Facebook is here to stay

An interesting thing about being plugged into the startup world is the frequency with which one sees “new ideas”. Many of them, alas, are just old ideas being rebranded or old ideas that the person proposing them is not aware of.

Facebook’s widely documented travails, with legislators inquiring into Facebook’s role in the 2016 US Presidential elections – and possibly more – on both sides of the Atlantic, mean there is once again a swell of entrepreneurs clamouring to make a “new Facebook”. Within just the last week, one tweeted he wanted to make a privacy-first, open source Facebook. Another in a closed founders’ group described a portfolio company, which is a combination of “Facebook and Gmail.. no spying, no ads, secure social platform, where you own the content and the network .. no fake users, ever”.

Which reminded me of another interesting thing about being an old hand on the web: we know what hasn’t worked, exactly why it didn’t work, and all that it may take to make it work.

Anyone remember Diaspora? It was founded on three principles: decentralisation, freedom, and privacy. But as social networks go, how many people do you know who use Diaspora? I admit I know none.

Then there was ‘Ello, which I am somehow still on, though yet to figure out how it adds any value to my life. May be I am in the minority. There are and have been others such as Path (uh!), Google+, MySpace, and Peach (ok, I admit ignorance).

Successful ones include Whatsapp, which is embroiled in its own version of “fake news” controversy (link may require registration) in the world’s largest democracy. Others are Slack, with its purpose built groups, and Quora, the knowledge community with over a 100 million users.

But none has yet matched Facebook’s near-total control of the conversations among the global user base of connected, mobile, literate people.

An early adopter, I was on SixDegrees.com somewhere around 1997. Many people discussing these networks have not heard about it though a Wikipedia page exists, as it should, for the super early mover in the social networking space. My observations through the years say that we all want privacy, no-ads, control over who sees our content, no fake names or bots, anonymity when we want to overshare or share stuff we should not be sharing, ability to join or leave groups, ability to engage safely, and the freedom to take our data when we leave. However few of us really know what it takes to build something like that. Fewer still know what it takes of us to ensure all of that on the platforms we use.

Let’s take the privacy and control pitch. Facebook has excellent, granular privacy controls. I should know. I operate my Facebook like a walled garden. To work it, however, you have to be alert to how your life is organised, make appropriate lists, and then be diligent about controlling who sees what out of your shared material. As I have written elsewhere, user motivation to figure out your product is a huge – and unhelpful – design assumption. The product and the UI need to be simple to use and easy to figure out.

Google+ made much noise about making privacy and control simpler and easier but Google really did not succeed at converting a sizeable chunk of its Gmail user base into Google+ users. This highlights the importance of switching costs and network effects in building a successful social network.

Then there is that bugbear of fake names, bots, and anonymity. Quora is by far and away my favourite community since 2010. It started off well. With a “real names” policy. That is how so many of us participate and write there with our real identities. Monitoring and policing real identities is a job and a half. There is a reporting feature, which active users, Top Writers, former moderators, and topic gnomes use heavily. It is difficult for users to keep on reporting if they keep seeing the reported users come back with changed names, or bots and sock puppets returning with a vengeance to vandalise content. It reduces the SNR on the website and can damage the culture of the community rapidly. It takes lots of people. Or machines. To keep bots, fake names, and anonymous usage under control. Oh, and real names mean nothing. On LinkedIn, people use real names and their employer names and yet there is open and inbox harassment, racist remarks, trashy comments on people’s posts.

Which brings me to the problem of “using the web while <insert minority type here>”. Did I say Quora is my favourite community on the web? But I am asocial as hell there. Others cannot comment on my content, nor can they message me. How did that come about? I was enticed to Quora by the purpose of sharing information and learning. At one point, there was a massive growth through influx of users, who did not understand or care about community policies, brought their own cultural artifacts and assumptions, and had a considerable impact on the experience in the community. I was quick and preemptive in battening down the hatches but others continue to suffer – Muslims, Jews, black people both Afro-Caribbean and African American, LGBTQIA persons, and women in general. This is a problem that no social network has licked yet though noises are often made in this regard.

In 2015, Facebook spent a reported $2.5Bn on capex including data centres and other infrastructure. LinkedIn is owned by Microsoft which has almost $90Bn in cash, Whatsapp is owned by deep-pocketed Facebook, Quora is a unicorn valuated at around $1.8Bn. The point is that even if the perfect product is created, and somehow users can be enticed to switch in huge numbers, creating and running a social network at scale is expensive business. One must not forget that users are used to “free”, so promises such as “no ads”, no data mining etc will lead to inevitable questions about the monetisation model.

All this can be summarised as “barriers to entry” in the social networking space.

And yet, every other day, there is an aspiration to create a new social network.

Back to Facebook then. With over 1 Bn users, Facebook is no longer a “social network”. Especially if information — fake or otherwise, and I am including Whatsapp’s challenges in this — is the stock-in-trade, Facebook fits the classical definition of “utilities” and, at the moment, it is also a natural monopoly. It is not a public utility. If, however, its externalities are anything to go by, including its impact on democracy and the information asymmetry created by its machine learning algorithms, it needs to be regulated. Those arguments have been made repeatedly over the last few years. One of my favourite commentators, danah boyd, wrote about it in 2010.

So how might Facebook be regulated? And will that reduce or increase the “barriers to entry” for new networks?

One of the best models of utilities regulation is the British one where regulation is seen as a second choice to a well functioning market. It focuses on consumer choice, competition, and forward-looking incentive regulation. Forward-looking what?

There lies the rub. None of us is paying for using Facebook. In fact, if pricing were introduced at this point, there will be an almighty uproar because, to many, it is like an “essential product” now.

If no consumer is paying to use Facebook, is it really a “market”?

As definitions go, we are in uncharted waters.

More importantly, how will regulating ensure or improve consumer choice or competition?

It is structural barriers, and consumer behaviour challenges, not Facebook, that prevent alternative social networks from achieving the same roaring success it has achieved.

In other words, unless regulators break Facebook up perhaps into consumer and business networks or force Facebook to shut down, or Facebook boldly starts charging fees, eroding its user base and reducing its own power, or an earth shattering paradigm emerges in economics and business regulation, Facebook is here to stay.

It may be forced to become more transparent, and build better governance like other listed entities. But it is here to stay.

 

Work and isolation

On the same day that I saw a journalist in London seeking to speak with people about workplace isolation, a friend in California noted that she wanted to have a little social but found that her real world community was either virtual or non-existent.

My friend in California chalked her lack of community down to her being an entrepreneur, where long hours of work mean one’s options to socialise are mainly people who are employees or customers, both of which can be awkward.

When I mentioned workplace isolation to friends in senior corporate jobs, one quipped that this isolation malarkey was all down to people opting to work in the gig economy. Another noted, with a sigh, that the more senior one became in a large corporation, the more isolated one became, with fewer and fewer people seeing one as human, and fewer still willing to speak truths to power, so to speak. Indeed the story of António Horta Osório, the CEO of Lloyds Bank in the UK, and his spiralling into depression that led to a breakdown is well-known and one of the few honest stories of the impact of isolation to come out in public.

Without even reflecting over my own career of over 20 years, I know instinctively that the gig economy did not create workplace isolation. It is an existential condition of human beings to seek both camaraderie and company, and solitude: the former perhaps to generate ideas and to rejuvenate the self, the latter to reflect, create, and indeed, rejuvenate.

My experience of isolation in corporate life came from many sources. One  of them was being a gender minority. I even wrote a piece about my experience in Cosmopolitan magazine’s India edition around 1996-97. While my male colleagues were good people, it was tricky to socialise with them weekend after weekend. The city I lived in, Delhi, did not then have public transport so it was expensive, unreliable, unsafe, or all of the above to go across town to attend book readings or see films etc.  My solution was to start learning German on the weekends, which earned me much mockery but also a career break into Europe to open a new country office.

That unfortunately brought its own flavour of isolation. This time I was in Switzerland’s German speaking region, as a gender, ethnicity, and apparently age minority in the IT industry. My coping was hugely eased by my friendship with two others in a similar boat, both foreign to the German speaking regions in their own ways.

I then transitioned to a role in the UK where my team was spread across time zones. That was splendid isolation indeed as I began work at home at about 4.30am to catch my Asia-based team members as they began the day and the work day rolled on all the way to California. Going into the office was an option but I needed a few hours in the day unplugged. This is the bit of my experience now cited in this FT article the journalist mentioned earlier was writing.

You see, there are many ways the structure of corporate work and workplaces can be isolating.

My life as an independent consultant and advisor, an entrepreneur if you will, after the corporate stint, has been a solitary experience, save for meeting clients at lunch and sometimes friends for coffee. This fits the cliched image of the gig economy that I mentioned earlier.

Yet somehow we cope. And many of us continue to thrive.

My sense is that women cope better. Most women are socialised to seek and build communities, “to tend and befriend” not just in times of great stress. The web is helping break geographical barriers and enhance some sense of community. MumsNet is a well-known example of such a community. Several closed and secret groups of women founders and leaders thrive on Facebook. Some such as Blooming Founders and NOI Club have physical world components too. With the burdensome expectations of performance of masculine behaviour, men suffer silently — and alone — in their loneliness. This does not help workplaces or society.

Institutionalised solutions are emerging too. The gig economy worker, the entrepreneur and the small-corporate worker alike now have options. WeWork provides co-working spaces, designed to foster serendipitous and organic networking. The company has diversified into providing co-living in a few cities around the world too and it is branded WeLive.

Some criticise WeLive as an extension of dormitory or student halls living but really now! In the face of all this evidence of loneliness and isolation, that is the best criticism you can come up with?

As I said to Emma in that FT article, loneliness can have an existential quality. It forces us to examine the meaning of life in ways being surrounded by people all the time does not make feasible. From that isolation emerge creativity and ingenuity. But it can also foster mental health and addiction problems for many.

The real solution for us all lies perhaps in Goldilocks’s perfect porridge — not too much isolation, not too much cacophony of human company. Each person’s “perfect” however will differ.

What does all this mean for the design of work and workplaces? And indeed for our lives and societies?

As I see it, we may need a complete rethink of our shared and personal spaces. For workplaces, it could mean the provisioning of both open spaces to socialise and banter, and closed, quieter spaces to think and do actual work, sometimes energised by that interaction. Our living spaces need similar possibilities, if not within our own homes, then within the larger context of our neighbourhoods and cities we live in.

Politically and socially, we seem to be in an upheaval worldwide. Many are selling us the nostalgia of a glorious past, which, some argue, keep us from imagining better futures.

In this churn, could we hope to create a new order of things that are actually designed to serve the humans that use or inhabit them? Much like the Arts & Crafts movement’s thinking on spaces, a hundred years on?

I need to reflect on this. Alone. Perhaps you do too. Let’s convene later!

Of untenable CEOs

The positions of two CEOs are being discussed this week as untenable. One of them is the British Prime Minister Theresa May, fresh from the weak and wobbly win at an election where she campaigned as the “strong and stable” alternative. The other is Travis Kalanick, the CEO of Uber, who is currently running an organisation without a COO, a CFO, a CMO or SVP of Engineering, and is under pressure to take a leave of absence following an investigation by Eric Holder into the pervasive sexist culture in the company.

On first glance, there are no similarities. What can a British PM fond of speaking in tautologies possibly have in common with a CEO of an organisation widely seen as having “disrupted” public transport and valued at US$ 70Bn (though some disagree)?

On a bit of reflection, one key similarity emerges: a leadership style that fosters a toxic organisational culture.

On becoming PM first, Mrs May famously operated a kitchen cabinet of sorts, with a small coterie of advisors and throwing out anyone who seemed to be out of line with her authoritarian way of working. She called an election presumably buoyed by a 20-point lead over Labour in the polls to seek an absolute majority to enable her to negotiate a Brexit deal without needing the support of the Parliamentary colleagues. Having called the election, she did not discuss her manifesto with her party or her team, focused on “Theresa May” and not the Conservative Party, and uttered meaningless soundbites that earned her the moniker MayBot over the campaign.

Mr Kalanick, on the other hand, presided over an organisation that thought nothing of threatening journalists and “weaponising facts“, nor of accessing and sharing medical records of a person raped by one of their drivers in a country far flung from California. Privacy was not a thing to bother with. He also deemed it acceptable to issue guidelines on how to have sex with a colleague at an office party.

Culture, as the developments this week show, does eat strategy for breakfast.

In Britain, the electorate was able to challenge Mrs May so much so that at the time of writing, there is a scramble on, and many Tories do not see her leadership going unchallenged.

In case of Uber, however, the three co-founders own a controlling stake. That may appear, at first glance, to make the job of the board harder if they wish to ask Mr Kalanick to step down. But the board has voted unanimously to adopt the Holder report and is said to be considering the option.

However, much as deposing Mrs May and Mr Kalanick may give a sense of having done something, the real challenges remain.

Uber’s culture will not repair itself overnight. Nor will the company magically be able to attract talent* to fill the key roles. Bad reputation and the whiff of scandals can endure, as another organisation unable to attract talent is currently experiencing.

Nor will Mrs May suddenly become better at being collaborative, discursive, amenable to advice, and realistic about Brexit negotiations, although this is precisely the advice being given to her. To be fair, she has apologised to Tory MPs. But despite her apparent contrition, “I will get us out of this mess” doesn’t sound like a departure from me-centricity.

Whoever takes the poisoned chalice, or chalices in case of Uber, shall face the challenge to be a vigilant steward of the interests of investors, shareholders, and citizens alike.

After all, in this brave new world of breaking coalitions and disrupted industries, “Eternal vigilance is not only the price of liberty; eternal vigilance is the price of human decency.”

*Link dated June the 14th added two days after this article was published.

Cosmetic counter sales staff: a counter view

A dear friend of mine recently spoke of how, while making an impulse purchase for a lipstick at an airport, she ended up having a fascinating conversation with a male counter sales guy, who seemed to be a lipstick connoisseur with a massive collection of his own. She noted how he had great insight into how lipstick should be bought, ideally for personality not just skin tone. Was it her gender bias, she wondered, that she was so delighted by this surprising encounter? She travels globally and had never experienced such a knowledgeable and passionate counter sales guy.

The story made me wonder about gender biases in talent hiring for specific roles especially in industries seen as gendered.

Across the world, cosmetics counter sales staff is rarely male (the exception: perfume counter sales staff is rarely female). The field sales force, however, is rarely female, as I note both from occasionally bumping into field sales staff of brands in SpaceNK and Liberty in London, and from my earlier experience in my first and extremely short-lived first job in a well-regarded Indian cosmetics company.

The brand managers in the company were almost all women whereas, barring a couple of stellar exceptions, the field sales force was all men. These men, otherwise traditional, old-fashioned, sometimes married, were the definitive experts on both our products and our consumers. In my short stint, it became quite clear that their job brought them in contact with wholesalers, retailers, and consumers, and whenever a new product was launched, they also gave trial products to their family and got unfiltered feedback from them. This gave them a wealth of knowledge and insight. Whether the company was harnessing it in a structured way, I couldn’t say.

In contrast, the counter sales staff only ever encounters a consumer primed for some purchase, even if not in the exact category she ends up buying. This means the encounters are more narrow in scope, and only if a consumer ends up at the counter in a slow time of day, can she expect a fulsome and deep conversation about the products and the anthropology and psychology of purchasing one colour over another.

In all this, the consumer is, of course, key. Not only does she, peripatetic as she is, encounter the brand in many more locations, she also gets to see the non-uniformities, the vagaries of the brand’s operations in many ways. These can be revealing about the brand’s values and prejudices.

What is stopping the cosmetic industry hiring more men as counter sales staff? Do men not seek out these roles? Or are they actively rejected in an act of gender bias, unless, as my friend noted in the case of the sales guy she met, they are “flamboyant” in their presentation?

And since everything needs to have a business case, by not having male sales staff, could brands be missing a trick in capturing the growing male interest in cosmetics and skin care? The male grooming and beauty market is estimated to be $50Bn and growing.

One could cynically note that keeping men and women segregated helps companies as they persist in charging women, in cosmetics and skin care, a whopping 37% more than they charge men. This is frankly not sustainable as the web is transparent, and women can read labels and buy substitute products and brands.

Change however is coming, slow but steady, it appears. Even if it is in the form of YouTube influencers.

Men could, of course, watch YouTube videos privately but coming to the cosmetics counter in a city centre store is still uncommon. Andrew Snavely, who runs a magazine focused on men’s grooming, thinks this is unwise and notes: “… young professional men find trial and error with products to be an expensive and time-consuming process…”. Could this be because men feel unwelcome at beauty counters to discuss their needs with the mainly female staff? Airport stores, such as the one my friend was visiting, are probably more welcoming because a man could always pretend he is buying for a woman and engage in a conversation about lipstick.

On a philosophical note, everything that frees women frees men too. And vice versa. That includes the freedom to discuss, try, buy and use cosmetics.

Cosmetic brands would do well to watch watch their gender biases and actively hire male counter sales staff, thus welcoming male customers more.

May be over time, both men and women will get better at speaking openly across gender lines about gendered topics.

Because we are worth it .

Governance is no “Indian wedding”

When India hosted the Commonwealth Games in 2010, the then-sports minister compared the event to an Indian wedding, saying that while preparations go on until the last minute, everything comes together on the day. I am reminded of that as I watch the stories coming out of India since the sudden demonetisation of two major currency notes on November the 8th, 2016.

The reasons why the move was made were unclear, and what one could and could not withdraw or deposit changed often. The Reserve Bank of India (RBI) refused an RTI (right to information) request asking about the reasons, and with its response to another RTI request, managed to create an impression that the RBI had no idea how many Rs 2000 bank notes it had printed. RBI is the Indian analogue of the Bank of England in the UK or the Federal Reserve (“the Fed”) in the US. These are not confidence enhancing moves, for citizens or for investors. To cite economist John Maynard Keynes: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.”

That is not the point of this monograph.

With my governance hat on, it is clear that no regulatory impact assessment was carried out before the demonetisation was announced. After all, the lives of so many publics – citizens, small and big businesses, state owned banks, private and multinational banks – were to be upended. If there had been such an exercise, RBI would have been more prepared rather than the ominous silence to which it treated the citizens before the Governor finally spoke nearly 2.5 weeks after demonetisation. (An alternative possibility, simultaneously more benign and more sinister, is that such an assessment was carried out but summarily ignored in favour of an “Indian wedding” type approach, and reliance on calls to nationalism and patriotism.)

Save for a top-down diktat, where was the country’s preparedness for such a massive transformation?

Does the “leadership” have experience of massive transformations involving both businesses and citizens? The committee to oversee it was announced nearly three weeks after the demonetisation. Other than Chandrababu Naidu, and possibly BCG’s Janmejaya Sinha, it is difficult to feel confident about the execution experience of the rest. Not least because the expensive failures presided over by some on the committee  are not easy to ignore.

What is the objective for this transformation? No, not the ones that changed daily, one increasingly jingoistic than the next! Minimising the black money in circulation? Reducing corruption? Making India a digital, cashless society?

For the sake of this argument, let’s assume a “digital, cashless India” was the goal.

Did anyone ask who will pay for the infrastructural investments needed? The National Payments Council of India’s (NPCI) Unified Payments Interface (UPI) is in the news but there is understandable confusion especially as different banks put out their own branded apps and the government adds to the confusion by launching its own app BHIM. The consumer-side apps are not the only solution needed. The government has asked banks to roll out 1 million POS terminals. No, nobody yet asking who will pay and how it will dent their profitability. Meanwhile, surcharges on the use of card payments have been introduced and withdrawn hastily.

(I am reminded of a friend’s wedding where a last minute Pashmina shawl purchase was made for over Rs 35,000 in 1996 money. Her mother told me, at weddings, expenses aren’t questioned. The “Indian wedding” analogy is still holding.)

Who thought ahead about the hundreds of millions of illiterate users who now not only need smart phones but also the magical ability to work their way through these apps to access and spend their own money? Apps to serve an illiterate user base will need inclusive design thinking, which is absent in the Indian public discourse, as I have written elsewhere.

What is the short and medium term impact on quality of life of citizens? Where is the mitigation for their loss of income or business? I am struggling to find any proof these questions were even asked.

There is no discussion whatsoever of who is benefiting the most at whose cost. My brief monograph on that question has remained on fire since it was published, suggesting I touched a nerve.

There is no evidence that the demonetisation was a considered policy move. There is plenty evidence that this is a case study for poor governance no matter how one looks at it. There was no clear goal, no plan. The leadership has no experience of delivering large transformations. Nobody has done any cost analysis or indeed asked who will pay. Citizens’ docility is assumed.

Governance is joined-up thinking. Absent that, it is just another “Indian wedding”.

[PS: About that Brexit thing ahead of us here in the UK, I am still looking for a culturally apt metaphor. Meanwhile, let’s go with “a giant omnishambles”.]