From Facebook Mentor To Activist (w/ Roger McNamee) | Interview | Real Vision™


Facebook had played a profound role in the
election and was not being honest about it. What Cambridge Analytica showed was that Facebook’s
business strategy was recklessly endangering the privacy of their users. As a business
strategy. These problems are built into the product. And I don’t know what’s going
to come out of this. Brian Price here for Real Vision in Menlo
Park, California, where today I’m going to be sitting down with an investing legend.
Roger McNamee is here to discuss what’s been happening with Facebook and his vision
for the future. Roger, thanks for joining us today. So I want you to do something for
me that nobody else can, and that is connect the dots between The Grateful Dead, two strokes,
Bono, and Mark Zuckerberg, in a career. would say that I have been in many ways the
luckiest person alive in the sense that I went into a career where timing is everything
and started as a Wall Street analyst. On the first day of the bull market of 1982 they
asked me to cover technology so effectively I had a 35 year tailwind. And you can explain
everything that happened my career based on the pure dumb luck of that combination of
timing and being handed technology. And then it just happens that I’m the kind of person
who has a couple of passions on the side. Music being the primary one. I’ve been a professional
musician my whole adult life and miraculously in doing so wound up getting to meet my heroes
being, The Grateful Dead and, after Jerry Garcia died, they found me somehow and reached
out and said can you help us with keeping our business together. And so I spent three
years consulting with them on their dot net which was their direct fan site and it was
a pretty cool experience because, having gone to a couple hundred shows I knew the scene
really, really well but it’s really different when you’re in the audience from when you’re
talking to the people in the boardroom. And that was how I met Bono, a woman named Sheryl
Sandberg who was working as chief of staff to the Secretary of the Treasury was working
with Bono in 1999 to forgive the debt of emerging countries that were never going to be able
to pay back. And Bono was curious about this guy who’s doing stuff for the Grateful Dead
and said, I want to give you a chance to get involved with that. And so Sheryl goes, You
won’t believe this but my brother in law works for that guy. I know exactly who he is. And
so she introduced me to Bono. And while I was working on the Grateful Dead project I
went to Dublin to meet with U2. And when I came back I had two strokes. When I got off
the airplane in San Francisco one stroke and then a few hours later no one and I didn’t
know it was a stroke. I didn’t do any of the right things and miraculously it didn’t kill
me. I mean it was literally a miracle. And then it took a long time; I had open heart
surgery to get rid of the cause of the stroke which was a birth defect in my heart. And
when I came back Steve Jobs gave me a chance to buy 18 percent of Apple in our Silver Lake
fund. And to go on the board, and my partners — I didn’t realize that my partners had decided
while I was gone that they liked splitting the money three ways.
And so when they came back they were looking to get rid of me so they said no to a chance
to buy 18 percent of Apple at cash. And one thing led to another and I I was working on
a project with Bono also for Silver Lake and it was obvious they didn’t want me around
so I quit. And I called Bono to say, hey I quit. And he goes well screw them, we’ll start
our own firm. And I go. Nobody’s calling you start an investment firm. I mean I know your
management company. There’s just no way. And he goes, no, we’re really going to do this.
And so that’s how Elevation happened. Tell me about your first meeting with Mark Zuckerberg.
: Imagine if you will that I’ve been in the business 25 years at that point which is more
than a career as a tech investor. There had been crashes along the way that wiped out
most of the people I knew from the early part of my career. So I had more experience as
a public market investor than anybody who was doing it in tech and was right up there
with the senior-most venture capitals. One of the things that I did was make myself available
to young entrepreneurs. It’s a great way to get to know them when they’re not raising
money. They’ve got a problem. They’re looking for somebody who’s got a perspective but without
any conflict. I get a phone call from a guy named Chris Kelly who is the chief privacy
officer of Facebook and I barely knew Chris, we’d met but we didn’t know each other well.
He calls and says, ‘Roger. My boss has an existential problem. And he needs somebody
like you to help him think it through. Would you be willing to take a meeting with him
today?’ Sure. I mean keep in mind this is 2006, March of 2006, the company is barely
two years old. Mark is 22 years old. I’m 49. At Elevation we had a conference rooms set
up like a living room. Basically a giant video game console and huge flat panel thing and
you know we were at the intersection of technology and media. So we had a meeting. Mark comes
to my office, looking just like Mark Zuckerberg. He’s got the courier bag, he’s got the T-shirt.
We say hello. We sit down and I’m closer to him in that setup than you are to me. And
I said Mark before we start I’ve got to tell you a few things because once you tell me
what’s going on, you’ll assume that anything I say after that is influenced by whatever
you told me. So I want to say a couple things. He says, go for it. I go, ‘If it hasn’t
already happened either Microsoft or Yahoo is going to offer a billion dollars to buy
Facebook and everyone you know from your parents to the board of directors, the management
team, the employees, are going to tell you to take the money. ‘They’ll tell you, Mark
you’re gonna have 650 million bucks; you can change the world.’ Your lead venture
capitalist Jim Breyer’s gonna say, ‘I’ll back your next company. It will be even better
than Facebook.’ I said, Mark, I’ve been watching this space a lot longer than Facebook
has been in existence. And I think you have done two things that are going to make all
the difference. You have real identity and you give the users the ability to control
their privacy settings. So I think that combination is going to make this product way more attractive
to adults than to kids. So I think you haven’t even gotten to where your real market is and
it will be very attractive to advertisers because adults have all the money. And I said,
the truth is you may have another idea as good as Facebook but you’ll never get the
timing perfect twice. No one ever has. Lots of entrepreneurs of great ideas but things
like Facebook happen because you have the perfect idea at the perfect moment of time.
And that’ll never happen again. Whereas I think Facebook is going to be bigger than
Google is now. Now that whole thing took me about two minutes to say. There then ensued
the most painful silence of my professional career. And it went on nearly five minutes.
And at the three minute mark I was ready to howl. I mean I was white knuckled in my seat.
Trust me. You have no idea how long five minutes is until there is somebody sitting in front
of you who’s pantomiming all these thinker poses. And not saying a word. He’s clearly
trying to say does he trust me or not. At the five minute mark he finally relaxes and
it’s like you can see a thought bubble over his head going, ‘OK. I’m going to trust
him.’ And he goes, ‘You’re not going to believe this.’ I go, ‘Dude, I’m so happy
you said something, just try me.’ He goes, ‘In my bag, I’ve got an offer to buy the
company for a billion dollars, and literally everything you said is true. And I said well,
look this is your company, what do you want to do. He goes, well I don’t want to disappoint
anybody and I go, I get that. But if it were just your choice what would you do? He goes,
well I’d like to I’d like to play out the hand I’d like to see how it’ll go. And I
go OK. Would you like my help to figure out how to do that? – Yes. So we literally reviewed
the company’s voting rights. And it turned out he had a golden vote. He had a situation
where literally it didn’t matter what everybody else thought, if he thought something, that
was the answer. And I said, here’s the thing Mark, remember that when these people invested
in your company, when they joined you as an employee, they were signing up for your vision.
And if your vision isn’t done, if you still think that this game is worth playing, you
can sit down with him and look him in the eye and go listen, I don’t think this is the
right time to sell. And, when you prove that you were correct, they are going to be really
happy that they didn’t sell out because Microsoft and Yahoo are going to kill this company.
There’s no way they’re going to see the vision through the way you would. Now, he left my
office after that. I’ll bet the whole thing was half an hour max. And he went home and
killed the deal that afternoon. And about a month later I got a call from him. Another
thing that came up. As you can imagine, with the whole team wanting to sell the company,
he had to make a few changes to get people who were aligned with the vision. And so I
helped them deal with all that and then the Winklevoss brothers thing came up and I helped
them go through a crisis management. And then the following year an opportunity came along.
One of his early employees had a personal change and needed to sell his options. He
didn’t have stock, he just had options. So it required a really clever and really trusting
buyer. You had to organize it, and he said, would you like a chance to invest. And he
said, here’s the deal I’ll give you choice, you can to go on the board, or you can invest,
but you can’t do both. You know I’m a little sour with my board because they tried to sell
my company. I go, dude, I’m an investor. I’ve got to invest. So I took the investment opportunity.
And then shortly after that Sheryl Sandberg called me up and goes, I need to come talk
to you. When Sherly came out of Washington in early 2000. she came and hung out in our
office for about a month. And she had a copy of The Tipping Point by Malcolm Gladwell.
And she goes, have you read this book and I said, no I haven’t read that book. She
says, because this book might as well be written about you. I go, really? And she goes, well
I want to work here. I’m going, wow. That’s really cool because I mean, we’re trying somebody
really really capable here. I go, wow. You want to work here. That’s awesome. So we spend
the next week or two, talked about investing. And my partner finally pulls me aside and
goes Roger, this is insane, this woman can change the world. If she works here she’ll
never get a chance to do that. She should be working for Google. Now keep in mind our
office was inside Kleiner Perkins in those days and so it was four doors down to John
Doerr’s office so simple handoff and next thing you know Sheryl goes to work at Google.
So when she calls me up it’s not like this is the first career conversation I’ve had,
but she goes, I’ve been given a chance to be the president of the Washington Post. ‘m
going, are you nuts? I mean here at Google, you’re killing those guys. And the dumbest
thing you could do would be, go from the winner to the loser. I’m going, Washington Post,
I have enormous emotional attachment to Washington Post, but realistically how are you going
to save the newspaper. If you can do that you’ve got to talk to Zuckerberg and maybe
go to Facebook. Because he needs somebody to create the business. She’s like, well,
he’s 23, I don’t know if I can work for a 23 year old. I’m going, he’s not your normal
23. I think it’s worth the conversation. So I call Mark and I go, so Mark I think I got
the person for you. And he goes really, who? Sheryl Sandberg. He goes, yeah but she’s
at Google. I’m going, Mark give me a closer proxy for what you’re doing. He goes, yeah
you’re right. And the thing about Mark and I knew this, was his mom’s a doctor. Really
strong personality. He’s got nothing but sisters. I was convinced he could work with a woman
who was successful which a lot of Silicon Valley people can’t do. Anyway. It only took
a couple of months. You know, they get together, get to know each other. It turned out there
was a good chemistry there. And it’s not like they’re both run of the mill people. I mean
Mark, you know he’s in some ways a classic successful Silicon Valley entrepreneur. But
on the sort of extreme side. And Sheryl is, her self-control is simply off the rails.
I mean, if you watch her do an interview it’s like you’re watching master give a master
class in staying on message. But both of them tremendously ambitious and they both wanted
to change the world profoundly, and I thought together they could do it. So once Sheryl
came on board. The company was shifting from what I would characterize as its startup mode,
into an operational mode. And I’m not an operator and so it was obvious to me, not to Mark,
but it was obvious to me at the time that my days as a mentor were going to come to
an end pretty quickly. But they had one thing left for me to work out which was mobile.
And because we had made this big investment in Palm, the pilot guys, to make the first
web phone called the Palm Pre, I knew a lot about what was going on in mobile and I was
convinced everything on desktops was going to wind up on smartphones. The smartphones,
you can think about them as a phone but in reality you are mostly going to do Internet
stuff on them. And that was not a well understood concept. In 2010 or 2009 as we were having
the conversation. But Mark was really into it and unlike some of the earlier topics,
this was one where there was no obvious right answer. So we have a lot of back and forth
on it, which I learned from and I’m quite confident he learned from too. And then you
know in sometime towards the end of 2009 just go, dude, I think you’ve outgrown me. I think
you’re all set. You know I’m just going to the background but I’ll be cheering for
you and I’ll be here if you ever need me but I don’t think you’re going. Which meant I
missed, the creation of the business model. And by the time 2016 came around, it meant
I didn’t understand the mechanics for how the business of Facebook worked, how they
used the techniques of propaganda, and the techniques of casino gambling, on a smartphone.
To create levels of psychological addiction that are analogous to a gambling addiction
or analogous to a videogame addiction. But with one really, really important difference
which is that because the way the product worked they had the ability, or their advertisers
had the ability, to manipulate what people think. And it took me a while to figure that
out. But when they did it was… It was really disturbing. I mean it was like, oh my god.
This thing that was about sharing family photos and birthdays and pictures of kittens. It’s
suddenly, now a tool that bad actors could use to harm innocent people. In a lot of different
ways. You described as your baby. At one point in timeYeah.. So here’s the problem. I started
my career as a public market investor and as a public market investor even in tech.
Where you’re working interactively with management teams I built my entire brand was built on
being an above average analyst of products. Everybody else worked on spreadsheets and
trying to forecast earnings and what I realized was in an industry as dynamic as personal
computers in the 80s, that if the product was hot, the estimate was always too low and
if it wasn’t hot, the estimate was always too high. So what you had to do was figure
out, was the product going to be hot or not hot. And so I became really good at that.
And it turns out that because no other investors were doing that I had got to have a special
relationship with a lot of people, many of whom are famous now. People like Bill Gates
and Steve Jobs, but many of whom were just immensely successful but less well known.
And over time as I did more venture capital my relationships to companies got deeper and
deeper, and my impact got greater. But it’s hard to top Facebook. I mean the combination
of absolute success and the fact that, it would have been acquired by Yahoo before any
of this happened, and who knows what would have happened to the business without Sherl.
Those two things meant that my fingerprints are on it. So I felt like this truly was my
baby. And so imagine, scroll forward to January, February of 2016. My wife and I are on vacation.
I’m on Facebook. I love Facebook. I used it every single day. I’m as addicted as anybody.
And I love the birthday things. I love sharing photographs and looking at other people’s
stuff, and I’m in a band, and it’s the way we communicate with the fans of the band.
So I’m on there looking around and it’s the beginning of the New Hampshire primary, 2016.
And all of a sudden I see these memes, photographs with text on them. Coming from groups ostensibly
associated with the Bernie Sanders campaign. But deeply misogynistic and in a way that
no campaign would be, and that wouldn’t be surprising, except they were spreading so
virally that I realized somebody was spending money. Now. Who would spend money, to spread
deeply misogynistic memes? That was a head scratcher. And so I just made a mental note
of it. I mean I discovered later course, that it was almost certainly the Russians. Fast
forward a month. Sometime in March of 2016 there’s a news report that Facebook had ejected
a firm that was using its application’s program interface to harvest data about people who
expressed interest in Black Lives Matter. They were then selling it to police departments.
I mean. Truly evil. Now Facebook threw them off the site but not until the damage been
done. These people’s lives have been irreparably changed by you know, by their actions. And
I go, whoa. I mean. That’s. Unlike, the Bernie bro thing, you could see who had done this
and you could see that, they had just used the Facebook tools created for advertisers
to do it. Fast forward to June. Brexit. The British are voting on whether or not to leave
the European Union. The final polls say that they’re going to remain and remain’s going
to win by four points. That night out comes the election returns and, leave has won by
four points. So, eight point swing. And, in the post mortems there was a lot of talk about
the role Facebook played. And what was interesting was nobody was blaming Facebook but if you
were in my position looking at this thing you’re going, whoa. Leave had a really, really,
inflammatorycampaign. They’re basically saying those evil immigrants are going to
destroy your culture, take away your jobs, and they’re ruining the country and all the
crime is blamed on them. And then they were offering this pie in the sky thing of, A,
we’re going to save billions of dollars or billions of pounds on exiting the EU, and
take all that money and pour it into the national system. So effectively they were saying to
everybody you can vote because of some racially motivated animus, but you can feel good about
it because you’re going to save the national health system. Meanwhile the Remain side has
no emotion at all. They’re basically going, we have the sweetest deal on Earth. We get
all the benefits of EU membership and we get to keep our own currency. That’s a great deal,
don’t screw it up. Should have won in a walk. I mean the British are; I mean stay the course
is the British way. And, yet the thing swings eight points. And I’m thinking of myself,
is Facebook, giving an advantage to inflammatory political campaigns over neutral ones? That
was the hypothesis that Brexit brought you to. And again I don’t have any notion of a
Russian connection at this point. Within two months all of a sudden there’s a lot of news
about Russia right? You know we all heard about the DNC hacks. You know, John Podesta’s
e-mails and all that stuff. Wikileaks. You learn about Manafort and his whole relationship
and all of a sudden you go, whoa, that’s creepy. And then in August there is this news report
that housing and urban development, has cited Facebook for having advertising tools that
enable people who own real estate to discriminate, in violation of the Fair Housing Act. Now
I’ve got four data points, unrelated, all pointing to the same thing. Bad actors using
Facebook’s standard ad tools to harm innocent people. I reach out to Recode. The. Tech blog.
I reach out to Kara Swisher and Walt Mossberg and I go guys, I’m seeing this stuff. What
are you seeing. Dead silence. No reaction. Zero reaction. They don’t even respond. I
do it again maybe three weeks later. So now we’re probably early September. I don’t hear
back right away but then Walt sends me a note and goes you know, you might be onto something.
Kara’s not interested in covering the story, we’re not going to cover it. But you should
write an op-ed for us. Take your time, write something. Let’s start a conversation about
this. So I set to work writing an op-ed and I don’t think I’m in any rush, because I don’t
think it’s going to affect the outcome of the election and I’m really worried that because
I don’t think it can affect the outcome of election, that if it goes down and Clinton
wins, that they’re going to dismiss my concerns because, hey it didn’t affect the election.
So I focus on a balance thing with all the different, all the different things that I’d
seen. So, the Black Lives Matter stuff, Brexit stuff, the Housing Urban Development stuff.
But it’s hard to write. Why? I mean I’m trying to write an op ed right and I’m trying to
stick to the facts and not exaggerate anything and yet make this tight case. I finish it
on the 30th of October and my wife points out, it was such a brilliant insight, hey
let’s send it to Mark and Sheryl. I mean, they’re your friends, you love this company.
Your goal is to help them not cause trouble, and all that was true. And so I sent it to
Mark and Sheryl. And they get right back to me. I mean within, hours. And both very thoughtful
replies, but saying basically the same thing. So what they said was, Roger, we really appreciate
your reaching out. We believe the things that you saw are isolated. Not systemic. And that
we have taken steps to ensure that all of them, can’t happen again. And they refer explicitly
to the Black Lives Matter thing where obviously they had evicted the people who did it. And
they said you know, we take you seriously. You know, you’ve been a friend of ours for
a long time so we’re going to have one of our senior people work really closely with
you, to figure out if there’s something we should be investigating. And they turn me
over to Dan Rose. Now Dan I think is the second longest serving executive of Facebook, and
he’s somebody I knew really well, respected a lot, and liked very much. And Dan gives
me the same basic shtick the next day. But with one important added note: he goes, Roger,
you know, we’re a platform. We’re not a media company. So as such we’re not responsible
for what third parties do on the platform. And we go back and forth, roughly once a day,
right up until the election. Then the election happens. And I’m apoplectic, at this point.
I go, OK guys I’m sorry. You have played a role here. We don’t know exactly what the
role is, but the platform has been used. It’s been used in Brexit, it’s been used in the
U.S. election. And Dan’s going, you understand we’re platform not a media company— I’m
going, dude, you got 1.8. 1.7 billion members at that time. If they decide that you’re responsible
for destabilizing democracy, it won’t matter what the US law says. Your trust will be destroyed.
And I’m begging them, basically look you want to do this like Johnson and Johnson, when
some dude tampered with Tylenol. Poisoned a few people I think in Chicago. They didn’t
sit around and debate it. They literally took every bottle off of every shelf from every
retail location everywhere. And they kept it off until they created tamperproof packaging.
They basically saidm we didn’t put that poison in the bottle. But these are our customers
and we’re going to take care of them. We’re going to act as though this is entirely our
responsibility. And they did it instantly, and I said guys, nobody is going to blame
you for whathappened here. If you get right on top of it. And with complete sincerity.
Commit yourself to, helping the government figure this thing out. This goes on for weeks.
I mean, almost three months basically, although with less and less frequency, because Dan’s
not moving at all. I mean he’s listening carefully and he’s being incredibly patient with me
but, not budging. You can imagine that my attempts to convince Dan, got, pretty emotional.
Because, I didn’t know exactly how Facebook had been used to affect the election but based
on what had happened in Brexit, I had no doubt. And in particular because one of the things
that came out from the election was that there were a really large number of, people who’d
voted for Obama who had not voted for Clinton. And it occurred to me that Facebook, because
it essentially is about inflammatory content, it’s about outrage cycles, is the perfect
tool for voter suppression. And so I’m sitting, I think to myself… I mean Trump won because
of really spectacularly well executed voter suppression. And, Facebook, it played a role.
So I wouldn’t let go. I keep in touch with Dan and he goes, how about if you just send
me more examples. And I think I got up to maybe 15 or 16 different examples of, situations
where they had contributed to bad actors harming innocent people. And finally in February of
2017 I realize, their position was not moving. I mean, if I hadn’t been so concerned about
the thing, I would have known on the first day it wasn’t moving, because I know the people
and… Philosophically they view criticism and regulation as forms of friction, to be
blown past as opposed to things to listen to and actually dig into. Because again they’re
in too big a rush, and friction is the enemy when you’re in a rush. And so the story goes
on and on, and you know it didn’t change until late December when Chamath Palihapitiya, who
had been their head of growth came out and did this confessional presentation at Stanford
talking about, how much he regretted the harm that they had created, and it was big coming
from him, because he’d run growth, he’d run the algorithm. So you know, him saying that
was really different than, us or Sean Parker or any of the other people who had expressed
doubts, because he’d hired all the people in their growth group. If those people decided
this was unacceptable I was going to cause a revolt. They came down on Chamath like a
ton of bricks and I think that was their last window where they could have done the Tylenol,
Johnson and Johnson thing. Where it was a year post election. You know, you’re getting
pretty long in the tooth for going, we didn’t know. But what they do instead, they basically
said, we’re going to treat this like the Alamo. We’re going to quash dissent and we’re going
to deny the whole thing. And we realize oh my god, they’re going to blow this. They’re
actually going to do the thing I warned them about which is to say they’re going to harm
their brand! Not just democracy but they’re going to actually harm their business What
are we supposed to do now? And I had written this really long essay for Washington Monthly.
It was designed to help policy makers in Washington understand the issues and then have a prescription.
Essentially, things like the global data protection regulations coming out in Europe, that were
about privacy, and all of it was scheduled to come on January 2nd. And what happened
was on January 1st , Mark Zuckerberg puts out a New Year’s resolution in which he says
we’re going to spend the year fixing Facebook. My thing comes out the next day and for all
intents and purposes, it was a 7500 word rebuttal. I’d written it two months earlier. But for
all intents and purposes it worked like a rebuttal. And the result was all of a sudden
everybody wanted our opinion again. And we’re starting to get tens of millions of unduplicated
reach on television, on multiple networks multiple times a day, but all basically talking
about this problem that Facebook had played a profound role in the election, and was not
being honest about it, and that in fact, the problem wasn’t based on a hack, it was based
on the Russians using the product exactly as was meant to be used except for a nefarious
purpose. And that resonated with some really interesting people. I mean I’m sitting there
and somebody forwards me a tweet from Tim Berners-Lee, the man who created the World
Wide Web. He’d found this article which was aimed at the audience inside the Beltway.
Somehow it had reached him in Europe, and he shared it with everybody on his list, which
was huge, I mean everybody follows Tim Berners-Lee. So the next big thing that happened was the
Cambridge Analytica. Bombshell. The Observer and The Guardian in the UK, and the New York
Times, het this whistleblower. Named Wiley, Christopher Wiley who had been the original
engineer at Cambridge Analytica, and basically came out with the full report that, Cambridge
Analytica had found a researcher who had been working with Facebook already, and had a trusted
relationship with him. And persuaded him to, do another study, academic study. Except the
data was all going to go to Cambridge Analytica and they were going to build an election business
around it. And what we now know is that they harvested 87 million user profiles using a
tool that Facebook had had in the markets since 2010. And the reason this story blew
up I think the way it did, was that when the tool went in the market in 2010, people protested
right away, and they protested right away because some of the people who used it were
game developers with huge audiences. I don’t know whether Cityville, which was a successor
to Farmville used it or not but it was designed for people like that. Cityville had 61 million
users 50 days after it started. And, well the simple math was that at that number everyone
in America would have known half a dozen people who were playing Cityville, which means they
would have been harvested half a dozen different times, just from that one thing. There were
nine million applications on the Facebook platform when they went public in 2012. If
1 percent of those applications harvested the friends lists, that would have been ninety
thousand applications harvesting. So that was pretty creepy but the real problem was
that Facebook signed a consent decree with the Federal Trade Commission in 2011 that
said, you can’t do that. You have to have informed consent. It must be explicitly called
out. People must have an opportunity to know in advance if their stuff is going to be used
and they must have the ability to stop it before it’s shared. Facebook basically had
a choice at that moment. They could have gotten rid of this tool that was designed, essentially
it was designed to make Facebook more viral and make applications that were high-use applications.
Games would increase minutes of use per day per user. And so this was designed to increase
all those metrics for Facebook. So it was part of their plan. And they wanted lots of
people to use it. I don’t know. I mean maybe it was 10 percent, in which case it was 900,000
apps that used it, whatever it was, it was a huge number. Some of which were gigantic.
And it turns out that the reverse was true. So if you used a product like Facebook on
an Android phone, Facebook would simply download all the metadata from your Android phone into
their account. So. What Cambridge Analytica showed was that Facebook’s business strategy,
was recklessly endangering the privacy of their users. As a business strategy. That
they had signed a consent decree and did neither– eliminating the tool, nor informing the users.And
Sandy Parakilas, who was part of our team, had been the manager of user privacy for the
Facebook platform. The very platform on which the Cambridge Analytica product ran. He’d
had that job from the consent decree until shortly after the IPO. And he left. And part
of his frustration was the Facebook paid lip service to the consent decree. They didn’t
actually do the things necessary enforce it. So when that news came out, and it played
out over three days, it was like we had all of Watergate crammed into three days… it
basically added tremendous color to why people like us were concerned about Facebook. And
it took you right to the edge without people completely understanding another really important
issue, which is that Facebook had offered to embed employees in both presidential campaigns.
The Clinton campaign turned it down. Trump took it. Now Trump was known to be working
with Cambridge Analytica. Cambridge Analytica is incredibly emotional. They blast this to
everybody. Stephen Bannon, Trump’s adviser had been part of starting Cambridge Analytica
so this is like not a secret. But here’s the thing. When Facebook did the deal that allowed
Cambridge Analytica to harvest all those user profiles, that was three years after the consent
decree. It should not have happened. And Facebook claims that they didn’t realize it was Cambridge
Analytica until December of 2015, when the Guardian published a story about which point
Facebook goes and says to both the researcher Alexander Cogen and to Cambridge Analytica,
you have to destroy this and you have to certify you destroy it. But they didn’t send anybody
into chat. And then roughly six months later they embed three employees in the Trump campaign
working in a war room in the San Antonio data office of Trump. Working side by side with
Cambridge Analytica people, on this gigantic data set. That was obviously the same one
that had been misappropriated by Cambridge Analytica two years earlier. And here’s the
thing: The top management of Facebook knew they had employees embedded in the campaign.
Everybody knew that Cambridge Analytica was working for Trump and there wasn’t enough
time between December and June to recreate that data set. With all this information,
how would you characterize Facebook’s thinking when it comes to individual users? I think
it’s really simple. You know, the line about advertising is when the product is free, the
user isn’t the customer, the user is the product. In Facebook’s case though it’s more like the
user it’s the fuel. That there’s something almost parasitic about it, because the psychological
manipulation that takes place doesn’t apply to everybody on the platform. But if you think
about the United States alone, there’ve always been people, a meaningful percentage
of the population that believes things that are demonstrably not true. You know flat earth,
contrails, whatever stuff that you can just feel is obviously not true. And I don’t know
what the normal number was, 7, 10 percent something like that. But today if you look
at it between things on the left like contrails and antivacs and things on the right like
climate change denial, it’s probably a third of the population. And, Facebook has played
a huge role in taking that number from whatever it used to be to whatever it is now. And it
has become literally the perfect tool for spreading disinformation and making people
not only believe it, but identify with it. Like you know, it’s their identity. With all
this in mind, how would you describe how attitudes have shifted in Silicon Valley from the time
when you were there and in the prime of your career, to now? Silicon Valley had a philosophy
that began in the early 2000s. This libertarian ideal that said, we’re going to disrupt things
and that’s okay because we’re not responsible for the consequences of what we do. This libertarian
model was sort of like it was situational, but it basically said you know, you’re really
smart, you’re well-educated, your intentions are good, whatever you do is fine. So when
I started my career, the Silicon Valley was still focused on the needs of government.
We were in the era where defense spending was the largest category of technology followed
by mainframe computers. And in that era, that’s the era of the white plastic pocket protector.
You know, the guys with the short sleeve white shirts and a tie. And you know if you watch
Apollo 13, people in Silicon Valley looked like that. Personal computer industry begins.
It’s an era where from an engineering point of view, there’s not enough of anything, there’s
no processing power, there’s not enough memory, not enough storage, not enough bandwidth to
do what you want to do. So Silicon Valley made tools and the tools required a manual
half a foot thick in order to use them properly. But it was very respectful in the sense that
we were trying to make the world a better place with these better tools. And I think
that lasted past the millennium. It was an era that valued experience almost above everything
else, because if you’re dealing with scarcity you don’t want to have to make the same mistakes
over again. Somewhere around 2002, 2003 suddenly we flipped. And there was enough of everything.
And Silicon Valley had a chance to rethink the whole proposition of what computers were
going to do. And as a community what we settled on was we were going to go for infinite scale.
We were going to go for products that were global in a completely different way. They
were consumer products that were global and which meant billions of users. In that model,
there were two or three things you needed to make that realistic. The first thing you
needed was you needed to have this notion that was embodied in the slogan of Facebook:
move fast and break things. This idea that that you were going to have a vision, you
were going to pursue it relentlessly, and you were going to run over whatever obstacles
came your way, and you want to avoid friction at all costs. And the second thing you needed
when you needed to absolve yourself of responsibility for the consequences of what you did. And
that’s where the libertarian values came in. And the Valley bought into it pretty deeply.
And the notion was, if you move fast and break things you’re going to hurt some people, and
you’ve got to be OK with that. Right? And not everybody was OK with that. The old timers
were like looking at it, going really? But the young crowd, because keep in mind the
other thing that happened here was when there was too much of everything you didn’t need
experience anymore. So Mark Zuckerberg can literally hire all his friends from Harvard,
with no experience, no sense of history, nobody’d ever read a novel. So they would have been
unconcerned or unaffected by the values that had preceded them. So the folks who were left
out of all of that would look at it and go, that doesn’t look right. And the new guys
would go, you guys are old. What do you know? The world began with the Internet. And people
got so rich, so quickly, that it became self reinforcing. And it validated itself. In fact
the whole world decided it was OK. I mean they looked at these things, and went, wow.
Zero to a billion people in 10 years. It’s like, what’s wrong with that? I mean it’s
puppy photos, it’s birthdays, all that. I mean, and the incredible thing was that Facebook,
Google, Twitter, Amazon, what they really delivered was dramatic advances in convenience.
The products were incredibly easy to use, incredibly convenient. They were free, obviously.
I mean Amazon would sell you stuff, but you know there was an awful lot of stuff that
was free. I mean their proposition was compelling. But nobody talked about the possibility of
there being downsides. That there would be a dark side to all this stuff. And so, much
as with food in the 40s and 50s when we adopted things like TV dinners and convenience food,
at a time when people had a lot going on and big families… Nobody said, Hey this is going
to lead to an epidemic of obesity. We didn’t know that, that all that sugar salt and fat
was going to cause problems downstream. And the same thing happened with these tech platforms.
It just happened in 10 years instead of 30 or 40. And the Valley has been incredibly
slow to accept that there’s a problem with that. In fact I’ll be really interested when
I go to TED this year as to whether people are open and happy about what we’re doing,
or whether they are in fact. You know, unhappy because we’re raining on their parade. Roger,
now that we’ve seen the dark side. How do we fix it? The worst part of the experience
that I’ve had on this whole thing was coming to grips with… these problems are built
into the products. Facebook in particular, but also for Twitter, also for YouTube, which
are the other people who are involved in the election manipulation. And then if you look
at things affecting kids, whether it’s YouTube Kids or Instagram or Snapchat or Facebook
Messenger for kids, same problem. The design of the products. Allows for manipulation by
outsiders, and it leads to addiction and unhappiness for the user, even if there’s no external
manipulation. Well, hang on. That’s not easy to fix And you really can’t fix it without
the cooperation of the people inside the company. So when I originally reached out in October
of 2016 that was with the hope that they would investigate it, not realizing that this was
something that was so inherent in the product, that they were going to have to change the
business model in order to fix the problem. We’ve now gone 16, 17 months since then, and
they have shown no sign of a willingness to actually make the changes necessary to eliminate
the risks. So now we’re in a, how do we mitigate the damage, mode. And there are a few things
that I think, a few areas where we have to do work. The first is we have to look at data
privacy and the consumer right to some kind of ownership of their own data. In Europe
they have a new law called the General Data Protection Regulation that is going into effect
May 25th. And that is essentially a consumer’s bill of rights for data. And you know it’s
not perfect but it’s really good, and it’s a great blueprint because it applies to all
EU citizens no matter where they are in the world. So everybody is going to have to support
it all around the world. So my advice to both Facebook and to Google has been explicitly,
embrace GDPR. Embrace the European model globally and do it like a religious mantra. These businesses
are based on trust. And the only way to regain the trust is for people to be materially less
worried about the integrity of these companies than they are today. So that would be step
one. Step two is related to the election stuff, and there are a couple of parts to that. The
first is that there are things these guys could do voluntarily they have not done. Facebook
has refused to cooperate with the authorities relative the analysis of what happened in
2016. There were 126 million Facebook users affected–directly touched by the Russian
interference. 20 million on Instagram. The obvious thing to do is to provide all of the
data related to those accounts, each time they were touched all of the things that they
saw, to the investigators, in a way that’s searchable and analyzable. Nobody’s asking
Facebook to expose their algorithms. Just give us the output. And their argument, which
is complete nonsense, is, oh if we do that then we have to give stuff to authoritarians
and bad countries. And I’m going, wait a minute. Facebook has this notion of community standards
that are individual to every market. And in authoritarian regimes the authoritarian controls
those community standards. If you go to Myanmar the community standard is repression of the
Rohingya minority, to the point of it being characterized as a as a genocide. And Facebook
is the tool they use to make that acceptable. It’s the tool that the government in the Philippines
uses to make death squads acceptable. I mean, you can’t tell me we can’t help solve the
fate of democracy in the United States, because you’re worried about those guys doing something
different. What they’re doing already is so horrible. It’s hard to imagine it getting
worse. So that data is really important. Second thing is they have to follow through on Senator
Richard Blumenthal’s request that they reach out to every one of those 126 million people
on Facebook, and 20 million on Instagram, reach out to them personally. With a really
detailed message that says, in 2016, the Russians interfered in the U.S. presidential election.
They manipulated Facebook. We did not catch it. Here is every time you were exposed to
the stuff. You need to understand all of this is disinformation from a hostile foreign power
designed to undermine our democracy. We as Americans have to stand up against them. And
the punch line should be, the effort in 2016 was about suppressing the vote. If we want
to minimize the damage in the future, the best thing to do is to have everybody vote.
And Facebook is the best one to do that message because, everybody looks and says, well that
person was effected and that person was effected, but I wasn’t effected. And that’s nonsense.
Only a 137 million people voted in our election. And 146 million people were affected. Between
Facebook and Instagram. That’s more than the number people who voted. And they aren’t random.
They were targeted. They were a combination of people who were known to be pro Trump with
the positive message. And then the communities that they thought had the highest probability
of being persuaded not to vote. The vast majority of people were in that. So they are people
of color, there are people like Bernie Sanders people who might be Jill Stein curious…
You know if you have all these different things, really intensely targeted. And getting those
people to recognize that they were manipulated, Facebook’s in a unique position to pull that
off. And they haven’t done it. So those two things they could do on their own. They
don’t need any help. Then, you have to look at what they can do to protect future elections.
And they’re making baby steps in that direction. With disclosure on the ads and things like
that, but most of this was done inside filter bubbles. Filter bubbles are what you get when
you have a product, as you do with Facebook, where each person has their own channel that’s
built around what they think they like; it’s really what Facebook wants them to like. And,
Facebook surrounds you with people who believe the same things you do, encourages you to
join groups of like-minded people and they do that because that clustering is good for
the advertising. There’s a side effect, that when you’re surround by people who agree with
you, your positions become more rigid and more extreme. And that’s good for Facebook
because you become more emotional. That’s how we got from say, 7 to 10 percent of people
believing things that are demonstrably not true to a third. Facebook’s played a huge
role in that. And so if you want to protect elections, you have to find some way to pierce
those filter bubbles. And you say, well one way you could do it would be to have more
mainstream news in people’s feeds. But what did Facebook do in January? They took mainstream
news out of people’s feeds. Had they done in 2015, it would have magnified the Russian
interference. So that’s not a good idea. So my point is Facebook hasn’t yet done even
one thing that’s going to help. And we need the cooperation. And then the last piece which
is really profoundly important relates to how data security works broadly. And we can
never put the genie back in the bottle. And we have to assume that everyone in the United
States has had their data harvested at least once and that that data is somewhere out on
the internet, nobody knows who has it nobody knows where it is, and you can’t get it back.
I don’t know what Facebook does about that. They’ve done a bunch of things. Recently where
they’ve reduced the number of places that applications can get user data on their site.
You think to yourself, well that sounds like progress. The problem with that is that the
things they’re doing now, are all things they should have done in 2011 when they signed
the consent decree. These were all things that were actually, the consent degree said,
you must do these things. So what they’re basically admitting is we ignored the consent
decree for seven years. I don’t think we’re supposed to give them credit for this. For
showing up seven years late to a party that they were required to attend. I think this
is really hard. And there is an op-ed written by Tim Wu, a professor at Columbia, in which
he says the most important thing to do is to replace Facebook. Now I don’t know how
you’re going to do that. But the one thing I know is that in 1956, AT&T cell phone company
signed a consent decree to end in antitrust case, in which they agreed to two things.
The first was they agreed not to enter any new markets which basically meant they weren’t
going to enter the computer industry. And then the second thing they did was they agreed
to freely license their entire patent portfolio at no cost. What’s really interesting about
that is that by not entering new markets they allow the personal, the mainframe computer
minicomputer, the PC industry has to happen independently. But the patent portfolio is
where the secret was. Because in that patent portfolio was something called the transistor.
Silicon Valley as we know it today was created by the AT&T consent decree and the most remarkable
thing about it was that AT&T continued to prosper. And yet we created all of Silicon
Valley. The semiconductor industry, the computer industry, the software industry, the Internet
industry, data networking industry, cellular… all of those things were created as a direct
result of that AT&T consent decree. And it’s all about creating the opportunity for competition.
And that’s what I would like to see happen. I would like to see solutions that… I don’t
see any benefit to punishing Facebook and Google and Twitter or others. I do think they
should be restricted in what they can do. But I think for the most part the most useful
thing we can do is create real competitors who have different business ideas, and different
business plans. And we should reward people who do things that serve the public interest.
You know, Silicon Valley has spent the last 40 years getting rid of jobs. Why? I mean
that’s sociopathic, we’re at this point now where we need to create good jobs for
people, particularly good jobs for people coming out of industries that are dying. There’s
no reason Silicon Valley can’t do that with a proper set of incentives. And you know,
the Internet platforms have done the opposite. And we need to create incentives for a new
generation to come along and do the right thing, and that’s what I hope will happen.
You understand the past. You see where we are right now. And you have a vision for the
future. So I guess my question is if Mark called you tomorrow, and said I need you,
will you join my board? Oh I would do that in a heartbeat, but that’s never going to
happen. I mean that, that is roughly equivalent of like, if you had wings would you fly. I
mean I’m an enormous fan of Facebook. I’m an enormous fan of Mark and Sheryl. What about
the stock? I think they’re killing the brand. I turned it over to a manager to manage my
position, because of what I was doing. And the manager sold a chunk of my position quite
recently. Facebook is still by far my largest investment position. So I’m still very deeply
attached to it. From a personal economic perspective. And I’m still deeply emotionally tied. And,
while it hasn’t appeared to them as though I’ve been trying to help, that’s been my goal
throughout this entire thing. I mean, somebody asked me an interview not too long ago, this
is after after the Mueller indictment, which was basically a superset of the list of hypotheses
we’d given Warner, eight months earlier. And… they said, wow you must be feeling really
great. And I go, what planet are you coming from. It’s the worst thing I’ve ever been
involved in. I mean. I was so proud of this company. And it never occurred to me it would
ever do any harm. Just never occurred to me and maybe I was naïve. And I’ll accept that.
But I took up this challenge. First the challenge of getting a conversation going, and now the
larger challenge of how do we fix it. With the goal that we could fix it. And with a
clear sense that, because of my biography and because of my understanding of the product
and knowing the people, that I might have an important role to play here. But it hasn’t
gone the way I hoped. I mean, I hoped that they would take my original memo and use that
as a basis for doing the right thing. I hoped that inquiries from Congress would cause them
to do the right thing. I hoped that having former employees like Chamath Palihapitiya
and Sean Parker and Justin Rosenstein, talking about how important it was to change, that
that would cause them to do the right thing. None of those things have worked. And they’re
still not working now. Mark’s testified in Washington D.C. and, you know, it all sounds
good but when you strip it out and actually look at what’s going on for the most part,
they are doing things that they wanted to do anyway and crediting this crisis for creating
the motivation. And when they’re actually doing something, like on personal privacy
where they’re being responsible to the consent decree, they’re doing it seven years later
than they should have done. I would love to help them get this right. But. There is no
sign, and there’ll be a better, I mean, I think the truth is now after all that’s
gone on, there’ll be a better messenger than me. You know I’ve been forced to take
up this mantle of being a critic which is not where I normally belong. I’m an analyst,
right? And in this this particular story I’m Jimmy Stewart in the Alfred Hitchcock movie.
I saw something that I wasn’t supposed to see. And pulled on the thread, and all of
a sudden found myself in the midst of something that was bigger than I was capable of handling.
And all of that has made me very unpopular, not just with people at Facebook. And I don’t
know what’s going to come out of this. I don’t know that democracy in the United States is
going to survive its brush with Facebook. You know, you look at what’s going on in Washington
right now and it’s hard to be confident that we’re going to have a happy ending. You know
with trade wars, you got real wars being threatened, you got all kinds of stuff going on and you
got all these people with really important jobs who seem to think that the purpose of
being in Washington is to enrich themselves. As an investor you go… basically we’re maximizing
uncertainty, which is the investor’s enemy. And we’re doing it the old fashioned way with
corrupt behavior. And, whether I like it or not, Facebook was one of the tools that these
people used to produce this outcome. We have the Russians, the Trump campaign. Others presumably.
And there’s no easy fix. And no way to put the genie back in the bottle. So you know.
I knock on wood that people you know, there are literally thousands of people who are
domain experts on each individual part of this problem. And many of them have really
great ideas. And what I’ve been hoping to do, what we’ve been trying to do, is to shine
a light on them. We started something called the Center for Human Technology. And we’re
working on a thing called the Ledger of Harms and the Ledger of Harms is essentially a catalog
of all of the failure modes of internet technology and smartphones, from addiction to election
interference. Basically killing off startups. But in great detail with links to all of the
best known work on the subject. That’s phase one, we’re going to release that in I hope
the next month. Once that’s out we’re going to share it with all the researchers and ask
them to connect their work to it. And the goal there is to shine a light on all the
great work going on in the field, that right now nobody can see because it’s taking place
too close to the action, and there’s no way to get it to policymakers, there’s no way
to get it to the tech companies. And so the hope with the Ledger of Harms is to shine
light on that, and then as people start to come up with remedies connect those into it
too. And that way anybody who wants to learn about this can go to whatever level of depth
they want to go, to understand what the problems are. What is known about them, who’s doing
the best work, what solutions they’ve come up with. Because it’s not going to be us.
My role in this whole thing is to run into the room with my hair on fire and go, hey,
my hair is on fire. And that’s worked out pretty well. But you know that’s one trick.
And my pony doesn’t have a second trick. And so, my hope is that I’ll be obsolete in this
whole exercise pretty quickly and we can hand it off to people who really know what they’re
doing. Because the Jimmy Stewart character is supposed to go off happily into the sunset
at the end of the movie. I want to make sure that happens.

19 comments

  1. It’s laughable how all of these clowns realize the error of their ways only after they have made a fortune.

  2. I'm from the UK. The propaganda for the remain side was just as bad, if not worse on facebook, and all media outlets! This guy seems incredibly biased

  3. im grateful for the interview from realvision, i look forward to these quite a bit, thanks for posting. love you all. keep it up!
    i love hearing about the inside baseball going on with facebook. truly informative however this mans lack of real truth awareness of whats going on politically in the world and why people are moving away from his main stream political and scientific views is astounding. go to geoengineeringwatch.org and tell me that contrails are not a serious issue. the pictures on that site are debate ending frankly. heck just look up for god's sake.

    i live in MD and i can tell you its amazing and earth shaking to see it going on every day. the russian meme that they influenced anything is also farcical on its face. just look at the amounts of money spent and a finance guy like him should get that call correct. how can such a smart guy miss the truth of so much and blow it on the social and real scientific awareness is mystifying to me. unless its conscious projection of mainstream narratives. or i guess we are all varyingly vulnerable to msm mind control no matter how intelligent we are.

    thanks again to real vision and the inside story is great which is why i'll share this but every time he throws out msm political narratives and memes my stomach turns over…..watch but have a can of pepto bismol at the ready….so thumbs up but qualified heavily…..

  4. a long video with a few lies, obvious to most of the world, he talks about Russian interference and Philippino death squads which are suspect at best and b.s. at worst and doesn't talk about the elephant in the room about the two governments in the U.S., its almost as if he works for the CIA

  5. Why is it that when FB gave user data to Obama for his campaign everyone celebrated it and named Obama the "Social Media President?" Now Trump wins and social media is a weapon. Why can't the liberal elite and the silicon valley elite just admit they funded the wrong candidate?

  6. This is such a clear, articulate, historical exposition of a major problem. Thanks, Roger. Please keep up the good work. (I think the negative comments below miss the point.)

  7. Yes, we need more people like this guy! So many zombies are blind to the long-term detrimental effects SM is having on society and our fellow citizens' brains, democracy and education.

  8. This is a great interview, but other data shows that the stuff going on with FB was done to and for both candidates. Russia screws with our elections and have for decades. They just now have another tool to screw with us. Something does need to be done or the Justice Democrats will start getting their candidates in both Republican and Democrat positions.

  9. Of course, Mr. McNamee had NO IDEA anything nefarious was going on while the stock price is up 1000 percent. But, when it falls… John Stumpf had no idea what his employees were doing at Wells. Mule nuggets.

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