Venture Labor: Work and the Burden of Risk in Innovative Industries

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Citation: Gina Neff (2012) Venture Labor: Work and the Burden of Risk in Innovative Industries.


Tagged: Sociology (RSS) NatematiasGenerals (RSS), sociology (RSS), labor (RSS), ethnography (RSS), startups (RSS), silicon alley (RSS), immaterial labor (RSS), digital labor (RSS), creative industries (RSS), risk (RSS), networks (RSS), social networks (RSS)


In this book, Gina Neff offers an in-depth picture of the experience and media of New York's Silicon Alley in the early 2000s, examining the ways that economic trends and communications media converged, with workers taking on personal risk as a basic part of work. The book focuses on the idea of risk and its relation to labor in the dot com economy-- something that Neff argues is becoming more widely pervasive[1].

Introduction: The Social Risks of the Dot-Com Era

Neff describes opens with a "shattering moment"[2] that changed her understanding of the dot-com field when "my jealousy of dot-com highfliers turned into sympathy" after the crash in 2008. She quotes a participant: "we thought the risk was that our company wouldn't go IPO, or maybe fail. We never thought that all the companies would fail" (2).

In the introduction, Neff describes dot-com workers as people who embraced the ideas described by Ulrich Beck in Risk Society[3], that "economic risk in modern life has become increasingly privatized and individualized." Neff sets out to extend this view in the following ways:

  • Risk is Social, and to understand the culture of risk, we need to understand the wider cultural and political factors, from media that celebrated risk, framing how people saw and understood risks[4]. Neff argues that although entrepreneurship relies on uncertainty as distinct from risk[5], people came to see that uncertainty as risk and that risk as cool, encouraged by investors and their social circles.
  • Work is Riskier, and dot com workers saw risks like stock options as "the best among otherwise limited options" (6). Neff outlines ways that work has become riskier, from lessened family and government support, less employment security, and the shifting of risk onto individuals in American society[6]:
    • a growing emphasis on profits from finance rather than production
    • a moment of "open or conflicting valuation" over the economic value of Internet-related business[7]
    • "the rise of flexible work practices"[8]

In this context of unstable employment, where risk has been shifted out of companies onto workers, theorists like Beck believed that workers would reject this risk and organize against it. Neff's research asks why workers continue to find it attractive:

  • "how people frame the risks of their jobs" and the social forces that "naturalize economic risks" as companies ask employees to see themselves as investors
  • the dot-com era as a reaction to wider risks in society, as workers tried to manage them. Neff argues that "they thought they understood all the risks they faced, and they thought that they had the power to hedge against or profit from these risks independently of what was happening in the economy at large"-- beliefs that crumbled in the dot-com crash (12).
  • the cultural and social discourses that contributed to this framing, as "the lure of risk...replaced the fear of uncertainty as the predominant economic rhetoric during the Internet boom" (16)

Defining Venture Labor

Neff describes venture labor, a strategy for managing contemporary work risk, as "the investment of time, energy, human capital, and other personal resources that ordinary employees make in the companies where they work... the explicit expression of entrepreneurial values by nonentrepreneurs...when people think of their jobs as an investment or as having a future payoff other than regular wages... bear[ing] some of the risks of their companies" (16). In addition, venture labor also "involves shifting managerial responsibility onto the employees themselves," including lessened job security (18). Neff argues that "the risks that ordinary employees take... are often not as portable, as easily diversified, or as fungible as financial investments" (18).

Neff argues that while dot-com workers are stereotyped as hustlers out to get rich quickly, most took it on as creative, interesting work that might in time be stable, reporting a greater sense of freedom. Yet in that period "more than 40% of those employed by New York internet companies in 1999 got some form of stock options or deferred income as part of their compensation package" and most of those jobs were "nonstandard" part-time or temp jobs (24-25). Neff points out that "the New York Internet industry in 1999 had a median salary of $42,600" lower than publishing. Neff notes that dot com workers internalized this risk, seeing it as their responsibility to network, skill up, and manage their security, often blaming themselves when things wend poorly.

Creative, Cultural, and Media Labor

Neff points out parallels between "creative industries" labor and venture labor, with "portfolio-based careers"[9]. Neff offers parallels to research on cultural entrepreneurs in London who blur work and social life[10]. Neff argues that this focus on cultural production differentiated New York's startups from Californias.


Neff sets out to connect people's "actions and representations" in the Internet industrie to wider economic and social structures. She collected data from Silicon Alley, hosting SIG meetings of the World Wide Web Artists Consortium, and participating in Silicon Alley social events, attending parties, networking events, and conferences. From 1996-2002, Neff conducted semi-structured interviews with 54 people at all levels within companies and across the network of people involved or wanting to be involved, adopting a network ethnography approach[11]. Neff used social network analysis "to justify the case selection of interview subjects" (32033).

Neff also conducted informal media analysis of material associated with the dot com industry, the media context in which the framing of risk occurred.

The Origins and Rise of Venture Labor

In this chapter, Neff describes the backdrop of venture labor in Silicon Alley, from the rise of Mosaic/Netscape's business through venture funding and IPO, to the transformation of IBM from a stable employer to a half-the-size, "leaner" more "entrepreneurial" company with large numbers of consultants (39-40), both symbols of a shift away from Whyte's Organization Man[12] towards riskier employment from "job security in one company towards... employability across several companies" (41). Observers called this the "new economy," but Neff argues that it is a continuation of postindustrial changes, as "entrepreneurialism became celebrated as a means of fixing an economy" (43). Companies shifted away from secure employment to linking market forces with pay and job security[13](45). Furthermore, proportion of revenue shared with employees was shrinking(45). Politically, both Reagan and Clinton praised technology and the information revolution as a renewed source of prosperity for America. In parallel, workplace culture was shifting towards higher salary gaps, as CEOs took salaries tied to stock prices, influencing motivations down the chart. Another thread was the reframing of Internet companies as a "sure bet," with people pointing to the stock market as evidence, and then investing(52).

Neff describes Silicon Alley as serving "three different masters--innovation in business, technology in the media" and known most for media-making initiatives, whether advertisers, entertainers, or other content industries (54-55). New businesses included webzines, music sites, and video experiments, often coming from collaborations beginning with experimental works of creative play. Baym points out that while "many of the early visible experiments were self-funded," they moved to being funded "with a perceived potential for financial payoff" in some cases had IPOs, failed, and were acquired by the industries they briefly set out to challenge (59).

Neff argues that "part of Silicon Alley's social innovation was linking technology to creativity" (62), where firms linked their work on the web with high culture, fashion, and architecture "to associate themselves with succesful, expensive creativity" (63). Neff argues that when small self-published creative projects received venture funding, "they risked their companies and often lost their investments in the intellectual property of their Web sites" (66).

Being Venture Labor: Strategies for Managing Risk

In this chapter, Neff describes the "narratives about choice of jobs" and "discursive framing of their careers" that reveal how people managed the wider risk of being in Silicon Alley, coming out of interviews with 54 people. Neff argues that these styles "emerged from the values about work and lifestyle" and that she especially observed them when people were denouncing each others' values or authenticity and asserting their own strategy for decisionmaking[14] (70).

Neff notes that these denunciations are operating in a context where person is part of the product[15] and "building a career is about building a reputation within a community" (73). Neff argues that these denunciations reveal worker's ideas of "appropriate performance of selfhood through and with good work" (73).

The three styles of work emerging from these denunciations were:

  • the financial strategy for managing risk, where workers saw their job as an investment. In this strategy "evaluated their companies for their potential as lucrative investments" in financial terms and saw their labor as an investment (73). These workers also invested in their CV, seeking to add "wow factor" items to a résumé(75). These workers tended to take stock options and tried to avoid being a "worker bee" (83). Skills, contacts, resumes, and portfolios were all seen as possible transferrable assets gained from risk-taking, associated with the companies they had worked for (81).
  • the creative strategy, where workers "expressed the payoff for those risks in terms of project success and visibility, which could lead to future work and career reputation," identifying more with projects than companies (unlike those who took the financial strategy) (83). These were more likely to be media-makers, focused on creating a "look" or "voice," (85). Creative workers differentiated themselves from each other by identifying as "early adopters," and felt like they had nothing to lose, given poor job prospects elsewhere (86). They tended to value creative potential more than job security, and sometimes imagined themselves in opposition of business motivations.
  • the actuarial strategy, where workers calculated the riskiness of positions and "keenly focused on career longevity" (88). These workers "considered it necessary to manage the risks associated with the industry in order to continue to stay in the industry" (88), developing skills in demand outside Silicon Alley, and denouncing "the 'naïveté' of people who did not plan carefully for company failure" (89). Many of these people "worked in Internet start-ups that operated on a cash-flow basis" rather than volatile companies built on venture funding. This strategy "is characterized by a sense of being able to solve uncertainty as a problem." When things went badly, they blamed themselves (93).

Across these groups, Neff argues that "people welcomed risk not necessarily because of the expected monetary payoffs, but because they thought they had to accept risk along with autonomy, creativity, or a 'good job', characteristics of project work[16][17][18](95). Across these strategies, people took on risk as a personal responsibility while arguing for "their own decision-making process as somehow culturally authentic" compared to others.

Why Networks Failed

In this chapter, Neff describes the way that venture laborers saw "partying" and "schmoozing" as business activities that would buffer their risk (something McRobbie has observed as common in cultural industries with younger workers) [19] and what happened when those networks failed to offer that security(103).

Neff notes that companies carefully cultivated their image through parties, rave-like events involving spectacle, scantily-clad women performers, and large quantities of intoxicating substances. These parties "were likened to Andy Warhol's factory," across media and wall street firms. Companies saw "the industry party circuit served as a way to advertise, announce success, and continue to build networks and support for their products and services"[20].

To interpret the labor involved in these parties, Neff argues that we need to understand the rise of networking in the popular imagination alongside their rise in communication and business practice. She cites Benkler's argument that communication and social networks are rising together, with widening range and diversity of ties as "the core driving social force behind the networked information economy"[21]. Alongside this came films like Six Degrees of Kevin Bacon, industry reports on the importance of networking, and the work of Malcolm Gladwell in The Tipping Point. The workers Neff interviewed took networking as a basic necessity, a part of work, and not very enjoyable. They saw parties as an important activity and saw their connections "as a form of unemployment insurance" (105).

Neff differentiates this kind of networking from older research on networking, since Silicon Alley was related to "project-based and temporary organization among the workers" described as "collective tinkering" by Grahber[22] (106). Neff argues that this necessity of networking is the result of the "privatization of job security--through individuals' networking activities" and that "building the social capital of an industry is seen as the work of individuals, not as a function of the industry as a whole" (105).

Neff describes the different strategies of community building undertaken in Silicon Alley, through an analysis of trade media coverage:

  • Professional Organizations:
    • The New York New Media Association, who worked like a trade association
    • The World Wide Web Artists Consortium, who coordinated smaller special interests groups and supported "email lists, parties, picnics, and panel discussions" (108)
    • Online news and email lists like the ECHO Bulletin Board Service
  • Trade publications, including online and print publications, who Neff argues formed what Kadushin calls a "social circle"[23], which are distinct from networks in that "social circles show that insiders can recognize who is legitimately in or outside of a particular scene or field, without necessarily knowing them or being connected to them" -- markers of industry legitimacy (109). Trade publications reinforced these circles by publishing top lists of insiders.
  • Gossip and social publications, who listed events and framed the social circle. Neff carries out an informal content analysis of social reporting by "The Cyber Scene", showing that even among conferences and seminars, twice as many were held at bars, nightclubs, and restaurants than offices or educational facilities (112).

Why did this networking fail? Networks do create a market intermediary that connects jobs with workers and builds social capital[24]. However, Neff notes that "there are differential uses of power and social capital within the same networks" and that not everyone has the same resources or capacities for building networks, most notably people with families. "Nontransparent hierarchies" can develop within these networks[16]. These networks "replaced other types of workforce support provided by organizations, unions, or associations" (122). And when someone fails to get work, everyone including the unemployed worker, blames the worker(123). The result can replicate "the pernicious old traits of the old boys' network--exclusivity, nontransparency, and inequality" (124). Notably Neff argues that "reliance on social networking as a job-matching system creates more inequality within an industry relative to industries with other types of job matching systems, because it privatizes into a social sphere job market functions that were once (at least somewhat) more transparently conducted in organizations"[16] (121-122). Furthermore, while the networking approach has benefits for regional industry, that labor is expected of individuals outside of their paid hours. Despite these problems, workers reported that networking was essential to maintaining employment.

Furthermore, Neff argues that as Silicon Alley grew, Silicon Alley events became less diverse, more homophilous over time, with people going to more and more specialized events, severing the links across groups. Neff supports this with two network graphs of event attendance, as reported in "The Cyber Scene" by Courtney Pulitzer (116-117). The graph from 1997 appears to show more cross-event links(116), and the graph from 1999 appears to show show more tightly-interconnected separate clusters (117). Consequently, when the crash came, these networks did not successfully hedge the risk of unemployment.

The Crash of Venture Labor

In this chapter, Neff looks at the dot-com collapse in 2000, with a particular focus on the perceptions and contradictory framings of workers. Neff, along with one of her participants, asks "Why did people believe in what they believed in?" (134). Neff identifies several narratives:

  • the narrative that "the Internet industry had a certain, positive future" (136)
  • the idea that "existing market metrics were insufficient to measure the potential growth of the Internet industry" (136)
  • the belief that "people had control and autonomy over their work and their choices in the industry" (136)

Neff builds this case by observing the rationalizations that participants offer for their decisions at the time. Whether they defended their choices or blamed themselves, Neff argues that they tended to focus on themselves, the choices they made, and the risk they took on. Neff argues that "the results of how they frame their decisions through microlevel perceptions make markets on a social level" (143). Neff argues that "the dot-com crash was in part a class between the rhetorical construction of economic value---what Thrift has called 'the romance' of the new economy[7]--and people's cultural evaluations of their labor, their companies, and the impact of economic forces in their lives" (144).

Ultimately, Neff argues, investors valued people's work differently than the value they gave their jobs, and workers learned that "financial capital is much more mobile than labor and better able to diversify across industries, countries, and business than people are able to diversify their human or their social capital" (146). And the culture of risk survived the crash, with processes of venture labor continuing into our time.

Conclusion: Lessons from a New Economy for a New Medium

Neff concludes by telling the story of Joshua Harris of Pseudo, whose claims about Internet video seemed over-the-top at the time of the 2000 crash, but which were eventually fulfilled by YouTube, who sold to Google for $1.65 billion in 2006. And like Pseudo, YouTube was built through venture labor. Neff argues that Silicon Alley was not an end of venture labor but instead marked the beginning of a longer story, and therefore offers ongoing lessons. Neff also reflects on the unfolding role of "disruptive" Internet technology to transform media and communications, and the role that social forces, alongside technology, play in that struggle.

In her concluding remarks, Neff describes a tension between theorists' opposition to risk and the embracing of risk among workers. Neff argues that ideas of job security have changed partly as people "willingly accept or actively welcome risk" (156). Neff argues that the attitudes towards risk within venture labor are also increasingly common among temps, interns, and students (159). Venture laborers "traded security for risk," but they were unable to understand "how their individual choices played into and were shaped by larger social dynamics," and they felt betrayed when they lost that bet (161-2).

Neff with an appeal: "people interested politically in creating better, more stable jobs will need first to tackle the enormous task of figuring out new, collective ways to organize uncertainty within economic production" (163).

Theoretical and practical relevance:

In Venture Labor, Gina Neff offers an amazing, demoralizing overview of extensive fieldwork with participants in New York's late 1990's Silicon Alley startup culture, looking at the ways that people took on personal risk as a basic part of their employment. Neff looks at the background of this industry, the strategies used to manage risk, the failure of networks, and the practices that survived the dot-com crash.

Neff anchors this book in a thoroughly considered set of literature on economics, risk, communications, theory, and sociology, making the bibliography an incredibly valuable resource as well.

Notable References

  1. Smith, V. (2002). Crossing the great divide: Worker risk and opportunity in the new economy. Cornell University Press.
  2. Schatzman, L., & Strauss, A. L. (1973). Field research: Strategies for a natural sociology. Prentice Hall. Chicago
  3. Ulrich Beck. (1992). Risk society: Towards a new modernity (Vol. 17). Sage.
  4. Douglas, M., & Wildavsky, A. (1983). Risk and culture: An essay on the selection of technological and environmental dangers. Univ of California Press.
  5. Knight, F. H. (1921). Risk, uncertainty and profit. New York: Hart, Schaffner and Marx.
  6. Hacker, J. S. (2008). The great risk shift: The new economic insecurity and the decline of the American dream. OUP Catalogue.
  7. 7.0 7.1 Thrift, N. (2001). 'It's the romance, not the finance, that makes the business worth pursuing': disclosing a new market culture. Economy and Society, 30(4), 412-432.
  8. Castells, M. (2011). The rise of the network society: The information age: Economy, society, and culture (Vol. 1). John Wiley & Sons.
  9. Neff, G., Wissinger, E., & Zukin, S. (2005). Entrepreneurial labor among cultural producers:“Cool” jobs in “hot” industries. Social Semiotics, 15(3), 307-334.
  10. McRobbie, A. (2002). Clubs to companies: notes on the decline of political culture in speeded up creative worlds. Cultural studies, 16(4), 516-531.
  11. Howard, P. N. (2002). Network ethnography and the hypermedia organization: New media, new organizations, new methods. New media & society, 4(4), 550-574.
  12. Whyte, W. H. (1956). The organization man. University of Pennsylvania Press.
  13. Cappelli, P. (1999). The new deal at work: Managing the market-driven workforce. Harvard Business Press.
  14. Boltanski, L., & Thévenot, L. (1991). De la justification: les économies de la grandeur.
  15. Adkins, L. (2005). The new economy, property and personhood. Theory, Culture & Society, 22(1), 111-130.
  16. 16.0 16.1 16.2 Christopherson, S. (2002). Project work in context: regulatory change and the new geography of media. Environment and Planning A, 34(11), 2003-2016.
  17. Batt, R., Christopherson, S., Rightor, N., & Van Jaarsveld, D. (2001). Net working: Work patterns and workforce policies for the new media industry. Economic Policy Institute, 1660 L Street NW, Suite 1200, Washington, DC 20036.
  18. Pratt, A. C. (2000). New media, the new economy and new spaces. Geoforum, 31(4), 425-436.
  19. McRobbie, A. (2002). Clubs to companies: notes on the decline of political culture in speeded up creative worlds. Cultural studies, 16(4), 516-531.
  20. Currid, E. (2007). Art, Culture, and New York City, from The Warhol Economy: How Fashion, Art, and Music Drive New York City.
  21. Benkler, Y. (2006). The wealth of networks: How social production transforms markets and freedom. Yale University Press. 15
  22. Grabher, G. (2002). Cool projects, boring institutions: temporary collaboration in social context. Regional studies, 36(3), 205-214. Chicago
  23. Kadushin, C. (1974). The American intellectual elite. Transaction Publishers.
  24. Coleman, J. S. (1988). Social capital in the creation of human capital. American journal of sociology, S95-S120.