Reality is finally catching up with overblown Silicon Valley rhetoric
Rhetoric, the art of persuasion, was the backbone of a classical education.
Today the term is more often pejorative: rhetoric is found wherever reality isn’t. No fantasy, however, can be long sustained. If rhetoric is to deliver its original purpose and persuade, it cannot escape reality for long.
So Silicon Valley is discovering.
For over a decade, the rhetoric of tech entrepreneurs has reached ever more extravagant heights. Now, as a series of firms falter at their first great persuasive test – the IPO – reality is catching up.
Wework’s recent travails are the archetypal case. Putting aside the issue of whether or not it even has the right to call itself a tech company, it epitomises this problem.
In the run-up to its much-hyped IPO, the rhetoric of its now defenestrated founder Adam Neumann was nothing short of ridiculous. His business, he claimed, would “elevate the world’s consciousness”.
Yet more glutinous praise was heaped on Neumann himself. In Wework’s IPO documentation, he was described as “a unique leader who has proven he can simultaneously wear the hats of visionary, operator and innovator”.
All this for a man who had shamelessly extracted some $700m from his loss-making business, even trademarking the word “we” so he could licence it to his own company for $5.9m (which he has since been pressured into paying back).
In reality, things proved uglier than Neumann’s visionary rhetoric. Wework’s IPO was initially set to value the business at $47bn. Confronted by a company that lost $1.9bn last year, the market baulked. Even when the valuation was revised to $20bn, the market still shook its head.
When the IPO was ultimately and inevitably scrapped, there was barely a word of explanation. Reality was doing the talking, and Neumann’s position could not last. On Tuesday, he was sacked. In a moment of uncharacteristic understatement, he described his presence at the company as a “significant distraction”.
Wework’s story is far from unique. The grandiose promises of Silicon Valley are starting to collide with more prosaic realities.
After an underwhelming IPO in May, Uber’s share price has been heading south. Expect more to follow.
Exercise company Peloton is to be the next much-hyped IPO, unless Wework’s failure has spooked it. Its founder, John Foley, tells the world that his business “sells happiness”. In reality, it sells exercise bikes – and fewer of them than it should.
Though its losses grew fourfold last year, Foley is seeking a valuation of £8bn. We shall soon see what the market makes of that.
Foley would be well advised to mind his language. Aristotle’s Rhetoric (the philosopher’s great treatise on the subject) is the perfect place to start.
Written over 2,000 years ago, Aristotle’s work is still much thumbed by speechwriters. Within it, he argues that effective persuasion is based on three “appeals”. Ethos, the character of the speaker, comes first. Next is pathos, an appeal to your audience’s emotions. Last but not least is logos, an argument directed at your audience’s sense of reason.
Silicon Valley has long believed that a strong brand (ethos) and a visionary message (pathos) will suffice. It is now finding out something that Aristotle always knew: without logos, we have little reason to believe you.
Doubts abound in the IPO market. Those heady days when rhetorical exuberance would deliver a multi-billion dollar valuation are at an end. Silicon Valley, obsessed with its newness, must now look back to some older wisdom. Fealty to reality, it will discover, is ignored at one’s peril.
It is to Aristotle again that we owe the idea of hubris: the pride that comes before the fall.
Until Silicon Valley’s rhetoric embraces reality, expect more falls like Neumann’s to come.
Main image credit: Getty