We Got Zucked: Roger McNamee On The Lessons Of Facebook For Boards & CEOs

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Roger McNamee was one of the most influential investors in Silicon Valley, mentoring many of the Valley’s hottest young leaders, including a very young Mark Zuckerberg. He recently wrote critically about Facebook in Zucked: Waking Up To The Facebook Catastrophe.

There’s been very little discussion from the investor community about the issues that you describe in your book.

I think there’s a really good reason for that. You know, we live in an era where corporate responsibility has been redefined to place the interests of the shareholder—really, the interests of the stock price—ahead of absolutely everything else in all situations. Where 30 years ago or 40 years ago, companies recognized that they had a responsibility to their employees, to the communities where those people lived, to the country where they lived, that has largely been replaced by this notion of if it doesn’t increase the value to shareholders, it doesn’t matter, in fact, probably is a negative.

I would hope that, in time, we would recognize that boards have a responsibility to more people than just the shareholders and that that responsibility’s actually in the long-term interest of the shareholders. That if you optimize everything for the very short run, you don’t really have a long run.

But what I don’t hear as part of the dialogue are the specific things that you’re talking about in terms of data. How much of that do you think is the concentration in the economy of the FANG stocks?

I think that’s a great question, and I don’t want to pretend like I know the exact answer. But it seems to me that there are a few components of it. One is that the nature of how data is being gathered and used has changed so radically over the past decade that no one should be shocked that there’s widespread confusion or ignorance.

So I look at it and say, “I’ve spent 34 years as a full-time tech investor. I’ve spent the better part of three years as an activist in this area, and it took me a long time to figure this out, and I’m still learning every single day, so I have great sympathy and empathy for board members at all levels.”

This is really complicated stuff, and, you know, we need to learn this together. That is why I wrote the book.

The second observation I would make is FANG is a really helpful thing from a stock market point of view, right? It defines that cluster, but we’re not talking about FANG here. We’re talking about Facebook, Google, and Amazon, relative to the data stuff. I don’t think Apple’s perfect, I don’t think Netflix is perfect, but they’re not the ones doing the things that we’re talking about right now. So the concentration’s even greater than you think.

This book is about helping everyone, including members of boards of directors, to look at their own behavior, to recognize that they do have a lot of power and a lot of control here. Because this stuff is so concentrated that everyone else represents the vast majority of the population, the vast majority of the corporate world. These companies cannot succeed without at least the passive consent of the people who use their products and the people who advertise on them, and that’s pretty much everybody.

As we enter this time where everyone is really focused on digital transformation, what’s the lesson here for everyone who runs a company?

I think the most important lessons around data are to recognize that the appropriate uses are the ones that benefit the people whose data you’re using. So it’s about improving your products and services to provide more value to those involved. If you find yourself in a situation where you’re using data to do other things, to create other products that may or may not benefit the people whose data went in, then I think you really ought to step back and ask yourself the question whether that is either morally or legally correct.

Almost certainly, there will be regulation of that kind of stuff. The question is, which side do you want to be on when that comes? Better for the corporate world to take the lead and get the credit for acting in the interests of consumers. This is a great opportunity right now, and it’s one of these things where, candidly, it’s in every company’s interest to get ahead of this issue. Instead of assuming that this is inevitable, which is the line that Facebook and Google put forward, I think we should recognize that we actually have a choice.

I want to see the technology industry return to this model of technology that empowers the people who use it. I don’t want to replace people’s jobs. I don’t want to replace the things that they believe and replace the things that they enjoy with AI-based systems. I don’t want to take away their humanity. I would rather go back to the Steve Jobs world of “bicycles for the mind” that empower people. I think that’s going to be a great business for everybody. It’s going to give us a chance to have a whole new wave. All that’s missing here is the resolve to do it. These companies are blocking a lot of innovation because that’s what monopolists do. I’m neither surprised nor do I blame them. But we don’t have to let them get away with it.

We’re in a terrible place right now but we don’t have to stay here. There is nothing inevitable about this cycle continuing. We can start a new cycle that’s a lot better.

Read more: What Would Regulation Of Facebook Look Like?


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