Are social media sites good for our society? Can social media be saved? Can social media be regulated? Is social media harmful? Lots of important questions are being raised as the Cambridge Analytica data harvesting scandal continues to gain momentum.
Every expert has published a think piece about what’s next for Facebook and social media in general. I’m not a social media expert and this is not a think piece. This is a top-down view of social media from someone who has been there from the beginning. Someone who has more social media experience than most of today’s social media experts.
My interest in gadgets and technology goes way back. Yes, I’m old enough to remember a time without home internet. I sent my first email in 1993 on America Online (It cost a dollar per email if I’m not mistaken). Ten years later, I joined my first online social network. In 2005, I joined LinkedIn, and a year later I added Yelp to the mix, followed by Facebook and Twitter in 2007.
For those of you who remember Dodgeball, I had joined that one as well. And many more that I can’t remember. The most recent one I joined was Hype, which has pivoted into the hit game HQ Trivia.
I still have a presence on all the major social media services, but it’s not the same and hasn’t been for a while. The early days of social media were fascinating, fun, and useful. Today, it’s just useful — if you’re a skilled user. For the novice user, there’s very little benefit and lots of potential long-term harm.
Social media is the cigarette of online services. A highly corrosive consumer product that’s both toxic and addictive. And just like real cigarettes, it’s not only harmful to the captivated user but the “second-hand smoke” has a profound impact on non-users as well.
Back in 2008, I attended a panel discussion at the San Francisco MySpace offices. One of the speakers was Dave Morin, the co-creator of the Facebook Platform and Facebook Connect. If I remember correctly, Facebook was about to surpass MySpace in total unique visitors. Everyone in that room was an avid Facebook user. The first iPhone was a few months old. And while the rest of the world was grappling with the fallout of the financial crisis, life in San Francisco was upbeat and always on.
It was a great and memorable time. A fleeting moment full of interesting new friends who went on to quickly create extreme wealth online. The app revolution had started and everyone at the event understood its potential. Every design choice and every feature was aimed at increasing “user engagement”.
Still, even back then, there were signs that data and privacy abuse was going to be a major issue in the future. Not only because there was a huge profit incentive, but because most users were playing fast and loose with their own personal data.
This lack of concern was especially evident in how Facebook users reacted and then conformed to eroding privacy policies. Then again, the user’s eroding privacy is Facebook’s competitive advantage.
Word traveled fast once the Facebook pages of both Tesla and SpaceX were deactivated. Here’s the thing: Deleting Facebook and keeping your Instagram account is like switching credit cards. You’re still exchanging data. In fact, you’re still exchanging data with the same company: Facebook. Put another way, it’s pointless.
Most users do not understand how powerful Facebook’s advertising technology is. Neither do regulators.
I had the opportunity to invest in Facebook while it was still a private company. At the time, the valuation was around $40 billion. I ended up passing. Back in those days, $40 billion was still a lot of money. Especially for a tech company with what was then still a fairly crude ad technology that generated all its revenue on desktops.
A lot has changed.
Today, the company is printing money. And why wouldn’t it, it has access to troves of data that advertisers can use for targeted ads. I’m not going to go into the specifics of the ad technology or how it relates to the Cambridge Analytica data harvesting scandal. There are plenty of news articles that do that already.
I want to stress the importance and value of the available data, and how its abuse can have serious consequences. There’s a reason why companies like Equifax get hacked. We all understand the value of financial and personal data.
Where most people get confused is why behavioral data is such a big deal.
Netflix knows what you watched. Amazon knows what you bought. Google knows what you searched. Facebook knows what you liked. But that’s the obvious stuff. With a large enough data set you can do lots of nifty things. Especially, as artificial intelligence gets more powerful. So it’s not just about what you can do with the data today (Which is a lot), but what you’ll be able to do with it two or three years from now.
You might remember the story of how Target knew a high school student was pregnant before her parents did. That was six years ago. Today, that’s ancient technology.
I should note that I, too, use the Facebook Pixel and Messenger on my site. They are powerful tools. I’ve been able to reach new readers thanks to FB’s custom and lookalike audience ad features. So far, readers in more than 20 countries have discovered and shared my posts more than 40,000 times.
Not using these tools would be like trying to cross the ocean in a paddle boat.
The technology works. Some might say it works too well. The EU is already strengthening its lead in data and privacy protection with its General Data Protection Regulation (GDPR). Still, both users and regulators will need to be more proactive in eliminating the mounting risks of data and privacy abuse.
By 2012, my Facebook and social media usage had peaked. At the time I was an enthusiastic Instagram user with 25,000 followers who was ranked in the top 4%. To put this number into context, back then, most major non-celebrity users had around 100,000 followers. Today, the same users have millions of followers, generating millions in revenue.
Why point this out? Because a year later I purged all my Instagram followers, a lot of my content, and most of my Facebook friends.
It was time for a change.
With Facebook, the choice was easy since my newsfeed was no longer useful. I had missed a few of my friends’ important posts. Naturally, they were upset when I didn’t get in touch.
Today, my messenger app is my social network. It feels more natural. When people want to share something with me, they message me. I no longer have to hunt for it on Facebook among all the noise.
Stepping away from Instagram was a bit more challenging.
For me, the issue was that my competitive side took over. It’s a great trait in business, not so great if you get hooked on social media or other random things. There’s a photo depicting what I mean by “my competitive side took over” (Of course it’s on Instagram).
Here’s the story behind this photo. I was supposed to meet a friend after dinner that night. She was going to have dinner with her friends and then we were going to meet up at an event afterwards. It was a pretty straightforward plan. Hard to screw up.
On the way, I stopped by a friend’s place for a quick bite. He had bought a new gaming console. That should have been my cue to exit.
I hadn’t played video games in years. He pressed the controller in my hands.
“Don’t worry. It’s going to be a quick game. I’ll kick your butt so fast, you’re gonna get whiplashed”, he said.
Sure enough, I lost. It was no contest. Problem is: I don’t like to lose and I don’t like to quit (I’m a bit competitive).
He took this photo sometime around 3 AM. By then, the tables had turned and I was on a roll. Beating him was easy. Explaining to my friend why I was a no-show at the event was much more difficult.
The subtle gamification of social media has been very profitable. As a San Francisco-based angel investor, I understood the mechanics and the psychology behind it, which is why I was so surprised to see the effect it had on me. Once my Instagram follower count and likes started to spike, I felt the same rush as in the photo. It made no sense to me because I had better things to do and more important things to focus on.
I still remember the moment I decided to get to 100,000 followers. It was at that very moment that I knew I had to pull the plug. After my purge, putting effort into social media was no longer appealing and I was free to focus on things that were important to me and made an actual difference.
At the time, I thought it was me and that my personality was ill-suited for these changing apps. Only recently, after meeting a few Instagram Influencers, did I realize that I’m not an outlier. It didn’t matter how massive their accounts were or how much money they were making, they were trapped inside a video game. Not surprisingly, Instagram has been rated the worst social media network for mental health and well-being.
It’s worth noting that I didn’t quit social media. I couldn’t.
I’m still involved in Silicon Valley through a number of family offices, but the bulk of our investments today involves public companies. Which is why there’s a need for a level of transparency that’s hard to match without social media. You’re able to increase stakeholder participation in ways that wouldn’t have been possible 10 years ago. So there are definitely benefits. What has changed, however, is the way I use social media.
The goal is no longer sharing — it’s documenting.
It’s a subtle but important difference in mindset because your metric of “success” is no longer tied to the online success of the post, but the offline success of the event or initiative you’re documenting.
Time will tell if the tech insiders who fear a smartphone dystopia are on to something. Keep checking your newsfeed, you’ll find out soon enough.
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