I bet on Facebook—and helped Soros write the speech that incensed its execs

 
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When a company grows from nothing to 2.2 billion active users and $40 billion in revenues in only 14 years, you can be sure of three things: First, the original idea was brilliant. Second, execution of the business plan had to be nearly flawless. And third, at some point along the way, the people who manage the company will lose perspective. If everything your company touches turns into gold for years on end, your executives will start to believe the good things people say about them. They will view their mission as exalted. They will reject criticism. They will ask, “If the critics are so smart, why aren’t they as successful and rich as we are?”

Companies far less successful than Facebook have fallen victim to such overconfidence. The culture of Silicon Valley, which celebrates the brash and the bold, breeds overconfidence and then lets nature take its course. The corpses of overconfident companies litter the landscape of the tech industry. Companies like Digital Equipment, Compaq, Netscape, Sun Microsystems, and MySpace were hot growth stories in their prime. Then there are the survivors who had lost prestige as their growth slowed down, companies like Intel, EMC, Dell, and Yahoo. The executives of these companies confidently predicted strong growth right up to the moment when there was none and the stock—and their dreams of endless growth—came tumbling down. Then there are companies like Microsoft, Oracle, and IBM, at one time undisputed leaders but whose giant market capitalization masks a dramatic loss in influence.

It took me a very long time to accept that Facebook founder Mark Zuckerberg and chief operating officer Sheryl Sandberg had fallen victim to overconfidence. As an early advisor to Zuck and an early investor in Facebook, I did not pick up the signal when I first reached out to them in October 2016. It was not even clear to me in February 2017, when I gave up on trying to convince Dan Rose, the company’s vice president of partnerships, to investigate my concerns. The evidence started to pile up in the month prior to the Congressional hearings on October 31 and November 1, 2017, but I still wanted to believe that Zuck and Sheryl would eventually change their approach.

The clincher was the episode with Chamath Palihapitiya, the former Facebook executive who told an audience at Stanford in December 2017 that he regretted that social media was “ripping apart society.” Before Chamath, Facebook could have said, “We didn’t cause the Russian interference, but it happened to our users and we will do everything in our power to protect them.” Facebook could have followed the crisis management playbook, cooperated fully and enthusiastically with investigators and reached out to users who were touched by the Russian interference with an explanation and evidence.

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