Silicon Valley would be wise to follow China’s lead (annotated for clarity)

Michael Moritz — a venture capitalist — wrote a love letter to human rights violations in the name of profit. We’ve interpreted what he’s really saying.


Silicon Valley would be wise to follow China’s lead (annotated for clarity)

Michael Moritz — a venture capitalist — wrote a love letter to human rights violations in the name of profit. We’ve interpreted what he’s really saying.

Silicon Valley would be wise to follow China’s lead (annotated for clarity)

Michael Moritz — a venture capitalist — wrote a love letter to human rights violations in the name of profit. We’ve interpreted what he’s really saying.

The original text of this article, written by Sequoia Capital’s Michael Moritz, appeared in full in the Financial Times. The below has been annotated for clarity.

The declaration by Didi, the Chinese ride-hailing company, that delivery business Meituan’s decision to launch a rival service would spark “the war of the century”, throws the intensive competition between the country’s technology companies into stark relief.

China is a country ruled by a totalitarian government that places very little value on the life and comfort of its citizens. By fusing the worst of capitalism with the worst of socialism, it has created a workforce that is lusted after by people like myself who are obsessed with making money and have little regard for how it gets made. Didi is an Uber-like company in China that is really good at making money. A new competitor has entered their market and Didi has declared war. Isn’t that exciting? Again, I love money and I’ve noticed the Chinese are getting really good at generating lots of it, particularly Didi. It seems to be at the expense of human beings but hey remember this is war.

The call to arms will certainly act as a spur for Didi employees, although it is difficult to see how they can work even harder. But what it does reveal is the striking contrast between working life in China’s technology companies and their counterparts in the west.

A declaration of war will make the Didi employees work harder even though that seems physically impossible, and that excites me to an almost sexual degree. It seems like this employee-shredding “war” will spark quite a bit of wealth creation, and that’s made me think about ways American workers could be more like Chinese workers.

In California, the blogosphere has been full of chatter about the inequity of life. Some of this, especially for women, is true and for certain individuals their day of reckoning has been long overdue. But many of the soul-sapping discussions seem like unwarranted distractions. In recent months, there have been complaints about the political sensibilities of speakers invited to address a corporate audience; debates over the appropriate length of paternity leave or work-life balances; and grumbling about the need for a space for musical jam sessions. These seem like the concerns of a society that is becoming unhinged.

Workers in California disgust me. Their pathetic needs like taking time off to ensure the health of a newborn baby, having time to relax and see one’s family, and a desire to enjoy hobbies make them seem literally crazy to me. I refer to those desiring a life outside of work as “unhinged” to demonstrate how alien the need to have such a balance is, because I am a billionaire and the concerns of a common person are beyond my understanding. What I truly can appreciate is wealth creation.

These topics are absent in China’s technology companies, where the pace of work is furious. Here, top managers show up for work at about 8am and frequently don’t leave until 10pm. Most of them will do this six days a week — and there are plenty of examples of people who do this for seven. Engineers have slightly different habits: they will appear about 10am and leave at midnight. Beyond the week-long breaks for Chinese new year and the October national holiday, most will just steal an additional handful of vacation days. Some technology companies also provide a rental subsidy to employees who choose to live close to corporate HQ.

In China, human rights are secondary to the creation of wealth, and I really like that. Even the people “in charge” are given punishing schedules that leave little time for enjoyment or relaxation. Vacations and personal space are secondary needs, and ideally your home should be as close to your workplace as possible so that you don’t waste any of the time you could be generating wealth for the company in a commute.

In California, this sort of pace might be common for the first couple of years of a company, but then it will slow. In China, by contrast, it is quite usual for the management of 10 and 15-year-old companies to have working dinners followed by two or three meetings. If a Chinese company schedules tasks for the weekend, nobody complains about missing a Little League game or skipping a basketball outing with friends. Little wonder it is a common sight at a Chinese company to see many people with their heads resting on their desks taking a nap in the early afternoon.

In California, after several years into the growth of a company, people will try and spend less time at work. That is offensive to me. In China, people will work almost like slaves for decades, eating their dinners between meetings as they grow into old age. The concept of humans putting their personal needs behind those of a business pleases me. Since the company and wealth generation always come first, Chinese kids are regularly disappointed when parents don’t attend important events like little league games. People are worked so relentlessly that they must nap at the office as well due to the grueling hours.

While male chauvinism is still common in the home, women have an easier time gaining recognition and respect in China’s technology workplaces — although they are still seriously under-represented in the senior ranks. Many of these high-flyers only see their children — who are often raised by a grandmother or nanny — for a few minutes a day. There are even examples of husbands, eager to spend time with their wives, who travel with them on business trips as a way to maintain contact.

Chinese men and companies treat women badly and don’t allow them to succeed very often. But if they do happen to make it somehow, those women will be lucky to see their children more than a few minutes a day. That, to me, is the very definition of “crushing it” am I right guys? I didn’t really have a point in writing this paragraph but I was hoping to create the false sense that somehow China was superior to America in its treatment of women, even though it is actually much worse.

There is also a deep-rooted sense of frugality. You don’t see $700 office chairs or large flat panel computer screens at most of the leading technology companies. Instead, the furniture tends to be spartan and everyone works on laptops. It is common for facility managers to allocate 80-100 square feet to each employee, compared with two to three times that amount in California.

On long-haul business flights most employees will fly economy and many share hotel rooms to save costs. It is also striking to the western eye how frequently a tea bag is reused or how, in winter, employees dress in coats and scarves at their desks to ward off the bone-chilling temperature.

People in China work in tiny environments that are physically uncomfortable. They eat poorly, have little privacy, and Chinese businesses don’t even care about them enough to properly heat their offices or factories. I think that’s preferable to workers feeling healthy, comfortable, or warm, and I wish American companies would adopt similarly draconian ideas, especially the ones I invest in.

There are plenty of workplaces in China insulated from these sorts of sensibilities — particularly within the large, state-controlled companies. The pace is also slower outside Beijing, Shanghai, Shenzhen and Guangdong. There is also no doubt that the roots of this work ethic spring from memories of privation and the desire to improve personal circumstances. Some of it is also due to the disregard paid to physical fitness — a pursuit that can chew up eight to 10 hours a week in Silicon Valley.

Can you believe that the self-interested employees in America spend time exercising their bodies in an attempt to stay physically fit? Eight to ten hours a week on exercise? Think about the money you could be making for the company in that time.

The Chinese approach may seem unhealthy and unappealing to westerners — and, as China’s gross domestic product rises the collective thirst for improvement may start to wane — but for now it’s a fact of life. Western investors may complain that there are some companies from which they are excluded but, for the most part, investment opportunities in the best companies are available and, in many respects, doing business in China is easier than doing business in California.

As the Chinese technology companies push ever harder outside the mainland, the habits of western companies will start to seem antique.

The Chinese approach is unhealthy and unappealing. Someday the people in China may be able to push back against a government structure and businesses that oppress them in innumerable ways, but until that happens the money is just going to keep rolling in. As a billionaire asshole, I love that.

In closing: I can only hope this kind of brutality focused on the working class can be brought to western countries as soon as possible. And I’m sure no one will react negatively to this essay.