Ethics In Tech & Lack Thereof

Sleeping Under The Cell Tower

By Vahid Razavi

The Balkans and Birth of BizCloud

In August 2008 I left the United States for Belgrade, Serbia on a mission to hire graphic designers and developers for my new startup, BizCloud. The initial idea behind BizCloud was to provide an online directory of businesses to keep documentation and applications in the cloud and share those documents freely with vendors or suppliers. We would provide data and “Software as a Service”and “Infrastructure as a Service” products to the business community. It seemed natural to start aB2B company as enterprise was still at that time relatively underserved in comparison to the B2C space. Our SaaS and IaaS product offerings included business intelligence, demographics, and business information. We launched BizCloud in December of 2008. In our initial iteration we targeted enterprise owners and B2B service providers including business brokers, accountants,attorneys, and others. We boasted a database of over 14 million US businesses. This treasure trove of data was combined with demographic information, creating a formidable document and image repository for business owners. We felt that this, combined with our SaaS business tools, would be a powerful combination. Our goal was to have our business data indexed by Google search results so business owners could maximize our platform’s many benefits. We soon realized that Google wasn’t going to index our page as BizCloud’s extensive data wasn’t considered “unique.” Godforbid a small company like ours dare aspire to get indexed and published when industry titans like Google and Yelp already had a large chunk of the 14 million businesses in our database! Even though our data was meant for a different purpose and audience we failed to get it indexed. We could have done so, of course, had we been willing or able to pay Google an exorbitant fee. There might be plenty of fuss being kicked up by issues surrounding net neutrality these days, but pay-to play has been a huge part of the Internet ever since the tech giants rose to prominence.

In late 2008 and early 2009 the financial markets collapsed. We were caught off guard just like pretty much everyone else, although I had been warning for some time that the economic model embraced in the US and other “advanced” nations was a ticking time bomb on a short fuse. Thenthe crash came and we had no funding options besides my family’s money and personal investments. Paying Google to index our data for optimal search results was absolutely out of the uestion. We needed a different approach. Instead of being a data-driven company we started to leverage content marketing under BizCloud and BizCloud Network brands. I hired an editor and a team of writers to cover the industry. In the six years that I ran BizCloud we produced over 5,500 articles and blog posts and over 100 videos focused on the burgeoning cloud computing industry, as well as cloud computing’s impact on the business community. We became a cloud broker and executed our business plan to leverage content to sell cloud computing products to the business community. We also partnered with industry leaders and helped promote them via our content writers and custom professional videos.

I’m often asked why I chose Serbia. I was drawn there via Croatia, where I had previously traveled and first fallen in love with the Balkans. I’d been mixing business and pleasure — with probably more of the latter and not enough of the former. It was time to get serious, and that meant getting myself to Belgrade as soon as possible. My first impression of the Serbian capital was it was a strange place to be. You could still see quite a few bombed-out buildings from NATO’s 1999“credibility” campaign against Slobodan Milosevic and Serb war crimes in the literally balkanized former Yugoslavia. A lot of Americans have no idea how much damage was done in their name and with their taxpayer dollars against the people of Serbia. We’ll get back to this shortly, but since we’re talking about first impressions of Belgrade, what I really remember is the vibrant city life,bustling cafe culture, and how everyone, even the less well-off people, looked incredibly stylish.

Long a gateway between East and West, beautiful Belgrade is a city of contrasts. It’s one of the oldest cities in Europe but, as I mentioned, the people — especially the younger ones — exude a modernism reflected in the clothes they wear, the art they enjoy, and the way they interact with the people around them. As the former capital of the multi-national, multiethnic, and multi-faith Yugoslavian Federation, it’s also a melting pot city where language, music, and food reflect a cosmopolitanism that would be the envy of many much larger global cities. The famous blue Danube and Sava rivers flow through the heart of the city, a timeless link between the Balkans and the nations of Central and Western Europe. The people of Belgrade are worldly and well-educated.It was as fine a place as any to settle in and start a business, even if we were about to experience the greatest economic calamity since the Great Depression.We rented an office in downtown Belgrade. My days were spent there working with my team to grow BizCloud. We worked our asses off, but we also had a great time building the company and enjoying each other’s company. We had what Americans call a great work-life balance, office morale was high, and we really felt a sense of accomplishment as we forged ahead with creating the best damned company we could.

Alas, within a week of my arrival in Serbia the financial markets crashed. The root cause of the crisis, conveniently forgotten by the same speculative forces that have brought us perilously close to the precipice once again as I write this 10 years later, was deregulation of the financial industry. For many decades — in fact, since the Great Depression — commercial banks were wisely prohibited from engaging in hedge fund trading with derivatives. But this barrier was shattered when President Bill Clinton signed into law a repeal of the Glass-Steagall Act in 1999. Banks then started issuing interest-only loans targeting subprime borrowers, fueling a housing bubble that was exacerbated by historically low interest rates. Fraudulent underwriting practices nurtured predatory and other dangerously unethical and illegal lending to millions of people, many of them people of color, who should have known they couldn’t afford six-figure mortgages. To make matters worse, the Federal Reserve raised interest rates just as the adjustable rates on the high-risk subprime loans started rising dramatically. Housing prices, which had attained ludicrous heights, began falling as demand dropped, with more and more would-be homeowners becoming unable to make their ballooning mortgage payments. These hapless millions found themselves underwater, unable to sell or to make payments. Cue the great foreclosure crisis. Meanwhile, the derivatives market collapsed and so did many of the companies that erstwhile engorged their coffers — and their executives’ net worths —in the freewheeling casino economy.

Lehman Brothers was the first to go. It was September 15, 2008, a lovely late summer’s day in Belgrade but sheer panic on Wall Street from what I was seeing and hearing from back in the States.However, by the time news of the Fed’s $85 billion takeover of AIG (which sold massive amounts of insurance without hedging its risky investments) reached Belgrade the following evening, you could feel the financial anxiety even where I was. Then came the battle over the $700 billion bail out for Wall Street firms deemed “too big to fail,” while the retirement and other investments of hundreds of millions of people around the world were tacitly deemed expendable. Washington Mutual, Wachovia, and other banks big and small folded in the ensuing financial bloodbath. This bloodbath now spread to the stock market as the Dow Jones Industrial Average, which had soaredpast 14,000 when it peaked in October 2007, plummeted to lows in the 6000s by the spring of 2009.The venerable Merrill Lynch was sold to Bank of America for $50 billion, with bleak reports and predictions driving the market ever-further south. There was serious talk about the end of Chicago free market ideas as a near-panic set in.