How to Fix Facebook - Before It Fixes Us

["Dave Farber" <dave () farber net>]

---------- Forwarded message ---------
From: Dewayne Hendricks <dewayne () warpspeed com>
Date: Mon, Jan 8, 2018 at 5:19 AM
Subject: [Dewayne-Net] How to Fix Facebook - Before It Fixes Us
To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>


[Note:  This item comes from friend David Rosenthal.  DLH]

How to Fix Facebook—Before It Fixes Us
An early investor explains why the social media platform’s business model
is such a threat—and what to do about it.
By Roger McNamee
January/February/March 2018 Issue
<
https://washingtonmonthly.com/magazine/january-february-march-2018/how-to-fix-facebook-before-it-fixes-us/
>

In early 2006, I got a call from Chris Kelly, then the chief privacy
officer at Facebook, asking if I would be willing to meet with his boss,
Mark Zuckerberg. I had been a technology investor for more than two
decades, but the meeting was unlike any I had ever had. Mark was only
twenty-two. He was facing a difficult decision, Chris said, and wanted
advice from an experienced person with no stake in the outcome.

When we met, I began by letting Mark know the perspective I was coming
from. Soon, I predicted, he would get a billion-dollar offer to buy
Facebook from either Microsoft or Yahoo, and everyone, from the company’s
board to the executive staff to Mark’s parents, would advise him to take
it. I told Mark that he should turn down any acquisition offer. He had an
opportunity to create a uniquely great company if he remained true to his
vision. At two years old, Facebook was still years away from its first
dollar of profit. It was still mostly limited to students and lacked most
of the features we take for granted today. But I was convinced that Mark
had created a game-changing platform that would eventually be bigger than
Google was at the time. Facebook wasn’t the first social network, but it
was the first to combine true identity with scalable technology. I told
Mark the market was much bigger than just young people; the real value
would come when busy adults, parents and grandparents, joined the network
and used it to keep in touch with people they didn’t get to see often.

My little speech only took a few minutes. What ensued was the most painful
silence of my professional career. It felt like an hour. Finally, Mark
revealed why he had asked to meet with me: Yahoo had made that
billion-dollar offer, and everyone was telling him to take it.

It only took a few minutes to help him figure out how to get out of the
deal. So began a three-year mentoring relationship. In 2007, Mark offered
me a choice between investing or joining the board of Facebook. As a
professional investor, I chose the former. We spoke often about a range of
issues, culminating in my suggestion that he hire Sheryl Sandberg as chief
operating officer, and then my help in recruiting her. (Sheryl had
introduced me to Bono in 2000; a few years later, he and I formed Elevation
Partners, a private equity firm.) My role as a mentor ended prior to the
Facebook IPO, when board members like Marc Andreessen and Peter Thiel took
on that role.

In my thirty-five-year career in technology investing, I have never made a
bigger contribution to a company’s success than I made at Facebook. It was
my proudest accomplishment. I admired Mark and Sheryl enormously. Not
surprisingly, Facebook became my favorite app. I checked it constantly, and
I became an expert in using the platform by marketing my rock band,
Moonalice, through a Facebook page. As the administrator of that page, I
learned to maximize the organic reach of my posts and use small amounts of
advertising dollars to extend and target that reach. It required an ability
to adapt, because Facebook kept changing the rules. By successfully
adapting to each change, we made our page among the highest-engagement fan
pages on the platform.

My familiarity with building organic engagement put me in a position to
notice that something strange was going on in February 2016. The Democratic
primary was getting under way in New Hampshire, and I started to notice a
flood of viciously misogynistic anti-Clinton memes originating from
Facebook groups supporting Bernie Sanders. I knew how to build engagement
organically on Facebook. This was not organic. It appeared to be well
organized, with an advertising budget. But surely the Sanders campaign
wasn’t stupid enough to be pushing the memes themselves. I didn’t know what
was going on, but I worried that Facebook was being used in ways that the
founders did not intend.

A month later I noticed an unrelated but equally disturbing news item. A
consulting firm was revealed to be scraping data about people interested in
the Black Lives Matter protest movement and selling it to police
departments. Only after that news came out did Facebook announce that it
would cut off the company’s access to the information. That got my
attention. Here was a bad actor violating Facebook’s terms of service,
doing a lot of harm, and then being slapped on the wrist. Facebook wasn’t
paying attention until after the damage was done. I made a note to myself
to learn more.

Meanwhile, the flood of anti-Clinton memes continued all spring. I still
didn’t understand what was driving it, except that the memes were viral to
a degree that didn’t seem to be organic. And, as it turned out, something
equally strange was happening across the Atlantic.

When citizens of the United Kingdom voted to leave the European Union in
June 2016, most observers were stunned. The polls had predicted a victory
for the “Remain” campaign. And common sense made it hard to believe that
Britons would do something so obviously contrary to their self-interest.
But neither common sense nor the polling data fully accounted for a crucial
factor: the new power of social platforms to amplify negative messages.

Facebook, Google, and other social media platforms make their money from
advertising. As with all ad-supported businesses, that means advertisers
are the true customers, while audience members are the product. Until the
past decade, media platforms were locked into a one-size-fits-all broadcast
model. Success with advertisers depended on producing content that would
appeal to the largest possible audience. Compelling content was essential,
because audiences could choose from a variety of distribution mediums, none
of which could expect to hold any individual consumer’s attention for more
than a few hours. TVs weren’t mobile. Computers were mobile, but awkward.
Newspapers and books were mobile and not awkward, but relatively cerebral.
Movie theaters were fun, but inconvenient.

[snip]

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