Sean Parker on the Negative Consequences of Social Networks

In this session from Techonomy 2011 in Tuscon, Ariz., Sean Parker, Managing Partner at Founders Fund and a co-founder of Napster, highlights some of the potential negative consequences of social networks. Also appearing in this video: Jim Breyer of Accel Partners and Techonomy’s David Kirkpatrick.

Parker: One of the things that worries me—you know, look, in a sense governments have always utilized whatever communication mediums are available to conduct surveillance, either legally or illegally, and a lot of the surveillance has been far more intrusive than, you know, looking at information on social networks. In functioning democracies, this is done under the context of a subpoena, and it is—you know, it’s really no different than—actually, probably in a lot of ways less intrusive than tapping someone’s phone. So, you know, there’s this wealth of data that’s publicly available, and to the extent that you’re going to raise kind of issues in the public sphere, obviously the standard answer that we always come back to, that we’re always giving: you’re choosing to make this information available. It’s completely up to you how you want to represent your life online, factually or erroneously, potentially. You can be extremely smart and extremely clever about how you broadcast and to whom you broadcast what information.

So, that being said, you know, I do think that some additional capability is required when you take into consideration that these networks, or just the emergence of kind of group organizing technology, much of which is going to lead to the individual empowerment that we talked about, will actually lead to fringe groups and cults, and basically isolated whackos who are finally, for the very first time, no longer isolated whackos.

Kirkpatrick: Right.

Parker: That’s incredibly scary to me. When you take all these Unabomber types, who are essentially sitting alone in their bedroom with no ability to reach similarly crazy people, and you give them tools to organize, you know, you’re—it sort of leads to this threat that no one’s really talking about.

Sean Parker on How Startup Culture Diffuses Talent

Techonomy Video  |  August 31, 2012, 12:00 PM

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In this session from Techonomy 2011 in Tuscon, Ariz., Sean Parker, Managing Partner at Founders Fund and a co-founder of Napster, argues that startup culture pulls critical talent into meaningless endeavors, instead of concentrating it on ideas that have true potential. Also appearing in this video: Jim Breyer of Accel Partners and Techonomy’s David Kirkpatrick.

Parker: I actually think that a lot of this is us drinking our own Kool-Aid, and in the absence of any good top down or government policy or sort of macroeconomic information which would indicate that we’re going in a good direction, we’re essentially—you know, it’s tempting to basically latch onto technology, and in particular technologies like social networking, which arguably accelerate productivity itself by allowing new businesses to get formed, and I think in truth, these little startups are ridiculously over-funded. It’s a complete reversal from where we were about eight years ago, when early stage capital was relatively scarce. It was extremely difficult to raise early stage capital, yet you still had some fairly large funds doing series Bs and series Cs and later stage deals. The market is ridiculously overcrowded with early stage investors.  There’s way too much early stage capital, and what happens is this results in a talent drain where the best talent gets diffused and they all go and work for their own startups, because it’s just too easy to get access to capital.

And a lot of these early stage investors, they’ll fund literally anything. I mean Ron Conway, great friend of mine, he’s an investor in pretty much every—I think every company I’ve ever founded. And he’s a fantastic guy. He still refers to his investment philosophy as the assembly line approach to investing. That basically implies that an investment comes in, it runs through an assembly line and then, you know, an opportunity comes in, an investment comes out. And there’s a lot of guys who are operating like this, and it’s fine if there’s a few guys doing this, but there’s so much capital now in the early stage, and we’re somewhat guilty of this because now the ecosystem’s changed. You actually now have institutionally backed venture funds who are funding early stage startups—I mean early stage venture funds, where venture funds are funding other venture funds in order to remain close to the deal flow. That’s never happened before. That’s actually a completely new phenomenon, as far as I know—

Breyer: And it will end very badly.

Parker: These companies are ridiculously over-funding. And this actually ties back kind of directly into this question what comes after the revolution. Well, what comes after the revolution is almost inevitably bureaucracy. In almost every case you have some sort of revolution, whether it’s in industry or government or whatever, and whoever inherits the fruits of the revolution inevitably builds a bureaucracy.

Kirkpatrick: Is that happening at Facebook?

Parker: I think Facebook’s still too young. But I think what we’re likely to see after this incredible boom in technology is basically the construction of a handful of very large, very successful companies that lead to a concentration of power similar to what we saw in the 1980s with the PC revolution. The PC revolution spawned a huge amount of creativity, huge number of companies, and eventually it consolidated into the Oracles and the Microsofts and the Intuits and a handful of mega players. I think we’re starting to see the maturation of the internet into a mature business. I mean the first bubble was kind of a joke. I mean it was like these were people we haven’t seen or heard from again, most of them. And they sort of didn’t know what they were doing, and the vast majority of those companies failed. We’re now at a point where there’s a handful of entrepreneurs, like Jack Dorsey, who was speaking here earlier. Jack is so incredibly talented, and has been through the ringer and has been around the block a couple of times, that he can reliably and predictably create great companies. I think ‘re going to see a lot of other serial entrepreneurs emerging who have sort of cracked the code, and they can reliably and predictably create great companies.

Sean Parker on How Global Currency Collapse Will Improve Markets

In this session from Techonomy 2011 in Tuscon, Ariz., Sean Parker, Managing Partner at Founders Fund and a co-founder of Napster, asserts that the collapse of currencies worldwide, starting in European countries, will improve markets more than investing in new technologies. Also appearing in this video: Jim Breyer of Accel Partners and Techonomy’s David Kirkpatrick.

Parker: There’s a set of ways that Europe can get themselves out of their current mess.  The one that’s most likely to prevail is some form of, you know, basically printing money or quantitative easing, and that likely kicks off some degree of a currency war, some kind of currency war, because Europe’s exports suddenly become much cheaper.  That probably gives the US license to print money as well, so QE3, quantitative easing 3, will be massive, and probably many times larger than its predecessors, and that results in pressure on China to try to keep their Renminbi as weak as possible.  So you’ll probably see this weird form of protectionism that takes the form of currency war.

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This is like, you know, this is a very bad thing, and it means that—and I don’t think that you can overcome this with technology investing in the consumer internet, even if it creates productivity gains and new markets.  I think you have to overcome this by basically assuming that certain markets are going to either deliberately or accidentally devalue their currencies, and therefore make themselves more competitive as manufacturers, and I think the world is going to want to have an alternative to China and a handful of other Asian countries as manufacturers of consumer electronics and chips.  So you can put—you know, if you believe that that’s the case, there are some public-private partnerships that makes sense in terms of scaling up manufacturing, but in places where markets are suddenly becoming more competitive because of the collapse of their currencies.

You Don’t Have to Live in Silicon Valley to Start a Company

By  |  February 17, 2014, 2:34 PM

Berlin has emerged as one of Europe's startup magnets. (Image via Shutterstock)

Berlin has emerged as one of Europe’s startup magnets. (Image via Shutterstock)

Just about every city in the world is now teaming with young people (and some older ones) who are starting companies with ambitious and tech-savvy aims. This good essay by a former Facebook European executive underscores how pointless it is for everyone to compare their own region or city with Silicon Valley. Yes that hub will remain potent, but with tech transforming the entire planet there is ample reason for confidence that numerous other places can become vibrant hubs. The bigger challenge for Europe is the continuing prejudice in many countries against entrepreneurship and risk, and labor laws that frequently become punitive. They can unnecessarily increase the risk that an entrepreneur faces in starting something, raising the cost of failure substantially. (Many countries require ongoing unemployment payments for lengthy periods to a fired employee.) What’s amazing is how many great startups emerge in Europe regardless.

Read more at The Guardian

Facebook Is a Fundamentally Broken Product That Is Collapsing Under Its Own Weight

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BY | FROM Business Insider| December 21, 2013|

In 2008, Mark Zuckerberg laid out his theory about people sharing content on Facebook.

“I would expect that next year, people will share twice as much information as they share this year, and [the] next year, they will be sharing twice as much as they did the year before,” he said.

The New York Times called it “Zuckerberg’s Law,” a playful homage to Moore’s Law, named after Intel co-founder Gordon Moore, who said, “The number of transistors incorporated in a chip will approximately double every 24 months.”

In 2011, Zuckerberg reiterated his theory on sharing, saying that it was still growing at an exponential rate.

And Zuckerberg is right about that.

But the exponential growth of sharing may not, actually, be helping Facebook. And with the explosion of dedicated mobile sharing apps, the industry may be evolving in ways that Zuckerberg never foresaw.

Specifically, Facebook is now trying to cram so much “sharing” through a single service that it is overwhelming many of its core users. Meanwhile, companies like Snapchat, WhatsApp, WeChat, Line, Twitter, and Instagram (which Facebook owns), are now cleaving off types of user-sharing that Facebook would like to have owned.

The amount of sharing that Facebook is trying to cram through its News Feed is now starting to turn into a problem for Facebook, argues freelance analyst Benedict Evans. We spoke with Evans last week about mobile messaging apps and Facebook, and he had a very pessimistic view of the latter.

In August, Facebook revealed that “every time someone visits News Feed there are on average 1,500 potential stories from friends, people they follow and Pages for them to see, and most people don’t have enough time to see them all. These stories include everything from wedding photos posted by a best friend, to an acquaintance checking in to a restaurant.”

Let’s say the average Facebook user is awake for 17 hours a day. To consume all that stuff, they would take in 88 new items per hour, or 1.5 things per minute. That’s just not possible.

Facebook knows it has a problem. It planned a major redesign that gave users more control over the News Feed. But it was scrapped when the first batch of users showed low engagement with the new design.

It’s also talking about trying to tweak what stories show up in your News Feed to cut back on what it considers to be low-quality content.

To Evans, this is evidence that Facebook’s core product, News Feed, is “broken.”

“The problem they’ve run into, the problem of sharing, of Zuckerberg’s law,” says Evans, “is that the News Feed has turned into a black hole and collapsed under its own weight.”

Facebook started off as a place to keep track of what your friends are up to, but because there’s so much stuff flowing through the News Feed, you could easily miss what your friends are doing. He points out that today, you could post that you’re getting married, but only half of your friends might see that posting because of the News Feeds’ algorithms.

“That’s a product problem,” says Evans. “There’s so much noise in the News Feed, they broke the product.” Facebook can come up with algorithms to surface the best material, but Evans says it’s just “a hack.” The deeper problem is that the “underlying product is broken.”

Evans presents an analogy to explain Facebook’s New Feed problem: “If you have 1,500 emails coming in every day, you wouldn’t say, ‘I need better algorithms.'”

But, Zuckerberg’s Law suggests we’re not getting rid of anything on Facebook. Instead, we’ll have more stuff. By this time next year we could have 3,000 posts, links, videos, status updates, etc., all flowing through the News Feed. It’s a struggle to sort through 1,500; how will Facebook deal with sorting through 3,000?

This News Feed issue becomes particularly problematic for Facebook in mobile.

On the mobile phone, it’s easy to have an “unbundled” experience that could hurt Facebook, says Evans.

On the desktop, Facebook is one big, monopolistic application. The inclination is to stay within Facebook for a lot of stuff.

On the phone, it’s easy to hit the home button, then open a new app, like WhatsApp, Snapchat, or Instagram.

Because the News Feed is broken, argues Evans, these targeted applications pose a problem for Facebook.

Want to just see photos from friends? Go to Instagram, or Snapchat. Want to just exchange messages with friends? WhatsApp, or Snapchat work. Want to play games? Candy Crush, Angry Birds, QuizUp, or whatever you want are available.

Just a few years ago, photos, messaging, and gaming, all resided in Facebook.

Now it’s all on your phone, which has developed into the real social platform. Apps can tap into your phone’s photos and address book, and deliver push notifications. Those were things that Facebook controlled on the desktop. Now, on mobile, “All the friction that protects Facebook isn’t there,” says Evans.

And, it all gets back to the News Feed. With so much stuff running through the News Feed, what should a mobile feed do? Should it be more about personal updates? Should it be a best of all those other apps? Facebook is still working through it.

Facebook isn’t going anywhere. It’s going to remain a permanent force in our lives. And with mobile growing, Evans says Facebook will still be a winner. He just doesn’t think it will be the only winner in the social mobile world, unlike in the desktop where it has a monopoly in social.

That said, Evans cautions, “There’s a bear case for Facebook: It turns into Yahoo. Billions of people use the product, but no one really thinks about it.”

This story originally appeared on Business InsiderBusiness Insider

Forget Smartphones and Watches. Are iCars and iCardio Monitors in Apple’s Future?

BY | February 17, 2014|
Forget Smartphones and Watches. Are iCars and iCardio Monitors in Apple's Future?

As iPhone and iPad growth has dwindled in recent months, Apple is dreaming bigger. And more diversified.

The storied tech giant’s signature “i” moniker may soon appear before a broad and unexpected crop of new product categories extending far beyond its long-rumored watches — including cars and medical devices, according to reports.

Not only did Apple executives meet with Tesla founder Elon Musk at its Cupertino headquarters last spring, confirms the San Francisco Chronicle, but the company is also said to be dipping its toes into the healthcare realm — specifically in hopes of developing technology that can predict heart attacks.

Related: PHOTOS: This Is Supposedly the iPhone 6

While rumors have swirled for months that Apple might acquire the electric car-maker Tesla, the reported summit between Musk and the utmost echelons of Apple’s leadership — including Adrian Perica, head of mergers and acquisitions, and Tim Cook, CEO — suggests serious interest.

Both brands are famed for their trailblazing technology marked by sleek design, as well as a self-owned retail model. If an acquisition isn’t still in the cards given Tesla’s increasing Wall Street appeal, The Chronicle speculates that the partnership could result in an Apple touchscreen on Tesla dashboards.

Related: This Apple iWatch Concept Design Is Simply Incredible

In the medical realm, it would seem as though Apple’s senior vice president of operations, Jeff Williams, is leading the company’s charge into mobile medical apps. Williams met with Food and Drug Administration chiefs, and the company has also requested several patents in the field, including technology that could potentially unlock electronic devices by identifying unique signals from owners’ hearts.

Finally, Apple has tapped the renowned audio engineer Tomlinson Holman to study the noise related to blood flow so that the company may one day develop software and sensors to predict heart attacks, reports the Chonicle.

A tool that might identify the sound that blood makes as it moves through clogged arteries could mark a revolutionary foray into the medical device market, analysts said.

Related: China Mobile Starts Selling iPhones, But No One Seems to Care

Geoff Weiss is a staff writer at

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I Always Forget My PayPal Password

What a week for leaders! As I was writing yesterday’s “Dear Mr. Armstrong” post , I was watching PayPal’s Internet discussion regarding David Marcus. As you may have read, Mr. Marcus sent out an email to San Jose employees about using PayPal products and participating in a merchant referral program for business who do not currently accept PayPal for payment.

I would like to congratulate Mr. Marcus on his passion for the company’s products and services. In my view it is imperative for leaders to be passionate about the objectives of the business. I agree that it is also important for businesses to have employees with a desire to use products and services provided by the company. Everyone should understand the Customer experience and work hard to make it the best it can be.

Beyond these views, we then have a ton of differences in the approach. When employees are not using your products they can serve as the best focus group to improve your products. Instead of chastising them, why not learn from them and celebrate them? We are eager to tell our employees it is our way or the highway instead of simply engaging them to learn from them. We need to do a better job learning from each other, not just in business but in society as a whole.

In the first part of his email to the employees Mr. Marcus discusses the lack of merchant referrals, especially compared to other locations within the company. Are your employees familiar with how to sell the products to merchants? Has the company helped them with this or asked why they are struggling? Have employees tried to solicit referrals and merchants provided negative feedback? Have your leaders worked to bring action to that feedback? As you can see before taking the direction of blaming the employees, it is often best to look at the deeper questions as opposed to the simple metric. I would recommend asking the employees to help you understand, but that is just my personal opinion. There are a number of other pieces within the email that was sent to employees that I would discuss:

“Employees in other offices hack into Coke machines to make them accept PayPal because they feel passionately about using PayPal everywhere.”

  • If PayPal owns the machines then they can do what they want, but if not, I do not think it is advisable to encourage employees to break into equipment owned by another business. Breaking laws are usually not something I would want in the culture of my company.

“I know there are people on our campus in San Jose who are here to make a difference every day. So I’m turning to you passionate PayPals who are here for purpose more than paycheck. We need your help. I need you to make it clear to colleagues, who display these types of behaviors that we won’t tolerate these anymore. My intention is to make San Jose (and every location) a place that retains, and attracts talent that’s passionate, and engaged. We can do it together. By demanding more of each other.”

  • Creating division within your company does not seem to be the best approach to winning people over. Within business or anywhere else, creating an environment where people are coming over holding torches, or tar and feathers, would not be pleasant.

“We have much work to do to reach greatness. We’re not perfect by any stretch of imagination. But passion, and purpose will help us get there faster.”

  • I could not agree more that passion and purpose will help any business move forward much faster. This is not something that starts with an email, but rather the top leadership establishing the mission and culture. The key then is hiring the right people from the start. If you were not hiring for the right culture, then leadership is most likely to blame.

“In closing, if you are one of the folks who refused to install the PayPal app or if you can’t remember your PayPal password, do yourself a favor, go find something that will connect with your heart and mind elsewhere.”

  • Well I do not work for PayPal, but I can tell you my feedback. I know apps are all the rage, but the reality is I do not want tons of apps on my phone. I want apps that I know I use on a regular basis, preferable daily. I have not tried the PayPal app, but if I do I would be happy to share the feedback with you. I can also tell you the reason I do not use PayPal as much is simple, I forget my password regularly. It is in a format that is different than other password I use. So for speed it is often faster for me to manually enter the information.

Too often we like to blame those around us instead of understanding the shortcomings of our business or listening to those around us who may have deep thoughts. I think it is important for all of us to live the passion we have at work and at home. It is not always possible or feasible, but I would recommend it if you can. I for one am passionate about the Customer, the Customer experience and the employee experience. I strive to live those in everything I do. I think the challenge lately, whether it is the Tim Armstrong example or this one, leaders are taking the easy path, instead of investing in listening to those at all levels in an organization. Leadership starts with listening in all aspects.

As a side note this week is random acts of kindness week, so if you have time, please do something nice for someone around you. Maybe a simple note to say thanks or buy a cup of coffee for someone.

Photo: Twin Design / shutterstock

Posted by:Frank Eliason