Apple employees push back against returning to the office in internal letter
“Over the last year we often felt not just unheard, but at times actively ignored”
A little piece of history.
What you need to know
- An Apple sign is up for auction, but it’s nothing like the ones you’ll see at an Apple Store today.
- This sign features the famous six-color rainbow logo from somewhere around 1978.
An unusual sign is available for auction with bidding starting at $12,000. You know with numbers like that involved this is going to be something special. This time around it’s a sign from 1978 with the original Apple six-color rainbow logo. Apple Computer is written beneath the famous multi-colored Apple.
The large acrylic sign measures 48.5 x 60.5-inches so you aren’t likely to put this on your office wall. But despite its age, the auctioneer lists the sign as being in „very good condition.“
Original Apple Computer Inc. sign, circa 1978, displaying the famous rainbow apple logo. Large sign measuring over 4′ x 5′ is one of the earliest Apple retail signs, displayed by an authorized reseller who learned about Apple by attending a computer conference in 1976. Acrylic sign in metal frame measures 48.5″ x 60.5″. A few surface marks, and some yellowing to background, but rainbow colors remain bright. Overall very good condition.
With biding starting at $12,000 there’s no telling what price this thing will ultimately sell for. You can check the auction out for yourself and place a bid if you like. Do it soon, though. This auction ends on February 25th at 5 pm PT.
Sex, Beer, and Coding: Inside Facebook’s Wild Early Days
This story is excerpted from Valley of Genius, by Adam Fisher.
Everyone who has seen The Social Network knows the story of Facebook’s founding. It was at Harvard in the spring semester of 2004. What people tend to forget, however, is that Facebook was only based in Cambridge for a few short months. Back then it was called TheFacebook.com, and it was a college-specific carbon copy of Friendster, a pioneering social network based in Silicon Valley.
Mark Zuckerberg’s knockoff site was a hit on campus, and so he and a few school chums decided to move to Silicon Valley after finals and spend the summer there rolling Facebook out to other colleges, nationwide. The Valley was where the internet action was. Or so they thought.
In Silicon Valley during the mid-aughts the conventional wisdom was that the internet gold rush was largely over. The land had been grabbed. The frontier had been settled. The web had been won. Hell, the boom had gone bust three years earlier. Yet nobody ever bothered to send the memo to Mark Zuckerberg—because at the time, Zuck was a nobody: an ambitious teenaged college student obsessed with the computer underground. He knew his way around computers, but other than that, he was pretty clueless—when he was still at Harvard someone had to explain to him that internet sites like Napster were actually businesses, built by corporations.
But Zuckerberg could hack, and that fateful summer he ended up meeting a few key Silicon Valley players who would end up radically changing the direction of what was, at the time, a company in name only. For this oral history of those critical months back in 2004 and 2005, I interviewed all the key players and talked to a few other figures who had insight into the founding era. What emerged, as you’ll see, is a portrait of a corporate proto-culture that continues to exert an influence on Facebook today. The whole enterprise began as something of a lark, it was an un-corporation, an excuse for a summer of beer pong and code sprints. Indeed, Zuckerberg’s first business cards read, “I’m CEO … bitch.” The brogrammer ’tude was a joke … or was it?
Sean Parker (cofounder of Napster and first president of Facebook): The dotcom era sort of ended with Napster, then there’s the dotcom bust, which leads to the social media era.
Steven Johnson (noted author and cultural commentator): At the time, the web was fundamentally a literary metaphor: “pages”—and then these hypertext links between pages. There was no concept of the user; that was not part of the metaphor at all.
Mark Pincus (co-owner of the fundamental social media patent): I mark Napster as the beginning of the social web—people, not pages. For me that was the breakthrough moment, because I saw that the internet could be this completely distributed peer-to-peer network. We could disintermediate those big media companies and all be connected to each other.
Steven Johnson: To me it really started with blogging in the early 2000s. You started to have these sites that were oriented around a single person’s point of view. It suddenly became possible to imagine, Oh, maybe there’s another element here that the web could also be organized around? Like I trust these five people, I’d like to see what they are suggesting. And that’s kind of what early blogging was like.
Ev Williams (founder of Blogger, Twitter, and Medium): Blogs then were link heavy and mostly about the internet. “We’re on the internet writing about the internet, and then linking to more of the internet, and isn’t that fun?”
Steven Johnson: You would pull together a bunch of different voices that would basically recommend links to you, and so there was a personal filter.
Mark Pincus: In 2002 Reid Hoffman and I started brainstorming: What if the web could be like a great cocktail party? Where you can walk away with these amazing leads, right? And what’s a good lead? A good lead is a job, an interview, a date, an apartment, a house, a couch.
And so Reid and I started saying, “Wow, this people web could actually generate something more valuable than Google, because you’re in this very, very highly vetted community that has some affinity to each other, and everyone is there for a reason, so you have trust.” The signal-to-noise ratio could be be very high. We called it Web 2.0, but nobody wanted to hear about it, because this was in the nuclear winter of the consumer internet.
Sean Parker: So during the period between 2000 and 2004, kind of leading up to Facebook, there is this feeling that everything that there was to be done with the internet has already been done. The absolute bottom is probably around 2002. PayPal goes public in 2002, and it’s the only consumer internet IPO. So there’s this weird interim period where there’s a total of only six companies funded or something like that. Plaxo was one of them. Plaxo was a proto–social network. It’s this in-between thing: some kind of weird fish with legs.
Aaron Sittig (graphic designer who invented the Facebook „like“): Plaxo is the missing link. Plaxo was the first viral growth company to really succeed intentionally. This is when we really started to understand viral growth.
Sean Parker: The most important thing I ever worked on was developing algorithms for optimizing virality at Plaxo.
Aaron Sittig: Viral growth is when people using the product spreads the product to other people—that’s it. It’s not people deciding to spread the product because they like it. It’s just people in the natural course of using the software to do what they want to do, naturally spreading it to other people.
Sean Parker: There was an evolution that took place from the sort of earliest proto–social network, which is probably Napster, to Plaxo, which only sort of resembled a social network but had many of the characteristics of one, then to LinkedIn, MySpace, and Friendster, then to this modern network which is Facebook.
Ezra Callahan (one of Facebook’s very first employees): In the early 2000s, Friendster gets all the early adopters, has a really dense network, has a lot of activity, and then just hits this breaking point.
Aaron Sittig: There was this big race going on and Friendster had really taken off, and it really seemed like Friendster had invented this new thing called “social networking,” and they were the winner, the clear winner. And it’s not entirely clear what happened, but the site just started getting slower and slower and at some point it just stopped working.
Ezra Callahan: And that opens the door for MySpace.
Ev Williams: MySpace was a big deal at the time.
Sean Parker: It was a complicated time. MySpace had very quickly taken over the world from Friendster. They’d seized the mantle. So Friendster was declining, MySpace was ascending.
Scott Marlette (programmer who put photo tagging on Facebook): MySpace was really popular, but then MySpace had scaling trouble, too.
Aaron Sittig: Then pretty much unheralded and not talked about much, Facebook launched in February of 2004.
Dustin Moskovitz (Zuckerberg’s original right-hand man): Back then there was a really common problem that now seems trivial. It was basically impossible to think of a person by name and go and look up their picture. All of the dorms at Harvard had individual directories called face books—some were printed, some were online, and most were only available to the students of that particular dorm. So we decided to create a unified version online and we dubbed it “The Facebook” to differentiate it from the individual ones.
Mark Zuckerberg (Facebook’s founder and current CEO): And within a couple weeks, a few thousand people had signed up. And we started getting emails from people at other colleges asking for us to launch it at their schools.
Ezra Callahan: Facebook launched at the Ivy Leagues originally, and it wasn’t because they were snooty, stuck-up kids who only wanted to give things to the Ivy Leagues. It was because they had this intuition that people who go to the Ivy Leagues are more likely to be friends with kids at other Ivy League schools.
Aaron Sittig: When Facebook launched at Berkeley, the rules of socializing just totally transformed. When I started at Berkeley, the way you found out about parties was you spent all week talking to people figuring out what was interesting, and then you’d have to constantly be in contact. With Facebook there, knowing what was going on on the weekend was trivial. It was just all laid out for you.
Facebook came to the Stanford campus—in the heart of Silicon Valley— quite early: March 2004.
Sean Parker: My roommates in Portola Valley were all going to Stanford.
Ezra Callahan: So I was a year out of Stanford, I graduated Stanford in 2003, and me and four of my college friends rented a house for that year just near the campus, and we had an extra bedroom available, and so we advertised around on a few Stanford email lists to find a roommate to move into that house with us. We got a reply from this guy named Sean Parker. He ended up moving in with us pretty randomly, and we discovered that while Napster had been a cultural phenomenon, it didn’t make him any money.
Sean Parker: And so the girlfriend of one of my roommates was using a product, and I was like, “You know, that looks a lot like Friendster or MySpace.” She’s like, “Oh yes, well, nobody in college uses MySpace.” There was something a little rough about MySpace.
Mark Zuckerberg: So MySpace had almost a third of their staff monitoring the pictures that got uploaded for pornography. We hardly ever have any pornography uploaded. The reason is that people use their real names on Facebook.
Adam D’Angelo (Zuckerberg’s high school hacking buddy): Real names are really important.
Aaron Sittig: We got this clear early on because of something that was established as a community principle at the Well: You own your own words. And we took it farther than the Well. We always had everything be traceable back to a specific real person.
Stewart Brand (founder of the Well, the first important social networking site): The Well could have gone that route, but we did not. That was one of the mistakes we made.
Mark Zuckerberg: And I think that that’s a really simple social solution to a possibly complex technical issue.
Ezra Callahan: In this early period, it’s a fairly hacked-together, simple website: just basic web forms, because that’s what Facebook profiles are.
Ruchi Sanghvi (coder who created Facebook’s Newsfeed): There was a little profile pic, and it said things like, “This is my profile” and “See my friends,” and there were three or four links and one or two other boxes below that.
Aaron Sittig: But I was really impressed by how focused and clear their product was. Small details—like when you went to your profile, it really clearly said, “This is you,” because social networking at the time was really, really hard to understand. So there was a maturity in the product that you don’t typically see until a product has been out there for a couple of years and been refined.
Sean Parker: So I see this thing, and I emailed some email address at Facebook, and I basically said, “I’ve been working with Friendster for a while, and I’d just like to meet you guys and see if maybe there’s anything to talk about.” And so we set up this meeting in New York—I have no idea why it was in New York—and Mark and I just started talking about product design and what I thought the product needed.
Aaron Sittig: I got a call from Sean Parker and he said, “Hey, I’m in New York. I just met with this kid Mark Zuckerberg, who is very smart, and he’s the guy building Facebook, and they say they have a ‘secret feature’ that’s going to launch that’s going to change everything! But he won’t tell me what it is. It’s driving me crazy. I can’t figure out what it is. Do you know anything about this? Can you figure it out? What do you think it could be?” And so we spent a little time talking about it, and we couldn’t really figure out what their “secret feature” that was going to change everything was. We got kind of obsessed about it.
Two months after meeting Sean Parker, Mark Zuckerberg moved to Silicon Valley with the idea of turning his dorm‐room project into a real business. Accompanying him were his cofounder and consigliere, Dustin Moskovitz, and a couple of interns.
Mark Zuckerberg: Palo Alto was kind of like this mythical place where all the tech used to come from. So I was like, I want to check that out.
Ruchi Sanghvi: I was pretty surprised when I heard Facebook moved to the Bay Area, I thought they were still at Harvard working out of the dorms.
Ezra Callahan: Summer of 2004 is when that fateful series of events took place: that legendary story of Sean running into the Facebook cofounders on the street, having met them a couple months earlier on the East Coast. That meeting happened a week after we all moved out of the house we had been living in together. Sean was crashing with his girlfriend’s parents.
Sean Parker: I was walking outside the house, and there was this group of kids walking toward me—they were all wearing hoodies and they looked like they were probably pot-smoking high-school kids just out making trouble, and I hear my name. I’m like, Oh, it’s coincidence, and I hear my name again and I turn around and it’s like, “Sean, what are you doing here?”
It took me about 30 seconds to figure out what was going on, and I finally realize that it’s Mark and Dustin and a couple of other people, too. So I’m like, “What are you guys doing here?” And they’re like, “We live right there.” And I’m like, “That’s really weird, I live right here!” This is just super weird.
Aaron Sittig: I get a call from Sean and he’s telling me, “Hey, you won’t believe what’s just happened.” And Sean said, “You’ve got to come over and meet these guys. Just leave right now. Just come over and meet them!”
Sean Parker: And so I don’t even know what happened from there, other than that it just became very convenient for me to go swing by the house. It wasn’t even a particularly formal relationship.
Aaron Sittig: So I went over and met them, and I was really impressed by how focused they were as a group. They’d occasionally relax and go do their thing, but for the most part they spent all their time sitting at a kitchen table with their laptops open. I would go visit their place a couple times a week, and that was always where I’d find them, just sitting around the kitchen table working, constantly, to keep their product growing.
All Mark wanted to do was either make the product better, or take a break and relax so that you could get enough energy to go work on the product more. That’s it. They never left that house except to go watch a movie.
Ezra Callahan: The early company culture was very, very loose. It felt like a project that’s gotten out of control and has this amazing business potential. Imagine your freshman dorm running a business, that’s really what it felt like.
Mark Zuckerberg: Most businesses aren’t like a bunch of kids living in a house, doing whatever they want, not waking up at a normal time, not going into an office, hiring people by, like, bringing them into your house and letting them chill with you for a while and party with you and smoke with you.
Ezra Callahan: The living room was the office with all these monitors and workstations set up everywhere and just whiteboards as far as the eye can see.
At the time Mark Zuckerberg was obsessed with file sharing, and the grand plan for his Silicon Valley summer was to resurrect Napster. It would rise again, but this time as a feature inside of Facebook. The name of Zuckerberg’s pet project? Wirehog.
Aaron Sittig: Wirehog was the secret feature that Mark had promised was going to change everything. Mark had gotten convinced that what would make Facebook really popular and just sort of cement its position at schools was a way to send files around to other people—mostly just to trade music.
Mark Pincus: They built in this little thing that looked like Napster—you could see what music files someone had on their computer.
Ezra Callahan: This is at a time when we have just watched Napster get completely terminated by the courts and the entertainment industry is starting to sue random individuals for sharing files. The days of the Wild West were clearly ending.
Aaron Sittig: It’s important to remember that Wirehog was happening at a time where you couldn’t even share photos on your Facebook page. Wirehog was going to be the solution for sharing photos with other people. You could have a box on your profile and people could go there to get access to all your photos that you were sharing—or whatever files you were sharing. It might be audio files, it might be video files, it might be photos of their vacation.
Ezra Callahan: But at the end of the day it’s just a file-sharing service. When I joined Facebook, most people had already kind of come around to the idea that unless some new use comes up for Wirehog that we haven’t thought of, it’s just a liability. “We’re going to get sued someday, so what’s the point?” That was the mentality.
Mark Pincus: I was kind of wondering why Sean wanted to go anywhere near music again.
Aaron Sittig: My understanding was that some of Facebook’s lawyers advised that it would be a bad idea. And that work on Wirehog was kind of abandoned just as Facebook user growth started to grow really quickly.
Ezra Callahan: They had this insane demand to join. It’s still only at a hundred schools, but everyone in college has already heard of this, at all schools across the country. The usage numbers were already insane. Everything on the whiteboards was just all stuff related to what schools were going to launch next. The problem was very singular. It was simply, “How do we scale?”
Aaron Sittig: Facebook would launch at a school, and within one day they would have 70 percent of undergrads signed up. At the time, nothing had ever grown as fast as Facebook.
Ezra Callahan: It did not seem inevitable that we were going to succeed, but the scope of what success looked like was becoming clear. Dustin was already talking about being a billion-dollar company. They had that ambition from the very beginning. They were very confident: two 19-year-old cocky kids.
Mark Zuckerberg: We just all kind of sat around one day and were like, “We’re not going back to school, are we?” Nahhhh.
Ezra Callahan: The hubris seemed pretty remarkable.
David Choe (noted graffiti artist): And Sean is a skinny, nerdy kid and he’s like, “I’m going to go raise money for Facebook. I’m going to bend these fuckers’ minds.” And I’m like, “How are you going to do that?” And he transformed himself into an alpha male. He got like a fucking super-sharp haircut. He started working out every day, got a tan, got a nice suit. And he goes in these meetings and he got the money!
Mark Pincus: So it’s probably like September or October of 2004, and I’m at Tribe’s offices in this dusty converted brick building in Potrero Hill—the idea of Tribe.net was like Friendster meets Craigslist—and we’re in our conference room, and Sean says he’s bringing the Facebook guy in. And he brings Zuck in, and Zuck is in a pair of sweatpants, and these Adidas flip-flops that he wore, and he’s so young looking and he’s sitting there with his feet up on the table, and Sean is talking really fast about all the things Facebook is going to do and grow and everything else, and I was mesmerized.
Because I’m doing Tribe, and we are not succeeding, we’ve plateaued and we’re hitting our head against the wall trying to figure out how to grow, and here’s this kid, who has this simple idea, and he’s just taking off! I was kind of in awe already of what they had accomplished, and maybe a little annoyed by it. Because they did something simpler and quicker and with less, and then I remember Sean got on the computer in my office, and he pulled up The Facebook, and he starts showing it to me, and I had never been able to be on it, because it’s college kids only, and it was amazing.
People are putting up their phone numbers and home addresses and everything about themselves and I was like, I can’t believe it! But it was because they had all this trust. And then Sean put together an investment round quickly, and he had advised Zuck to, I think, take $500,000 from Peter Thiel, and then $38,000 each from me and Reid Hoffman. Because we were basically the only other people doing anything in social networking. It was a very, very small little club at the time.
Ezra Callahan: By December it’s—I wouldn’t say it’s like a more professional atmosphere, but all the kids that Mark and Dustin were hanging out with are either back at school back East or back at Stanford, and work has gotten a little more serious for them. They are working more than they were that first summer. We don’t move into an office until February of 2005. And right as we were signing the lease, Sean just randomly starts saying, “Dude! I know this street artist guy. We’re going to come in and have him totally do it up.”
David Choe: I was like, “If you want me to paint the entire building it’s going to be $60,000.” Sean’s like, “Do you want cash or do you want stock?”
Ezra Callahan: He pays David Choe in Facebook shares.
David Choe: I didn’t give a shit about Facebook or even know what it was. You had to have a college email to get on there. But I like to gamble, you know? I believed in Sean. I’m like, This kid knows something and I am going to bet my money on him.
Ezra Callahan: So then we move in, and when you first saw this graffiti it was like, “Holy shit, what did this guy do to the office?” The office was on the second floor, so as you walk in you immediately have to walk up some stairs, and on the big 10-foot-high wall facing you is just this huge buxom woman with enormous breasts wearing this Mad Max–style costume riding a bulldog.
It’s the most intimidating, totally inappropriate thing. “God damn it, Sean! What did you do?” It’s not so much that we set out to paint that, because that was the culture. It was more that Sean just did it, and that set a tone for us. A huge-breasted warrior woman riding a bulldog is the first thing you see as you come in the office, so like, get ready for that!
Ruchi Sanghvi: Yes, the graffiti was a little racy, but it was different, it was vibrant, it was alive. The energy was just so tangible.
Katie Geminder (project manager for early Facebook): I liked it, but it was really intense. There was certain imagery in there that was very sexually charged, which I didn’t really care about but that could be considered a little bit hostile, and I think we took care of some of the more provocative ones.
Ezra Callahan: I don’t think it was David Choe, I think it was Sean’s girlfriend who painted this explicit, intimate lesbian scene in the woman’s restroom of two completely naked women intertwined and cuddling with each other—not graphic, but certainly far more suggestive than what one would normally see in a women’s bathroom in an office. That one only actually lasted a few weeks.
Max Kelly (Facebook’s first cyber-security officer): There was a four-inch by four-inch drawing of someone getting fucked. One of the customer service people complained that it was “sexual in nature,” which, given what they were seeing every day, I’m not sure why they would complain about this. But I ended up going to a local store and buying a gold paint pen and defacing the graffiti—just a random design— so it didn’t show someone getting fucked.
Jeff Rothschild (investor turned Facebook employee): It was wild, but I thought that it was pretty cool. It looked a lot more like a college dorm or fraternity than it did a company.
Katie Geminder: There were blankets shoved in the corner and video games everywhere, and Nerf toys and Legos, and it was kind of a mess.
Jeff Rothschild: There’s a PlayStation. There’s a couple of old couches. It was clear people were sleeping there.
Karel Baloun (one of the earliest Facebook programmers): I’d probably stay there two or three nights a week. I won an award for “most likely to be found under your desk” at one of the employee gatherings.
Jeff Rothschild: They had a bar, a whole shelf with liquor, and after a long day people might have a drink.
Ezra Callahan: There’s a lot of drinking in the office. There would be mornings when I would walk in and hear beer cans move as I opened the door, and the office smells of stale beer and is just trashed.
Ruchi Sanghvi: They had a keg. There was some camera technology built on top of the keg. It basically detected presence and posted about who was present at the keg—so it would take your picture when you were at the keg, and post some sort of thing saying “so-and-so is at the keg.” The keg is patented.
Ezra Callahan: When we first moved in, the office door had this lock we couldn’t figure out, but the door would automatically unlock at 9 am every morning. I was the guy that had to get to the office by 9 to make sure nobody walked in and just stole everything, because no one else was going to get there before noon. All the Facebook guys are basically nocturnal.
Katie Geminder: These kids would come in—and I mean kids, literally they were kids—they’d come into work at 11 or 12.
Ruchi Sanghvi: Sometimes I would walk to work in my pajamas and that would be totally fine. It felt like an extension of college; all of us were going through the same life experiences at the same time. Work was fantastic. It was so interesting. It didn’t feel like work. It felt like we were having fun all the time.
Ezra Callahan: You’re hanging out. You’re drinking with your coworkers. People start dating within the office …
Ruchi Sanghvi: We found our significant others while we were at Facebook. All of us eventually got married. Now we’re in this phase where we’re having children.
Katie Geminder: If you look at the adults that worked at Facebook during those first few years—like, anyone over the age of 30 that was married—and you do a survey, I tell you that probably 75 percent of them are divorced.
Max Kelly: So, lunch would happen. The caterer we had was mentally unbalanced and you never knew what the fuck was going to show up in the food. There were worms in the fish one time. It was all terrible. Usually, I would work until about 3 in the afternoon and then I’d do a circuit through the office to try and figure out what the fuck was going to happen that night. Who was going to launch what? Who was ready? What rumors were going on? What was happening?
Steve Perlman (Silicon Valley veteran who started in the Atari era): We shared a break room with Facebook. We were building hardware: a facial capture technology. The Facebook guys were doing some HTML thing. They would come in late in the morning. They’d have a catered lunch. Then they leave usually by mid-afternoon. I’m like, man, that is the life! I need a startup like that. You know? And the only thing any of us could think about Facebook was: Really nice people but never going to go anywhere.
Max Kelly: Around 4 I’d have a meeting with my team, saying “here’s how we’re going to get fucked tonight.” And then we’d go to the bar. Between like 5 and 8-ish people would break off and go to different bars up and down University Avenue, have dinner, whatever.
Ruchi Sanghvi: And we would all sit together and have these intellectual conversations: “Hypothetically, if this network was a graph, how would you weight the relationship between two people? How would you weight the relationship between a person and a photo? What does that look like? What would this network eventually look like? What could we do with this network if we actually had it?”
Sean Parker: The “social graph” is a math concept from graph theory, but it was a way of trying to explain to people who were kind of academic and mathematically inclined that what we were building was not a product so much as it was a network composed of nodes with a lot of information flowing between those nodes. That’s graph theory. Therefore we’re building a social graph. It was never meant to be talked about publicly. It was a way of articulating to somebody with a math background what we were building.
Ruchi Sanghvi: In retrospect, I can’t believe we had those conversations back then. It seems like such a mature thing to be doing. We would sit around and have these conversations and they weren’t restricted to certain members of the team; they weren’t tied to any definite outcome. It was purely intellectual and was open to everyone.
Max Kelly: People were still drinking the whole time, like all night, but starting around 9, it really starts solidifying: “What are we going to release tonight? Who’s ready to go? Who’s not ready to go?” By about 11-ish we’d know what we were going to do that night.
Katie Geminder: There was an absence of process that was mind-blowing. There would be engineers working stealthily on something that they were passionate about. And then they’d ship it in the middle of the night. No testing—they would just ship it.
Ezra Callahan: Most websites have these very robust testing platforms so that they can test changes. That’s not how we did it.
Ruchi Sanghvi: With the push of a button you could push out code to the live site, because we truly believed in this philosophy of “move fast and break things.” So you shouldn’t have to wait to do it once a week, and you shouldn’t have to wait to do it once a day. If your code was ready you should be able to push it out live to users. And that was obviously a nightmare.
Katie Geminder: Can our servers stand up to something? Or security: How about testing a feature for security holes? It really was just shove it out there and see what happens.
Jeff Rothschild: That’s the hacker mentality: You just get it done. And it worked great when you had 10 people. By the time we got to 20, or 30, or 40, I was spending a lot of time trying to keep the site up. And so we had to develop some level of discipline.
Ruchi Sanghvi: So then we would only push out code in the middle of the night, and that’s because if we broke things it wouldn’t impact that many people. But it was terrible because we were up until like 3 or 4 am every night, because the act of pushing just took everybody who had committed any code to be present in case anything broke.
Max Kelly: Around 1 am, we’d know either we’re fucked or we’re good. If we were good, everyone would be like “whoopee” and might be able to sleep for a little while. If we were fucked then we were like, “OK, now we’ve got to try and claw this thing back or fix it.”
Katie Geminder: 2 am: That was when shit happened.
Ruchi Sanghvi: Then another push, and this would just go on and on and on and on and on until like 3 or 4 or 5 am in the night.
Max Kelly: If 4 am rolled around and we couldn’t fix it, I’d be like, “We’re going to try and revert it.” Which meant basically my team would be up till 6 am So, go to bed somewhere between 4 and 6, and then repeat every day for like nine months. It was crazy.
Jeff Rothschild: It was seven days a week. I was on all the time. I would drink a large glass of water before I went to sleep to assure that I’d wake up in two hours so I could go check everything and make sure that we hadn’t broken it in the meantime. It was all day, all night.
Katie Geminder: That was very challenging for someone who was trying to actually live an adult life with, like, a husband. There was definitely a feeling that because you were older and married and had a life outside of work that you weren’t committed.
Mark Zuckerberg: Why are most chess masters under 30? Young people just have simpler lives. We may not own a car. We may not have family … I only own a mattress.
Kate Geminder: Imagine being over 30 and hearing your boss say that!
Mark Zuckerberg: Young people are just smarter.
Ruchi Sanghvi: We were so young back then. We definitely had tons of energy and we could do it, but we weren’t necessarily the most efficient team by any means whatsoever. It was definitely frustrating for senior leadership, because a lot of the conversations happened at night when they weren’t around, and then the next morning they would come in to all of these changes that happened at night. But it was fun when we did it.
Ezra Callahan: For the first few hundred employees, almost all of them were already friends with someone working at the company, both within the engineering circle and also the user support people. It’s a lot of recent grads. When we move into the office was when the dorm room culture starts to really stick out and also starts to break a little bit. It has a dorm room feeling, but it’s not completely dominated by college kids. The adults are coming in.
Jeff Rothschild: I joined in May 2005. On the sidewalk outside the office was the menu board from a pizza parlor. It was a caricature of a chef with a blackboard below it, and the blackboard had a list of jobs. This was the recruiting effort.
Sean Parker: At the time there was a giant sucking sound in the universe, and it was called Google. All the great engineers were going to Google.
Kate Losse (early customer service rep): I don’t think I could have stood working at Google. To me Facebook seemed much cooler than Google, not because Facebook was necessarily like the coolest. It’s just that Google at that point already seemed nerdy in an uninteresting way, whereas like Facebook had a lot of people who didn’t actually want to come off as nerds. Facebook was a social network, so it has to have some social components that are like really normal American social activities—like beer pong.
Kate Geminder: There was a house down the street from the office where five or six of the engineers lived that was one ongoing beer pong party. It was like a boys’ club—although it wasn’t just boys.
Terry Winograd (noted Stanford computer-science professor): The way I would put it is that Facebook is more of an undergraduate culture and Google is more of a graduate student culture.
Jeff Rothschild: Before I walked in the door at Facebook, I thought these guys had created a dating site. It took me probably a week or two before I really understood what it was about. Mark, he used to tell us that we are not a social network. He would insist: “This is not a social network. We’re a social utility for people you actually know.”
MySpace was about building an online community among people who had similar interests. We might look the same because at some level it has the same shape, but what it accomplishes for the individual is solving a different problem. We were trying to improve the efficiency of communication among friends.
Max Kelly: Mark sat down with me and described to me what he saw Facebook being. He said, “It’s about connecting people and building a system where everyone who makes a connection to your life that has any value is preserved for as long as you want it to be preserved. And it doesn’t matter where you are, or who you’re with, or how your life changes: because you’re always in connection with the people that matter the most to you, and you’re always able to share with them.”
I heard that, and I thought, I want to be a part of this. I want to make this happen. Back in the ’90s all of us were utopian about the internet. This was almost a harkening back to the beautiful internet where everyone would be connected and everyone could share and there was no friction to doing that. Facebook sounded to me like the same thing. Mark was too young to know that time, but I think he intrinsically understood what the internet was supposed to be in the ’80s and in the ’90s. And here I was hearing the same story again and conceivably having the ability to help pull it off. That was very attractive.
Aaron Sittig: So in the summer of 2005 Mark sat us all down and he said, “We’re going to do five things this summer.” He said, “We’re redesigning the site. We’re doing a thing called News Feed, which is going to tell you everything your friends are doing on the site. We’re going to launch Photos, we’re going to redo Parties and turn it into Events, and we’re going to do a local-businesses product.” And we got one of those things done, we redesigned the site. Photos was my next project.
Ezra Callahan: The product at Facebook at the time is dead simple: profiles. There is no News Feed, there was a very weak messaging system. They had a very rudimentary events product you could use to organize parties. And almost no other functions to speak of. There’s no photos on the website, other than your profile photo. There’s nothing that tells you when anything on the site has changed. You find out somebody changed their profile picture by obsessively going to their profile and noticing, Oh, the picture changed.
Aaron Sittig: We had some people that were changing their profile picture once an hour, just as a way of sharing photos of themselves.
Scott Marlette: At the time photos was the number-one most requested feature. So, Aaron and I go into a room and whiteboard up some wireframes for some pages and decide on what data needs to get stored. In a month we had a nearly fully functioning prototype internally to play with. It was very simple. It was: You post a photo, it goes in an album, you have a set of albums, and then you can tag people in the photos.
Jeff Rothschild: Aaron had the insight to do tagging, which was a tremendously valuable insight. It was really a game changer.
Aaron Sittig: We thought the key feature is going to be saying who is in the photo. We weren’t sure if this was really going to be that successful; we just felt good about it.
Facebook Photos went live in October 2005. There were about 5 million users, virtually all of them college students.
Scott Marlette: We launched it at Harvard and Stanford first, because that’s where our friends were.
Aaron Sittig: We had built this program that would fill up a TV screen and show us everything that was being uploaded to the service, and then we flicked it on and waited for photos to start coming in. And the first photos that came in were Windows wallpapers: Someone had just uploaded all their wallpaper files from their Windows directory, which was a big disappointment, like, Oh no, maybe people don’t get it? Maybe this is not going to work?
But the next photos were of a guy hanging out with his friends, and then the next photos after that were a bunch of girls in different arrangements: three girls together, these four girls together, two of them together, just photos of them hanging out at parties, and then it just didn’t stop.
Max Kelly: You were at every wedding, you were at every bar mitzvah, you were seeing all this awesome stuff, and then there’s a dick. So, it was kind of awesome and shitty at the same time.
Aaron Sittig: Within the first day someone had uploaded and tagged themselves in 700 photos, and it just sort of took off from there.
Jeff Rothschild: Inside of three months, we were delivering more photos than any other website on the internet. Now you have to ask yourself: Why? And the answer was tagging. There isn’t anyone who could get an email message that said, “Someone has uploaded a photo of you to the internet”—and not go take a look. It’s just human nature.
Ezra Callahan: The single greatest growth mechanism ever was photo tagging. It shaped all of the rest of the product decisions that got made. It was the first time that there was a real fundamental change to how people used Facebook, the pivotal moment when the mindset of Facebook changes and the idea for News Feed starts to germinate and there is now a reason to see how this expands beyond college.
Jeff Rothschild: The News Feed project was started in the fall of 2005 and delivered in the fall of 2006.
Dustin Moskovitz: News Feed is the concept of viral distribution, incarnate.
Ezra Callahan: News Feed is what Facebook fundamentally is today.
Sean Parker: Originally it was called “What’s New,” and it was just a feed of all of the things that were happening in the network—really just a collection of status updates and profile changes that were occurring.
Katie Geminder: It was an aggregation, a collection of all those stories, with some logic built into it because we couldn’t show you everything that was going on. There were sort of two streams: things you were doing and things the rest of your network was doing.
Ezra Callahan: So News Feed is the first time where now your homepage, rather than being static and boring and useless, is now going to be this constantly updating “newspaper,” so to speak, of stuff happening on Facebook around you that we think you’ll care about.
Ruchi Sanghvi: And it was a fascinating idea, because normally when you think of newspapers, they have this editorialized content where they decide what they want to say, what they want to print, and they do it the previous night, and then they send these papers out to thousands if not hundreds of thousands of people. But in the case of Facebook, we were building 10 million different newspapers, because each person had a personalized version of it.
Ezra Callahan: It really was the first monumental product-engineering feat. The amount of data it had to deal with: all these changes and how to propagate that on an individual level.
Ruchi Sanghvi: We were working on it off and on for a year and a half.
Ezra Callahan: … and then the intelligence side of all this stuff: How do we surface the things that you’ll care about most? These are very hard problems engineering-wise.
Ruchi Sanghvi: Without realizing it, we ended up building one of the largest distributed systems in software at that point in time. It was pretty cutting-edge.
Ezra Callahan: We have it in-house and we play with it for weeks and weeks—which is really unusual.
Katie Geminder: So I remember being like, “OK, you guys, we have to do some level of user research,” and I finally convinced Zuck that we should bring users into a lab and sit behind the glass and watch our users using the product. And it took so much effort for me to get Dustin and Zuck and other people to go and actually watch this. They thought this was a waste of time. They were like, “No, our users are stupid.” Literally those words came out of somebody’s mouth.
Ezra Callahan: It’s the very first time we actually bring in outside people to test something for us, and their reaction, their initial reaction is clear. People are just like, “Holy shit, like, I shouldn’t be seeing this, like this doesn’t feel right,” because immediately you see this person changed their profile picture, this person did this, this person did that, and your first instinct is Oh my God! Everybody can see this about me! Everyone knows everything I’m doing on Facebook.
Max Kelly: But News Feed made perfect sense to all of us, internally. We all loved it.
Ezra Callahan: So in-house we have this idea that this isn’t going to go right: This is too jarring a change, it needs to be rolled out slowly, we need to warm people up to this—and Mark is just firmly committed. “We’re just going to do this. We’re just going to launch. It’s like ripping off a Band-Aid.”
Ruchi Sanghvi: We pushed the product in the dead of the night, we were really excited, we were celebrating, and then the next morning we woke up to all this pushback. I had written this blog post, “Facebook Gets a Facelift.”
Katie Geminder: We wrote a little letter, and at the bottom of it we put a button. And the button said, “Awesome!” Not like, “OK.” It was, “Awesome!” That’s just rude. I wish I had a screenshot of that. Oh man! And that was it. You landed on Facebook and you got the feature. We gave you no choice and not a great explanation and it scared people.
Jeff Rothschild: People were rattled because it just seemed like it was exposing information that hadn’t been visible before. In fact, that wasn’t the case. Everything shown in News Feed was something people put on the site that would have been visible to everyone if they had gone and visited that profile.
Ruchi Sanghvi: Users were revolting. They were threatening to boycott the product. They felt that they had been violated, and that their privacy had been violated. There were students organizing petitions. People had lined up outside the office. We hired a security guard.
Katie Geminder: There were camera crews outside. There were protests: “Bring back the old Facebook!” Everyone hated it.
Jeff Rothschild: There was such a violent reaction to it. We had people marching on the office. A Facebook group was organized protesting News Feed and inside of two days, a million people joined.
Ruchi Sanghvi: There was another group that was about how “Ruchi is the devil,” because I had written that blog post.
Max Kelly: The user base fought it every step of the way and would pound us, pound Customer Service, and say, “This is fucked up! This is terrible!”
Ezra Callahan: We’re getting emails from relatives and friends. They’re like, “What did you do? This is terrible! Change it back.”
Katie Geminder: We were sitting in the office and the protests were going on outside and it was, “Do we roll it back? Do we roll it back!?”
Ruchi Sanghvi: Now under usual circumstances if about 10 percent of your user base starts to boycott the product, you would shut it down. But we saw a very unusual pattern emerge.
Max Kelly: Even the same people who were telling us that this is terrible, we’d look at their user stream and be like: You’re fucking using it constantly! What are you talking about?
Ruchi Sanghvi: Despite the fact that there were these revolts and these petitions and people were lined up outside the office, they were digging the product. They were actually using it, and they were using it twice as much as before News Feed.
Ezra Callahan: It was just an emotionally devastating few days for everyone at the company. Especially for the set of people who had been waving their arms saying, “Don’t do this! Don’t do this!” because they feel like, “This is exactly what we told you was going to happen!”
Ruchi Sanghvi: Mark was on his very first press tour on the East Coast, and the rest of us were in the Palo Alto office dealing with this and looking at these logs and seeing the engagement and trying to communicate that “It’s actually working!,” and to just try a few things before we chose to shut it down.
Katie Geminder: We had to push some privacy features right away to quell the storm.
Ruchi Sanghvi: We asked everyone to give us 24 hours.
Katie Geminder: We built this janky privacy “audio mixer” with these little slider bars where you could turn things on and off. It was beautifully designed—it looked gorgeous—but it was irrelevant.
Jeff Rothschild: I don’t think anyone ever used it.
Ezra Callahan: But it gets added and eventually the immediate reaction subsides and people realize that the News Feed is exactly what they wanted, this feature is exactly right, this just made Facebook a thousand times more useful.
Katie Geminder: Like Photos, News Feed was just—boom!—a major change in the product and one of those sea changes that just leveled it up.
Jeff Rothschild: Our usage just skyrocketed on the launch of News Feed. About the same time we also opened the site up to people who didn’t have a .edu address.
Ezra Callahan: Once it opens to the public, it’s becoming clear that Facebook is on its way to becoming the directory of all the people in the world.
Jeff Rothschild: Those two things together—that was the inflection point where Facebook became a massively used product. Prior to that we were a niche product for high-school and college students.
Mark Zuckerberg: Domination!
Ruchi Sanghvi: “Domination” was a big mantra of Facebook back in the day.
Max Kelly: I remember company meetings where we were chanting “dominate.”
Ezra Callahan: We had company parties all the time, and for a period in 2005, all Mark’s toasts at the company parties would end with “Domination!”
Mark Zuckerberg: Domination!!
Max Kelly: I especially remember the meeting where we tore up the Yahoo offer.
Mark Pincus: In 2006 Yahoo offered Facebook $1.2 billion ,I think it was, and it seemed like a breathtaking offer at the time, and it was difficult to imagine them not taking it. Everyone had seen Napster flame out, Friendster flame out, MySpace flame out, so to be a company with no revenues, and a credible company offers a billion-two, and to say no to that? You have to have a lot of respect to founders that say no to these offers.
Dustin Moskovitz: I was sure the product would suffer in a big way if Yahoo bought us. And Sean was telling me that 90 percent of all mergers end in failure.
Mark Pincus: Luckily, for Zuck, and history, Yahoo’s stock went down, and they wouldn’t change the offer. They said that the offer is a fixed number of shares, and so the offer dropped to like $800 million, and I think probably emotionally Zuck didn’t want to do it and it gave him a clear out. If Yahoo had said, “No problem, we’ll back that up with cash or stock to make it $1.2 billion,” it might have been a lot harder for Zuck to say no, and maybe Facebook would be a little division of Yahoo today.
Max Kelly: We literally tore the Yahoo offer up and stomped on it as a company! We were like, “Fuck those guys, we are going to own them!” That was some malice-ass bullshit.
Mark Zuckerberg: Domination!!!
Kate Losse: He had kind of an ironic way of saying it. It wasn’t a totally flat, scary “domination.” It was funny. It’s only when you think about a much bigger scale of things that you’re like, Hmmmm: Are people aware that their interactions are being architected by a group of people who have a certain set of ideas about how the world works and what’s good?
Ezra Callahan: “How much was the direction of the internet influenced by the perspective of 19-, 20-, 21-year-old well-off white boys?” That’s a real question that sociologists will be studying forever.
Kate Losse: I don’t think most people really think about the impact that the values of a few people now have on everyone.
Steven Johnson: I think there’s legitimate debate about this. Facebook has certainly contributed to some echo chamber problems and political polarization problems, but I spent a lot of time arguing that the internet is less responsible for that than people think.
Mark Pincus: Maybe I’m too close to it all, but I think that when you pull the camera back, none of us really matter that much. I think the internet is following a path to where the internet wants to go. We’re all trying to figure out what consumers want, and if what people want is this massive echo chamber and this vain world of likes, someone is going to give it to them, and they’re going to be the one who wins, and the ones who don’t, won’t.
Steve Jobs: I don’t see anybody other than Facebook out there—they’re dominating.
Mark Pincus: So I don’t exactly think that a bunch of college boys shaped the internet. I just think they got there first.
Mark Zuckerberg: Domination!!!!
Ezra Callahan: So, it’s not until we have a full-time general council onboard who finally says, “Mark, for the love of God: You cannot use the word domination anymore,” that he stops.
Sean Parker: Once you are dominant, then suddenly it becomes an anticompetitive term.
Steven Johnson: It took the internet 30 years to get to 1 billion users. It took Facebook 10 years. The crucial thing about Facebook is that it’s not a service or an app—it’s a fundamental platform, on the same scale as the internet itself.
Steve Jobs: I admire Mark Zuckerberg. I only know him a little bit, but I admire him for not selling out—for wanting to make a company. I admire that a lot.
The written language is very different from the spoken word. And so, I’ve taken the liberty of correcting slips of the tongue, dividing streams of consciousness into sentences, ordering sentences into paragraphs, and eliminating redundancies. The point is not to polish and make what was originally spoken read as if it were written, but rather to make the verbatim transcripts of what was actually said readable in the first place.
That said, I’ve been careful to retain the rhythms of speech and quirks of language of everyone interviewed for this article intact, so that what you hear in your mind’s ear as you read is true in every sense of the word: true to life, true to the transcript, and true to the speakers‘ intended meaning.
The vast majority of the words found in this article originated in interviews that were given to me especially for this article. Where that wasn’t possible I tried, with some success, to unearth previously unpublished interviews and quote from them. And in a few cases I’ve resorted to quoting from interviews that have been published before.
Mark Zuckerberg’s quotes were uttered at a guest lecture he gave to Harvard’s Introduction to Computer Science class in 2005 and in an interview he gave to the Harvard Crimson in February that same year. Dustin Moskovitz’s quotes were taken from a keynote address at the Alliance of Youth Movements Summit in December of 2008 and from David Kirkpatrick’s authoritative history, The Facebook Effect. David Choe’s comments were made on The Howard Stern Show in March 2016. Steve Jobs made his remarks to his biographer, Walter Isaacson. The interview was aired on 60 Minutes soon after Jobs died in 2011.
This story is excerpted from Valley of Genius, by Adam Fisher.
On October 29, 1969, in this room at UCLA, a student programmer sent the first message using ARPANET, a precursor to the modern internet. The message didn’t go well. The programmer, Charley Kline, got halfway through the word login before the program crashed. It wasn’t a great start.
It would take a few more decades until the internet started entering our homes, but its impact is almost incalculable. It’s transformed nearly every facet of life, and whole human generations identify around its existence.
In 2007, Gary Rivlin wrote a New York Times feature profile of highly successful people in Silicon Valley. One of them, Hal Steger, lived with his wife in a million-dollar house overlooking the Pacific Ocean. Their net worth was about $3.5 million. Assuming a reasonable return of 5 percent, Steger and his wife were positioned to cash out, invest their capital, and glide through the rest of their lives on a passive income of around $175,000 per year after glorious year. Instead, Rivlin wrote, “Most mornings, [Steger] can be found at his desk by 7. He typically works 12 hours a day and logs an extra 10 hours over the weekend.” Steger, 51 at the time, was aware of the irony (sort of): “I know people looking in from the outside will ask why someone like me keeps working so hard,” he told Rivlin. “But a few million doesn’t go as far as it used to.”
Steger was presumably referring to the corrosive effects of inflation on the currency, but he appeared to be unaware of how wealth was affecting his own psyche. “Silicon Valley is thick with those who might be called working-class millionaires,” wrote Rivlin, “nose-to-the-grindstone people like Mr. Steger who, much to their surprise, are still working as hard as ever even as they find themselves among the fortunate few. But many such accomplished and ambitious members of the digital elite still do not think of themselves as particularly fortunate, in part because they are surrounded by people with more wealth—often a lot more.”
After interviewing a sample of executives for his piece, Rivlin concluded that “those with a few million dollars often see their accumulated wealth as puny, a reflection of their modest status in the new Gilded Age, when hundreds of thousands of people have accumulated much vaster fortunes.” Gary Kremen was another glaring example. With a net worth of around $10 million as the founder of Match.com, Kremen understood the trap he was in: “Everyone around here looks at the people above them,” he said. “You’re nobody here at $10 million.” If you’re nobody with $10 million, what’s it cost to be somebody?
Now, you may be thinking, “Fuck those guys and the private jets they rode in on.” Fair enough. But here’s the thing: Those guys are already fucked. Really. They worked like hell to get where they are—and they’ve got access to more wealth than 99.999 percent of the human beings who have ever lived—but they’re still not where they think they need to be. Without a fundamental change in the way they approach their lives, they’ll never reach their ever-receding goals. And if the futility of their situation ever dawns on them like a dark sunrise, they’re unlikely to receive a lot of sympathy from their friends and family.
What if most rich assholes are made, not born? What if the cold-heartedness so often associated with the upper crust—let’s call it Rich Asshole Syndrome—isn’t the result of having been raised by a parade of resentful nannies, too many sailing lessons, or repeated caviar overdoses, but the compounded disappointment of being lucky but still feeling unfulfilled? We’re told that those with the most toys are winning, that money represents points on the scoreboard of life. But what if that tired story is just another facet of a scam in which we’re all getting ripped off?
The Spanish word aislar means both “to insulate” and “to isolate,” which is what most of us do when we get more money. We buy a car so we can stop taking the bus. We move out of the apartment with all those noisy neighbors into a house behind a wall. We stay in expensive, quiet hotels rather than the funky guest houses we used to frequent. We use money to insulate ourselves from the risk, noise, inconvenience. But the insulation comes at the price of isolation. Our comfort requires that we cut ourselves off from chance encounters, new music, unfamiliar laughter, fresh air, and random interaction with strangers. Researchers have concluded again and again that the single most reliable predictor of happiness is feeling embedded in a community. In the 1920s, around 5 percent of Americans lived alone. Today, more than a quarter do—the highest levels ever, according to the Census Bureau. Meanwhile, the use of antidepressants has increased over 400 percent in just the past 20 years, and abuse of pain medication is a growing epidemic. Correlation doesn’t prove causation, but those trends aren’t unrelated. Maybe it’s time to ask some impertinent questions about formerly unquestionable aspirations, such as comfort, wealth, and power.
I was in India the first time it occurred to me that I, too, was a rich asshole. I’d been traveling for a couple of months, ignoring the beggars as best I could. Having lived in New York, I was accustomed to averting my attention from desperate adults and psychotics, but I was having trouble getting used to the groups of children who would gather right next to my table at street-level restaurants, staring hungrily at the food on my plate. Eventually, a waiter would come and shoo them away, but they’d just run out to the street and watch from there—waiting for me to leave the waiter’s protection, hoping I’d bring some scraps with me.
In New York, I’d developed psychological defenses against the desperation I saw in the streets. I told myself that there were social services for homeless people, that they would just use my money to buy drugs or booze, that they’d probably brought their situation on themselves. But none of that worked with these Indian kids. There were no shelters waiting to receive them. I saw them sleeping in the streets at night, huddled together for warmth, like puppies. They weren’t going to spend my money unwisely. They weren’t even asking for money. They were just staring at my food like the starving creatures they were. And their emaciated bodies were brutally clear proof that they weren’t faking their hunger.
A few times, I bought a dozen samosas and handed them out, but the food was gone in an instant, and I was left with an even bigger crowd of kids (and, often, adults) surrounding me with their hands out, touching me, seeking my eyes, pleading. I knew the numbers. With what I’d spent on my one-way ticket from New York to New Delhi, I could have pulled a few families out of the debt that would hold them down for generations. With what I’d spent in New York restaurants the year before, I could have put a few of those kids through school. Hell, with what I’d budgeted for a year of traveling in Asia, I probably could have built a school.
I wish I could tell you I did some of that, but I didn’t. Instead, I developed the psychological scar tissue necessary to ignore the situation. I learned to stop thinking about things I could have done but knew I wouldn’t. I stopped making facial expressions that suggested I had any capacity for compassion. I learned to step over bodies in the street—dead or sleeping—without looking down. I learned to do these things because I had to—or so I told myself. Textbook RAS.
Research conducted at the University of Toronto by Stéphane Côté and colleagues confirms that the rich are less generous than the poor, but their findings suggest it’s more complicated than simply wealth making people stingy. Rather, it’s the distance created by wealth differentials that seems to break the natural flow of human kindness. Côté found that “higher-income individuals are only less generous if they reside in a highly unequal area or when inequality is experimentally portrayed as relatively high.” Rich people were as generous as anyone else when inequality was low. The rich are less generous when inequality is extreme, a finding that challenges the idea that higher-income individuals are just more selfish. If the person who needs help doesn’t seem that different from us, we’ll probably help them out. But if they seem too far away (culturally, economically), we’re less likely to lend a hand.
The social distance separating rich and poor, like so many of the other distances that separate us from each other, only entered human experience after the advent of agriculture and the hierarchical civilizations that followed, which is why it’s so psychologically difficult to twist your soul into a shape that allows you to ignore starving children standing close enough to smell your plate of curry. You’ve got to silence the inner voice calling for justice and for fairness. But we silence this ancient, insistent voice at great cost to our own psychological well-being.
A wealthy friend of mine recently told me, “You get successful by saying yes, but you need to say no a lot to stay successful.” If you’re perceived to be wealthier than those around you, you’ll have to say no a lot. You’ll be constantly approached with requests, offers, pitches, and pleas—whether you’re in a Starbucks in Silicon Valley or the back streets of Calcutta. Refusing sincere requests for help doesn’t come naturally to our species. Neuroscientists Jorge Moll, Jordan Grafman, and Frank Krueger of the National Institute of Neurological Disorders and Stroke (NINDS) have used fMRI machines to demonstrate that altruism is deeply embedded in human nature. Their work suggests that the deep satisfaction most people derive from altruistic behavior is not due to a benevolent cultural overlay, but comes from the evolved architecture of the human brain.
When volunteers in their studies placed the interests of others before their own, a primitive part of the brain normally associated with food or sex was activated. When researchers measured vagal tone (an indicator of feeling safe and calm) in 74 preschoolers, they found that children who’d donated tokens to help sick kids had much better readings than those who’d kept all their tokens for themselves. Jonas Miller, the lead investigator, said that the findings suggested “we might be wired from a young age to derive a sense of safety from providing care for others.” But Miller and his colleagues also found that whatever innate predisposition our species has toward charity is influenced by social cues. Children from wealthier families shared fewer tokens than the children from less well-off families.
Psychologists Dacher Keltner and Paul Piff monitored intersections with four-way stop signs and found that people in expensive cars were four times more likely to cut in front of other drivers, compared to folks in more modest vehicles. When the researchers posed as pedestrians waiting to cross a street, all the drivers in cheap cars respected their right of way, while those in expensive cars drove right on by 46.2 percent of the time, even when they’d made eye contact with the pedestrians waiting to cross. Other studies by the same team showed that wealthier subjects were more likely to cheat at an array of tasks and games. For example, Keltner reported that wealthier subjects were far more likely to claim they’d won a computer game—even though the game was rigged so that winning was impossible. Wealthy subjects were more likely to lie in negotiations and excuse unethical behavior at work, like lying to clients in order to make more money. When Keltner and Piff left a jar of candy in the entrance to their lab with a sign saying whatever was left over would be given to kids at a nearby school, they found that wealthier people stole more candy from the babies.
Researchers at the New York State Psychiatric Institute surveyed 43,000 people and found that the rich were far more likely to walk out of a store with merchandise they hadn’t paid for than were poorer people. Findings like this (and the behavior of drivers at intersections) could reflect the fact that wealthy people worry less about potential legal repercussions. If you know you can afford bail and a good lawyer, running a red light now and then or swiping a Snickers bar may seem less risky. But the selfishness goes deeper than such considerations. A coalition of nonprofit organizations called the Independent Sector found that, on average, people with incomes below $25,000 per year typically gave away a little over 4 percent of their income, while those earning more than $150,000 donated only 2.7 percent (despite tax benefits the rich can get from charitable giving that are unavailable to someone making much less).
There is reason to believe that blindness to the suffering of others is a psychological adaptation to the discomfort caused by extreme wealth disparities. Michael W. Kraus and colleagues found that people of higher socio-economic status were actually less able to read emotions in other people’s faces. It wasn’t that they cared less what those faces were communicating; they were simply blind to the cues. And Keely Muscatell, a neuroscientist at UCLA, found that wealthy people’s brains showed far less activity than the brains of poor people when they looked at photos of children with cancer.
Books such as Snakes in Suits: When Psychopaths Go to Work and The Psychopath Test argue that many traits characteristic of psychopaths are celebrated in business: ruthlessness, a convenient absence of social conscience, a single-minded focus on “success.” But while psychopaths may be ideally suited to some of the most lucrative professions, I’m arguing something different here. It’s not just that heartless people are more likely to become rich. I’m saying that being rich tends to corrode whatever heart you’ve got left. I’m suggesting, in other words, that it’s likely the wealthy subjects who participated in Muscatell’s study learned to be less unsettled by the photos of sick kids by the experience of being rich—much as I learned to ignore starving children in Rajastan so I could comfortably continue my vacation.
In an essay called “Extreme Wealth is Bad for Everyone—Especially the Wealthy,” Michael Lewis observed, “It is beginning to seem that the problem isn’t that the kind of people who wind up on the pleasant side of inequality suffer from some moral disability that gives them a market edge. The problem is caused by the inequality itself: it triggers a chemical reaction in the privileged few. It tilts their brains. It causes them to be less likely to care about anyone but themselves or to experience the moral sentiments needed to be a decent citizen.”
Ultimately, diminished empathy is self-destructive. It leads to social isolation, which is strongly associated with sharply increased health risks, including stroke, heart disease, depression, and dementia.
In one of my favorite studies, Keltner and Piff decided to tweak a game of Monopoly. The psychologists rigged the game so that one player had huge advantages over the other from the start. They ran the study with over a hundred pairs of subjects, all of whom were brought into the lab where a coin was flipped to determine who’d be “rich” and “poor” in the game. The randomly chosen “rich” player started out with twice as much money, collected twice as much every time they went around the board, and got to roll two dice instead of one. None of these advantages was hidden from the players. Both were well aware of how unfair the situation was. But still, the “winning” players showed the tell-tale symptoms of Rich Asshole Syndrome. They were far more likely to display dominant behaviors like smacking the board with their piece, loudly celebrating their superior skill, even eating more pretzels from a bowl positioned nearby.
After fifteen minutes, the experimenters asked the subjects to discuss their experience of playing the game. When the rich players talked about why they’d won, they focused on their brilliant strategies rather than the fact that the whole game was rigged to make it nearly impossible for them to lose. “What we’ve been finding across dozens of studies and thousands of participants across this country,” said Piff, “is that as a person’s levels of wealth increase, their feelings of compassion and empathy go down, and their feelings of entitlement, of deservingness, and their ideology of self-interest increases.”
Of course, there are exceptions to these tendencies. Plenty of wealthy people have the wisdom to navigate the difficult currents their good fortune generates without succumbing to RAS—but such people are rare, and tend to come from humble origins. Perhaps an understanding of the debilitating effects of wealth explains why some who have built large fortunes are vowing not to pass their wealth to their children. Several billionaires, including Chuck Feeney, Bill Gates, and Warren Buffett have pledged to give away all or most of their money before they die. Buffet has famously said that he intends to leave his kids “enough to do anything, but not enough to do nothing.” The same impulse is expressed among those lower on the millionaire totem pole. According to an article on CNBC.com, Craig Wolfe, the owner of CelebriDucks, the largest custom collectible rubber duck manufacturer, intends to leave the millions he’s made to charity, which is amazing—but nowhere near as amazing as the fact that someone made millions of dollars selling collectible rubber ducks.
Do you know someone who suffers from RAS? There may be help for them. UC Berkeley researcher Robb Willer and his team conducted studies in which participants were given cash and instructed to play games of various complexity that would benefit “the public good.”
Participants who showed the greatest generosity benefited from more respect and cooperation from their peers and had more social influence. “The findings suggest that anyone who acts only in his or her narrow self-interest will be shunned, disrespected, even hated,” Willer said. “But those who behave generously with others are held in high esteem by their peers and thus rise in status.” Keltner and Piff have seen the same thing: “We’ve been finding in our own laboratory research that small psychological interventions, small changes to people’s values, small nudges in certain directions, can restore levels of egalitarianism and empathy,” said Piff. “For instance, reminding people of the benefits of cooperation, or the advantages of community, cause wealthier individuals to be just as egalitarian as poor people.” In one study, they showed subjects a short video—just 46 seconds long—about childhood poverty. They then checked the subjects’ willingness to help a stranger presented to them in the lab who appeared to be in distress. An hour after watching the video, rich people were as willing to lend a hand as were poor subjects. Piff believes these results suggest that “these differences are not innate or categorical, but are malleable to slight changes in people’s values, and little nudges of compassion and bumps of empathy.”
Piff’s findings align with the lessons passed along by thousands of generations of our foraging ancestors, whose survival depended on developing social webs of mutual aid. Selfishness, they understood, leads only to death: first social and ultimately biological. While the neo-Hobbesians struggle to explain how human altruism can exist, other scientists question their premise, asking if there’s any functional utility to selfishness. “Given how much is to be gained through generosity,” says Robb Willer, “social scientists increasingly wonder less why people are ever generous and more why they are ever selfish.”
Decades of “greed is good” messaging has sought to remove a sense of shame from being a beneficiary of outrageous extremes of wealth inequality. Still, the shame lingers, because the messaging runs up against one of our species’ deepest innate values. Institutions seeking to justify a fundamentally anti-human economic system constantly re-broadcast the message that winning the money game will bring satisfaction and happiness. But we’ve got around 300,000 years of ancestral experience telling us it just isn’t so. Selfishness may be essential to civilization, but that only raises the question of whether a civilization so out of step with our evolved nature makes sense for the human beings within it.
From Civilized to Death: The Price of Progress by Christopher Ryan. Copyright © 2019 by Christopher Ryan. Reprinted by permission of Avid Reader Press, a Simon & Schuster imprint
If you re-read the first few chapters of The Innovator’s Dilemma and you insert “Apple” every time Clayton Christensen mentions “a company,” a certain picture emerges: Apple is a company on the verge of being disrupted, and the next great idea in tech and consumer electronics will not materialize from within the walls of its Cupertino spaceship.
The Innovator’s Dilemma, of course, is about the trap that successful companies fall into time and time again. They’re well managed, they’re responsive to their customers, and they’re market leaders. And yet, despite doing everything right, they fail to see the next wave of innovation coming, they get disrupted, and they ultimately fail.
In the case of Apple, the company is trapped by its success, and that success is spelled “iPhone.”
Take, for example, Christensen’s description of the principles of good management that inevitably lead to the downfall of successful companies: “that you should always listen to and respond to the needs of your best customers, and that you should focus investments on those innovations that promise the highest returns.”
Molly Wood (@mollywood) is an Ideas contributor at WIRED and the host and senior editor of Marketplace Tech, a daily national radio broadcast covering the business of technology. She has covered the tech industry at CNET, The New York Times, and in various print, television, digital and audio formats for nearly 20 years. (Ouch.)
Then think about the iPhone, which, despite some consumer-unfriendly advances like the lost headphone jack and ever-changing charging ports, has also been adjusted and tweaked and frozen by what customers want: bigger screens, great cameras, ease of use, and a consistent interface. And the bulk of Apple’s investment since 2007, when the iPhone came out, has been about maintaining, developing, and selling this one device.
In the last quarter of 2018, the iPhone accounted for $51 billion of Apple’s $84 billion in revenue. Its success, the economic halo around it, and its seeming invincibility since its launch have propelled Apple to heights few companies have ever imagined. But the device will also be its undoing.
Here’s what happens when you have a product that successful: You get comfortable. More accurately, you get protective. You don’t want to try anything new. The new things you do try have to be justified in the context of that precious jewel—the “core product.”
So even something like Apple’s Services segment—the brightest non-iPhone spot in its earnings lately—mostly consists of services that benefit the iPhone. It’s Apple Music, iTunes, iCloud—and although Apple doesn’t break out its numbers, the best estimate is that a third or more of its Services revenue is driven by the 30 percent cut it takes from … yep, apps downloaded from the App Store.
The other bright spot in the company’s latest earnings report is its Wearables, Home, and Accessories category. Here again, Apple doesn’t break out the numbers, but the wearables part of that segment is where all the growth is, and that means Apple Watches. And you know what’s still tied nice and tight to the iPhone? Apple Watches.
Even Apple’s best-selling accessories are most likely AirPods, which had a meme-tastic holiday season and are, safe to say, used mostly in conjunction with iPhones. (I’d bet the rest of the accessories dollars are coming from dongles and hubs, since there’s nary a port to be found on any of its new MacBooks.) As for stand-alones, its smart speakers are reportedly great, but they’re not putting a dent in Amazon or Google, by latest count. Apple TV, sure. Fine. But Roku shouldn’t have been embedded in a TV before Apple was.
And none of these efforts count as a serious attempt at diversification.
You may be tempted to argue that Apple is, in fact, working on other projects. The Apple acquisition rumors never cease; nor do the confident statements that the company definitely, absolutely, certainly has a magical innovation in the works that will spring full grown like Athena from the forehead of Zeus any day now. I’m here to say, I don’t think there’s a nascent warrior goddess hiding in there.
Witness Apple’s tottering half-steps into new markets that are unrelated to the iPhone: It was early with a voice assistant but has stalled behind Amazon and even Google Assistant. It wasn’t until last year that the company hired a bona fide machine-learning expert in John Giannandrea, former head of search and AI at Google—and he didn’t get put on the executive team until December 2018. That’s late.
There’s its half-hearted dabble in self-driving technology that was going to be a car, then became software, then became 200 people laid off. Its quailing decade-long attempt to build a streaming service would be sort of comical if there weren’t clearly so much money being thrown around, and so tentatively at that. Rumors of its launch go back as far as 2015, although now it’s supposed to launch in April—this time they mean it.
But even if the streaming service actually arrives, can it really compete against YouTube, PlayStation, Sling, DirecTV, Hulu, and just plain old Netflix? Apple’s original programming is also apparently “not coming as soon as you think.” Analysts are, at this point, outright begging Apple to buy a studio or other original content provider, just to have something to show against Netflix and Amazon originals.
Of course, lots of companies innovate through acquisition, and everyone loves to speculate about what companies Apple might buy. Rumors have ranged from GoPro to BlackBerry to Tesla to the chipmaker ARM. Maybe Netflix. Maybe Tesla. Maybe Disney. Maybe Wired. (Apple News is a hugely successful product … mostly on iPhones, of course.) But at every turn, Apple has declined to move, other than its $3 billion Beats buy in 2014 (which it appears to be abandoning, or cannibalizing, these days).
Now, let me be clear, once again. None of this is to suggest that Apple is doing anything wrong. Indeed, according to Christensen, one of the hallmarks of the innovator’s dilemma is the company’s success, smooth operations, great products, and happy customers. That’s one of the things that makes it a dilemma: A company doesn’t realize anything’s wrong, because, well, nothing is. Smartphone sales may be slowing, but Apple is still a beloved brand, its products are excellent, its history and cachet are unmatched. But that doesn’t mean it has a plan to survive the ongoing decline in global smartphones sales.
The Innovator’s Dilemma does say an entrenched company can sometimes pull out of the quicksand by setting up a small, autonomous spinoff that has the power to move fast, pursue markets that are too small to move the needle for a company making $84 billion a quarter, and innovate before someone else gets there first.
Well, Apple has no autonomous innovation divisions that I know of, and the guys in charge are the same guys who have been in charge for decades: Tim Cook, Eddy Cue, Phil Schiller, Craig Federighi, Jony Ive—all have been associated with Apple since the late ’80s or ’90s. (I mean, has there ever really been a time without Jony Ive?)
You see what I’m saying here: brilliant team with a long record of execution and unparalleled success. Possibly not a lot of fresh ideas.
And then there’s the final option for innovation, one that Apple has availed itself of many times in the past. As Steve Jobs often said, quoting Picasso: “Good artists copy; great artists steal.” The iPod was born of existing MP3 players; the iPhone improved on clunky, ugly smartphones already on the market. The MacOS and the computer mouse were developed to maturity (yes, with permission) after being invented at Xerox PARC.
So maybe Apple will find the hottest thing in tech that’s still slightly unknown and come out with a better version. But is there such a thing as a way-sexier cloud computing business?
I guess it’s possible that the rumored virtual- and augmented-reality headset that Apple is supposed to release in 2020 will take the world by storm and popularize VR in a way that no one imagined, and like AirPods, will take a look that’s painfully dorky on the surface and turn it into a not-quite-ironic must-have statement of affluence and cool. It’s happened before. But this time, I think the company will get beaten to that punch—or whatever punch is next. Apple will be around for a long time. But the next Apple just isn’t Apple.
Wouldn’t it be a different world if everybody thought the way you did? If everybody spontaneously conformed to your every wish, your every thought, your every feeling? Since life doesn’t work that way, you would do well to become skilled at the art of negotiation.
In negotiation, after all, neither party holds all the aces. Instead, negotiation proceeds (or should proceed) on a rather level playing field. Since both parties want to win, what is the best way to proceed? Here are five steps.
1. Establish the relationship
The wise negotiator establishes the relationship before proceeding further. Doing so allows you to get a feeling for the person with whom you are dealing, and vice versa. Though often ignored, „feeling“ itself is an essential part of negotiation. So, always be open and sincere. Honesty, integrity and dignity are palpable qualities, and the foundation upon which constructive negotiations are built.
You are best positioned to negotiate when the other party respects you, not only as a businessperson, but as a human being. Trust, which is gained through that respect, is the key to successful negotiation.
2. Choose ‚honey over vinegar.‘
You’ll do better with honey than with vinegar — but the honey must be genuine. Never underestimate the natural ability of other people to sense who you really are. Disingenuous, manipulative and secretive are feelings that simply cannot be hidden.
When negotiating, you too can sense if the other party’s values are subpar or lack integrity altogether. No greater red flag exists in the entire arena of negotiation.
3. Focus on the win-win.
Win-wins are the only way to go. If you approach a negotiation thinking only of yourself, you are a terrible negotiator. Understanding what all parties need, and working for all concerned is vital. Keep in mind that seeing things in only black and white (win-lose) creates limited thinking; creativity is essential to good negotiation.
Ultimately, all people involved should find themselves on the same side of the fence. You want to be a player, not a pain. Keep your eye on the big picture and don’t get caught up in the small stuff. Stay out of the weeds.
4. Embody your inner adult.
Never forget that everyone has an inner adult and an inner child. It is remarkable to witness how even high-level business deals break down because someone at the table starts thinking childishly, instigating that behavior in others. When you see this happening, keep in mind that everyone goes out of balance.
Be the stable anchor, the respectful adult at the table. Helping people come back into balance is often best done by example. Take the high road, embodying your inner adult. Don’t argue; instead, understand.
5. Respect the rhythm of the relationship.
Always remember that there is a rhythm to everything. Don’t push it. Oftentimes, it is best to say nothing. Never forget that silent pauses can be a very powerful tool. Give yourself and others the time and space to reflect upon everything that has been said.
Don’t rush it. Try to sense the natural and appropriate rhythm of all the people at the table, including yourself.
By implementing these five points, you will be well on your way to mastering the art of negotiation. Negotiation is all about relationships. By cultivating and maintaining a good rapport with everyone at the table, every player can win. You’re not just creating an agreement, you are cultivating a long-term relationship as well as a reputation.
By mastering the subtle art of negotiation, you establish yourself as a top-rank business person, and that in itself may lead to even greater opportunities in the future.
1. Companies Worldwide Strive for GDPR Compliance
Companies around the world are scrambling to get their business and its practices into compliance – a significant task for many of them. While technically, the deadline to get everything in order passed on May 25, for many companies the process will continue well into June and possibly beyond. Some companies are even shutting down in Europe for good, or for as long as it takes them to get in compliance.
Even with the deadline behind us, the GDPR continues to be a top story for the tech world and may remain so for some time to come.
2. Amazon Provides Facial Recognition Tech to Law Enforcement
Amazon can’t seem to go a whole month without showing up in a tech news roundup. This month it’s for a controversial story: selling use of Rekognition, their facial recognition software, to law enforcement agencies on the cheap.
Civil rights groups have called for the company to stop allowing law enforcement access to the tech out of concerns that increased government surveillance can pose a threat to vulnerable communities in the country. In spite of the public criticism, Amazon hasn’t backed off on providing the tech to authorities, at least as of this time.
3. Apple Looks Into Self-Driving Employee Shuttles
Of the many problems facing our world, the frustrating work commute is one that many of the brightest minds in tech deal with just like the rest of us. Which makes it a problem the biggest tech companies have a strong incentive to try to solve.
Apple is one of many companies that’s invested in developing self-driving cars as a possible solution, but while that goal is still (probably) years away, they’ve narrowed their focus to teaming up with VW to create self-driving shuttles just for their employees. Even that project is moving slower than the company had hoped, but they’re aiming to have some shuttles ready by the end of the year.
4. Court Weighs in on President’s Tendency to Block Critics on Twitter
Three years ago no one would have imagined that Twitter would be a president’s go-to source for making announcements, but today it’s used to that effect more frequently than official press conferences or briefings.
In a court battle that may sound surreal to many of us, a judge just found that the president can no longer legally block other users on Twitter. The court asserted that blocking users on a public forum like Twitter amounts to a violation of their First Amendment rights. The judgment does still allow for the president and other public officials to mute users they don’t agree with, though.
5. YouTube Launches Music Streaming Service
YouTube joined the ranks of Spotify, Pandora, and Amazon this past month with their own streaming music service. Consumers can use a free version of the service that includes ads, or can pay $9.99 for the ad-free version.
With so many similar services already on the market, people weren’t exactly clamoring for another music streaming option. But since YouTube is likely to remain the reigning source for videos, it doesn’t necessarily need to unseat Spotify to still be okay. And with access to Google’s extensive user data, it may be able to provide more useful recommendations than its main competitors in the space, which is one way the service could differentiate itself.
6. Facebook Institutes Political Ad Rules
Facebook hasn’t yet left behind the controversies of the last election. The company is still working to proactively respond to criticism of its role in the spread of political propaganda many believe influenced election results. One of the solutions they’re trying is a new set of rules for any political ads run on the platform.
Any campaign that intends to run Facebook ads is now required to verify their identity with a card Facebook mails to their address that has a verification code. While Facebook has been promoting these new rules for a few weeks to politicians active on the platform, some felt blindsided when they realized, right before their primaries no less, that they could no longer place ads without waiting 12 to 15 days for a verification code to come in the mail. Politicians in this position blame the company for making a change that could affect their chances in the upcoming election.
Even in their efforts to avoid swaying elections, Facebook has found themselves criticized for doing just that. They’re probably feeling at this point like they just can’t win.
7. Another Big Month for Tech IPOs
This year has seen one tech IPO after another and this month is no different. Chinese smartphone company Xiaomi has a particularly large IPO in the works. The company seeks to join the Hong Kong stock exchange on June 7 with an initial public offering that experts anticipate could reach $10 billion.
The online lending platform Greensky started trading on the New York Stock Exchange on May 23 and sold 38 million shares in its first day, 4 million more than expected. This month continues 2018’s trend of tech companies going public, largely to great success.
8. StumbleUpon Shuts Down
In the internet’s ongoing evolution, there will always be tech companies that win and those that fall by the wayside. StumbleUpon, a content discovery platform that had its heyday in the early aughts, is officially shutting down on June 30.
Since its 2002 launch, the service has helped over 40 million users “stumble upon” 60 billion new websites and pieces of content. The company behind StumbleUpon plans to create a new platform that serves a similar purpose that may be more useful to former StumbleUpon users called Mix.
9. Uber and Lyft Invest in Driver Benefits
In spite of their ongoing success, the popular ridesharing platforms Uber and Lyft have faced their share of criticism since they came onto the scene. One of the common complaints critics have made is that the companies don’t provide proper benefits to their drivers. And in fact, the companies have fought to keep drivers classified legally as contractors so they’re off the hook for covering the cost of employee taxes and benefits.
Recently both companies have taken steps to make driving for them a little more attractive. Uber has begun offering Partner Protection to its drivers in Europe, which includes health insurance, sick pay, and parental leave – so far nothing similar in the U.S. though. For its part, Lyft is investing $100 million in building driver support centers where their drivers can stop to get discounted car maintenance, tax help, and customer support help in person from Lyft staff. It’s not the same as getting full employee benefits (in the U.S. at least), but it’s something.
Photo Credits: oe24.at – Copyrights of oe24.at reserved
Let’s put aside Instagram, WhatsApp and other Facebook products for a minute. Facebook has built the world’s biggest social network. But that’s not what they sell. You’ve probably heard the internet saying “if a product is free, it means that you are the product.”
And it’s particularly true in this case because Facebook is the world’s second biggest advertising company in the world behind Google. During the last quarter of 2017, Facebook reported $12.97 billion in revenue, including $12.78 billion from ads.
That’s 98.5 percent of Facebook’s revenue coming from ads.
Ads aren’t necessarily a bad thing. But Facebook has reached ad saturation in the newsfeed. So the company has two options — creating new products and ad formats, or optimizing those sponsored posts.
Facebook has reached ad saturation in the newsfeed
This isn’t a zero-sum game — Facebook has been doing both at the same time. That’s why you’re seeing more ads on Instagram and Messenger. And that’s also why ads on Facebook seem more relevant than ever.
If Facebook can show you relevant ads and you end up clicking more often on those ads, then advertisers will pay Facebook more money.
So Facebook has been collecting as much personal data about you as possible — it’s all about showing you the best ad. The company knows your interests, what you buy, where you go and who you’re sleeping with.
You can’t hide from Facebook
Facebook’s terms and conditions are a giant lie. They are purposely misleading, too long and too broad. So you can’t just read the company’s terms of service and understand what it knows about you.
That’s why some people have been downloading their Facebook data. You can do it too, it’s quite easy. Just head over to your Facebook settings and click the tiny link that says “Download a copy of your Facebook data.”
In that archive file, you’ll find your photos, your posts, your events, etc. But if you keep digging, you’ll also find your private messages on Messenger (by default, nothing is encrypted).
And if you keep digging a bit more, chances are you’ll also find your entire address book and even metadata about your SMS messages and phone calls.
All of this is by design and you agreed to it. Facebook has unified terms of service and share user data across all its apps and services (except WhatsApp data in Europe for now). So if you follow a clothing brand on Instagram, you could see an ad from this brand on Facebook.com.
Messaging apps are privacy traps
But Facebook has also been using this trick quite a lot with Messenger. You might not remember, but the on-boarding experience on Messenger is really aggressive.
On iOS, the app shows you a fake permission popup to access your address book that says “Ok” or “Learn More”. The company is using a fake popup because you can’t ask for permission twice.
There’s a blinking arrow below the OK button.
If you click on “Learn More”, you get a giant blue button that says “Turn On”. Everything about this screen is misleading and Messenger tries to manipulate your emotions.
“Messenger only works when you have people to talk to,” it says. Nobody wants to be lonely, that’s why Facebook implies that turning on this option will give you friends.
Even worse, it says “if you skip this step, you’ll need to add each contact one-by-one to message them.” This is simply a lie as you can automatically talk to your Facebook friends using Messenger without adding them one-by-one.
The next time you pay for a burrito with your credit card, Facebook will learn about this transaction and match this credit card number with the one you added in Messenger
If you tap on “Not Now”, Messenger will show you a fake notification every now and then to push you to enable contact syncing. If you tap on yes and disable it later, Facebook still keeps all your contacts on its servers.
On Android, you can let Messenger manage your SMS messages. Of course, you guessed it, Facebook uploads all your metadata. Facebook knows who you’re texting, when, how often.
Even if you disable it later, Facebook will keep this data for later reference.
But my favorite thing is probably peer-to-peer payments. In some countries, you can pay back your friends using Messenger. It’s free! You just have to add your card to the app.
It turns out that Facebook also buys data about your offline purchases. The next time you pay for a burrito with your credit card, Facebook will learn about this transaction and match this credit card number with the one you added in Messenger.
In other words, Messenger is a great Trojan horse designed to learn everything about you.
And the next time an app asks you to share your address book, there’s a 99-percent chance that this app is going to mine your address book to get new users, spam your friends, improve ad targeting and sell email addresses to marketing companies.
I could say the same thing about all the other permission popups on your phone. Be careful when you install an app from the Play Store or open an app for the first time on iOS. It’s easier to enable something if a feature doesn’t work without it than to find out that Facebook knows everything about you.
GDPR to the rescue
There’s one last hope. And that hope is GDPR. I encourage you to read TechCrunch’s Natasha Lomas excellent explanation of GDPR to understand what the European regulation is all about.
Many of the misleading things that are currently happening at Facebook will have to change. You can’t force people to opt in like in Messenger. Data collection should be minimized to essential features. And Facebook will have to explain why it needs all this data to its users.
If Facebook doesn’t comply, the company will have to pay up to 4 percent of its global annual turnover. But that doesn’t stop you from actively reclaiming your online privacy right now.
You can’t be invisible on the internet, but you have to be conscious about what’s happening behind your back. Every time a company asks you to tap OK, think about what’s behind this popup. You can’t say that nobody told you.