Roger McNamee is a prominent Silicon Valley investor with a reputation for harshly criticizing some of the largest and most influential tech companies.
His anger is centered on Facebook, which he launched with an early investment and was an advisor to Mark Zuckerberg, co-founder and CEO. McNamee helped to hire COO Sheryl Sandberg and stopped Zuckerberg from selling his young company in 2006 for $1 billion.
“I was so happy with Facebook.” “I thought Mark was unique,” McNamee told Ann Grimes, a veteran Wall Street Journal tech reporter at Stanford Graduate School of Business. The conversation occurred in April in a discussion sponsored by the Corporations and Society Initiative headed by Professor Anat R. Admati. “I was blissfully an admirer.”
The bromance has ended. McNamee says that the social network has become “terrible” for America. “Bad actors use the design of Facebook, and other platforms, to harm and even kill innocent individuals.”
McNamee, now retired, has written a broadside book titled Zucked: Waking up to the Facebook Catastrophe. McNamee has promoted it through numerous media interviews, speaking engagements, and a spot on the New York Times bestseller list.
He is careful not to make his criticism personal. His complaint goes beyond Zuckerberg and Facebook. McNamee states, “These people are not bad.” He criticizes the business model in Silicon Valley, which treats the consumers as “fuel,” and the overall economic climate of the United States.
He says that we have been deregulating for over 40 years. He says that we’ve moved from a form of capitalism in which the government set rules and enforced them to ensure fairness for all. Few restrictions are left, and they are not implemented as much. Businesses are, therefore, encouraged to “grab whatever they can.”
McNamee says that the culture of our economy has become so distorted that it is almost unreasonable to expect Zuckerberg and other executives to be more responsible.
He says that if Rex Tillerson, when he was at Exxon, could have a different foreign policy despite sanctions against Russia and if Wells Fargo got away with graduating [millions] customers a new window in 2008, then it is hard to imagine Facebook being held to a more stringent standard.
McNamee was particularly shocked by how easily a terrorist from New Zealand used social media to broadcast the shooting attack he carried out on a New Zealand mosque on 15 March. He says a kill button may be needed to turn off social media urgently. He says that “New Zealand is a game changer.”
Data: The Real Price
It is an excellent metaphor to say that Silicon Valley treats consumers as “fuel.” Facebook, Google, and other companies that rely on advertising are built around collecting and selling personal data. This includes location. McNamee describes an almost Faustian deal where consumers exchange their data for services.
“We have always claimed that services were free. But this is not true. This is a bartering of data in exchange for services. He maintains that data prices have risen geometrically or at least on a steep slope.
He says that data collection is not just a passive tool. It has become more sophisticated and is now a way to manipulate or modify behavior. Pokemon Go is a mobile app that allows users to hunt down digital creatures hidden around the city. The game appears harmless. It’s not just a game. McNamee explains, “If we put Pokemons in Starbucks, we can make you go in and purchase some coffee.” “That is manipulation, and it’s certainly not what we signed on for.”
Flame wars on Twitter and Facebook get clicks and reveal quite a bit about the participants. McNamee believes that this is no accident. He says that if you want to know what people are like, you need to break through the civility of each of us. The best way to do this is to provoke us. You want people to be in a state of instability to see what they are. The business model relies on hate speech, anger, fear, disinformation, and conspiracy theories.
McNamee believes that censoring content is not the solution. He argues that the General Data Protection Regulation of the European Union is not working because it judges the content “after the fact.” “If you’re going to solve the issue, you need to remove the incentive,” which means changing the business model.
In Search of Solutions
McNamee hasn’t been clear about how he will remove this incentive. He has mentioned antitrust tools at Stanford and elsewhere and has spoken positively about Senator Elizabeth Warren’s plan to break up large tech companies. He said he was lobbying the Federal Communications Commission (FCC) and the Federal Trade Commission on privacy issues. However, he did not speak with whom he worked or what he wanted them to do.
McNamee believes that investors can play a significant role in this. “It’s time to stop focusing solely on shareholder value.”
He admits, however, that he has shared on Facebook. “I didn’t want anyone accusing me of speaking badly of a company whose stock I just sold. My theory was that I made much money on the stock, and my actions could cause it to drop. This was a value judgment.”
McNamee admits his inconsistent position and says, “I am not the perfect messenger.” This is no small matter; it’s people’s lives. “We can’t forget this.”
