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The Strangest Meeting Ever
New technology is not good or evil in and of itself. Itās all about how people choose to use it. āDAVID WONG
I should probably tell the story of how I intersected with Facebook in the first place. In the middle of 2006, Facebookās chief privacy officer, Chris Kelly, sent me an email stating that his boss was facing an existential crisis and required advice from an unbiased person. Would I be willing to meet with Mark Zuckerberg?
Facebook was two years old, Zuck was twenty-two, and I was fifty. The platform was limited to college students, graduates with an alumni email address, and high school students. News Feed, the heart of Facebookās user experience, was not yet available. The company had only nine million dollars in revenue in the prior year. But Facebook had huge potentialāthat was already obviousāand I leapt at the opportunity to meet its founder.
Zuck showed up at my Elevation Partners office on Sand Hill Road in Menlo Park, California, dressed casually, with a messenger bag over his shoulder. U2 singer Bono and I had formed Elevation in 2004, along with former Apple CFO Fred Anderson, former Electronic Arts president John Riccitiello, and two career investors, Bret Pearlman and Marc Bodnick. We had configured one of our conference rooms as a living room, complete with a large arcade video game system, and that is where Zuck and I met. We closed the door and sat down on comfy chairs about three feet apart. No one else was in the room.
Since this was our first meeting, I wanted to say something before Zuck told me about the existential crisis.
āIf it has not already happened, Mark, either Microsoft or Yahoo is going to offer one billion dollars for Facebook. Your parents, your board of directors, your management team, and your employees are going to tell you to take the offer. They will tell you that with your share of the proceedsāsix hundred and fifty million dollarsāyou will be able to change the world. Your lead venture investor will promise to back your next company so that you can do it again.
āItās your company, but I donāt think you should sell. A big company will screw up Facebook. I believe you are building the most important company since Google and that before long you will be bigger than Google is today. You have two huge advantages over previous social media platforms: you insist on real identity and give consumers control over their privacy settings.
āIn the long run, I believe Facebook will be far more valuable to parents and grandparents than to college students and recent grads. People who donāt have much time will love Facebook, especially when families have the opportunity to share photos of kids and grandkids.
āYour board of directors, management team, and employees signed up for your vision. If you still believe in your vision, you need to keep Facebook independent. Everyone will eventually be glad you did.ā
This little speech took about two minutes to deliver. What followed was the longest silence I have ever endured in a one-on-one meeting. It probably lasted four or five minutes, but it seemed like forever. Zuck was lost in thought, pantomiming a range of Thinker poses. I have never seen anything like it before or since. It was painful. I felt my fingers involuntarily digging into the upholstered arms of my chair, knuckles white, tension rising to a boiling point. At the three-minute mark, I was ready to scream. Zuck paid me no mind. I imagined thought bubbles over his head, with reams of text rolling past. How long would he go on like this? He was obviously trying to decide if he could trust me. How long would it take? How long could I sit there?
Eventually, Zuck relaxed and looked at me. He said, āYou wonāt believe this.ā
I replied, āTry me.ā
āOne of the two companies you mentioned wants to buy Facebook for one billion dollars. Pretty much everyone has reacted the way you predicted. They think I should take the deal. How did you know?ā
āI didnāt know. But after twenty-four years, I know how Silicon Valley works. I know your lead venture investor. I know Yahoo and Microsoft. This is how things go around here.ā
I continued, āDo you want to sell the company?ā
He replied, āI donāt want to disappoint everyone.ā
āI understand, but that is not the issue. Everyone signed up to follow your vision for Facebook. If you believe in your vision, you need to keep Facebook independent. Yahoo and Microsoft will wreck it. They wonāt mean to, but that is what will happen. What do you want to do?ā
āI want to stay independent.ā
I asked Zuck to explain Facebookās shareholder voting rules. It turned out he had a āgolden vote,ā which meant that the company would always do whatever he decided. It took only a couple of minutes to figure that out. The entire meeting took no more than half an hour.
Zuck left my office and soon thereafter told Yahoo that Facebook was not for sale. There would be other offers for Facebook, including a second offer from Yahoo, and he would turn them down, too.
So began a mentorship that lasted three years. In a success story with at least a thousand fathers, I played a tiny role, but I contributed on two occasions that mattered to Facebookās early success: the Yahoo deal and the hiring of Sheryl. Zuck had other mentors, but he called on me when he thought I could help, which happened often enough that for a few years I was a regular visitor to Facebookās headquarters. Ours was a purely business relationship. Zuck was so amazingly talented at such a young age, and he leveraged me effectively. It began when Facebook was a little startup with big dreams and boundless energy. Zuck had an idealistic vision of connecting people and bringing them together. The vision inspired me, but the magic was Zuck himself. Obviously brilliant, Zuck possessed a range of characteristics that distinguished him from the typical Silicon Valley entrepreneur: a desire to learn, a willingness to listen, and, above all, a quiet confidence. Many tech founders swagger through life, but the best onesāincluding the founders of Google and Amazonāare reserved, thoughtful, serious. To me, Facebook seemed like the Next Big Thing that would make the world better through technology. I could see a clear path to one hundred million users, which would have been a giant success. It never occurred to me that success would lead to anything but happiness.
The only skin in the game for me at that time was emotional. I had been a Silicon Valley insider for more than twenty years. My fingerprints were on dozens of great companies, and I hoped that one day Facebook would be another. For me, it was a no-brainer. I did not realize then that the technology of Silicon Valley had evolved into uncharted territory, that I should no longer take for granted that it would always make the world a better place. I am pretty certain that Zuck was in the same boat; I had no doubt then of Zuckās idealism.
Silicon Valley had had its share of bad people, but the limits of the technology itself had generally prevented widespread damage. Facebook came along at a time when it was possible for the first time to create tech businesses so influential that no country would be immune to their influence. No one I knew ever considered that success could have a downside. From its earliest days, Facebook was a company of people with good intentions. In the years I knew them best, the Facebook team focused on attracting the largest possible audience, not on monetization. Persuasive technology and manipulation never came up. It was all babies and puppies and sharing with friends.
I am not certain when Facebook first applied persuasive technology to its design, but I can imagine that the decision was not controversial. Advertisers and media companies had been using similar techniques for decades. Despite complaints about television from educators and psychologists, few people objected strenuously to the persuasive techniques employed by networks and advertisers. Policy makers and the public viewed them as legitimate business tools. On PCs, those tools were no more harmful than on television. Then came smartphones, which changed everything. User count and usage exploded, as did the impact of persuasive technologies, enabling widespread addiction. That is when Facebook ran afoul of the law of unintended consequences. Zuck and his team did not anticipate that the design choices that made Facebook so compelling for users would also enable a wide range of undesirable behaviors. When those behaviors became obvious after the 2016 presidential election, Facebook first denied their existence, then responsibility for them. Perhaps it was a reflexive corporate reaction. In any case, Zuck, Sheryl, the team at Facebook, and the board of directors missed an opportunity to build a new trust with users and policy makers. Those of us who had advised Zuck and profited from Facebookās success also bear some responsibility for what later transpired. We suffered from a failure of imagination. The notion that massive success by a tech startup could undermine society and democracy did not occur to me or, so far as I know, to anyone in our community. Now the whole world is paying for it.
In the second year of our relationship, Zuck gave Elevation an opportunity to invest. I pitched the idea to my partners, emphasizing my hope that Facebook would become a company in Googleās class. The challenge was that Zuckās offer would have us invest in Facebook indirectly, through a complicated, virtual security. Three of our partners were uncomfortable with the structure of the investment for Elevation, but they encouraged the rest of us to make personal investments. So Bono, Marc Bodnick, and I invested. Two years later, an opportunity arose for Elevation to buy stock in Facebook, and my partners jumped on it.
WHEN CHRIS KELLY CONTACTED ME, he knew me only by reputation. I had been investing in technology since the summer of 1982. Let me share a little bit of my own history for context, to explain where my mind was when I first entered Zuckās orbit.
I grew up in Albany, New York, the second youngest in a large and loving family. My parents had six children of their own and adopted three of my first cousins after their parents had a health crisis. One of my sisters died suddenly at two and a half while I was in the womb, an event that had a profound impact on my mother. At age two, I developed a very serious digestive disorder, and doctors told my parents I could not eat grains of any kind. I eventually grew out of it, but until I was ten, I could not eat a cookie, cake, or piece of bread without a terrible reaction. It required self-discipline, which turned out to be great preparation for the life I chose.
My parents were very active in politics and civil rights. The people they taught me to look up to were Franklin Roosevelt and Jackie Robinson. They put me to work on my first political campaign at age four, handing out leaflets for JFK. My father was the president of the Urban League in our home town, which was a big deal in the mid-sixties, when President Johnson pushed the Civil Rights Act and Voting Rights Act through Congress. My mother took me to a civil rights meeting around the time I turned nine so that I could meet my hero, Jackie Robinson.
The year that I turned ten, my parents sent me to summer camp. During the final week, I had a terrible fall during a scavenger hunt. The camp people put me in the infirmary, but I was unable to keep down any food or water for three days, after which I had a raging fever. They took me to a nearby community hospital, where a former military surgeon performed an emergency operation that saved my life. My intestine had been totally blocked by a blood clot. It took six months to recover, costing me half of fourth grade. This turned out to have a profound impact on me. Surviving a near-death experience gave me courage. The recovery reinforced my ability to be happy outside the mainstream. Both characteristics proved valuable in the investment business.
My father worked incredibly hard to support our large family, and he did so well. We lived an upper-middle-class life, but my parents had to watch every penny. My older siblings went off to college when I was in elementary school, so finances were tight some of those years. Being the second youngest in a huge family, I was most comfortable observing the big kids. Health issues reinforced my quiet, observant nature. My mother used me as her personal Find My iPhone whenever she mislaid her glasses, keys, or anything. For some reason, I always knew where everything was.
I was not an ambitious child. Team sports did not play much of a role in my life. It was the sixties, so I immersed myself in the anti-war and civil rights movements from about age twelve. I took piano lessons and sang in a church choir, but my passion for music did not begin until I took up the guitar in my late teens. My parents encouraged me but never pushed. They were role models who prioritized education and good citizenship, but they did not interfere. They expected my siblings and me to make good choices. Through my teenage years, I approached everything but politics with caution, which could easily be confused with reluctance. If you had met me then, you might well have concluded that I would never get around to doing anything.
My high school years were challenging in a different way. I was a good student, but not a great one. I liked school, but my interests were totally different from my classmatesā. Instead of sports, I devoted my free time to politics. The Vietnam War remained the biggest issue in the country, and one of my older brothers had already been drafted into the army. It seemed possible that I would reach draft age before the war ended. As I saw it, the rational thing to do was to work to end the war. I volunteered for the McGovern for President campaign in October 1971 and was in the campaign office in either New Hampshire or upstate New York nearly every day from October 1971, the beginning of my tenth-grade year, through the general election thirteen months later. That was the period when I fell in love with the hippie music of San Francisco: the Grateful Dead, Jefferson Airplane, Quicksilver Messenger Service, Big Brother and the Holding Company, and Santana.
I did not like my school, so once the McGovern campaign ended, I applied to School Year Abroad in Rennes, France, for my senior year. It was an amazing experience. Not only did I become fluent in French, I went to school with a group of people who were more like me than any set of classmates before them. The experience transformed me. I applied to Yale University and, to my astonishment, got in.
After my freshman year at Yale, I was awarded an internship with my local congressman, who offered me a permanent job as his legislative assistant a few weeks later. The promotion came with an increase in pay and all the benefits of a full-time job. I said noāI thought the congressman was crazy to promote me at nineteenābut I really liked him and returned for two more summers.
A year later, in the summer of 1976, I took a year off to go to San Francisco with my girlfriend. In my dreams, I was going to the city of the Summer of Love. By the time I got there, though, it was the city of Dirty Harry, more noir than flower power. Almost immediately, my father was diagnosed with inoperable prostate cancer. Trained as a lawyer, my father had started a brokerage firm that grew to a dozen offices. It was an undersized company in an industry that was undergoing massive change. He died in the fall of 1977, at a particularly difficult time for his business, leaving my mother with a house and little else. There was no money for me to return to college. I was on my own, with no college degree. I had my guitar, though, and practiced for many hours every day.
When I first arrived in San Francisco, I had four hundred dollars in my pocket. My dream of being a reporter in the mold of Woodward and Bernstein lasted for about half a day. Three phone calls were all it took to discover that there were no reporter jobs available for a college dropout like me, but every paper needed people in advertising sales. I was way too introverted for traditional sales, but that did not stop me. I discovered a biweekly French-language newspaper where I would be the entire advertising department, which meant not only selling ads but also collecting receivables from advertisers. When you only get paid based on what you collect, you learn to judge the people you sell to. If the ads didnāt work, they wouldnāt pay. I discovered that by focusing on multi-issue advertising commitments from big accounts, such as car dealerships, airlines, and the phone company, I could leverage my time and earn a lot more money per issue. I had no social life, but I started to build savings. In the two and a half years I was in San Francisco, I earned enough money to go back to Yale, which cost no more than 10 percent of what it costs today.
Every weekday morning in San Francisco I watched a locally produced stock market show hosted by Stuart Varney, who went on to a long career in broadcasting at CNN and Fox Business Network. After watching the show for six months and reading Barronās and stacks of annual reports, I finally summoned the courage to buy one hundred shares of Beech Aircraft. It went up 30 percent in the first week. I was hooked. I discovered that investing was a game, like Monopoly, but with real money. The battle of wits appealed to me. I never imagined then that investing would be my career. In the fall of 1978, I reapplied to Yale. They accepted me again, just weeks before two heartbreaking events chased me from San Francisco: the mass suicide of hundreds of San Franciscans at Jonestown and the murder of San Franciscoās mayor and supervisor Harvey Milk by another member of the cityās board of supervisors.
Celebrating my first Christmas at home since 1975, I received a gift that would change my life. My older brother George, ten years my senior, gave me a Texas Instruments Speak & Spell. Introduced just months earlier, the Speak & Spell combined a keyboard, a one-line alphanumeric display, a voice processor, and some memory to teach elementary school children to pronounce and spell words. But to my brother, it was the future of computing. āThis means that in a few years, it will be possible to create a handheld device that holds all your personal information,ā h...
