Zucked

More troubling phenomena caught my attention. In March 2016, for example, I saw a news report about a group that exploited a programming tool on Facebook to gather data on users expressing an interest in Black Lives Matter, data that they then sold to police departments, which struck me as evil. Facebook banned the group, but not until after irreparable harm had been done. Here again, a bad actor had used Facebook tools to harm innocent victims.

In June 2016, the United Kingdom voted to exit the European Union. The outcome of the Brexit vote came as a total shock. Polling had suggested that “Remain” would triumph over “Leave” by about four points, but precisely the opposite happened. No one could explain the huge swing. A possible explanation occurred to me. What if Leave had benefited from Facebook’s architecture? The Remain campaign was expected to win because the UK had a sweet deal with the European Union: it enjoyed all the benefits of membership, while retaining its own currency. London was Europe’s undisputed financial hub, and UK citizens could trade and travel freely across the open borders of the continent. Remain’s “stay the course” message was based on smart economics but lacked emotion. Leave based its campaign on two intensely emotional appeals. It appealed to ethnic nationalism by blaming immigrants for the country’s problems, both real and imaginary. It also promised that Brexit would generate huge savings that would be used to improve the National Health Service, an idea that allowed voters to put an altruistic shine on an otherwise xenophobic proposal.

The stunning outcome of Brexit triggered a hypothesis: in an election context, Facebook may confer advantages to campaign messages based on fear or anger over those based on neutral or positive emotions. It does this because Facebook’s advertising business model depends on engagement, which can best be triggered through appeals to our most basic emotions. What I did not know at the time is that while joy also works, which is why puppy and cat videos and photos of babies are so popular, not everyone reacts the same way to happy content. Some people get jealous, for example. “Lizard brain” emotions such as fear and anger produce a more uniform reaction and are more viral in a mass audience. When users are riled up, they consume and share more content. Dispassionate users have relatively little value to Facebook, which does everything in its power to activate the lizard brain. Facebook has used surveillance to build giant profiles on every user and provides each user with a customized Truman Show, similar to the Jim Carrey film about a person who lives his entire life as the star of his own television show. It starts out giving users “what they want,” but the algorithms are trained to nudge user attention in directions that Facebook wants. The algorithms choose posts calculated to press emotional buttons because scaring users or pissing them off increases time on site. When users pay attention, Facebook calls it engagement, but the goal is behavior modification that makes advertising more valuable. I wish I had understood this in 2016. At this writing, Facebook is the sixth most valuable company in America, despite being only fifteen years old, and its value stems from its mastery of surveillance and behavioral modification.

When new technology first comes into our lives, it surprises and astonishes us, like a magic trick. We give it a special place, treating it like the product equivalent of a new baby. The most successful tech products gradually integrate themselves into our lives. Before long, we forget what life was like before them. Most of us have that relationship today with smartphones and internet platforms like Facebook and Google. Their benefits are so obvious we can’t imagine foregoing them. Not so obvious are the ways that technology products change us. The process has repeated itself in every generation since the telephone, including radio, television, and personal computers. On the plus side, technology has opened up the world, providing access to knowledge that was inaccessible in prior generations. It has enabled us to create and do remarkable things. But all that value has a cost. Beginning with television, technology has changed the way we engage with society, substituting passive consumption of content and ideas for civic engagement, digital communication for conversation. Subtly and persistently, it has contributed to our conversion from citizens to consumers. Being a citizen is an active state; being a consumer is passive. A transformation that crept along for fifty years accelerated dramatically with the introduction of internet platforms. We were prepared to enjoy the benefits but unprepared for the dark side. Unfortunately, the same can be said for the Silicon Valley leaders whose innovations made the transformation possible.

If you are a fan of democracy, as I am, this should scare you. Facebook has become a powerful source of news in most democratic countries. To a remarkable degree it has made itself the public square in which countries share ideas, form opinions, and debate issues outside the voting booth. But Facebook is more than just a forum. It is a profit-maximizing business controlled by one person. It is a massive artificial intelligence that influences every aspect of user activity, whether political or otherwise. Even the smallest decisions at Facebook reverberate through the public square the company has created with implications for every person it touches. The fact that users are not conscious of Facebook’s influence magnifies the effect. If Facebook favors inflammatory campaigns, democracy suffers.

August 2016 brought a new wave of stunning revelations. Press reports confirmed that Russians had been behind the hacks of servers at the Democratic National Committee (DNC) and Democratic Congressional Campaign Committee (DCCC). Emails stolen in the DNC hack were distributed by WikiLeaks, causing significant damage to the Clinton campaign. The chairman of the DCCC pleaded with Republicans not to use the stolen data in congressional campaigns. I wondered if it were possible that Russians had played a role in the Facebook issues that had been troubling me earlier.

Just before I wrote the op-ed, ProPublica revealed that Facebook’s advertising tools enabled property owners to discriminate based on race, in violation of the Fair Housing Act. The Department of Housing and Urban Development opened an investigation that was later closed, but reopened in April 2018. Here again, Facebook’s architecture and business model enabled bad actors to harm innocent people.

Like Jimmy Stewart in the movie, I did not have enough data or insight to understand everything I had seen, so I sought to learn more. As I did so, in the days and weeks after the election, Dan Rose exhibited incredible patience with me. He encouraged me to send more examples of harm, which I did. Nothing changed. Dan never budged. In February 2017, more than three months after the election, I finally concluded that I would not succeed in convincing Dan and his colleagues; I needed a different strategy. Facebook remained a clear and present danger to democracy. The very same tools that made Facebook a compelling platform for advertisers could also be exploited to inflict harm. Facebook was getting more powerful by the day. Its artificial intelligence engine learned more about every user. Its algorithms got better at pressing users’ emotional buttons. Its tools for advertisers improved constantly. In the wrong hands, Facebook was an ever-more-powerful weapon. And the next US election—the 2018 midterms—was fast approaching.

Yet no one in power seemed to recognize the threat. The early months of 2017 revealed extensive relationships between officials of the Trump campaign and people associated with the Russian government. Details emerged about a June 2016 meeting in Trump Tower between inner-circle members of the campaign and Russians suspected of intelligence affiliations. Congress spun up Intelligence Committee investigations that focused on that meeting.

But still there was no official concern about the role that social media platforms, especially Facebook, had played in the 2016 election. Every day that passed without an investigation increased the likelihood that the interference would continue. If someone did not act quickly, our democratic processes could be overwhelmed by outside forces; the 2018 midterm election would likely be subject to interference, possibly greater than we had seen in 2016. Our Constitution anticipated many problems, but not the possibility that a foreign country could interfere in our elections without consequences. I could not sit back and watch. I needed some help, and I needed a plan, not necessarily in that order.

1

The Strangest Meeting Ever

New technology is not good or evil in and of itself. It’s all about how people choose to use it. —DAVID WONG

I should probably tell the story of how I intersected with Facebook in the first place. In the middle of 2006, Facebook’s chief privacy officer, Chris Kelly, sent me an email stating that his boss was facing an existential crisis and required advice from an unbiased person. Would I be willing to meet with Mark Zuckerberg?

Facebook was two years old, Zuck was twenty-two, and I was fifty. The platform was limited to college students, graduates with an alumni email address, and high school students. News Feed, the heart of Facebook’s user experience, was not yet available. The company had only nine million dollars in revenue in the prior year. But Facebook had huge potential—that was already obvious—and I leapt at the opportunity to meet its founder.

Zuck showed up at my Elevation Partners office on Sand Hill Road in Menlo Park, California, dressed casually, with a messenger bag over his shoulder. U2 singer Bono and I had formed Elevation in 2004, along with former Apple CFO Fred Anderson, former Electronic Arts president John Riccitiello, and two career investors, Bret Pearlman and Marc Bodnick. We had configured one of our conference rooms as a living room, complete with a large arcade video game system, and that is where Zuck and I met. We closed the door and sat down on comfy chairs about three feet apart. No one else was in the room.

Since this was our first meeting, I wanted to say something before Zuck told me about the existential crisis.

“If it has not already happened, Mark, either Microsoft or Yahoo is going to offer one billion dollars for Facebook. Your parents, your board of directors, your management team, and your employees are going to tell you to take the offer. They will tell you that with your share of the proceeds—six hundred and fifty million dollars—you will be able to change the world. Your lead venture investor will promise to back your next company so that you can do it again.

“It’s your company, but I don’t think you should sell. A big company will screw up Facebook. I believe you are building the most important company since Google and that before long you will be bigger than Google is today. You have two huge advantages over previous social media platforms: you insist on real identity and give consumers control over their privacy settings.

“In the long run, I believe Facebook will be far more valuable to parents and grandparents than to college students and recent grads. People who don’t have much time will love Facebook, especially when families have the opportunity to share photos of kids and grandkids.

“Your board of directors, management team, and employees signed up for your vision. If you still believe in your vision, you need to keep Facebook independent. Everyone will eventually be glad you did.”

This little speech took about two minutes to deliver. What followed was the longest silence I have ever endured in a one-on-one meeting. It probably lasted four or five minutes, but it seemed like forever. Zuck was lost in thought, pantomiming a range of Thinker poses. I have never seen anything like it before or since. It was painful. I felt my fingers involuntarily digging into the upholstered arms of my chair, knuckles white, tension rising to a boiling point. At the three-minute mark, I was ready to scream. Zuck paid me no mind. I imagined thought bubbles over his head, with reams of text rolling past. How long would he go on like this? He was obviously trying to decide if he could trust me. How long would it take? How long could I sit there?

Eventually, Zuck relaxed and looked at me. He said, “You won’t believe this.”

I replied, “Try me.”

“One of the two companies you mentioned wants to buy Facebook for one billion dollars. Pretty much everyone has reacted the way you predicted. They think I should take the deal. How did you know?”

“I didn’t know. But after twenty-four years, I know how Silicon Valley works. I know your lead venture investor. I know Yahoo and Microsoft. This is how things go around here.”

I continued, “Do you want to sell the company?”

He replied, “I don’t want to disappoint everyone.”

“I understand, but that is not the issue. Everyone signed up to follow your vision for Facebook. If you believe in your vision, you need to keep Facebook independent. Yahoo and Microsoft will wreck it. They won’t mean to, but that is what will happen. What do you want to do?”

“I want to stay independent.”

I asked Zuck to explain Facebook’s shareholder voting rules. It turned out he had a “golden vote,” which meant that the company would always do whatever he decided. It took only a couple of minutes to figure that out. The entire meeting took no more than half an hour.

Zuck left my office and soon thereafter told Yahoo that Facebook was not for sale. There would be other offers for Facebook, including a second offer from Yahoo, and he would turn them down, too.

So began a mentorship that lasted three years. In a success story with at least a thousand fathers, I played a tiny role, but I contributed on two occasions that mattered to Facebook’s early success: the Yahoo deal and the hiring of Sheryl. Zuck had other mentors, but he called on me when he thought I could help, which happened often enough that for a few years I was a regular visitor to Facebook’s headquarters. Ours was a purely business relationship. Zuck was so amazingly talented at such a young age, and he leveraged me effectively. It began when Facebook was a little startup with big dreams and boundless energy. Zuck had an idealistic vision of connecting people and bringing them together. The vision inspired me, but the magic was Zuck himself. Obviously brilliant, Zuck possessed a range of characteristics that distinguished him from the typical Silicon Valley entrepreneur: a desire to learn, a willingness to listen, and, above all, a quiet confidence. Many tech founders swagger through life, but the best ones—including the founders of Google and Amazon—are reserved, thoughtful, serious. To me, Facebook seemed like the Next Big Thing that would make the world better through technology. I could see a clear path to one hundred million users, which would have been a giant success. It never occurred to me that success would lead to anything but happiness.

The only skin in the game for me at that time was emotional. I had been a Silicon Valley insider for more than twenty years. My fingerprints were on dozens of great companies, and I hoped that one day Facebook would be another. For me, it was a no-brainer. I did not realize then that the technology of Silicon Valley had evolved into uncharted territory, that I should no longer take for granted that it would always make the world a better place. I am pretty certain that Zuck was in the same boat; I had no doubt then of Zuck’s idealism.

Silicon Valley had had its share of bad people, but the limits of the technology itself had generally prevented widespread damage. Facebook came along at a time when it was possible for the first time to create tech businesses so influential that no country would be immune to their influence. No one I knew ever considered that success could have a downside. From its earliest days, Facebook was a company of people with good intentions. In the years I knew them best, the Facebook team focused on attracting the largest possible audience, not on monetization. Persuasive technology and manipulation never came up. It was all babies and puppies and sharing with friends.

I am not certain when Facebook first applied persuasive technology to its design, but I can imagine that the decision was not controversial. Advertisers and media companies had been using similar techniques for decades. Despite complaints about television from educators and psychologists, few people objected strenuously to the persuasive techniques employed by networks and advertisers. Policy makers and the public viewed them as legitimate business tools. On PCs, those tools were no more harmful than on television. Then came smartphones, which changed everything. User count and usage exploded, as did the impact of persuasive technologies, enabling widespread addiction. That is when Facebook ran afoul of the law of unintended consequences. Zuck and his team did not anticipate that the design choices that made Facebook so compelling for users would also enable a wide range of undesirable behaviors. When those behaviors became obvious after the 2016 presidential election, Facebook first denied their existence, then responsibility for them. Perhaps it was a reflexive corporate reaction. In any case, Zuck, Sheryl, the team at Facebook, and the board of directors missed an opportunity to build a new trust with users and policy makers. Those of us who had advised Zuck and profited from Facebook’s success also bear some responsibility for what later transpired. We suffered from a failure of imagination. The notion that massive success by a tech startup could undermine society and democracy did not occur to me or, so far as I know, to anyone in our community. Now the whole world is paying for it.

In the second year of our relationship, Zuck gave Elevation an opportunity to invest. I pitched the idea to my partners, emphasizing my hope that Facebook would become a company in Google’s class. The challenge was that Zuck’s offer would have us invest in Facebook indirectly, through a complicated, virtual security. Three of our partners were uncomfortable with the structure of the investment for Elevation, but they encouraged the rest of us to make personal investments. So Bono, Marc Bodnick, and I invested. Two years later, an opportunity arose for Elevation to buy stock in Facebook, and my partners jumped on it.

WHEN CHRIS KELLY CONTACTED ME, he knew me only by reputation. I had been investing in technology since the summer of 1982. Let me share a little bit of my own history for context, to explain where my mind was when I first entered Zuck’s orbit.

I grew up in Albany, New York, the second youngest in a large and loving family. My parents had six children of their own and adopted three of my first cousins after their parents had a health crisis. One of my sisters died suddenly at two and a half while I was in the womb, an event that had a profound impact on my mother. At age two, I developed a very serious digestive disorder, and doctors told my parents I could not eat grains of any kind. I eventually grew out of it, but until I was ten, I could not eat a cookie, cake, or piece of bread without a terrible reaction. It required self-discipline, which turned out to be great preparation for the life I chose.

My parents were very active in politics and civil rights. The people they taught me to look up to were Franklin Roosevelt and Jackie Robinson. They put me to work on my first political campaign at age four, handing out leaflets for JFK. My father was the president of the Urban League in our home town, which was a big deal in the mid-sixties, when President Johnson pushed the Civil Rights Act and Voting Rights Act through Congress. My mother took me to a civil rights meeting around the time I turned nine so that I could meet my hero, Jackie Robinson.

The year that I turned ten, my parents sent me to summer camp. During the final week, I had a terrible fall during a scavenger hunt. The camp people put me in the infirmary, but I was unable to keep down any food or water for three days, after which I had a raging fever. They took me to a nearby community hospital, where a former military surgeon performed an emergency operation that saved my life. My intestine had been totally blocked by a blood clot. It took six months to recover, costing me half of fourth grade. This turned out to have a profound impact on me. Surviving a near-death experience gave me courage. The recovery reinforced my ability to be happy outside the mainstream. Both characteristics proved valuable in the investment business.

My father worked incredibly hard to support our large family, and he did so well. We lived an upper-middle-class life, but my parents had to watch every penny. My older siblings went off to college when I was in elementary school, so finances were tight some of those years. Being the second youngest in a huge family, I was most comfortable observing the big kids. Health issues reinforced my quiet, observant nature. My mother used me as her personal Find My iPhone whenever she mislaid her glasses, keys, or anything. For some reason, I always knew where everything was.

I was not an ambitious child. Team sports did not play much of a role in my life. It was the sixties, so I immersed myself in the anti-war and civil rights movements from about age twelve. I took piano lessons and sang in a church choir, but my passion for music did not begin until I took up the guitar in my late teens. My parents encouraged me but never pushed. They were role models who prioritized education and good citizenship, but they did not interfere. They expected my siblings and me to make good choices. Through my teenage years, I approached everything but politics with caution, which could easily be confused with reluctance. If you had met me then, you might well have concluded that I would never get around to doing anything.

My high school years were challenging in a different way. I was a good student, but not a great one. I liked school, but my interests were totally different from my classmates’. Instead of sports, I devoted my free time to politics. The Vietnam War remained the biggest issue in the country, and one of my older brothers had already been drafted into the army. It seemed possible that I would reach draft age before the war ended. As I saw it, the rational thing to do was to work to end the war. I volunteered for the McGovern for President campaign in October 1971 and was in the campaign office in either New Hampshire or upstate New York nearly every day from October 1971, the beginning of my tenth-grade year, through the general election thirteen months later. That was the period when I fell in love with the hippie music of San Francisco: the Grateful Dead, Jefferson Airplane, Quicksilver Messenger Service, Big Brother and the Holding Company, and Santana.

I did not like my school, so once the McGovern campaign ended, I applied to School Year Abroad in Rennes, France, for my senior year. It was an amazing experience. Not only did I become fluent in French, I went to school with a group of people who were more like me than any set of classmates before them. The experience transformed me. I applied to Yale University and, to my astonishment, got in.

After my freshman year at Yale, I was awarded an internship with my local congressman, who offered me a permanent job as his legislative assistant a few weeks later. The promotion came with an increase in pay and all the benefits of a full-time job. I said no—I thought the congressman was crazy to promote me at nineteen—but I really liked him and returned for two more summers.

A year later, in the summer of 1976, I took a year off to go to San Francisco with my girlfriend. In my dreams, I was going to the city of the Summer of Love. By the time I got there, though, it was the city of Dirty Harry, more noir than flower power. Almost immediately, my father was diagnosed with inoperable prostate cancer. Trained as a lawyer, my father had started a brokerage firm that grew to a dozen offices. It was an undersized company in an industry that was undergoing massive change. He died in the fall of 1977, at a particularly difficult time for his business, leaving my mother with a house and little else. There was no money for me to return to college. I was on my own, with no college degree. I had my guitar, though, and practiced for many hours every day.