Pando

UPDATED: The “hater” is calling from inside the cap table

By Sarah Lacy , written on December 11, 2017

From The Delivering Happiness Desk

[Story updated with Facebook's response, and some additional thoughts...]

Back in March, I wrote an in-depth piece about Silicon Valley’s astounding waning Soft Power.

That waning was a shocking development in many ways. Venture-funded entrepreneurship had become an aspirational brand around the world, with cities and countries slapping “SILICON!” onto different local geographical landforms just hoping to steal some of that high growth magic. Even the Hillary Clinton State Department started taking entrepreneurs all over the world, to aid in diplomacy.

And then the greed-soaked, toxic-masculinity, Disruption era … well, Disrupted! that “change the world!” image.

From my piece:

Europe is leading a full on revolt against Silicon Valley, holding companies like Google and Facebook to account in ways no other place has ever been able to. And there’s a growing backlash against Uber there too, most recently a campaign to force the company to pay millions of dollars in back taxes...

...Silicon Valley leaders erroneously think because people are still using their products, it’s all fine. But if products like Uber and even Facebook and Twitter go so far in their accountability only to egos and valuation (Uber) or the data (Facebook) or WTF knows what (Twitter), they start to become the new cigarettes. Things you use because you are addicted that you aren’t particularly proud of using.

You think I’m exaggerating? Pull up any story on the rates of depression post election and read about people who killed their social media accounts, only to log back in sheepishly through their dog’s account to keep informed. (This is literally a story I heard on NPR.)

Therapists are treating people for the effects of social media.

Plenty of insiders have dismissed this trend with a wave of the hand and the derisive moniker, “hater!” But when you are building a company that needs to be a global brand for billions of people, you kinda need those “haters” to be users…

And they will become increasingly harder to dismiss. Those concentric circles of “haters” are getting tighter and tighter… While Uber’s board is in full-on suing itself, Evan Williams has sought to right the wrongs of Twitter with the more thoughtful and long form Medium, even Facebook’s founders and key early executives are owning up to what they’ve inflicted on the world and expressing remorse.

Sean Parker made the following comments last month:

I don't know if I really understood the consequences of what I was saying, because [of] the unintended consequences of a network when it grows to a billion or 2 billion people and ... it literally changes your relationship with society, with each other ... It probably interferes with productivity in weird ways. God only knows what it's doing to our children's brains.

The thought process that went into building these applications, Facebook being the first of them, ... was all about: 'How do we consume as much of your time and conscious attention as possible?' And that means that we need to sort of give you a little dopamine hit every once in a while, because someone liked or commented on a photo or a post or whatever. And that's going to get you to contribute more content, and that's going to get you ... more likes and comments.

It's a social-validation feedback loop ... exactly the kind of thing that a hacker like myself would come up with, because you're exploiting a vulnerability in human psychology."

The inventors, creators — it's me, it's Mark [Zuckerberg], it's Kevin Systrom on Instagram, it's all of these people — understood this consciously. And we did it anyway.

Bear in mind, Facebook was Parker’s sole validation after he’d been painted as a pariah by the very powerful Mike Moritz and basically run out of the Valley’s inner circles. It made him billions, despite his short stint there. And-- oops!-- that validation and wealth came at the expense of kids’ brains.

Today, Gizmodo reports similarly galling statements by Chamath Palihapitiya, the very architect of a lot of those growth tactics.

I feel tremendous guilt. I think we all knew in the back of our minds—even though we feigned this whole line of, like, there probably aren’t any bad unintended consequences. I think in the back, deep, deep recesses of, we kind of knew something bad could happen. But I think the way we defined it was not like this…

So we are in a really bad state of affairs right now, in my opinion. It is eroding the core foundation of how people behave by and between each other. And I don’t have a good solution. My solution is I just don’t use these tools anymore. I haven’t for years.

He added that his kids are “not allowed to use this shit.” We should note that both have been happy to keep all the money the made from that same shit.

We should also note that these comments come a week after Facebook released a new messenger service aimed at six year olds. If Facebook is expressing the same concerns in house, it doesn’t seem to be impacting the product road map.

UPDATE: In a rare move, Facebook responded to Palihapitiya saying the following: 

Chamath has not been at Facebook for over six years. When Chamath was at Facebook we were focused on building new social media experiences and growing Facebook around the world. Facebook was a very different company back then and as we have grown we have realized how our responsibilities have grown too. We take our role very seriously and we are working hard to improve. We’ve done a lot of work and research with outside experts and academics to understand the effects of our service on well-being, and we’re using it to inform our product development. We are also making significant investments more in people, technology, and processes, and — as Mark Zuckerberg said on the last earnings call — we are willing to reduce our profitability to make sure the right investments are made.

When I first started to read this statement, I assumed what followed the first line would be something like, "So how does he even know what we are doing?" or "We've changed dramatically since then." Some have said the statement implies Palihapitiya is out of touch, doesn't get the Facebook of today.

But read it carefully. It doesn't. It only says they've realized how responsible they should be and they're going to work on it, even if that means, potentially in the future, impacting profitablity.

"When Chamath was at Facebook we were focused on building new social media experiences and growing Facebook around the world." What of that does not describe Facebook since? It's launched (and copied) several new social media experiences in the last year and continues to prioritize its international growth. It is eyeing a move into China, even if it comes with censorship concessions. It came under fire for its plan to subsidize the Internet in India. Last week, it announced a plan to roll out a new Messenger service for six year olds. 

Facebook is-- by its own press releases-- a company "focused on building new social media experiences and growing Facebook around the world." If that's actually changed, it's terrible news for Facebook shareholders and great news for Snap. 

Beyond that note the verbs Facebook used: "we have realized" and "we take our role very seriously" and are "working hard to improve" and "we've done research" and "making significant investments." None of these point to actual change that has shown up in the product since Palihapitiya left.

I can't imagine why this statement was issued, but to me, it read to me as an admission that Palihapitiya was right, and the company hasn't done anything --yet-- to change things.