decades, they hadn’t found much of value on the Caribbean islands. Still, they knew that there was gold nearby; the Carib peoples, innocent to gold’s perceived value to Westerners, had been observed using the yellow metal to weigh down fishing nets—until, of course, the Spanish took it away from them.
Still, the Spanish were hungry for more. In 1511, King Ferdinand had written to his colonists, “Get gold, humanely, if you can, but at all hazards, get gold.” And that was fine with the conquistadors. As recalled by the famed 19th century American historian William H. Prescott, Cortés declared upon his arrival in the New World, “I came to get gold, not to till the soil, like a peasant.”
We all know what happened next: in barely two years, Cortés conquered the Aztecs and gained possession of vast amounts of gold as well as silver. And a decade later, further south in Peru, Francisco Pizarro similarly vanquished the Incas. Considerations of ethics and morality aside, these two conquests rank as among the most astounding military victories in world history.
Okay, so now we can skip ahead, from the early 16th century to the early 21st. History never repeats itself, as Mark Twain is said to have said, but it does rhyme—that is, it echoes with eerie familiarity.
And here’s the rhyme: today, the tech titans are the new digital conquistadors. To be sure, the techsters aren’t killing anyone, and yet just as surely, in their non-violent way, they have stormed and overwhelmed the status quo. For instance, Facebook’s founding motto, “Move fast and break things,” is the sort of language that Cortés and Pizarro would have understood. And even now, Facebook’s official address is One Hacker Way.
Of course, conquistadors tend to get rich. The Spanish conquistadors certainly did—or they died trying. And the “angel investor” in that conquering effort, the Spanish crown, reaped far greater rewards, as treasure-laden galleons sailed home from New Spain. The historian Prescott lyricized about the wealth from a single silver mine at Potosí high in the Andes “whose silver fountains…were soon to pour such streams of wealth over Europe.” It’s been estimated that Potosí has since yielded 60,000 tons of silver.
For their part, the digital conquistadors have also done well, too: six of the 10 richest Americans today are tech moguls, their fortunes all up from nothing within a few decades.
Then there’s the transformation—some would say devastation—that has been wrought by all this conquering. The chaotic history of Latin America since Cortés and Pizarro speaks for itself, even if the greatest damage was inadvertent. The Spanish brought with them smallpox and measles, to which the indigenous population had no resistance; up to 90 percent died. (In revenge, the New World gave syphilis to the Old World.)
As we return to the present, we can stipulate, once again, that losing one’s money, or even way of life, is not as bad as losing one’s actual life—or being consigned forever to brutal serfdom. Still, a lot of Americans, including whole industries, have lost a great deal in the last two decades.
We have all observed, for example, the wiping out of bookstores and music stores, as well as the dramatic thinning out of retail overall. Yet this sort of hemorrhage affects far more than employers and employees; it affects also entire economic ecosystems. Moreover, digitalization has enabled the instantaneous movement of information and capital around the world, with physical goods and factories moving and migrating only slightly more slowly. The ultimate question of who’s better off and who’s worse off as a result of all this creative destruction is hotly debated, and yet few would dispute that the digerati have been the biggest winners.
What makes the comparison between the old conquistadors and the new conquistadors most poignant is the parallel mismatch between the invaders and the invaded.
Back then, the Spanish were blessed with bravado, while the Aztecs and Incas were cursed with naiveté. The conquistadors arrived in Mexico and Peru in ridiculously small numbers—a few hundred soldiers, coming to a continent of tens of millions. And yet they were militarily superior; they had guns and iron swords and armor, as well as horses, none of which the Indians had ever seen. On the battlefields of yore, nothing was scarier than a caparisoned cavalryman wielding a long lance.
It must be said, too, that the Spanish had greater courage and cunning; they could brazen their way through tight situations, as when Cortés and his men entered Tenochitlán, the Aztec capital, and took up residence in Montezuma’s palace—they soon took the great king captive. At the same time, the Spanish were skilled at recruiting local allies; the cannibalistic Aztecs, in particular, had plenty of enemies.
The Spanish had another force with them, too: the power of the Catholic Church. Whatever the metaphysics of the moment, the conquistadors certainly believed that they were on a divine mission, that God was on their side.
Half a millennium later, the digital conquistadors are similarly small in numbers, but similarly advantaged in skills, bravado, and, yes, belief. And so their targets never knew what hit them. When Google’s search engine launched in 1998, it was entirely ad-free. People wondered if it was some sort of science experiment, completely innocent and harmless. After all, Google’s public profession was “Don’t be evil.”
Yet it soon became clear that Google had figured out the digital equivalent of a better mousetrap. In this case, the prey was data, especially data related to advertising. And here, the naiveté of those in Google’s path was equally stunning.
For example, newspapers. In 1995, there were some 2,100 of them in the United States, all making money, or at least trying to, by selling hard copies as well as advertising.
Then along came Google, which scooped up their advertising revenues. And what was the newspapers’ response? These hardbitten cynics? Like the meekest lambs being led to the slaughter, almost all of them put their content online for free. Why? Because they had been bowled over by the mystique of the internet gods: they thought that they, too, had to submit.
So Google happily scooped up that newspaper content, making it freely available online. Analogically speaking, the resulting destruction of newspapers ranks up there with the destruction of the Aztecs and Incas.
After these and many other triumphs over the “old,” Google now boasts a market capitalization of some $750 billion. That’s about 14 times the market cap of the venerable General Motors.
And while Google might be the most successful of the digital companies, it is hardly unique. Other digital crusaders, too, have shown dauntless courage. It was Facebook’s Mark Zuckerberg who, just a month ago, echoed the daring of Cortés when he trod into the halls of Congress and totally owned those elected Montezumas.
Then as now, one of the strengths of the conquistadors has been that, bonded by common belief, they could work together to win empire. To be sure, probably not many in Silicon Valley believe in a Christian God as did the Spanish, but they all probably agree that they personify the inexorable wave of the future.
Someday, of course, the newly conquered digital empire will break apart and be superseded, just as was the fate of the Spanish empire.
Yet for now, we must marvel at the digital conquistadors’ audacity. In fact, in our vanquishment, it sometimes seems that marveling is about the only thing we can do.
James P. Pinkerton is an author and contributing editor at TAC. He served as a White House policy aide to both Presidents Ronald Reagan and George H.W. Bush.