Vox - Code Conference, Day 1https://cdn.vox-cdn.com/community_logos/52517/voxv.png2018-06-10T19:01:17-04:00http://www.vox.com/rss/stream/171413252018-06-10T19:01:17-04:002018-06-10T19:01:17-04:00Watch all of Recode’s interviews from Code 2018
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<img alt="Evan Spiegel, Snapchat founder and CEO" src="https://cdn.vox-cdn.com/thumbor/XegkesBRH1l-4TbRwUNSVGxtruk=/72x0:1209x853/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/60015419/REC_ASA_CODE18_20180529_181526_0433_preview.0.jpeg" />
<figcaption>Asa Mathat</figcaption>
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<p>Evan Spiegel, Sheryl Sandberg, Daniel Ek, Dara Khosrowshahi and more.</p> <p id="4o4pHb">Some of the biggest names in tech, media and even the agencies that regulate these industries took the stage at <strong>Recode’s</strong> Code Conference in Rancho Palos Verdes, Calif. And Sunday, the third episode of <a href="https://www.recode.net/2018/6/7/17438414/watch-video-msnbc-recode-revolution-facebook-uber-snapchat-kara-swisher-peter-kafka">MSNBC and Recode’s “Revolution” series</a> featured five of the biggest interviews from Code this year: Snap CEO Evan Spiegel, Spotify CEO Daniel Ek, Uber CEO Dara Khosrowshahi, Airbnb CEO Brian Chesky and Facebook’s COO Sheryl Sandberg and CTO Mike Schroepfer.</p>
<p id="dWjA79">Want more? You can watch the full interviews of everyone featured on our MSNBC special as well as with leaders like Democratic Senator Mark Warner, Alibaba executive vice chairman Joe Tsai and Momofuku chef and “Ugly Delicious” host David Chang</p>
<p id="bZYHLt">Watch them all below and <a href="http://youtube.com/recode">find more on our YouTube channel</a>.</p>
<h3 id="s8TmG3">Snap CEO Evan Spiegel </h3>
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<h3 id="h5V6J7">Spotify CEO Daniel Ek</h3>
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<h3 id="bC2IpC">Uber CEO Dara Khosrowshahi</h3>
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<h3 id="6uxZDo">Alibaba executive vice chairman Joe Tsai</h3>
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<h3 id="10XYeo">Momofuku chef and “Ugly Delicious” host David Chang</h3>
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<h3 id="TLBnyK">Aileen Lee, founder and managing partner of Cowboy Ventures, Sukhinder Singh Cassidy, president of Step Up and founder of the Boardlist, and Megan Smith, CEO of Shift 7 and the third U.S. Chief Technology officer of the United States of America. </h3>
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<h3 id="2Xdqbw">Illumina CEO Francis deSouza</h3>
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<h3 id="2MN8Qs">Brad Garlinghouse, CEO of Ripple; Bridget van Kralingen SVP, IBM Global Industries; Kathryn Haun, Lecturer, Stanford Graduate School of Business </h3>
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<h3 id="Vtzlx9">AT&T chairman and CEO Randall Stephenson </h3>
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<h3 id="bIsvkE">Airbnb CEO Brian Chesky</h3>
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<h3 id="UbRpAt">Stitch Fix CEO Katrina Lake</h3>
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<h3 id="FIMFP1">Mary Meeker, partner at the venture capital firm Kleiner Perkins Caufield & Byers</h3>
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<h3 id="xkQk57">U.S. Senator Mark Warner, (D-VA), Vice Chairman of the Senate Select Committee on Intelligence</h3>
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<h3 id="dnt8OA">Facebook COO Sheryl Sandberg and CTO Mike Schroepfer</h3>
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<h3 id="LXcCMo">21st Century Fox CEO James Murdoch</h3>
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<h3 id="yGwPO6">Linda McMahon, 25th Administrator of the Small Business Administration and member of President Donald Trump’s Cabinet </h3>
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<h3 id="Oxqa6e">Microsoft president Brad Smith</h3>
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<aside id="Tv60Fd"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p id="w7hd3F"></p>
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<p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/6/10/17446824/watch-videos-full-interviews-kara-swisher-peter-kafka-recode-code-2018Recode Staff2018-06-08T13:29:55-04:002018-06-08T13:29:55-04:00Evan Spiegel encourages Facebook to ‘copy our data protection practices also’
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<img alt="Snap CEO Evan Spiegel" src="https://cdn.vox-cdn.com/thumbor/MBaZggsNtgR_TsT-xIGJ_vEcRMM=/148x0:2580x1824/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59890377/REC_ASA_CODE18_20180529_182510_0589.0.jpg" />
<figcaption>Asa Mathat</figcaption>
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<p>Spiegel pours salt on the wound in his long-simmering fight with Instagram.</p> <p id="jeBHsM">Evan Spiegel actually <em>wants</em> Facebook to copy part of his business: His company’s privacy policies.</p>
<p id="aEjLsR">The Snap CEO poured salt on the wound on Tuesday evening when he called out Facebook, which famously copied Snapchat’s Stories feature on Instagram, for its problem with user data in <a href="https://www.recode.net/2018/5/29/17384680/evan-spiegel-snap-ceo-code-conference-facebook-copy">an interview onstage at <strong>Code Conference</strong></a> in Rancho Palos Verdes, Calif.</p>
<p id="N7qR77">“We would really appreciate it if they copied our data protection practices also,” Spiegel said, triggering some cheering from the audience.</p>
<p id="BLnPjp">Spiegel said Facebook — whose name he repeatedly declined to utter — has failed to sufficiently overhaul its user privacy protections after the <a href="https://www.recode.net/2018/3/19/17140410/facebook-mark-zuckerberg-seecurity-data-50-million-users-cambridge-analytica-president-donald-trump">Cambridge Analytica scandal</a> exploded earlier this spring.</p>
<p id="pH0E8H">“Fundamentally, I think the changes have to go beyond window dressing to real changes to the ways that these platforms work,” he said.</p>
<p id="xkVIVy">Facebook didn’t take the comment too kindly. Alex Stamos, Facebook’s chief security officer, fired back at Spiegel in a tweet, pointing to Snap’s own privacy issues.</p>
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<p lang="en" dir="ltr">Snapchat’s implicit promise that photos really disappear combined with poor API security has lead to serious mass leaks of revenge porn. So no, I don’t think copying Snapchat would be a smart move.<a href="https://t.co/FSfTA8ry5A">https://t.co/FSfTA8ry5A</a></p>— Alex Stamos (@alexstamos) <a href="https://twitter.com/alexstamos/status/1001651414228226054?ref_src=twsrc%5Etfw">May 30, 2018</a>
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<p id="LbOoZp">Watch the whole interview here:</p>
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<p id="YcBPjU">Or listen to it on our podcast <strong>Recode Decode</strong>:</p>
<div id="JTNIiq"><iframe src="https://player.megaphone.fm/VMP5053719259" style="width: 100%; height: 200px; border: 0 none;" scrolling="no"></iframe></div>
<aside id="X4iUht"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/29/17384792/evan-spiegel-snap-snapchat-facebook-copy-data-privacy-ceo-code-conferenceTheodore Schleifer2018-06-08T11:05:53-04:002018-06-08T11:05:53-04:00Full video and transcript: Snap CEO Evan Spiegel at Code 2018
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<img alt="Snap CEO Evan Spiegel" src="https://cdn.vox-cdn.com/thumbor/OPvx5TPXZDF73JtASDdYzZhVPKg=/304x0:2736x1824/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59897203/REC_ASA_CODE18_20180529_183559_0599.0.jpg" />
<figcaption>Asa Mathat</figcaption>
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<p>“As time goes on, I think it will become clear to more and more people that our values are really hard to copy.”</p> <div id="NnDD92"><iframe src="https://player.megaphone.fm/VMP5053719259" style="width: 100%; height: 200px; border: 0 none;" scrolling="no"></iframe></div>
<p id="LjdhA4"><strong>Kara Swisher: Social media </strong><strong>i</strong><strong>s important to our country, as it turns out, so we have a lot to talk about in these next two sessions. The first person I’m bringing out is someone who’s been at Code before, was here many years ago, he just pointed out to me. Someone I think is really creative, a really interesting entrepreneur, has had a tough time since he went public and lots of issues. But he’s here to talk about that.</strong></p>
<p id="mSd6K9"><strong>He just got bothered by my 13-year-old explaining what he did and didn’t like about the app. </strong><strong>M</strong><strong>y 16-year-old just sent me a whole long list of things, so we’re going to get into that. So without further ado, Evan Spiegel, co-founder and CEO of Snap.</strong></p>
<p id="orVxtD"><strong>One of the things, you just, congratulations, you just had a baby. You can just say congratulations to him.</strong></p>
<p id="7fRJxh"><strong>How’s it going so far?</strong></p>
<p id="wj4d4T"><strong>Evan Spiegel</strong>: It is literally the greatest thing in the world.</p>
<p id="UDaUw0"><strong>Yes, as it turns out, it is. And it’s a boy, right?</strong></p>
<p id="lrQZqv">Little boy. Yeah.</p>
<p id="Z107Dr"><strong>Good. Well, you’ll like that. I have mine. I like them very much. I’m enjoying them very much. So let’s start about that. I’m not kidding. My kids are on Snapchat a lot</strong><strong>,</strong><strong> especially my 16-year-old. He grew up with Snapchat. I hate to do anecdotal things, but I watch him use it a lot.</strong></p>
<p id="DGb9hv"><strong>He was mad about the redesign, like furious. He sent me, he was like, “Tell Evan I’m very upset about this.” I’m like, “I think I won’t.” But he had a whole long list of issues, and yet, he uses it almost every day. He’s always on it. He uses it for communication. He uses and he does it so, in such a facile way. So talk a little bit about this redesign</strong><strong>,</strong><strong> because it was very controversial, impact on your business, so talk about, walk us through what you think happened and the mistakes you made and what you were trying to do to fix it.</strong></p>
<p id="pKACY8">Well, first, please thank him for using the service despite the redesign.</p>
<p id="HwBn43"><strong>Yeah. Okay. Good.</strong></p>
<p id="PtRzCe">I think fundamentally, if you look at the redesign, it’s really important to try and understand the problem that we were trying to solve. When we looked at social media, one of the biggest problems that really stood out to us was this constant conflict between needing to have a small group of friends to feel comfortable expressing yourself, but also needing to have a large group of friends so that you can watch more content.</p>
<p id="GwgfIv">Traditionally what’s happened, especially because social media businesses make their money with advertising, is that those businesses try to encourage you to add as many friends as possible. And then at some point, because you’ve added all these friends and some of them you don’t know and maybe you now have 1,000 friends, you feel uncomfortable actually creating yourself.</p>
<p id="pFDPZk">That for us was worrisome because our business is all about empowering people to express themselves. That’s what we tried to do. That’s why we open into the camera. And so we wanted to find a way to empower people to express themselves, to keep that small group of friends but at the same time expose the whole world of content that’s on Snapchat that people want to watch.</p>
<p id="U4852m">I think if we look at the execution, in terms of the philosophy, I’m excited about the progress we’re making. In terms of the execution, we have to continue to evolve and iterate the product to get the result that we’re looking for.</p>
<p id="MeOhv1"><strong>You and I talked about this. We had a great talk in Venice at your office, which ... Evan has a hard time talking in public, in private, but in public, you’re quite private, you’re quite passionate about how you were thinking about the theories around what you were doing. You were solving for a problem that these social networks have gotten too big and too anonymous and the behaviors change on them as people use it.</strong></p>
<p id="YzYSFg"><strong>When you got this feedback, when you saw it, what did you think and how did you make the decision</strong><strong>?</strong><strong> </strong><strong>B</strong><strong>ecause I think you just made it on your own theories, not on data, which other people tend to ... or not? Explain how you decided to do it.</strong></p>
<p id="BNnE8W">We use a combination, obviously, of data and also our own intuition about the underlying problem and our philosophy that guides us there. I think the thing that we always try to do when we release a product, if we believe that that underlying philosophy, that that reasoning is sound, we’re willing to push out a product, knowing that that solution may change over time. We try to stay open to the wide solution space effectively and iterate as quickly as possible.</p>
<p id="uWilGS">One of the things that I’ve noticed with our team is that if we lean too heavily on data, we just wait and wait and wait and can get stuck in very small iterations, rather than looking more broadly at new solutions, and so for us to just continually push forward as a company I think is really important, as long as that underlying philosophy is sound.</p>
<p id="UREJOg"><strong>So what do you need to do about this redesign? What did you learn from it as an executive? I mean</strong><strong>,</strong><strong> you’re a relatively new executive. We’ll get into the IPO part of it in a minute, but what did you learn to do about that because this is your ... You don’t have 20 products. You don’t have nine different divisions and things like that.</strong></p>
<p id="naPodT">Well, one of the things, honestly, that I underestimated at the time was how much it would impact, for example, our investors or our team. You know, if you remember, I think after our Q4 earnings, our stock was up like 50 percent in one day, right? So everyone’s like really excited, and they just could not comprehend why we would totally change our product and redesign the service, right, after that amazing blockbuster earnings.</p>
<p id="OEfPNC">And so for me, that was a really great lesson because to me, it teaches the importance of having that long-term conviction even though it’s going to surprise people, even though it’ll make people feel uncomfortable, and so we really tried to let people know that we expected some disruption. But despite doing that and despite trying to prepare our community but also the investor community and our team for the disruption that we thought would come with the redesign, it still really had an impact.</p>
<p id="IKJRD7">I think as people get to know our business over time and as they build trust with us and they see us make more of these decisions ... You know, I think when we were a private company — and we’ve talked about this a million times — we made a lot of decisions that people thought were totally wild, right? Whether it was ephemeral communications or stories or lenses. These are concepts that were really hard for people to understand at the time, but our conviction and that underlying philosophy that drove the product development is what allowed us to continue to build for the long term.</p>
<p id="MmCJli"><strong>Can you upgrade that space in public? You do have public investors. You have the stock. You have the pressure on the stock. Does that make it impossible</strong><strong>? O</strong><strong>r I mean</strong><strong>,</strong><strong> you can be in a Jeff Bezos</strong><strong>-</strong><strong>like position. You did that for years, but do you have that trust in investors to be able to do that?</strong></p>
<p id="FrnMnB">It’s going to be a process to build that trust. I think the first time we started building that trust was really around the transition in our advertising business. So about 18 months ago, all of our advertising was sold by salespeople, right? Direct sales. We realized that we would be unable to scale the business to reach millions and millions of advertisers if all of our ads were sold by people. We had to create software to do that. We had to take our business through a transition to move from that direct sales force to programmatic advertising. That was another example, I think, where people were worried about it, because with a direct sales force you have fixed prices for your adverting, and with programmatic you have a dynamic auction that determines your pricing.</p>
<p id="5WHoar">Because we don’t have as many advertisers in our auction yet, that pricing is lower because there aren’t as many people competing to buy those ads.</p>
<p id="3LyW11"><strong>But it’s the right decision?</strong></p>
<p id="zhuvZy">And it’s the right decision for the long term. We saw that impact on our revenue after we went public, and we took that criticism, and then by Q4, I think people saw how the programmatic business really impacted revenue and got comfortable with that decision. But they punished us for a couple of quarters, and so I think it’s going to take a cycle of doing that a few times before we build that trust.</p>
<p id="W7YP10"><strong>So you’re just going to piss people off for quarter after quarter</strong><strong>?</strong><strong> </strong><strong>O</strong><strong>r what? It’s funny.</strong></p>
<p id="3a1rBL">We’re going to try really hard not to piss people off. We really try to be thoughtful and communicate about the decisions we’re making, but ultimately, I think people are going to have to see that consistency where we release ephemeral messaging and it doesn’t make sense to people, and then several years later it makes sense and it’s the dominant behavior.</p>
<p id="baKgir">I think we’ve done that now with a number of products, and so a couple of years from now, I hope we’re sitting here and talking about ...</p>
<p id="gRW0Ue"><strong>The design is fantastic.</strong></p>
<p id="Lk6cLP">Yeah, talking about how great it is.</p>
<p id="qPRTXj"><strong>Would you go back on the design and some of these things that people didn’t like? What don’t you think people ... What would you change back</strong><strong>?</strong><strong> </strong><strong>O</strong><strong>r what do you ... that you listen because a part of you doesn’t want to, right? </strong><strong>“</strong><strong>This is the way I want to go.</strong><strong>”</strong></p>
<p id="GbqVoM">We changed one big thing almost right away. One of the mistakes that we had made was combining your communications with the Stories that you wanted to watch. We tried to put that all in one place for your friends because we thought it would make the app feel more familiar. So instead of seeing, for example, opening the app and seeing a celebrity, you always, you saw your friends. We really thought that was important to building deeper relationships with your friends.</p>
<p id="pNX4NF">I think the mistake that we made was that people think really differently about their communication than they do about watching Stories. Stories is more of a lean-back experience. You’re bored. You have some time. You’re waiting for your friend to reply. And so you start watching content on our service, and so having Stories get in the way of that communication behavior I think was really frustrating to people, so we changed that really quickly. That’s already out and I think making a positive impact. We’re just going to continue to iterate.</p>
<p id="PgvFqQ">But I think the important thing is really that I think we solved this really challenging problem of being able to maintain a smaller group of your close friends who you feel comfortable expressing yourself and also opening up the world of content on Snapchat.</p>
<p id="cyXQgt"><strong>All right. Let’s talk then about going public since this is about that. How is it going?</strong></p>
<p id="9cj3sE">It requires ... I would say a bit more grit than being a private company. I think one of things that’s interesting, when you’re a private company, you can sort of smooth out the ups and downs. In a way, that’s harder when you’re public because you have to talk about metrics all the time.</p>
<p id="TF4aD3">But I think the important thing for us is building that muscle of not putting numbers before doing the right thing for the people that use our service. This is a really good time to do that because embedding that culture really early in our business is extremely important, and so for our team to see our commitment to doing the right thing for our community, doing the right thing for people over the long term I think will really serve the business for a long period of time.</p>
<p id="0UTQGz"><strong>And so do you feel like, do you regret not staying private then, smoothing out things as you do this?</strong></p>
<p id="le6rKs">I think this was the logical step forward in being an independent company. When we raised a lot of money from venture capitalists, I guess our first investor invested at like a $4.25 million valuation, right? The understanding from the venture capitalist was that we were going to provide an exit for them. That was either going to be in the form of an acquisition or that would be in the form of an IPO.</p>
<p id="7bi4QJ"><strong>Right, so you did it for venture capitalists or ... because they don’t care. You shouldn’t care about them, but go ahead.</strong></p>
<p id="ObuZ9h">To be honest with you, we do care about them, and we do care about our investors. I think for us, this was a really great transition to take what is ultimately short-term capital, venture investors are short-term investors. They invest for a couple of years, and then they rotate out of their investments, and so we were able to transition inherently short-term investors to long-term investors, and despite that are being — a little volatility that comes with that — ultimately, that’s the right thing to do to build our business.</p>
<p id="2cl5kK"><strong>How do you develop this as CEO? I mean</strong><strong>,</strong><strong> you started this very young. You’re still very young. How is it being a public company and what has it done</strong><strong>?</strong><strong> </strong><strong>B</strong><strong>ecause you spend a lot more time on creativity, on instinct, it seems. Talk about that, how you think you are as a manager, and we’ll talk about things that have happened internally. You’ve lost a lot of executives. Listen, I remember when Facebook went through nine CEOs at once before they settled on the right one. But talk about that, that transition of your ability to move forward.</strong></p>
<p id="fAfT5m">For us, this year, the big theme for us, the No. 1 priority in the business was our team performance. Our entire leadership team has really been focused on that. We totally changed a ton of our processes around people. I can speak specifically to the way that I give feedback to our team and sort of how we’ve evolved in the last year or so.</p>
<p id="Rb12SA">One of the things that I noticed is that I really needed to spend a lot of time thinking about what works best for my style, like what’s the best way that Evan can be a great leader instead of trying to emulate other CEOs or other great ...</p>
<p id="uscrcK"><strong>Were there any ones you were trying to emulate?</strong></p>
<p id="RXLJFp">Oh, my gosh. There’s so many, and tons that are mentors.</p>
<p id="t1E6bd"><strong>Who? Who?</strong></p>
<p id="iGB3po">John Donahoe is a good example. He’s actually the one who inspired me to really focus on coaching, because we went on a walk, and he’s like, “Evan, think about how much time athletes spend training for every minute they spend playing.” He’s like, “Why don’t you do more coaching?” It’s like, “Great idea. Thank you.”</p>
<p id="OyyEWe">So one of things that we’ve done is really formalize our coaching practices. At Snap, we actually have coaches that work with every single member of our leadership team, and then I work together with all of those coaches to try and constantly improve.</p>
<p id="JwzMVb">I think outside of that, I’ve noticed that written feedback works really well for me, so I write letters to our team about — individuals —nspecifically about their performance. We combine that with 360 reviews both for myself and everyone else on the team, so it’s not just my perspective, and then everyone develops their own plan and then works with their coach to implement it.</p>
<p id="QUCRFs">And so I think taking that personal development as a leadership team really, really seriously has made a huge difference for our company in a really short amount of time.</p>
<p id="cvmsjP"><strong>So what is an Evan management system</strong><strong>?</strong><strong> </strong><strong>B</strong><strong>ecause you seem like a loner comparatively, are you not? That’s the perception I think people have</strong><strong>,</strong><strong> that you</strong><strong> ...</strong><strong> a lot of companies, they operate with two people or something like that. Who is your partner? Do you need one or ... </strong></p>
<p id="KNUZjI">I am so not a loner. I think there’s been strange conflation of my personality ... I’m sort of like a private person.</p>
<p id="J3yyRh"><strong>You are.</strong></p>
<p id="aUqstP">I don’t really like talking to media and stuff with the exception being with you here today.</p>
<p id="6VYhLi"><strong>Oh, thank you. I appreciate it.</strong></p>
<p id="rsa2Uf">But I think that’s been conflated to say that our team works that way, and that’s not the case at all. We have a team that works really well together. I’m really proud of that. We all have shared goals. We hold each other accountable. That’s had to change. It hasn’t always been the case, but that’s absolutely critical. Otherwise, we wouldn’t be able to execute this quickly.</p>
<p id="PW1TTE">I think one thing that I help do at the company is really try to set the tone, provide the vision, and tried to guide people back to our philosophy sometimes when we stray. So, I think there are moments when, you know, it can be tempting for someone to look over their shoulder at what everyone else is doing and then try to do that at Snap. I can’t tell you how many people I’ve interviewed that have said, “You should just add ‘Likes.’” It’s like, “Well, let me tell you why that’s not what we do at Snap, and why we think that’s really important to self-expression.”</p>
<p id="FNIqkF"><strong>You just eject them out of the room when they do that?</strong></p>
<p id="LQR6eg">I try to be really patient and explain. Another one of my mentors said, “Look, your job as a leader is just to explain stuff all the time.”</p>
<p id="ldUhds"><strong>Right. </strong></p>
<p id="ufkT8v">So, I really try to explain our philosophy and how we think about the world in our products. I think for me, as a leader, that’s been critical. I think the idea of me as a loner is sort of, it’s not ...</p>
<p id="7fKpGx"><strong>It’s interesting. It’s there</strong><strong>,</strong><strong> the idea that you’re ... It is. It absolutely</strong><strong> is.</strong></p>
<p id="Qzb35f">That’s a little depressing, I guess.</p>
<p id="uOYMll"><strong>Yeah, it is. So, sad loner by himself. No, I think your life is just fine. It seems like it from your Instagram. No, I’m kidding. Teasing. </strong></p>
<p id="WOXexI"><strong>So, talk about ... You’ve had a lo</strong><strong>ss</strong><strong> of</strong><strong> upper</strong><strong> people in the management. It gets written about, and it may not be completely accurate, it might be accurate. What is happening there when different people leave? Because, ultimately, building the right team is over time. I’ve seen it happen</strong><strong> in</strong><strong> a day. I’ve seen it</strong><strong>,</strong><strong> like people come and go and they can either cycle up or cycle bad. So, I don’t find that that unusual, but you have had a lot of turnover. </strong><strong>T</strong><strong>alk about what’s the problem with people stay or go, what do you need there?</strong></p>
<p id="IDZoLT">I think there’s a combination of factors. If I were to look at, I guess, maybe the key ones, I think first and foremost, obviously the company has changed so dramatically in a very short period of time. So we now have, I don’t know, almost 3,000 people; a couple years ago we had a couple hundred. So, to scale a team that quickly actually requires a changing skillset, because the things that work when you’re a really small company don’t work when you’re a lot larger. That’s been on huge factor, I think.</p>
<p id="mPiiiO">Another one, and it sort of relates to that, I think, is really about adaptability, and that has to do obviously with the rate at which the company is needing to grow faster, but also has to do with how you approach problems at Snap. One of the things I’ve seen is that people who are absolutely brilliant, who are geniuses, experts in their fields, come to Snap and have a hard time approaching problems in a new way. And they want to continue what they’ve been doing in the past. For us, that’s really challenging, because we really want people to approach problems with almost a blank canvas. That’s how we arrived at solutions like Stories or Lenses or ephemeral messaging. I think for us, having that open-mindedness and willingness to approach problems from different angles is really important. </p>
<p id="AQTfdS">I think the last one — and this has become more important to me over time — in the past, the way we ran the team, people were sort of responsible for their own verticals, and that just doesn’t work to be a high-functioning leadership team. You need everyone to be accountable for the same goals and to work together to do that. So, a huge part of that is then making sure you hire people who really work well with other people, and make them better. </p>
<p id="0haPjU"><strong>Right, right. </strong></p>
<p id="OdCHGz">So, I think across those three, I would say — and I’m sure there are others — those are how I think about building the right team.</p>
<p id="9xfQpF"><strong>Building the right team. So, let’s get to the story today, which</strong><strong> ...</strong><strong> we talked about diversity. There’s a very tough story on Cheddar, a good story, about problems at Snapchat, which just me, is so normal for the whole</strong><strong> [industry]</strong><strong>. Every single company has this issue, and this was your turn to talk about it. You had someone who left who wrote a pretty tough letter about the culture. Talk about what your reaction to that. Because you guys admitted this was a problem, we’ve been trying to fix it, this was ... They left last November</strong><strong>. T</strong><strong>he letter that went to everyone, it was a woman engineer there, talked about a toxic male culture, models at a party, which you also objected to, but you’re the CEO. All kinds of things where </strong><strong>... </strong><strong>a </strong><strong>“</strong><strong>Game of Throne</strong><strong>”-</strong><strong>type mentality, too male. Talk about that.</strong></p>
<p id="ZsTzZ2">Yeah, that letter was a really good wake-up call for us because, obviously, we’re constantly thinking about how to have the culture that we want and how to reinforce the values that we want. And we’re thinking about it even more because, as I mentioned, the company has grown so fast. So, to take on that challenge of a company growing that quickly, hiring people that quickly, then reinforcing the culture and values is really challenging.</p>
<p id="lV8cR0">I think the wake-up call for us with that letter was that we needed to do even more, and needed to do it faster. Right? So, we reorganized the engineering team, put new leadership in place. We actually hired external consultants to come into the company, talk to people and help show us areas where we could improve. We ran a company-wide survey to identify other issues and act on them. We changed our promotion process. </p>
<p id="XVriS7">So, I’m proud of the progress that our team made in the last six months. I’m glad we started moving a lot faster on these issues. And obviously, there’s a lot more to do. So, we’re gonna stay focused and keep going.</p>
<p id="Ma5LvB"><strong>And you released the numbers, which are as bad as all of them, but why is that? I want to get to why it is. Because a lot of people are like ... Even Facebook is coming out next, “We were surprised by this. </strong><strong>W</strong><strong>e didn’t realize this.” Why don’t you realize this? I know it sounds crazy</strong><strong>, y</strong><strong>ou know what I mean? I do feel like sometimes, and you do get that, “We think it’s important, we think it’s a priority.” One</strong><strong>,</strong><strong> it doesn’t change, and two, what is it? Is it an evolving nature of you, or your management team? Or what happens where it comes as such a surprise that is not a surprise to a lot of people?</strong></p>
<p id="RwUcnM">Well, I think if we go back a little bit, I’m not sure it was surprise to us. For example, I think the article talks about this female engineer feeling uncomfortable because she overheard something that a senior leader had said. She went to HR, and HR had a conversation with him and talked about it, and said, “Hey, that’s not appropriate.” </p>
<p id="pXMs4K"><strong>Right. </strong></p>
<p id="dpCEqM">Ultimately, to me, that is the sign of a culture that we want, where people are identifying problems and speaking up about them. So, I think Step One, talking about that problem, having people come forward and talk about it, allows us to fix the problems. So I’m happy that that occurred in our company. </p>
<p id="iHq1GX">I do think we’re aware, and I do think we’re working on it. I think the question is always, “What else can we do?” And we’re constantly thinking about that and trying to learn. </p>
<p id="AwgHLr"><strong>Right. Then what do you do as a leader</strong><strong>?</strong><strong> Because sometimes I think leaders put them as priority </strong><strong>No. 7</strong><strong>, or priority </strong><strong>No.</strong><strong> 14</strong><strong>, a</strong><strong>nd never priority </strong><strong>No. 1</strong><strong>. The only thing, when I was reading that story today, they mentioned, as usual, there’s a party with scantily clad women. I looked</strong><strong>.</strong><strong> 10 years ago, I wrote one about Yahoo like that. There was like strippers onstage at a Yahoo event. Or Twitter they had a frat party that was ... I’m sort of like, what has to happen from your perspective</strong><strong>?</strong><strong> </strong><strong>B</strong><strong>ecause here you have all the power. What has to happen? I’m holding you totally responsible for all of it. I’m not, because I want to understand. </strong></p>
<p id="8osAoj">I think, Megan, for example, backstage, had a great idea. That, “Hey, at every single one of your leadership meetings, you should just make this a standing item and talk about the progress you made that week.” That was a great idea. It’s not something we talk about at our leadership meetings. Maybe every other week, but I think just relentlessly repeating and making it a priority for senior leadership is really important, and there’s more we can do there. Again, I think people are gonna make mistakes, and I was frustrated to say the least to see people dressed up as deer at a holiday party, or anniversary party, or whatever it was. Just because it’s also strange. </p>
<p id="jCCOX3"><strong>Yeah, it is. </strong></p>
<p id="My10RG">Yeah. </p>
<p id="UJ7gF4"><strong>But you get the party and get rid of the deer. </strong></p>
<p id="B1jzYI">Oh, we did. Literally, like what is this happening? Why?</p>
<p id="ysFBhr"><strong>Right. Who made that decision?</strong></p>
<p id="qoEBVO">That was someone who is on our events team, and she made a mistake and life goes on. I think, again, having a culture where people can make mistakes, we give them feedback and they grow, I think it’s really important. I think especially with the younger work force, people are gonna make mistakes, we should expect that, it’s part of the learning process. And having that mechanism whereby we turn that into feedback and then change is critical. </p>
<p id="URLVjj"><strong>Al</strong><strong>l </strong><strong>right, let’s move on</strong><strong> </strong><strong>to another topic. Facebook. Oh, God. Poor Evan, he’s being such a good sport here. No, but you are a very creative person. You create these things and they borrow them rather extensively. Tell me how that feels. People borrow my things all the time, it drives me crazy, I want to kill them. </strong></p>
<p id="qOoRE1">Yeah, I think it bothers my wife more than it bothers me. Gosh. I think fundamentally it’s important to understand that Snapchat is not just a bunch of features. It really has an underlying philosophy that runs directly counter to traditional social media. I think that’s why traditional social media feels threatened. Because, fundamentally, if people realize that competing with their friends for “Likes” and attention is kind of unpleasant and really not that great ...</p>
<p id="F2wfgC"><strong>Agreed.</strong></p>
<p id="ovo4Z7">... then I think they’re gonna look for alternatives. And what we said at Snapchat is actually, there’s this great alternative, which is all about building deeper relationships with people that you’re close to. And we believe that empowering that self-expression is really important. I think while, of course ... I think what they’ve done is they’ve changed their products and changed their mission, but I think fundamentally they’re having a really hard time changing the DNA of their company. The DNA of their company is all about having people compete with each other online for attention. </p>
<p id="k5quFX">I think sort of, as time goes on, I think it will become clear to more and more people that our values are really hard to copy, and I think the reason why is because values are something that you feel. I think, over time, especially given the relationship that we’ve built with our community, which I feel is very strong, I think that it will be harder to really copy the essence of what Snapchat is. </p>
<p id="1H6nJC"><strong>What is the impact when they do? Because I had Kevin </strong><strong>Systrom</strong><strong> on my thing and I said, “You’ve just taken this. This is really kind of offensive to me that you’ve done this.” And he goes, “Well, just because Evan invented the car radio doesn’t mean I can’t do a better one. And yes, that’s what we did.” Just didn’t even bother pretending. And why should he? Because it’s obvious what happened. So, how do you then keep ... It isn’t a feature war, but what is the impact when they do something you do and do a pretty good job copying. People used to accuse Microsoft of that quite a bit. So talk about that, what do you do then?</strong></p>
<p id="LLxQgw">I think we do what we’ve always done, which is just continue to innovate and continue to deliver really great products for our customer. And we’ve always believed that if we really listen to our customers and provide them with things that they totally love, that they’ll use our services. </p>
<p id="05sN4s"><strong>Do you feel ... What is the pressure like when they do that? What does your wife do then? Tell me what your wife does. </strong></p>
<p id="Ce63jS"><strong>I like a good dramatic pause, so it’s fine. </strong></p>
<p id="WQ8HF5">I guess, what I’m saying is that fundamentally ...</p>
<p id="cOxoX3"><strong>It doesn’t matter?</strong></p>
<p id="Ajw9Wh">Yeah, fundamentally, we have to stay true to our DNA and who we are as a company. And our desire to empower people to express themselves. I think people are going to continue to follow the innovations that we’ve created, and that’s part of how this industry works. </p>
<p id="LkujQw">Ultimately, I think if you want it personally how I feel about it, I think as a designer — and I think the designers on our team would say the same thing — that the No. 1 feeling for a designer, the best thing in the entire world is if you design something that’s so simple and so elegant that the only thing other people can do is copy it exactly. That, as a designer, is the most fantastic triumph in the world. So, I think from ... thank you. Thanks. It really is the most fantastic thing in the world. So, I think that because our team gets their joy out of changing the world in the right direction, that will continue to be our strategy. </p>
<p id="z7Yj1j">I guess what I’m saying, to take it a step further, is that we would really appreciate it if they copied out data protection practices also. </p>
<p id="CDsQzG"><strong>I was waiting for that. </strong></p>
<p id="t4ccP8">Maybe that’s what Sheryl’s announcing after. </p>
<p id="DyfKwk"><strong>Speaking of that, I want to finish up on values, because you said the word value. And I say the word value a lot, and I think values are important</strong><strong>,</strong><strong> because with values you have to make choices, and you can’t be a benign platform that has</strong><strong> ...</strong><strong> no</strong><strong> “w</strong><strong>e’re trying to be everything to everyone.</strong><strong>”</strong><strong> You cannot do that. You can try, but it always runs into humanity. So, picking values</strong><strong>,</strong><strong> I think</strong><strong>,</strong><strong> is critically important and very few tech people want to do that. They want it always ... And that’s, to me, where a lot of the problems</strong><strong> [arise]</strong><strong>. Talk about tech responsibility. You and I have talked ... 18 months ago, he was talking about the things that Facebook ran into this year. Which was interesting. I remember that conversation. The inability to control your platform or understand what’s on it, if you take the hands off the wheel. Talk about those choices, because I think it really is important. </strong></p>
<p id="jwbpyj">Whew. I guess ... This is sort of at a high level. I guess what I would say about this, and how I feel ... Obviously, life is not about making money, life’s not about winning awards, it’s not about winning competitions or whatever. Life is really about having an impact on the world, changing the way that people experience the world, changing the way that you experience the world. I think for me, one of the things that I worry about is that businesses very quickly reduce problems to numbers. They think about themselves in terms of numbers and they get obsessed with driving numbers. I think the interesting thing about humanity and about values is that these are things that can’t actually be quantified.</p>
<p id="MRmm45">For me, I think the big red flag for all of us should be when we put more weight on things that can be counted instead of the things that can’t be. Because the things that can’t be counted are the things that make us human, and the things that are the most important to protect.</p>
<p id="pOym8l"><strong>So what happens now with the tech industry? These hearings, these ... I get, I’m gonna ask this question I asked of Tim Cook. What would you do if you were Mark Zuckerberg in this situation? You almost sold your company to him and then you didn’t, allegedly. Knock on wood. Is that wood? Okay. </strong></p>
<p id="ICZbBK">Fundamentally, I think the changes have to go beyond window dressing to real changes to the ways that these platforms work. I think the thing that concerns me the most, and we’ve already seen this with GDPR for example, rather than complying with the actual spirit of GDPR and the data privacy practices, some companies just took their data processing practices and jammed them in the terms of service. Then they said, “Because our data processing practices are in the terms of service and that’s a contract with the user, we’re compliant with GDPR.” That’s why people got sued on the first day that GDPR was enacted. </p>
<p id="p7hCNB">I think for me, it’s very clear this is a long road. It’s a road that’s going to be litigated, but I think if you look at the shift and you look at the appreciation that people have for user privacy and how fundamentally important it is to humanity, I think we’re just getting started in the way that people are gonna have to change their businesses.</p>
<p id="up5Yl4"><strong>To what? Because it’s all predicated on that.</strong></p>
<p id="7Pyj2q">I think it’s important to point out that there wasn’t any Russian manipulation of Snapchat.</p>
<p id="K4ngRL"><strong>No, they just used the system.</strong></p>
<p id="FVdRGl">Right. That there are alternatives, and that the way that you treat user privacy is really important. For us, that goes back to when we were in my dorm room. When it was just me and Bobby, when there were three or four people using our products, we cared about data retention. It’s taken seven years for people in the technology industry to take a look at what we’ve done, getting rid of personal information rather than storing it, hoarding it forever. And to say, “Hey, that actually kind of makes sense.” </p>
<p id="sGL57W">So I think for us ... It’s exciting to me that seven years later after we built our business on this idea of data minimization, effectively, that the rest of the industry is starting to embrace that and I think that will have a positive impact. </p>
<p id="VjBY04"><strong>Do you expect a lot of regulation coming?</strong></p>
<p id="Yfpr6G">I think that foolishly some big companies want that because they believe they’re best equipped to deal with regulation and that there are times in history when regulation has actually entrenched big companies because they’re the most capable of complying. I think that’s a huge mistake because I think that that would inhibit innovation, but I do think that there are some really great legal frameworks that are developing — like GDPR — that’s really well thought out, that puts the user first, that gives the user control and choice, that will make a big difference.</p>
<p id="OFhS7w">I think there’s gonna be a balance. I think there will be some regulation, but I think at the same time, technology companies need to incorporate the spirit of protecting user privacy, and if they’re willing to change their businesses to do that then I think we’ll be able to find a happy medium.</p>
<p id="bBHirm"><strong>Al</strong><strong>l </strong><strong>right, questions from the audience, please? For him? We’re going to start over here.</strong></p>
<p id="fKsVTD"><strong>Speaker 1</strong><strong>: Hi. You were so thoughtful about talking about how you brought in business consultants from outside to help you and the leadership team and then Kara pressed you pretty hard on the ... for want of a better term, the frat boy culture that appears a lot in tech. How many of those consultants, if you don’t mind me asking, that are helping you with your business are women or people of color?</strong></p>
<p id="qQyl5h">That’s a great question. I don’t have the exact breakout, but obviously that’s something that we pay attention to because we wanna have a wide variety of perspectives in terms of people who help us. I actually can follow up with you and then figure that out and give you the exact number.</p>
<p id="5mcdTk"><strong>Kara Swisher: I’ll get you in touch with him.</strong></p>
<p id="3ieUoE">But I don’t have them off the top of my head.</p>
<p id="VM6Jgg"><strong>Speaker 1</strong><strong>: Thank you</strong>.</p>
<p id="wE43rP"><strong>Josh Topolsky</strong><strong>: Hi. Found the tall mic, which is great. I have a question about news. You know, Facebook obviously dealing with a lot of the Russia stuff, a lot of the hate speech. Twitter clearly dealing with a similar problem. You obviously think of Snapchat as a different kind of platform, but you’ve got Discover, right? Which is kind of this forum for news and information for the broad set of users. How do you curate that? Are you gonna continue to curate that very closely and as the user base grows and more people want in, when the Daily Caller ... maybe they already have a Snapchat channel, the Daily Caller calls up and says, “We wanna do it.” Or Stormfront is like, “Hey, we have a big following and we really wanna talk about the issues that are facing white nationalists.” Or whatever. How do you guys manage that? How do you curate that? What is your policy, what is your thinking? What is your technical and intellectual thinking around how you manage that as you grow?</strong></p>
<p id="Xr461C">That’s a really great question and I can talk a little bit to the foundational elements. First of all, we have humans review all of the people who distribute content on Discover. I think that works because really only like 1 percent of content is good, so we don’t have to have zillions of people doing that. We just really try to curate things that people wanna watch.</p>
<p id="Z73hBl"><strong>Kara Swisher: So you use all humans? It’s not an AI?</strong></p>
<p id="KI4D27">You know, I’m sure we use some technology tools, but human beings look at it.</p>
<p id="DuRnNh"><strong>Kara Swisher: Right.</strong></p>
<p id="tAGwRB">So I think that’s one piece. I think the second piece you bring up that’s really important is it really has a lot to do with how we’ve structured Discover in the first place, which is to surface a lot of different perspectives and to put the publication front and center. </p>
<p id="yBupkC">So I think what’s really interesting about Discover is that you start understanding that someone like the Wall Street Journal, for example, has a different point of view than the New York Times or the Economist or whatever when you’re reading Discover. Having people making it really clear that those perspectives are different and then providing a wide variety of them I think is really helpful to our user base. I don’t think we’d ever include something on our platform that is blatantly hate speech, but as long as we’re very clearly labeling different peoples perspectives, I think we’re open to a wide variety of those perspectives.</p>
<p id="wXHYLZ"><strong>Josh Topolsky</strong><strong>: So on that, if it is Breitbart or maybe they already have a Snapchat or the Daily Caller. How do you rate the publications, I guess is what I’m saying. Where do you draw the line and how do you draw that line?</strong></p>
<p id="ei2pza">So I personally probably do not have the right skill set to do that so we have people with editorial backgrounds that really think deeply about those things and make those decisions.</p>
<p id="p5tsAI"><strong>Josh Topolsky</strong><strong>:</strong><strong> </strong><strong>So you’re not blatantly just like, “We’re the free speech platform, anybody who wants to put news on here can do it.” It’s gotta be ... you guys have to look at it and say, “Yes, we want this. No, we don’t.”</strong></p>
<p id="PJ6U2M">Yeah, we’ve taken a very different approach in that regard.</p>
<p id="mMBsbJ"><strong>Josh Topolsky</strong><strong>:</strong><strong> </strong><strong>Good, thanks.</strong></p>
<p id="X3JbiG"><strong>Kara Swisher: So you’re not having a crowdsourcing </strong><strong>“</strong><strong>who’s good?</strong><strong>”</strong></p>
<p id="bBVqmg">No, not on Discover.</p>
<p id="EobJ4E"><strong>Kara Swisher: Yeah, I think that’s fantastic. You? You have one? Okay, right here.</strong></p>
<p id="Pszv8g"><strong>Tim Peterson</strong><strong>: You said positive things about GDPR. I’m curious what your thoughts are on the California Consumer Privacy Act which is described as mini-GDPR. It’s not a perfect analogy. It’s something that Facebook and Google have supported the opposition group. Facebook’s kind of pulled the support, but not their money. Snap, what are your thoughts? Is it something you support or against and if you do support or are against it, how does that take effect? Are you actively supporting or opposing?</strong></p>
<p id="kqgdX1">You know, I’m not familiar enough with the exact specifics of it to give you a thoughtful enough answer, so this is another one we could probably follow up on. But I think if it’s consistent with some of the basic principles of GDPR that’s something that we’d be supportive of.</p>
<p id="RcAlKQ"><strong>Tim Peterson</strong><strong>: It’s basically ... The foundation of it is right to know. It borrows that from GDPR but it’s opt-out by default.</strong></p>
<p id="VKmjar">Can I talk to you about it after?</p>
<p id="KHE8Od"><strong>Tim Peterson</strong><strong>: Okay, cool. Thanks.</strong></p>
<p id="A8XLgQ"><strong>Kara Swisher: Very quickly, we only have a very short time.</strong></p>
<p id="EuDJhS"><strong>Alex Heath</strong><strong>: Alex Heath from Cheddar. I’m glad you already talked a lot about the diversity issues. Thanks, Kara, for that.</strong></p>
<p id="M0wRqz"><strong>So I wanted to talk about the business. It seems to me that a lot of the wind has been taken out of Stories with the redesign and with Instagram. If you have metrics to share, please correct me. Given that your ad product is so closely tied to Stories now and Snapchat is also a messaging platform, how are you thinking about monetization outside of Stories? You’ve dabbled in e-commerce, you’re dabbling in hardware. What excites you the most about potential other revenue streams? If you could just turn off Story ads, what would you be doing?</strong></p>
<p id="DRp6Q1">I think I should clarify a little bit about what we did with the redesign because it is actually really closely tied to Stories and about opening up more inventory. If you look at the application before the redesign, the stories pages just had a list of your friends. Sometimes, mixed in there were friends like celebrities that you don’t actually know. What we found that over time, influencers, for example people who post really frequently often because it’s their job, were ending up at the top of the list because that list was recency based. Our Stories page, at the top of the page a lot of people had content from people they didn’t know very well. </p>
<p id="dcJNcs">What we wanted to do with the redesign was really put your friends first. Make sure when you open the application, your friends are at the top of the page, but then open up this world of content so you don’t just see content that you’ve had to add as a friend. You can see a bunch of content that’s personalized just for you but you don’t have to make that person your friend. I think for us that was really our way of thinking about how to scale the Stories opportunity, because you’re inherently limited if you’re only showing Stories that someone’s manually added. </p>
<p id="RxPhG8">For us, with the redesign we have an infinite scroll now of really, really great content that’s personalized for you. I think there may be some misperception about that opportunity for our business. Really, that was one of the big reasons why we wanted to do the redesign: To create that opportunity for our business and also stay true to our mission of empowering people to express themselves. We try to do both at the same time.</p>
<p id="KI6Uwl">I can’t speak to future products or opportunities but ...</p>
<p id="8xYoYN"><strong>Alex Heath</strong><strong>: You’ve dabbled in e-commerce already and hardware. Out of, say, those two things, what excites you the most about those two things or those things we could expect more of?</strong></p>
<p id="eeRS4i">Hardware’s a really important pillar of our strategy. So if you look at the three things that we’re investing a lot in, we have Lens Studio which allows you to create all these great augmented reality experiences, we have the core Snapchat application that a lot of people use all day long and where we can iterate really quickly on those augmented reality experiences. Then we have Spectacles that, while still in its infancy, I think has a lot of potential to overlay computing on the world around you. </p>
<p id="iOxJb5">I think if you look at Snapchat — and again, it’s very early — to just open Snapchat into the camera, into your experience, but to imagine that with the evolution of computing, we’ve gone from mainframes to people now looking at really small computers in their hands. I think if we look at the evolution of computing over the next several decades, computing’s gonna be overlayed on the world around you. I think Spectacles is a really important part of making that happen. </p>
<p id="glWGHM">For me, as it pertains to our hardware strategy, I don’t think that’s gonna generate a ton of revenue for us tomorrow, but I do think it’s a really important investment in the future.</p>
<p id="9xR34I"><strong>Alex Heath</strong><strong>: Thanks.</strong></p>
<p id="YqVqqR"><strong>Kara Swisher: Great. I think that’s all we have time for. Evan, one last question</strong><strong>: A</strong><strong>s a CEO</strong><strong>,</strong><strong> would you ever consider selling your company if you had to? You have not.</strong></p>
<p id="jywUrZ">I think as a fiduciary we’re always required to consider it.</p>
<p id="rT2t5y"><strong>Kara Swisher: Thank you so much, Evan Spiegel.</strong></p>
<aside id="XACAxo"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/30/17397120/snap-ceo-evan-spiegel-transcript-code-2018Recode Staff2018-06-07T13:39:34-04:002018-06-07T13:39:34-04:00Full video and transcript: Facebook COO Sheryl Sandberg and CTO Mike Schroepfer at Code 2018
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<img alt="Facebook COO Sheryl Sandberg and CTO Mike Schroepfer" src="https://cdn.vox-cdn.com/thumbor/3yTmCDN6T1laerN6Qg5oKKsaXEI=/0x0:2432x1824/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59897849/REC_ASA_CODE18_20180529_192148_9799.0.jpg" />
<figcaption>Asa Mathat</figcaption>
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<p>“To this day, we still don’t actually know what data Cambridge Analytica had.”</p> <div id="jH219N"><iframe src="https://player.megaphone.fm/VMP1154927787" style="width: 100%; height: 200px; border: 0 none;" scrolling="no"></iframe></div>
<p id="gkxptt"><strong>Kara Swisher: I don’t think we have to say much. Facebook has been in the news. You may have heard them, seen them, everywhere.</strong></p>
<p id="EmatfF"><strong>Peter Kafka: Let’s bring ‘em up.</strong></p>
<p id="zTZ22E"><strong>Kara Swisher: Let’s bring ‘em up</strong><strong>.</strong><strong> Sheryl Sandberg, CEO of Facebook</strong><strong>,</strong><strong> and Mike Schroepfer, CTO of Facebook.</strong></p>
<p id="P2t4T0"><strong>Sheryl Sandberg</strong>: We are between all of you and a late dinner.</p>
<p id="omkkQ6"><strong>Kara Swisher: No, no</strong><strong>,</strong><strong> no. We have lots to say.</strong></p>
<p id="XubMBA"><strong>Peter Kafka: There’s time.</strong></p>
<p id="e6BX5W"><strong>Kara Swisher: We have lots to talk about. Thank you for coming, first of all.</strong></p>
<p id="s6HPQm"><strong>Sheryl Sandberg</strong>: Thank you for having us.</p>
<p id="GlekwS"><strong>Kara Swisher: This has been an obviously news-filled year for you all. I told Sheryl this was going to be tougher than usual.</strong></p>
<p id="q6zLAw"><strong>Sheryl Sandberg</strong>: Bring it on.</p>
<p id="xepfsW"><strong>Kara Swisher: All right, excellent.</strong></p>
<p id="RTLR3O"><strong>Sheryl Sandberg</strong>: We’re ready.</p>
<p id="KmyISu"><strong>Kara Swisher: So why wasn’t anybody fired at Facebook over the situation with Cambridge Analytica?</strong></p>
<p id="AnEWo8"><strong>Sheryl Sandberg</strong>: You should start with easy questions.</p>
<p id="rwryYW"><strong>Kara Swisher: No, no, I think I’ll start there, and in three parts. Why wasn’t anyone fired, who should’ve been fired ... and that’s enough.</strong></p>
<p id="wvh4Ef"><strong>Sheryl Sandberg</strong>: Okay, well we’ll do the third part. So, Mark has said very clearly on Cambridge Analytica that he designed the platform and he designed the policies, and he holds himself responsible. </p>
<p id="1teZFU">The controls in the company and this are under me, I hold myself responsible for the ones we didn’t have. And look, Shroep and I are here, we run the company.</p>
<p id="AyZvmm">We do fire people at Facebook. We don’t chop them out and make examples of them, that’s not how we are, because we want a culture of responsibility up top and we take it.</p>
<p id="iz2Nox">And the thing for us, and I think what underlies your question is, “Do we know that we were late?” Not just on the data for Cambridge Analytica, but on fake news, on misinformation, on elections, and what are we doing about it. And we definitely know we’re late, we have said we’re sorry, but sorry’s not the point.</p>
<p id="UxyXEo"><strong>Kara Swisher: Yeah.</strong></p>
<p id="jHowfd"><strong>Sheryl Sandberg</strong>: What’s the point, the point is the action ...</p>
<p id="CqjDht"><strong>Kara Swisher: </strong><strong>Y</strong><strong>our ads are lovely, but go ahead.</strong></p>
<p id="AfGOoE"><strong>Sheryl Sandberg</strong>: Well, thank you. But the point is the action we’re taking, and on all of these fronts, we’re really thinking about the responsibility we take in a very different way. </p>
<p id="AofJRD">When you think about the history of Facebook — and you’ve been following us and part of it for a long time — you know, for the last 10-12 years, we’ve been really focused on social experiences and building those and enabling those. What the world would look like if people knew it was your birthday. I was just in Houston, people found people and saved people through Harvey because they were posting publicly on Facebook, those good use cases. But I don’t think we were focused enough on the bad, and when you have humanity on a platform, you get the beauty and you get the ugliness. </p>
<p id="SVUpyW">And where we are now, is really understanding the responsibility we have to more proactively see the problems and prevent them.</p>
<p id="y4E8ON"><strong>Kara Swisher: So </strong><strong>...</strong><strong> go ahead.</strong></p>
<p id="bGRW2V"><strong>Peter Kafka: I’m gonna play kind of good cop.</strong></p>
<p id="xm9TnF"><strong>Sheryl Sandberg</strong>: That’s hard with Kara. She’s such a good cop.</p>
<p id="Uzdf64"><strong>Peter Kafka: Isn’t the problem not that someone screwed up but that you built this architecture that’s fundamentally open to</strong><strong> —</strong><strong> whether it’s Cambridge Analytica or the election stuff or any of the problems that have been surfacing the last couple of years where it’s built for scale, its software is built for sort of minimal oversight, and you want the humans to sort of populate it with content and use it. Automated ads systems, it seems like, James Murdoch referred to it as this giant attack surface, that you built this thing that’s actually working in the way you initially thought it was going to work, you just didn’t realize what you built.</strong></p>
<p id="lUkydk"><strong>Sheryl Sandberg</strong>: I don’t know that ...</p>
<p id="txVUtT"><strong>Kara Swisher: One of you can start with the </strong><strong>...</strong></p>
<p id="fR8AIm"><strong>Mike Schroepfer</strong>: I was gonna jump ... do you think that what you raised is a real fundamental tension between sort of giving tools that are easy for people to have free expression, and then for keeping people safe. Because yes, if you really want to lock everything down, you censor everything and have human reviewers read every single post someone puts on there, but I don’t think that’s what people actually want. </p>
<p id="MLulaj">And what we’re trying to balance is easy tools for you to be able to post, share, photos, links, whatever you want with anyone you want, but to make sure the really bad stuff, the abuses, hate speech, bullying, economic abuses, or this election interference, to get that stuff off the platform, while not still taking free speech ...</p>
<p id="jzevqv"><strong>Peter Kafka: Is that doable with something that’s fundamentally going to be built from software and automation that reaches two billion people around the world?</strong></p>
<p id="8GnH6X"><strong>Mike Schroepfer</strong>: We do think it ...</p>
<p id="XOaV9E"><strong>Sheryl Sandberg</strong>: Not perfectly.</p>
<p id="VYa0yU"><strong>Mike Schroepfer</strong>: This is what we’re in right now, is trying to do this really well. I think it’s a combination of humans and technology to make this work, and to figure out in each society, in each culture, where’s the line between political speech and hate speech? How do we make sure that we get things that work for everyone, all across the world, that sort of on an unprecedented scale?</p>
<p id="T5jXYh"><strong>Kara Swisher</strong><strong>: Let’s go back a little bit further. You just said that we didn’t see the negative parts, that people ... I don’t know if you meant human beings but I know quite a few bad ones. But the idea is, what is in your culture that didn’t see that? Like you’re saying, I know Mark apologized, the ads, it seems like everyone’s doing an apology ad. What is it in the culture, because I can remember a meeting when Facebook Live happened, where I actually, when I was shown it, I said, “What are you going to do about when someone murders someone or commits suicide or beats someone up?” And I think the product manager’s like, “Kara, you’re so negative,” and I’m like, “What?” Like, I’m sorry, humanity is really awful in many ways.</strong></p>
<p id="o7NTVS"><strong>Sheryl Sandberg</strong>: I think that is part of the tension, and Live is a good example. When Live happened, there was a lot of good, really catchy in terms of sharing. People really enjoyed the experience, but there were things that were wrong, and we actually on that one, I think, moved very quickly. We got down to human review of anything live within minutes, which is actually hard to do operationally but we got there. And that was really important, and there have been things that were taken down off Live right away. There have also been things that have happened in Live that we were able to really intervene and help people.</p>
<p id="gHWhdM">So, with all of it, I think it goes to the point you were making which is a very good point. We built an open platform. It is a platform where so many people come on and share. They’re going to do the good, and they’re going to do the bad. It’s not that we’re ever going to prevent all of it. We will never say that, but we can get better. We can be more transparent. We can put a lot more resources and a lot more thought with technology, automation and people. </p>
<p id="pbg508">We’re also really working on being more transparent, that we think is a huge part of the answer. So content policy. Free expression is fundamental to Facebook, it’s a very deep value for us, but so is a safe community. And as Shroep was saying, those values really rub against each other.</p>
<p id="ttgkXk">We’ve published our community standards, but now we went ahead and published the internal guidelines that people use to judge, because what is free expression for one person is hate for another. We worked with over 100 experts around the world. We published those, we had a lot of good feedback and we’re going to keep iterating. We also published our results, so we have out there now, how many pieces of, you know, 1.3 billion fake accounts taken down in six months. ISIS and Al-Qaeda content, we’re getting 99 percent of it before it’s reported. Sexual content, we’re getting 96 percent. Hate speech, 38 percent before it’s reported. </p>
<p id="Pb1gw6">So we can see where the areas we need to invest and by being open about that, we think we can get people to help us because ...</p>
<p id="0GHLlO"><strong>Peter Kafka: Your overall plan</strong><strong>,</strong><strong> right, is in your term we’re going to hire a lot of people, Mark said we’re going to hire so many people to audit our political ads, we’re going to lose money on political ads this cycle. But x</strong><strong> </strong><strong>number of years out from now, the software will be good enough that we’re going to solve most of this. Do you guys believe, sort of top down, that eventually you can solve the software problem with another software problem?</strong></p>
<p id="AB02u1"><strong>Mike Schroepfer</strong>: I mean, you can see this in the numbers that Sheryl just talked about, because if we published numbers of, for example, objectionable content, nudity and pornography, identified by people first and reported to us, vs. identified by automated systems. Several years ago, it would’ve been 0 percent and 100 percent, all generally reported by people. Now it’s 96 percent automated by AI systems and you’re seeing this again, with violence the number is 86, with hate speech it’s 38 percent, because it’s harder, it’s more nuanced, it’s more in the frontier of development.</p>
<p id="AGIELK"><strong>Peter Kafka: But it’s solvable?</strong></p>
<p id="odElRU"><strong>Mike Schroepfer</strong>: But we’ve seen years, and this goes back many, many years of development to make these systems work, and we see quarter over quarter steady progress. </p>
<p id="BCyfMB">I’m, as a technologist, I was very worried about some of these harder problems. We’ve made more progress in the last six months than I thought was actually possible. So that gives me a lot of optimism to do this from a technology perspective over time.</p>
<p id="MJRNQR"><strong>Sheryl Sandberg</strong>: I think one of the things people worry about is, do we think we can automate everything? Do we think we can be neutral? No. </p>
<p id="WSiV7b"><strong>Mike Schroepfer</strong>: No.</p>
<p id="oQ2B4Y"><strong>Sheryl Sandberg</strong>: No. We want to get things when they’re loaded so the difference between something being loaded, and technology pulling it down before anyone sees it, that’s much better. That’s what we’re able to do with ISIS and Al-Qaeda content. We’re able to do that more with photos and adult sexual content. Hate speech as language, more nuanced. So the automation which helps us get it down before its seen, that’s great. But there are humans building the technology and we understand that.</p>
<p id="MZd08g"><strong>Sheryl Sandberg</strong>: And there are humans making the decisions on the rules, and I think at every stage there’s gonna have to be some technology and some human review.</p>
<p id="5tVCie"><strong>Kara Swisher: Let’s go back to how it happened, because I don’t think that was the answer in the congressional hearing. They seemed riveted by your terms of service and what your actual business model was. That was an impressive display of intelligence by our politicians. And it’s so funny </strong><strong>...</strong></p>
<p id="zWRhji"><strong>Sheryl Sandberg</strong>: You should run, you could be in Congress, and then you could ...</p>
<p id="gUBwcw"><strong>Kara Swisher: We’ll get into that in a second. When they were asking these questions, one of the things they didn’t ask is exactly what happened</strong><strong>.</strong><strong> Like, exactly how did this occur? And I’m really interested in</strong><strong> —</strong><strong> and one of the things Mark said a lot was</strong><strong> —</strong><strong> we take a broader responsibility now.</strong></p>
<p id="WkXENz"><strong>Why didn’t you take a broader responsibility for what is in the culture that creates that</strong><strong>?</strong><strong> </strong><strong>A</strong><strong>nd I don’t think it’s malevolence. I don’t, I’m not accusing you of that. I think, what is it that’s part of the Facebook culture that didn’t see this coming, in terms</strong><strong> </strong><strong>...</strong><strong> </strong><strong>and walk through Cambridge Analytica first.</strong></p>
<p id="uhvbgO"><strong>Mike Schroepfer</strong>: Do you want to go through the timeline, do you want to talk about ...</p>
<p id="YRwPch"><strong>Kara Swisher: Timeline, yes. So let’s talk about the actual time, because I have heard some versions of it but I remember being at the 2008 event where you opened on the platform. You needed to bring people in, you needed subscribers, you created this open thing, you handed out the data. What did you think was gonna, what happened there? So walk through that</strong><strong>.</strong></p>
<p id="ds5m5Z"><strong>Mike Schroepfer</strong>: Can you go all the way back to 2007, 2008 when the platform first launched. The idea was, people are using the service Facebook, they want to take their data with them to a third-party app, to make it social, to enhance it. Over the years, there’s a lot of pressure to say, don’t be a walled garden, let people take their data and easily bring it to another application.</p>
<p id="M1FKIn"><strong>Kara Swisher: You also needed to give it to them to come on the platform, you needed some sort of candy to attract all these app developers in, correct? Or something to get them to use </strong><strong>...</strong></p>
<p id="x4b4yK"><strong>Mike Schroepfer</strong>: Well, they wanted to build these, great. I mean, many of these are name-brand companies now and they, like many people, thought that apps are better with your friends and with the social data. In the early years, it was a lot, the idea — and I think this gets back to your optimism versus pessimism for these things. I think for the entrepreneurs in the audience, you’ll know that as an entrepreneur, you get told “no” and “your idea’s stupid” nine times out of 10 during the day. You have to some degree take it as an optimistic attitude to bring something new into the world, whether it’s a new product, a new company or a new future in a product. </p>
<p id="Omtlc0">So I think you start there when you’re building these things, and for the platform, what we spent a lot of time on was, “Look, people are smart. They’re ultimately using a third-party app, so whatever Facebook data they take, they’re also putting new data into that app.” So they have to trust that app and understand what it is. Our job is to kind of give them the notice on what’s happening. We built these ... I remember spending iteration after iteration on how exactly do we design this dialogue to make it super clear exactly what data you’re getting from Facebook and bringing to the third-party app, because if the customer knows what’s happening, they can make informed decisions.</p>
<p id="xsQYb4">And that was really the focus of the platform in the early years. As the platform got bigger and things scaled, this is when in 2014 we said, “Look, we want to kind of restrict access to these things. We want to do more proactive review of applications.” So all new apps had to get reviewed by our staff, and to get to your specific question about the timeline that happened here, this app was built around that time frame, and then we heard in December of 2015 via media reports that an app developer had basically gotten Facebook data once people installed it, and then resold it to a third party.</p>
<p id="y6Czuf"><strong>Kara Swisher: Why via media reports? You’re super smart people, I’m pretty certain. So where does it break down there, that you didn’t know what was going on?</strong></p>
<p id="IUANVr"><strong>Mike Schroepfer</strong>: The problem is we can’t observe the actual data transfer that happens there. I don’t actually even know physically how the data went from one to the other. There isn’t a channel that we have some sort of control over. Again, as a consumer you’re ultimately trusting a third party with your data. Whatever data you brought from Facebook, whatever data, you’re taking these personality quizzes and you’re inputting new data in there. That’s a relationship with that developer that you have to trust that they’ll be responsible with the data they’re using. </p>
<p id="OHtRcS">Whether it’s on Facebook or some map you downloaded from an app store, so we didn’t observe that until we heard about it through third-party reports. That’s when the events went into motion where we ...</p>
<p id="wfRhsi"><strong>Kara Swisher: That was 2015. </strong></p>
<p id="eHw9m2"><strong>Mike Schroepfer</strong>: Yeah, and the first thing, we immediately disabled the app from the platform so it couldn’t have further access. The goal was to figure out who had this data, how do we make sure that that data is deleted and is safe, and that’s what kind of happened in that time frame. </p>
<p id="MU2icL">And the reason this has come up this year again in 2018 is subsequent reports that despite agreements to the fact that they had deleted the data, they may not have. That’s when we resurfaced and looked through all of these things. We had made many platform changes, as I said, in 2014, which made a lot of this not possible because you could no longer pull friends’ data. </p>
<p id="t8zVtZ">That’s when we’ve really just taken this much sharper, more pessimistic view on everything in the company. It’s the biggest cultural shift I’ve ever seen in the 10 years I’ve been there, which is just top to bottom. Not just what are all the great things that can happen, but what are all the ways people can abuse this? What are all the theoretical ways this can happen? How do we make product changes? How do we make policy changes? How do we invest our resources differently, both in security and content review, and in product development?</p>
<p id="71a1sC">And that’s like a process that’s ongoing, right? We’ve been working on this since then.</p>
<p id="Weiiuj"><strong>Peter Kafka: You grew </strong><strong>at</strong><strong> an enormous rate, not by accident. You’ve created systems to help you grow. There’s growth hacking as a term. Looking back, do you wish that you had grown more slowly, or reined in growth, or been more thoughtful at the ways you’re growing and how much </strong><strong>of</strong><strong> that is attributed to the problems you have today?</strong></p>
<p id="mRpTFd"><strong>Mike Schroepfer</strong>: I do, sorry, I don’t.</p>
<p id="otliNB"><strong>Sheryl Sandberg</strong>: No, go ahead.</p>
<p id="cbMAhu"><strong>Kara Swisher: Well</strong><strong>,</strong><strong> let’s do Sheryl first. Go ahead, Sheryl.</strong></p>
<p id="GxXS06"><strong>Sheryl Sandberg</strong>: Looking back, we definitely wish we had put more controls in place. We got legal certification that Cambridge Analytica didn’t have the data, we didn’t audit them, and now we’re waiting for the government. We still want to, we’re going to. We wish we had taken more firm steps.</p>
<p id="2gpkCo"><strong>Kara Swisher: You had those media reports, why didn’t you?</strong></p>
<p id="vNnSKw"><strong>Sheryl Sandberg</strong>: We did go back and got ...</p>
<p id="3FJaAH"><strong>Kara Swisher: They said they didn’t, but then </strong><strong>...</strong></p>
<p id="fVWDdg"><strong>Sheryl Sandberg</strong>: They legally certified they had deleted the data. We did not go and audit.</p>
<p id="8AXcOi"><strong>Kara Swisher: Why not?</strong></p>
<p id="cT9k3c"><strong>Sheryl Sandberg</strong>: Which is what we’re doing now. It always looks obvious in the hindsight, we absolutely should have. But to your question, I think we can grow and we can continue to grow but we can also have controls in place. Those exist in long things, you know ...</p>
<p id="uE0pPf"><strong>Peter Kafka: Right, now that you’re </strong><strong>two</strong><strong> billion people, Mark says we’re going to slow down and we’re going to be more thoughtful about it</strong><strong>.</strong><strong> </strong><strong>I</strong><strong>f you’re cynical, you might suggest it’s easier to say this now than it was </strong><strong>five</strong><strong> or 10 years ago.</strong></p>
<p id="pZdH4K"><strong>Kara Swisher: Absolutely.</strong></p>
<p id="GY8m8H"><strong>Sheryl Sandberg</strong>: Well, we always had some controls in place but I don’t think they were enough. So let’s talk about data because that’s what we were talking about. We always had ways for people to control your data. You always could go in and choose to share your data with apps, and you could always delete. Always there. What did we do now? We put it at the top of everyone’s news feed, a very easy way. Here’s all the apps you’ve connected to, here’s how you easily delete them. So I think we’re really building on what we did before. The reason we were able to do that so quickly is all of those controls existed. We already had all of those controls, they were just harder to find for people and we made them easier.</p>
<p id="ADfxS3">So we are building on some of the controls we had before as we address some of these, and in some of the areas, we’re going much further. It’s also the case that threats change. Let’s talk about Herman, let’s talk about the election. If you go back to 2016 and you think about what people were worried about in terms of nation, states or election security, it was largely spamming, phishing, hacking. That’s what people were worried about. A lot of the Sony emails, a lot of people hacking into systems. We were on a really good tech team. We were very protective on that, and we didn’t have problems a lot of other platforms had. We didn’t see coming — and I don’t think we were alone in this, but it’s on us — we didn’t see coming a different kind of more insidious threat.</p>
<p id="mb7C9l">But once we saw it, we did publish a white paper. We found the ads, and now we look forward to the next elections and we understand that threat, and we’re taking very strong steps.</p>
<p id="NHaPpD"><strong>Kara Swisher: But you all did know that you were gonna make a lot of money. Well, we’ll get to all that election spending in a minute</strong><strong>.</strong></p>
<p id="woXvVK"><strong>Sheryl Sandberg</strong>: Yeah. You want to ...</p>
<p id="omMxf7"><strong>Kara Swisher: Go ahead.</strong></p>
<p id="ymSuAO"><strong>Sheryl Sandberg</strong>: On elections, this is important. So, we realized we didn’t see the new threat coming. We were focused on the old threat, and now we understand that this is the kind of threat we have. We’ve taken very aggressive steps. There are elections going on all over the world as we speak, and also coming up to the 2018. </p>
<p id="KUMiK4">So fake accounts, we’ve publicly reported this. We’ve pulled down 1.3 billion in the last six months. Importantly, we pulled down fake accounts in Alabama, a Macedonian troll farm that we found that was trying to spread fake information in that election. We worked with the German government, pulled down fake accounts there, 30,000 in France that could’ve effected theirs, so we are showing that we are able to meet those threats. Probably not perfectly. </p>
<p id="FRvc5k">You know, we can talk as much as you want about fake news, the really aggressive steps we’re taking there. We’re now set up with third-party fact-checkers with the AP in 50 states looking at local and state news coming into our midterm election, and ads transparency, which — I know Senator Warner’s here. In that area, we’re not waiting for legislation. He has a bill out there, we’re supportive of that bill, but we built the tool that that bill requires, and it’s live, so anyone can see any of the political and issue ads.</p>
<p id="71YU3p">So the issue for us is we were slow. We are learning from our mistakes and taking action. We’re also pretty humble about this. We understand that now we’re protecting against this threat, but we have to have a different mindset of trying to see around the corner and the next threat.</p>
<p id="VqDayN"><strong>Peter Kafka: Were you surprised when you read the Mueller indictment and saw how few people they committed to that effort, how little money th</strong><strong>ey</strong><strong> had to spend to sort of fill Facebook with spam?</strong></p>
<p id="QrnfgC"><strong>Kara Swisher: It wasn’t hard to do.</strong></p>
<p id="BVTNmy"><strong>Peter Kafka: It was not a giant team.</strong></p>
<p id="2Mer6t"><strong>Sheryl Sandberg</strong>: I mean, even the IRA ads, it was a small amount of money that went far, and that is why we have to take such strong steps. You know, in going back, a lot of the source of these things, if you think about fake news or elections, are fake accounts. So fake accounts are a big part of this thing here. </p>
<p id="KU9b3I">The other thing is really disrupting the economic incentives. A lot of fake news, a lot of it is politically motivated, but it’s also economically motivated. People want to write outlandish headlines so that they can get clicks so that they can make money, so we’ve taken very aggressive steps to go after the economic incentives, kick people out of ad networks, make sure they can’t make money. In all of this, we’re going to have to solve today’s problems but also see ahead to the new ones. I think one of the most important things we’re doing are around transparency.</p>
<p id="zkKe7E"><strong>Kara Swisher: For users?</strong></p>
<p id="KqvPi4"><strong>Sheryl Sandberg</strong>: Transparency for people. Right now, it’s actually pretty amazing if you go in and look at it. You can go in and see any ad running that has political or issue content, directed at anyone. The problem before is that if you weren’t in the targeting group — you know, if I were targeting Peter — you couldn’t see those ads, but now it’s open and transparent for everyone. I think that is going to help people surface problems. I think people are going to find more things, and that will help us learn, pull them down and build the tools to prevent those in a more automated way.</p>
<p id="vjtCO7"><strong>Kara Swisher: So one of the things that you’re talking before, it</strong><strong>’s</strong><strong> like there’s this before and after. Like, “Oh, no. We got woke over here at Facebook</strong><strong>”</strong><strong> o</strong><strong>r</strong><strong> something.</strong></p>
<p id="ai0si2"><strong>Sheryl Sandberg</strong>: I think there is a before and after ...</p>
<p id="HYSNTN"><strong>Kara Swisher: Yeah, all right. It does.</strong></p>
<p id="7IIjVC"><strong>Sheryl Sandberg</strong>: ... and I think that’s appropriate.</p>
<p id="S4d1UU"><strong>Kara Swisher: Right. But many people now have hostility toward Facebook and toward the tech industry because of it. Yeah, obviously people, fair or not, blame Facebook for the election, or its part in it. I think its part in it and other things. What’s the, from your perspective, the overall impact on the tech industry and the country at large? What responsibility do you actually feel for what happened?</strong></p>
<p id="5wO9KT"><strong>Sheryl Sandberg</strong>: For what happened in the election or just in general? In the election?</p>
<p id="2SgzLK"><strong>Kara Swisher: Both.</strong></p>
<p id="L445q3"><strong>Sheryl Sandberg</strong>: Look, the story of this election is going to be studied for a long time, and I don’t think any of us have perfect answers. We’re committed to helping to find those answers. I think we’re unique. We’ve set up an election commission. We’re giving them access to data, third parties. They are researchers. They are going to report publicly on what they find, and we’re cooperating deeply with that. I don’t think we know ...</p>
<p id="npw6un"><strong>Kara Swisher: What about ...</strong></p>
<p id="3bpxFs"><strong>Mike Schroepfer</strong>: I mean, I think at the heart of this is you’re asking a question about responsibility. People have responsibility for impact of the tools they build, not just the existence of those tools.</p>
<p id="lOvFpy"><strong>Kara Swisher: Yes. That’s the drum I like to bang.</strong></p>
<p id="BBdCQK"><strong>Mike Schroepfer</strong>: Right, and I think that the days in tech of just, “Hey, I built these tools. I’m not responsible for what happens with them,” are sort of over. You really need to have a deep responsibility to think about not just the good that these tools can have, but the bad, and what are all the things we can do to guard against it, and is the weight of these tools more in the positive than the negative. I think that’s, again, the big cultural shift that I think a lot of people in tech have to make to really think about this in advance, not just after the thing was created.</p>
<p id="m0VOAw"><strong>Sheryl Sandberg</strong>: And I think tech has long been, as an industry, pretty insular, and I think that’s changing, too.</p>
<p id="kiAFsp"><strong>Kara Swisher: Really? I know.</strong></p>
<p id="f5F4Ti"><strong>Sheryl Sandberg</strong>: Yeah.</p>
<p id="cBjBo6"><strong>Kara Swisher: No, I think that it’s true.</strong></p>
<p id="SV8CeJ"><strong>Sheryl Sandberg</strong>: Yes, so that’s changing, too, so what’s going on right now with elections, we’re working much more closely. Like some of the stuff we found in Germany, we found with the German government. We worked with the French government. We’re working with local authorities around the world. I think, again, opening up our community standards, opening up to be more transparent, that enables people to find things, and everyone to work together, because a lot of these threats, we definitely take responsibility, but bad actors will go from platform to platform, and so the more we can cooperate, and our industry is doing a better and better job at that. When we find a bad actor, we are cooperating on that and some of the legal changes have allowed so that we can pull them down and so can everyone else. I think that’s important.</p>
<p id="cHWdos"><strong>Peter Kafka: Very much in the hearings, and how comically inept some of those questions seem</strong><strong>ed</strong><strong> to be</strong><strong>.</strong></p>
<p id="3xJtzv"><strong>Sheryl Sandberg</strong>: She said that ...</p>
<p id="CYfPZX"><strong>Peter Kafka: Yeah. I know.</strong></p>
<p id="etLDSQ"><strong>Sheryl Sandberg</strong>: But she’ll run, and then she’ll be up there, and then she’ll understand.</p>
<p id="m7W4XZ"><strong>Peter Kafka: But even people who were knowledgeable, I mean, if you ask two different people what’s wrong with Facebook, they’re going to give you different answers. Some are upset about the Russian ads and some are upset about Diamond and Silk. Is that the names? Did I get it right?</strong></p>
<p id="DQRiY1"><strong>Sheryl Sandberg</strong>: Uh-huh. </p>
<p id="6lvFJy"><strong>Kara Swisher: Yeah.</strong></p>
<p id="VnGe7r"><strong>Peter Kafka: Do you feel like </strong><strong>the </strong><strong>U</strong><strong>.</strong><strong>S</strong><strong>.</strong><strong> government and governments in general are really ready to engage in a technical discussion about how to fix specific problems with Facebook or other parts of the tech business?</strong></p>
<p id="eLYyil"><strong>Kara Swisher: Yeah, because I mean, a lot of people are like, “Oh, Mark did well.” But largely because he didn’t sweat, apparently, but I mean, it was ridiculous</strong><strong>ly</strong><strong> low bar. Everyone was, “Mark did well.” I was like, “No, they did badly. Sure, he did better than they did.” Which was not very hard, but that’s right. Are they able to understand and legislate well, because some of the calls are for breaking you up, for example?</strong></p>
<p id="GL0ZYw"><strong>Sheryl Sandberg</strong>: So the question of regulation is a real one and deep one. It’s not a question of people say, “Should Facebook be regulated? Should other companies, our industry, be regulated?” We are regulated. We’re regulated on privacy. We’re all regulated under GDPR, which Evan talked about.</p>
<p id="70QOus"><strong>Kara Swisher: Not much. Compared to other industries. I think most</strong><strong> ...</strong></p>
<p id="9oqprr"><strong>Sheryl Sandberg</strong>: And it’s not really a question of if there’s more regulation, the question is what regulation. We’re working closely with regulators around the world. Evan made a really important point that we feel deeply, too, which is regulation often, actually, entrenches big companies.</p>
<p id="UDLAoh"><strong>Kara Swisher: Yeah.</strong></p>
<p id="nIBwlY"><strong>Sheryl Sandberg</strong>: So GDPR, I think we’ve done a very good job complying with. We’ve put up expensive to build systems and tools and controls for people.</p>
<p id="OVrolJ"><strong>Kara Swisher: You have a lot of lawyers, too. Yeah.</strong></p>
<p id="5hYCvH"><strong>Sheryl Sandberg</strong>: Yeah, but if you look at what we built, if we were a startup 10 years ago, we wouldn’t be able to build all those settings and get them out, and we’re making those available to the world. So, we’re supportive of the right regulation that supports innovation that is based on an understanding of the technology, and that is good for people, and there are some of those examples.</p>
<p id="OUOWGH"><strong>Peter Kafka: But we spent 20 minutes talking about what a complex system you’ve built and how difficult it was for you to figure out the problems and how you’re going through it now. I mean, do you really imagine this is something where a bureaucrat or legislators are going to be able to sort of keep up to date with what’s going on with your various platforms?</strong></p>
<p id="2I11z5"><strong>Sheryl Sandberg</strong>: I mean, look. It’s hard. There are examples. There are funny examples from history. In the United Kingdom, when the car was invented, they passed a law saying that in order to operate a motor vehicle, you needed two people. One behind the wheel and one walking in front of the car with a red flag.</p>
<p id="3JpVwp"><strong>Peter Kafka: That’s pretty good.</strong></p>
<p id="YzuxP0"><strong>Sheryl Sandberg</strong>: That will absolutely save lives, but you don’t get the car. I mean, I’ll ask the audience a question. Who here answers a call if there’s no caller ID? If you don’t see the number? Raise your hand if you will answer that call.</p>
<p id="3FeZ0b">A couple of you. I’m going to call you. But most people won’t. When caller ID first came out, the state of California tried to pass a law against it because it was considered a violation of the caller’s privacy that you would know where that is. So, there are laws that are clearly either contemplated or passed that are bad ideas. There are also laws that are good ideas. I think people feel pretty good about GDPR and the controls it’s given people, and so it’s our job to work closely with regulators and legislators all over the world so that if there’s more regulation, and when there’s more regulation, it’s the right regulation.</p>
<p id="ks6xYc"><strong>Kara Swisher: So, let me ask that, Schrep first. Should Facebook be broken up? Google and Facebook, should they be broken up?</strong></p>
<p id="6kCfs7"><strong>Mike Schroepfer</strong>: Look, I think there’s two things. One, is there competition in the market, and if you look at many of the products we build, if you want to share a video, YouTube’s a better place to do it. If you want to have a public conversation, Twitter’s a great place to do it. If you want to send a message, there’s Snapchat, there’s WeChat, there’s LINE, there’s any number of things out there that you can use, iMessage, just to send those messages, so consumers are smart. They use the products that they want. We’re a very small part of the overall ads business, so I think we’re honest when say we feel like we feel competition all the time.</p>
<p id="zwnII5">The other thing we are able to do in tackling a lot of these issues, they are the same across the platforms. We’re able to take the same technology we’re using in Facebook to deal with objectionable content, hate speech and bullying and immediately apply it to Instagram at a massive scale, and I think that’s a really big benefit for where we are today. </p>
<p id="36GJEY"><strong>Kara Swisher: So your answer is no?</strong></p>
<p id="HRRPgg"><strong>Mike Schroepfer</strong>: No.</p>
<p id="8cmyME"><strong>Kara Swisher: Okay. What about you?</strong></p>
<p id="x7uVbT"><strong>Sheryl Sandberg</strong>: No. For all the same reasons.</p>
<p id="iGkmbt"><strong>Kara Swisher: Yeah.</strong></p>
<p id="Bf4gwI"><strong>Sheryl Sandberg</strong>: You want me to say more?</p>
<p id="66ngR5"><strong>Kara Swisher: Yes, please.</strong></p>
<p id="rNJEEV"><strong>Sheryl Sandberg</strong>: Yeah, I mean, look. This is a question fundamentally about competition and what are the benefits to consumers of being together. I think it’s what Schrep said. I’ll share a specific example. If you were doing child-exploitative content, WhatsApp’s encrypted, but we know who you are from Facebook. We can take your account down on WhatsApp, too. So there are real benefits, and I think the real question is do consumers have a choice? I think along every product we have, there is a lot of choice out there.</p>
<p id="jh39Cc"><strong>Peter Kafka: Do you think you’ll be allowed to buy another WhatsApp or another Oculus or do major acquisitions like that now in the way you’ve been able to in the past? Microsoft essentially was really restricted in terms of what they can buy. Google</strong><strong>,</strong><strong> there’s much more eyes on them because of their size. It seems like you guys are going to be there now.</strong></p>
<p id="u9zDZz"><strong>Sheryl Sandberg</strong>: Well, certainly as you get bigger, there’s more scrutiny of acquisitions, and there should be. So, we’ll see. It really depends what it is. If it was in something that wasn’t core to what we were doing in a new area, like Oculus was, I think it would probably be allowed.</p>
<p id="QxLrqO"><strong>Peter Kafka: How are you getting along with your fellow tech giants? You’ve been competing with Google for a long time. Tim Cook recently told Kara some things that in the real world would be considered very mild, sort of dinner conversation, but in Silicon Valley apparently it was considered a rough attack. How are you getting along with Apple and Google?</strong></p>
<p id="LIx4qi"><strong>Kara Swisher: Yeah. What did you think of what he said?</strong></p>
<p id="T2uNLw"><strong>Peter Kafka: Or that one?</strong></p>
<p id="0mI3UC"><strong>Sheryl Sandberg</strong>: Yeah, I mean, look, the conversation that you had with Tim and the stuff Apple’s saying is important to them. Right? They have a product they feel strongly about. Won’t shock you to know that Mark and I strongly disagree with their characterization of our product. We’re proud of the business model we built. We have an ad-supported business that allows people all around the world to use a product for free, and if you’re trying to connect the whole world, that’s pretty important. So we respectfully disagree.</p>
<p id="1puO7R"><strong>Kara Swisher: Okay. What about you? </strong></p>
<p id="ObFrc9"><strong>Mike Schroepfer</strong>: Same. I mean, I think that the thing that I wish we could spend more time on is the substance of these issues, because there’s times when you can get nice clippy soundbites and sort of kick someone when it’s popular and they’re down. That’s us right now. I get it. We, in many ways, deserve it. </p>
<p id="xQw501"><strong>Kara Swisher: He did go on and have a very cogent discussion about it, but go ahead.</strong></p>
<p id="jJeThy"><strong>Mike Schroepfer</strong>: But I think there’s lots of questions on trade-offs, so how do you build a product that the whole world can use, like what are the different business models that work? Can every consumer afford a $10-a-month subscription or a $700 device?</p>
<p id="5Y05vH"><strong>Kara Swisher: Right.</strong></p>
<p id="x45aXF"><strong>Mike Schroepfer</strong>: And for billions of people around the world, like, no, not yet. So I think that there are trade-offs there. And in all of these things ... And I think, as an engineer, what frustrates me is there are deep issues in a lot of these things and mistakes that we’ve made and things I really wish we had done differently, but in many cases, you face these really hard trade-offs, which is you can have more of something and then you’re going to have less of something else. I can make you more secure. We’re going to make some mistakes and take down some things that we shouldn’t have taken down. That is a balance in all of this.</p>
<p id="bfvIHG"><strong>Peter Kafka: Are you guys thinking about an alternate Facebook that’s ad free and/or paid? Is that a product that you’re working on?</strong></p>
<p id="C2QdU3"><strong>Mike Schroepfer</strong>: I’m sorry?</p>
<p id="otuUAD"><strong>Peter Kafka: Are you working on a paid product?</strong></p>
<p id="JGb9tJ"><strong>Sheryl Sandberg</strong>: I mean, we’ve looked at subscriptions, and we’ll continue to look at them, but we’re committed to continuing to provide a free service, because it’s core to the mission of what we do.</p>
<p id="2jiRA5"><strong>Kara Swisher: But how far are you along on a paid service?</strong></p>
<p id="pYzv47"><strong>Sheryl Sandberg</strong>: We’re looking. We’ve always looked. But really the heart of the product is a free service, and again, we think that’s really important.</p>
<p id="o6TX6E"><strong>Kara Swisher: I’ll try you. How far are you along on a paid service? I don’t like that answer.</strong></p>
<p id="ySi3x3"><strong>Mike Schroepfer</strong>: I’m not trying to be one of the people that’s fired over all of this tonight.</p>
<p id="z8k5XW"><strong>Kara Swisher: Well, no one’s getting fired, apparently.</strong></p>
<p id="A8PIYH"><strong>Peter Kafka: I want to ask about</strong><strong> ...</strong></p>
<p id="kcDveJ"><strong>Sheryl Sandberg</strong>: That is not ... That is not what we said.</p>
<p id="3VI7hw"><strong>Peter Kafka: You guys do sell some stuff. Everyone in the audience has an Oculus Go. It’s 200 bucks, right?</strong></p>
<p id="qpTmti"><strong>Sheryl Sandberg</strong>: Yeah.</p>
<p id="pAcVAd"><strong>Mike Schroepfer</strong>: Yeah.</p>
<p id="IccFxL"><strong>Peter Kafka: Explain again why you’re in the hardware business, and that’s </strong><strong>not </strong><strong>your first hardware product.</strong></p>
<p id="bp4tmC"><strong>Kara Swisher: It’s because they’re really</strong><strong> ...</strong></p>
<p id="uycBVD"><strong>Sheryl Sandberg</strong>: Yeah, you really like it.</p>
<p id="iS3QEo"><strong>Kara Swisher: They’re super sorry about the Russians, so everybody gets an Oculus Go. No, I’m teasing. Thank you.</strong></p>
<p id="OlTIkj"><strong>Audience member</strong>: [Yay!]</p>
<p id="qoaLYt"><strong>Sheryl Sandberg</strong>: Thank you.</p>
<p id="BeTL2H"><strong>Kara Swisher: Yes, let’s talk about VR.</strong></p>
<p id="oRxjB4"><strong>Sheryl Sandberg</strong>: Did you hear what he said? Accessible VR.</p>
<p id="bOEpCS"><strong>Mike Schroepfer</strong>: Accessible VR. Can we bring him up onstage? </p>
<p id="h1qWRi"><strong>Peter Kafka: Yeah, yeah, yeah, yeah.</strong></p>
<p id="lbpaHA"><strong>Mike Schroepfer</strong>: He’s doing a better job on it.</p>
<p id="oz9w0D"><strong>Sheryl Sandberg</strong>: He likes it.</p>
<p id="F67RLT"><strong>Kara Swisher: But talk about VR. This is like because it’s</strong><strong> ...</strong></p>
<p id="i6kZ24"><strong>Peter Kafka: I want to ask two questions. One, why are you making your own hardware and selling it</strong><strong>?</strong><strong> </strong><strong>A</strong><strong>nd two, why are you in VR? Again, Tim Cook says you should be in AR</strong><strong>,</strong><strong> not VR.</strong></p>
<p id="RKbSUn"><strong>Mike Schroepfer</strong>: Okay, great questions. We’ll do the first one first, which is if you see the Oculus Go, it’s a $199 product that you pull out of your bag and you put on your head and you’re in VR. No headphones, it’s got built-in speakers. It’s at a price point that many people can actually afford. Doesn’t require a PC or your phone to dock it or anything else like that. There’s a tremendous amount of engineering that goes into making that product sellable at that price. I know when we set that target, the team was like, “You can’t do it.” Right. So the only way we know how to do it is by doing all the work ourselves so that we can make the right trade-off needed to sell this product and build the ecosystem around it.</p>
<p id="HXzHxL">Towards the bigger question of like hey, why VR at all, it’s the only technology I can think of that’s going to build the closest thing we have to a teleporter or transporter from Star Trek, which is, “I want to be somewhere else or with someone else very far away, and I can’t afford or don’t have the time to take the long flight to get there.” And VR ... There’s an app that’s coming out that will take you to the Natural History Museum in London. You can actually pick up specimens from the drawer that are so sensitive the scientists themselves can’t touch them because they’ll break them. They’re fossilized. You can make them different sizes. You can see what it’s like to see a pterodactyl in flight, right, and that’s an experience that we can bring to hundreds of millions or billions of people and children all over the world through VR. I don’t know of a technology that can do that.</p>
<p id="ux0oMC"><strong>Peter Kafka</strong><strong>: And you think this is a mass product — because it has not taken off yet — and you think that’s just a function of expense and difficulty in getting the stuff up and running?</strong></p>
<p id="v5LtXq"><strong>Mike Schroepfer</strong>: I think this is an early, early market and an early product, and so we’re pushing the market forward here. I think, as someone in the audience here said is, this device is the first one that didn’t involve a bunch of asterisks on the end, which is like, “Then do this, then do this,” and by then you’re like, “I’m done. I got something else to do.” This is just put it on, you are in Jurassic World looking at dinosaurs. You’re in the Natural History Museum. You’re seeing an NBA game courtside. Right? These are things that you can’t scale out via any other technology in this way.</p>
<p id="Hst6dP"><strong>Peter Kafka: It’s a different experience for guys, right, to like get in early on a market and then to buy it, spend a lot of money on a company where the market doesn’t exist, as opposed to WhatsApp, Instagram. You built these things. They were wid</strong><strong>e</strong><strong>ly used by lots and lots of people. You made it big early about</strong><strong> ...</strong></p>
<p id="NgtaIY"><strong>Mike Schroepfer</strong>: I mean, remember, I helped with onboarding Instagram when it was 10 million users when we bought it. It’s grown quite a bit since then. </p>
<p id="3EPCPU"><strong>Sheryl Sandberg</strong>: It was a good buy.</p>
<p id="fAqYJS"><strong>Mike Schroepfer</strong>: But you’re right. I think it’s a new market, there’s a lot of new technology. As amazing as the Go is, we have multi years of sort of R&D in the labs that we’re ready to bring to subsequent products that can kind of take this even further. So, when you look at a space and you say, “If I can build the product, I know people will love it.” Then you ask the question, “Well, can we build it?” I’m pretty sure we can in VR. </p>
<p id="Ax93Sd">When you go to AR, everyone’s like, “Yeah, it’d be amazing to have these super awesome glasses that give me this full 3-D world,” and then you actually go and you look at the physics of it and battery life and all of the rest of it and say, “There’s a bunch of stuff that doesn’t exist in the world yet that we need to go invent to make that happen.” So we’re working on that too, but I don’t think that’s coming to market in 2019.</p>
<p id="reeSOJ"><strong>Kara Swisher: And Sheryl, was that a reaction? I mean, you all tried the phone and others succeeded</strong><strong>,</strong><strong> at Google and Apple particularly. Is it a reaction to having to be in the hardware market or do you ever imagine Facebook going back into phones?</strong></p>
<p id="Xu83nh"><strong>Sheryl Sandberg</strong>: I don’t think we’re talking about going back into phones. I think this is an exciting new area, it’s possibly a new platform, it can be a very social experience, and we’re excited about it.</p>
<p id="4mqvwb"><strong>Kara Swisher: All right, last question and then we’ll get to ... How do you think this has affected your business for the long term this past year? And you’re not as public as you are, Sheryl; how has it affected your image?</strong></p>
<p id="yLKNsv"><strong>Sheryl Sandberg</strong>: I don’t think any of our individual images are the point. The point is the responsibility we bear for the platform and protecting people going forward.</p>
<p id="WtHXC3">You know, in terms of the business, we don’t make decisions for the short run. We don’t have to and we shouldn’t; I don’t think any company should have to. But we have founder control and protections in place, and we’re very clear that we’re gonna make the investments we need to make. I don’t think there’s a trade-off between a business over any reasonable timeframe.</p>
<p id="tSmXPU"><strong>Kara Swisher: Has it been effective ... You’re the one that interfaces with advertisers the most. </strong></p>
<p id="ypZuJE"><strong>Sheryl Sandberg</strong>: Yeah, and we’ve had a handful of advertisers pull, some have already come back. I don’t think it’s effected our short-term business. But it effects ...</p>
<p id="HYSuQw"><strong>Peter Kafka: What about your behavior or engagement? You measure how they feel about it.</strong></p>
<p id="brOBfZ"><strong>Sheryl Sandberg</strong>: Yeah. I mean, we’ve looked, there’s certainly an impact, but I don’t think it’s detrimental right now to the current business. But it matters, and we’re investing because we want to do the right thing. We’ve always wanted to do the right thing. I think we were very taken with the social experiences and now we’re very taken with the need to provide safety, security, integrity on our platform.</p>
<p id="iSH62X">We also — again — approach this understanding that this is gonna be an arms race. This is gonna be an arms race; we’re gonna do some things, someone else is gonna do something, we’re gonna have to do better. And there are risks ahead of us we have not yet seen, and so we want to make sure we’re working closely with other companies, working closely with government, closely with civil society around the world so that we deeply understand what’s happening on our platform. </p>
<p id="jFrY2S">We also really want to protect the good. I mentioned this. I was in Houston, I met this guy, he owned a taco store. When Hurricane Harvey happened, he had lots of food but no ability to bring it to anyone. He met a guy on Facebook who owned a taco truck; they were competitors, they didn’t know each other. He put his food in the truck and they used Facebook to see where people are checking in and drove around feeding them. That doesn’t mean that every day on Facebook something happens, and I don’t mean that to be Pollyannish, but it matters. And we care. We care about preventing that. Now those people were all able to be fed because they had shared publicly on Facebook where they are, and so people have to trust us, that they can share not just in an emergency but in a daily place during an election, during a difficult time for them personally or a difficult time for a country. People have to trust us.</p>
<p id="Rq3bUA">And so the responsibility we take to earn people’s trust and take real action to prevent the harm while protecting the good, we’re about as serious as we know how to be about it.</p>
<p id="S9uvCo"><strong>Kara Swisher</strong><strong>: I’m gonna ask this one more time: How has it affected you? I know it’s not about you personally, but you know, Evan just talked about the difficult of doing Wall Street stuff. I want you each to say, if you can, if you have human emotions ... No, I’m teasing you. </strong></p>
<p id="8Y7v7k"><strong>Mike Schroepfer</strong>: I am programmed with human emotions.</p>
<p id="cjegbq"><strong>Sheryl Sandberg</strong>:<strong> </strong>Kara, Kara. </p>
<p id="GJkeqy"><strong>Kara Swisher: No, I’m trying to get you to say it. Like what</strong><strong> ...</strong></p>
<p id="TK1yiY"><strong>Sheryl Sandberg</strong>: Have you read my books?</p>
<p id="O7f55c"><strong>Kara Swisher: Yes, I have. Yes, yep. But how has it affected you?</strong></p>
<p id="BEY90b"><strong>Sheryl Sandberg</strong>: You don’t get to say that to me.</p>
<p id="qYSMvM"><strong>Kara Swisher: What has it changed ... I know that. I know. I mean, what is</strong><strong> ...</strong></p>
<p id="KNC7pt"><strong>Mike Schroepfer</strong>: She can say it to me.</p>
<p id="xKdCgP"><strong>Kara Swisher: How has it affected you as an executive? How about as an executive, not as a ...</strong></p>
<p id="DD4FLh"><strong>Mike Schroepfer</strong>: I am programmed with human emotions. Very advanced sub-system, so ...</p>
<p id="s8mjzj"><strong>Kara Swisher: You worked together forever. Something broke here.</strong></p>
<p id="A8Lffg"><strong>Mike Schroepfer</strong>: Look, it’s never fun to ... We all read the news every day and see everyone, you know, mad at us and upset at us and hating on us, and as an individual, that’s not fun. But I don’t think anyone ... Like I don’t think we deserve any sympathy, because our job is to build this platform in a way that makes sense. And you know, the fact that there are some real issues there makes it harder because it’s not just BS you can wave away, but say like, man, terrible stuff happens on the platform all the time. And that’s the stuff that really gets you down, is this awful thing happened. My gosh, what are all the things I wish we could’ve done to fix it and what are all the things we’re gonna do now? And it’s sort of this ... It’s not fun to be in but it’s really important work. And so I don’t know if that helps, it’s ...</p>
<p id="3MQMWw"><strong>Kara Swisher: And you?</strong></p>
<p id="VfLadH"><strong>Sheryl Sandberg</strong>: It’s hard, but it should be. I mean, it’s hard because ...</p>
<p id="uAnaij"><strong>Kara Swisher: So what did you learn as an executive? </strong></p>
<p id="KtGfcr"><strong>Sheryl Sandberg</strong>: I learned that we needed to invest more in safety and security, I learned that we needed to try to find the new threat. And I sit here feeling pretty confident that we’re doing a much better job than we were before on the threats we know of today, and feeling a lot of, you know, need to figure out what the next threats are and knowing that we won’t do it alone and knowing that we need to work in a much more transparent and open way, because I think that’s the only way we’ll be able to find the next threat. But I take that really seriously.</p>
<p id="7pSHQz"><strong>Peter Kafka: Did you get the answer you want?</strong></p>
<p id="hYxDcZ"><strong>Kara Swisher: I think I did, yes.</strong></p>
<p id="uXivGN"><strong>Peter Kafka: Can we open up to the audience?</strong></p>
<p id="SvbAa0"><strong>Sheryl Sandberg</strong>: You know what I’m saying.</p>
<p id="ZGgtsM"><strong>Don Graham</strong><strong>: So I’m Don Graham of Graham Holdings. I want to identify myself as, for a long time and always, a friend of Facebook, but for years not an insider; I don’t know what’s going on inside.</strong></p>
<p id="CZhHdR"><strong>Kara Swisher: You were on the board.</strong></p>
<p id="lhLmKV"><strong>Don Graham</strong><strong>: I was, up to three years ago, Kara. </strong></p>
<p id="RnTvJg"><strong>Kara Swisher: Still.</strong></p>
<p id="oWw90M"><strong>Don Graham</strong><strong>: So I want to say, this is not the greatest compliment you’ll ever have, that the Kara/Peter questioning here is a much better version of the conversation that the senators and Mark had in Washington, D.C.</strong></p>
<p id="Yr2SWa"><strong>Kara Swisher: We’re gonna run. </strong></p>
<p id="JJGqrL"><strong>Don Graham</strong><strong>: You’ll get better compliments in your life. But there’s one thing that’s happened since that conversation, and that’s that Facebook has actually announced to us users a series of what sound like very difficult changes that you’ve made on the platform. And I wish that, since you’ve recapitulated the conversation with Mark, Sheryl would summarize the changes you’ve made and also tell this audience, some of whom I think are on Facebook, about product changes that you’re planning to make in the next few months to address the questions that Kara and Peter have asked.</strong></p>
<p id="Vsnlb6"><strong>Peter Kafka: Let’s do the news part. Tell us what’s coming.</strong></p>
<p id="r01KEY"><strong>Kara Swisher: And clear history.</strong></p>
<p id="18ZGnf"><strong>Mike Schroepfer</strong>: New news, you’re saying? </p>
<p id="QD8Elv"><strong>Don Graham</strong><strong>: Yeah.</strong></p>
<p id="xYTgW9"><strong>Mike Schroepfer</strong>: Still trying to get me fired tonight. </p>
<p id="Bkwhi6"><strong>Kara Swisher: You’re not getting fired.</strong></p>
<p id="6MYy3P"><strong>Mike Schroepfer</strong>: Thank you, Don, it’s a great question. So there’s initiatives in each of these categories, so I’ll try to just give a high level ... And I think the fundamental of it is, Sheryl said is, a whole heck of a lot more transparency on what’s happening and a whole heck of a lot more proactive taking these things down. So when you look at news, it’s down-ranking of clickbait-y articles, disrupting economic incentives. So if you’re being sent to a site that’s basically just this ad farm, we figure that out and down-rank that. That’s using third-party fact-checkers, as you mentioned, in all 50 states. You know, showing up for local elections. It’s “about this article,” so you can get more information on the providence of the article. Lots of things to help consumers better understand exactly what’s happening in the news. That’s just, you know, a small set of things overall in news.</p>
<p id="cqWMUY">In the broader platform, there’s been a number of places where we just looked at every nook and cranny of the platform and figured out where can we either just completely deprecate APIs or require more review in all cases so that we’re reviewing the applications not just for what they do but making sure that there’s sort of minimal use of data in all regards. We put a notice in front of everyone in Facebook about what apps they’ve used, so you can go in and see what apps you’ve used, delete them if you don’t want. If you haven’t used an app in 90 days, we’ll auto-disconnect it from your account so it can’t ... You know, you use an app and then three months later it pulls more data. That’s just stopped, that’s broken. </p>
<p id="gS9ZbP"><strong>Kara Swisher: All right, new. New.</strong></p>
<p id="o917rl"><strong>Peter Kafka: What’s the new stuff?</strong></p>
<p id="3TWNvs"><strong>Mike Schroepfer</strong>: That’s all stuff we launched in the last like two months.</p>
<p id="TuOC0i"><strong>Kara Swisher: All right, new</strong><strong> </strong><strong>...</strong></p>
<p id="lly2Kz"><strong>Sheryl Sandberg</strong>: Clear history. </p>
<p id="gsf1Yx"><strong>Peter Kafka: We’re not gonna get new ...</strong></p>
<p id="5H0FpQ"><strong>Mike Schroepfer</strong>: Clear history is the thing that we announced but haven’t yet shipped, right? Which is if I want to disconnect all Facebook data from my Facebook account, like kinda clearing my history in my browser or clearing my cookies, you can do that.</p>
<p id="F9d2QY"><strong>Peter Kafka: Can I extract my information from Facebook if I’m not a Facebook user? Can I go to you and say</strong><strong>,</strong><strong> </strong><strong>“W</strong><strong>hat do you know about me, and by the way, can I have that data back?</strong><strong>”</strong></p>
<p id="5ZrAWH"><strong>Mike Schroepfer</strong>: The challenge is we don’t have a personal profile for you on Facebook, so we don’t actually even know how to identify you as that data ...</p>
<p id="tTbUQ1"><strong>Peter Kafka: Are you guys thinking about how to solve that?</strong></p>
<p id="AizMOm"><strong>Mike Schroepfer</strong>: Well again, in many cases you have cookie data from a device or from a browser, but I don’t know which person this is associated with, and so it’s pretty hard to get that data back for an individual. </p>
<p id="qg9gvP">But there’s, you know, we can ... I don’t know if that fully answers the question. Is there anything else that I ...</p>
<p id="Mw0KQ9"><strong>Sheryl Sandberg</strong>: Yeah, well, clear history. We’re taking the GDPR settings and controls, they’re out in Europe obviously, but they’ll be coming to the rest of the world in the next number of months.</p>
<p id="lNKDa3">So along the way, things around data, things around news, things around elections, things around fake accounts and content. </p>
<p id="GErKch"><strong>Peter Kafka: Sam, don’t ask them to disclose new product stuff. </strong></p>
<p id="39RSvF"><strong>Sam Schwartz</strong><strong>: Hi, Sam Schwartz from Comcast. We talked a lot about transparency, especially around the source of ads, Russian bots, those kinds of things. But I’m really confused about the News Feed algorithm itself right on Facebook and transparency around that. I see all kinds of stories on mine, I never know why they’re ranked in the order that they are, and studies show that that News Feed has the power to influence the moods of billions of people. </strong></p>
<p id="PmeLZ2"><strong>How do we grade you on that awesome responsibility to ... As a for-profit company, I would assume some of that’s done for my benefit and some of it’s done for yours. How do we grade your curation of the News Feed?</strong></p>
<p id="JShdu8"><strong>Mike</strong> <strong>Schroepfer</strong>: It’s a great question. I mean, one of the things that, when you look at ... First of all, the content of your feed is dominated by who you friend and what pages you like. So the easiest way to adjust the content of your News Feed is to adjust that. And then on a story basis, we’re introducing more and more controls to allow you to sort of mute a particular person, to unfollow them so you can still be friends but maybe their stuff doesn’t show up in feed, and ads, for example. There’s a really useful control that says “why am I seeing this ad?” that gives you pretty great detailed information on exactly why this ad was shown to you. </p>
<p id="cE38sX">So I think in every case what we’re trying to do is give you controls; when you’re looking at this like why did I get this story, we should help you answer that question on the spot, which is what we found is most effective to answer these sorts of things.</p>
<p id="Wc544B"><strong>Kara Swisher: And in terms of hiring people ... Sheryl, you talked about this, this crowdsourcing of what our news source is. Where is that? The idea that you would have your community rank sources. </strong></p>
<p id="aOT70F"><strong>Sheryl Sandberg</strong>: So we’ve done a lot in news, right? Probably the most important thing we’ve done in news, which is taking down distribution across the board for news partners and news publishers, is that we’ve really taken very strong action on clickbait, on sensationalism, and then we did meaningful social interactions; really getting back to the heart of what Facebook was, which was really a place to connect with family and friends. We heard from people that they wanted more friends and family, less video, less public content, less news, so those signals got taken into account.</p>
<p id="JXVGdQ">We also really care about psychological well-being. And so we started looking at this and we’re gonna continue to look at this, this research is ongoing, and we found that when people are interacting with content where they’re actively engaged, friends, family, they “Like,” they comment, they share, that’s very positive, but it’s not as positive when you’re a passive consumer. So that also meant the signals went that we had more friends and family, less news.</p>
<p id="NkbB2K">Then within news, we want news that’s trusted, that’s real, accurate information, and we also really care about local. And this is hard. There’s no perfect way to do this. But what we did on trusted is we went out to the community at large and we asked people to identify news sources they were familiar with, not that they read, but they were familiar with — because if you hadn’t heard of them, it’s not fair to rank them — and then do you trust? That was one signal that was used to increase distribution for some news sources and decrease distribution for others, and really hit, I think, some of the more sensational sources.</p>
<p id="qlPQef">We’re also prioritizing informative, again working hard with third-party fact-checkers, to mark and really dramatically decrease the distribution of fake news and also prioritize local. We’ve announced that we’re gonna be supporting local news; we are gonna make sure that people see local news, and hopefully accurate local news, in their News Feed. We think it’s important.</p>
<p id="1VtMPd"><strong>Peter Kafka: Someone’s gotta make that local news and someone’s gotta figure out a business model that makes that local news possible, and that’s ... I mean, you guys are playing around the edges for that, but it seems like if you just wanted to cut people a check, that would help a lot of local newsrooms survive. </strong></p>
<p id="DoUUZa"><strong>Sheryl Sandberg</strong>: Well, we’re thinking about what we do in local news and considering things. </p>
<p id="6bnI5R"><strong>Peter Kafka: Okay. Real quick. </strong></p>
<p id="n7kUCL"><strong>Ina Fried</strong><strong>: Ina with Axios. On Cambridge Analytica, I get in 2015 they certified, they deleted it, and you thought they deleted it. The question I haven’t heard a clear answer to is when the Trump campaign, you had people working within it, when they suddenly had all this data on voters, how was no one either hired up at Facebook or working with the campaign suspicious of where did they get that data?</strong></p>
<p id="rI11Bu"><strong>Sheryl Sandberg</strong>: They didn’t have any data that we could’ve identified as ours. To this day, we still don’t actually know what data that Cambridge Analytica had. We are trying to do an audit, the British government came in and put our audit on hold so they could do theirs, but we did not see data that we thought was from Facebook; otherwise we would have done that. </p>
<p id="q9IHOP"><strong>Ina Fried</strong><strong>: Did you see a suspicious amount of data that they knew more about voters or that ... Not really?</strong></p>
<p id="P0adhF"><strong>Sheryl Sandberg</strong>: No, not really. </p>
<p id="VboIFr"><strong>Audience Member</strong><strong>: In Sri Lanka, the government recently had to shut down Facebook because of fake news that led to violence. And so I was just wondering practically, on the ground in international locations, what are you doing in order to combat those sorts of situations?</strong></p>
<p id="zNAUeY"><strong>Mike Schroepfer</strong>: Yeah, there’s been issues in Sri Lanka and Myanmar and others, and you know I talked earlier, this is the worst thing to see, is when people weaponize this platform and it causes real-world harm. The challenge here is getting, as you say, people on the ground in the country who understand the landscape, the cultural landscape, the nuances of the languages, the NGOs to work with, the folks to work with there, to help understand where the issues are and where we need to intervene. And so that’s been our focus, is to literally just get more people on the ground in each of these countries who can focus on that and then have product teams in the company who, when they get feedback about changes we need to make there, who can deal with that.</p>
<p id="PpHCfY">We’re also looking at technological solutions. For a lot of the AI tools that we’ve built, they require large amounts of training data, for those familiar, and that training data’s readily available in the bigger languages. But in languages like Burmese, they’re just ... It’s not as good. And so it’s actually one of the core focuses of our lab, is to figure out how to take, you know, a classifier in one language like English and transmute it over to a language of very little data like Burmese so we can immediately deploy some of the technology we’ve built for other languages there. We’re kind of doing all these paths in parallel because we want to solve this as quickly as we can.</p>
<p id="CktI0l"><strong>Kara Swisher: All right, last </strong><strong>question</strong><strong> from me: Do you feel like your company does understand the responsibility you have now and do you think that has </strong><strong>— o</strong><strong>bviously Mark</strong><strong>,</strong><strong> you </strong><strong>— d</strong><strong>oes your whole management team feel that?</strong></p>
<p id="QNfmla"><strong>Sheryl Sandberg</strong>: I think we feel it really deeply. I think we’re making huge investments, really huge investments; they’ll hit our profitability. We think those are the right things to do and I think we know it’s an arms race, that we sit here knowing what today’s problems are, feeling more responsibility for the future, and knowing we need to protect people who are using our platform. </p>
<p id="LdmCkA"><strong>Mike Schroepfer</strong>: I mean, as I said earlier, it’s the biggest cultural shift I’ve seen in the company in the whole time I’ve been there by a pretty wide margin. </p>
<p id="sl8Nj5"><strong>Kara Swisher: All right, thank you so much. </strong></p>
<p id="jH7llv"><strong>Mike Schroepfer</strong>: Thank you.</p>
<aside id="KYRihP"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/30/17397126/facebook-sheryl-sandberg-mike-schroepfer-transcript-code-2018Recode Staff2018-06-03T17:11:05-04:002018-06-03T17:11:05-04:00Snap CEO Evan Spiegel: Facebook can copy our features, but ‘our values are hard to copy’
<figure>
<img alt="Evan Spiegel, co-founder and CEO of Snapchat maker Snap" src="https://cdn.vox-cdn.com/thumbor/HDMiLXlLBrkoOQRVvwX8gsZXJ5Q=/72x0:1209x853/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59890251/REC_ASA_CODE18_20180529_182626_0520_preview.0.jpeg" />
<figcaption>Asa Mathat</figcaption>
</figure>
<p>“Fundamentally, they’re having a really hard time changing the DNA of their company.”</p> <p id="ya0Y4X">Snap CEO Evan Spiegel has a few things to say about Facebook and the <a href="https://www.recode.net/2017/3/28/15079774/facebook-stories-snapchat-instagram-copy">social giant’s decision to copy some of Snapchat’s best features</a>. </p>
<p id="Cqc3q2">1. <em>Thanks, it’s flattering. </em></p>
<p id="TL5G44">2. Copying Snapchat’s most popular features doesn’t mean Facebook will win the war between the two companies. </p>
<p id="TlmtZ9">“Snapchat is not just a bunch of features, it has an underlying philosophy that really runs counter to traditional social media,” Spiegel said Tuesday at <strong>Recode’s </strong>annual<strong> Code Conference</strong> in Ranchos Palos Verdes, Calif. “I think that’s why traditional social media feels threatened. Because fundamentally people realize that competing with their friends for ‘Likes’ and attention is kind of unpleasant and really not that great.”</p>
<p id="5lRxKY">Snapchat doesn’t have “Likes,” and Spiegel has long pushed to make Snapchat a communication platform more than a broadcast platform — it’s a place for your close friends. That is different from Facebook’s social network format, Spiegel argues, which means that even though Facebook can copy Snapchat’s features, Snap can still survive. </p>
<p id="33tNFK">“Fundamentally, they’re having a really hard time changing the DNA of their company,” Spiegel added. “And the DNA of their company is all about having people compete with each other online for attention.” </p>
<p id="mvrhJb">“Our values are hard to copy.”</p>
<p id="5gDCq7">Watch his full interview below.</p>
<div id="Y2MoBu">
<div data-analytics-viewport="video" data-analytics-action="volume:view:article:middle" data-analytics-label="EvanSpiegel_Full session|38736" data-volume-uuid="145d48f81" data-volume-id="38736" data-analytics-placement="article:middle" data-volume-placement="article" data-volume-autoplay="false" id="volume-placement-995" class="volume-video" data-volume-player-choice="youtube"></div>
</div>
<p id="YcBPjU">Or listen to it on our podcast <strong>Recode Decode</strong>:</p>
<div id="AqP4w4"><iframe src="https://player.megaphone.fm/VMP5053719259" style="width: 100%; height: 200px; border: 0 none;" scrolling="no"></iframe></div>
<aside id="F7HCfs"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/29/17384680/evan-spiegel-snap-ceo-code-conference-facebook-copyKurt Wagner2018-06-01T10:22:15-04:002018-06-01T10:22:15-04:00Code 2018: When will Silicon Valley take responsibility for its products?
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<img alt="Uber CEO Dara Khosrowshahi, Facebook COO Sheryl Sandberg and Spotify CEO Daniel Ek at the 2018 Code Conference" src="https://cdn.vox-cdn.com/thumbor/w0eZ-iONi7ljcjf2MDbPjoHLMVQ=/78x0:2237x1619/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59916827/dara_sheryl_daniel.0.jpg" />
<figcaption>Uber CEO Dara Khosrowshahi, Facebook COO Sheryl Sandberg and Spotify CEO Daniel Ek | Asa Mathat for Recode</figcaption>
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<p>Who’s growing up — and who’s lagging behind — was a recurring question this week at the <strong>Code Conference</strong>.</p> <p id="N2veWe">An unofficial theme of the <a href="https://www.recode.net/code-conference"><strong>2018</strong> <strong>Code Conference</strong></a> was the “Spider-Man” quote (<a href="https://quoteinvestigator.com/2015/07/23/great-power/">or was it Voltaire?</a>), “With great power comes great responsibility.” Tech is changing and disrupting the world every day — but do its leaders see themselves as responsible for those changes, good <em>and</em> bad? </p>
<p id="7bUvkU">On the latest episode of <strong>Too Embarrassed to Ask</strong>, we convened a supergroup of Vox Media podcast hosts — <a href="https://itunes.apple.com/us/podcast/recode-decode-hosted-by-kara-swisher/id1011668648?mt=2">Recode Decode</a> host Kara Swisher, <a href="https://itunes.apple.com/us/podcast/recode-media-with-peter-kafka/id1080467174?mt=2">Recode Media</a> host Peter Kafka and <a href="https://itunes.apple.com/us/podcast/converge-with-casey-newton/id1385113107?mt=2">Converge</a> host Casey Newton — to recap the conference and dive into that question. They concluded that whether or not tech companies are volunteering for that great responsibility, it is being thrust upon them. </p>
<p id="wGDZCo">“All of these companies — not just Facebook and YouTube, but Spotify and Uber — describe themselves as ‘platforms,’” Kafka said. “The argument is, ‘We’re just in the middle here and people are putting stuff up,’ or ‘People are connecting with drivers, we’re just facilitating it.’</p>
<p id="EWAexH">“This is the year where we’re bumping up against some of those limits, whether the companies are recognizing it on their own or being forced to recognize it,” he added.</p>
<p id="nTdtv1">Newton drew a distinction between leaders like <a href="https://www.recode.net/2018/5/31/17397186/full-transcript-uber-dara-khosrowshahi-code-2018">Uber CEO Dara Khosrowshahi</a> — who he said appeared “more boring” than former CEO Travis Kalanick, for the better — and <a href="https://www.recode.net/2018/5/31/17397188/full-transcript-spotify-daniel-ek-code-2018">Spotify CEO Daniel Ek</a>. While Khosrowshahi explained clearly how he intends to clean up the mess he inherited, Ek wouldn’t or couldn’t explain Spotify’s temporary decision to <a href="https://www.nytimes.com/2018/05/10/arts/music/rkelly-spotify-accusations-xxxtentacion.html">ban R. Kelly from its playlists</a>. </p>
<p id="eQCXRh">“If you have artists who have done really bad things in the real world, should you continue to promote them on your public playlists?” Newton asked. “Not, ‘Should they be allowed to be on the platform?’ because there’s a lot of artists who’ve done a lot of shady things, but if you’re going to put together the best ‘90s playlist, should R. Kelly be on it, given all the <a href="https://www.buzzfeed.com/jimderogatis/r-kelly-sexual-abuse-allegations-lizzette-martinez-times-up?utm_term=.uw2B15zdY#.ue2BOl9qo">stories about [him] being a sexual predator</a>?” </p>
<p id="PWEBRL">“[Ek] said the word ‘transparency’ 400 times, and I still have no idea what his company thinks about its policies,” he said. </p>
<p id="YIpXYU">You can listen to <strong>Too Embarrassed to Ask</strong> on <a href="https://itunes.apple.com/us/podcast/too-embarrassed-to-ask/id1073226719?mt=2">Apple Podcasts</a>, <a href="https://open.spotify.com/show/4MU3RFGELZxPT9XHVwTNPR">Spotify</a>, <a href="http://pca.st/ask">Pocket Casts</a>, <a href="https://overcast.fm/itunes1073226719/too-embarrassed-to-ask">Overcast</a> or wherever you listen to podcasts.</p>
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<p id="LdqOrS">On the new podcast, the trio also talked about one of the limitations of judging tech execs based on their public appearances at conferences like <strong>Code</strong>. Following on Newton’s remark that <a href="https://www.recode.net/2018/5/30/17397126/facebook-sheryl-sandberg-mike-schroepfer-transcript-code-2018">Facebook’s Sheryl Sandberg and Mike Schroepfer</a> were “clearly there to wrap up their apology tour,” Kafka said we shouldn’t read too much into interviewees who seem to have been heavily coached before an interview. </p>
<p id="r4kgJX">“What’s the upside for them to be candid?” Kafka asked, saying former <a href="https://www.recode.net/2016/10/5/13171430/steve-jobs-apple-conference-swisher-mossberg">Apple CEO Steve Jobs</a> was the exception that proved the rule. “‘Oh, this is how I really feel about this.’ And they might tell you as soon as you walk offstage, or at least a version of it. But they can’t do it [onstage].” </p>
<p id="KvsLiz">Newton said he was most intrigued by a different aspect of the Facebook interview: The lack of a clear statement defining the social behemoth’s purpose, like the one given to its smaller rival Snapchat via <a href="https://www.recode.net/2018/5/30/17397120/snap-ceo-evan-spiegel-transcript-code-2018">Snap CEO Evan Spiegel</a>. </p>
<p id="kQsDRz">“When Spiegel talks about Snap, it’s about getting away from this world where you feel like you’re competing online for attention with your friends, you’re competing for ‘Likes,’” Newton said. “It’s about building closer connections to the people you already know, as opposed to doing these broadcast performances for the entire world. </p>
<p id="LF7KoB">“Sheryl Sandberg was not trying to make the complete case for why Facebook should exist,” he added. “It’s so big that I don’t think they feel like they need to make the case for why. But I would say that given the year and a half that they’ve had, what they should be doing is putting forth an executive who can sketch a positive vision of what Facebook is doing in our lives.” </p>
<p id="IpkVQN">If you like this podcast, make sure to check out our others:</p>
<ul>
<li id="VJPaOf">
<strong>Recode Decode, hosted by Kara Swisher, </strong>is a weekly show featuring in-depth interviews with the movers and shakers in tech and media. You can subscribe on <a href="https://itunes.apple.com/us/podcast/recode-decode-hosted-by-kara-swisher/id1011668648?mt=2">Apple Podcasts</a>, <a href="https://open.spotify.com/show/47jQcyRcrM1EoV0sU39N9F">Spotify</a>, <a href="http://pca.st/recode">Pocket Casts</a>, <a href="https://overcast.fm/itunes1011668648/recode-decode-hosted-by-kara-swisher">Overcast</a> or wherever you listen to podcasts.</li>
<li id="g8wWS8">
<strong>Recode Media with Peter Kafka</strong> features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on <a href="https://itunes.apple.com/us/podcast/recode-media-with-peter-kafka/id1080467174?mt=2">Apple Podcasts</a>, <a href="https://open.spotify.com/show/0yW8lq5dBrXHEeiNPFqMeh">Spotify</a>, <a href="http://pca.st/recodemedia">Pocket Casts</a>, <a href="https://overcast.fm/itunes1080467174/recode-media-with-peter-kafka">Overcast</a> or wherever you listen to podcasts.</li>
</ul>
<p id="sM8o3O">If you like what we’re doing, <a href="https://itunes.apple.com/us/podcast/too-embarrassed-to-ask/id1073226719?mt=2">please write a review on Apple Podcasts</a> — and if you don’t, just tweet-strafe <a href="https://twitter.com/karaswisher">Kara</a>. Tune in next Friday for another episode of <strong>Too Embarrassed to Ask</strong>!</p>
<aside id="18URCc"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/6/1/17415236/silicon-valley-responsibility-facebook-uber-spotify-kara-swisher-peter-kafka-casey-newton-podcastEric Johnson2018-05-31T01:22:35-04:002018-05-31T01:22:35-04:00Facebook still doesn’t know what user data Cambridge Analytica actually had
<figure>
<img alt="Facebook COO Sheryl Sandberg" src="https://cdn.vox-cdn.com/thumbor/j9H-6uXHhnX3iKhnKTNkTmrA3sE=/63x0:1200x853/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59890961/REC_ASA_CODE18_20180529_190749_0775_preview.0.jpeg" />
<figcaption>Asa Mathat</figcaption>
</figure>
<p>Did the Trump campaign have suspicious-looking data sets? “No, not really.”</p> <p id="Ifg8ph">There are still some (big) rocks to be turned over in Facebook’s Cambridge Analytica drama. </p>
<p id="ioUcBx">Despite suspending the data firm, which <a href="https://www.recode.net/2018/3/17/17134072/facebook-cambridge-analytica-trump-explained-user-data">collected the personal data of as many as 87 million Facebook users</a> without their permission, Facebook is still trying to figure how big the Cambridge Analytica problem is. </p>
<p id="npC0bs">“To this day, we still don’t actually know what data Cambridge Analytica had,” COO Sheryl Sandberg said on Tuesday at <strong>Recode</strong><strong>’s</strong> annual <strong>Code Conference</strong> in Rancho Palos Verdes, Calif. </p>
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<p id="SZXsSX">That’s not really a secret, though it’s an interesting reminder. Facebook was set to conduct an audit of Cambridge Analytica, a data firm used by Donald Trump’s presidential campaign during the 2016 election. But that audit was put on hold when the U.K. government came in to conduct their own investigation. </p>
<p id="NdP5zS">Facebook has clearly not picked the audit back up — at least not yet. </p>
<p id="adV9pu">When asked if Facebook employees, who helped with the Trump campaign, noticed any kind of suspicious data set, Sandberg said, “No, not really.” </p>
<p id="zM47t9">Understanding what data Cambridge Analytica had is important because it could be useful in trying to determine how much of a role Facebook may have had in the 2016 U.S. presidential election. </p>
<p id="XWqNp0">Here are some other highlights from the conversation:</p>
<ul>
<li id="OK3EEY">Sandberg gently pushed back on recent criticism from Apple CEO <a href="https://www.recode.net/2018/3/28/17172212/apple-facebook-revolution-tim-cook-interview-privacy-data-mark-zuckerberg">Tim Cook about their data troubles,</a> saying Facebook “respectfully disagrees” with his critique. Recall that <a href="https://www.recode.net/2018/4/2/17188392/mark-zuckerberg-ezra-klein-podcast-tim-cook-glib">Zuckerberg said Cook’s comments were “extremely glib.”</a>
</li>
<li id="nPDlVe">Sandberg said that she expects Facebook to draw more questions from regulators if it makes more multi-billion dollar acquisitions like Oculus or WhatsApp. “Certainly as you get bigger there’s more scrutiny of acquisitions — and there should be,” she said. Sandberg predicted that a major acquisition would “probably be allowed” as long as the acquired company wasn’t related to Facebook’s core business, but rather an expansion of it.</li>
<li id="A1jcSH">Facebook is doing more in hardware — <a href="https://www.recode.net/2018/5/1/17305254/oculus-go-virtual-reality-headset-on-sale-how-to-buy">check out the new Oculus headset</a> — but don’t expect Facebook to reboot its past failed effort to create an operating system or its own mobile device: “I don’t think we’re talking about going back into phones,” Sandberg said.</li>
</ul>
<aside id="9FPyex"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/29/17384806/facebook-coo-sheryl-sandberg-cto-mike-schroepfer-code-conference-trump-cambridge-analyticaKurt WagnerTheodore Schleifer2018-05-30T12:29:12-04:002018-05-30T12:29:12-04:00Full video and transcript: Microsoft President Brad Smith at Code 2018
<figure>
<img alt="Microsoft President Brad Smith" src="https://cdn.vox-cdn.com/thumbor/3Gu66BWhQxj3qZG9_Y6C73gcwFU=/87x0:2519x1824/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/59896389/REC_ASA_CODE18_20180529_153813_9777.0.jpg" />
<figcaption>Asa Mathat</figcaption>
</figure>
<p>“If you create tech that changes the world, the world is going to want to govern you.”</p> <div id="BSGALO">
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<p id="aZhQAr"><strong>Kara Swisher: Let’s begin with someone I’ve known for maybe 25 years or something like that, Brad Smith. He’s the president of Microsoft. Brad? </strong></p>
<p id="mwhO8A"><strong>Brad Smith</strong>: Hey, Kara. </p>
<p id="mtgxX8"><strong>So, so much to talk about. I can’t believe we actually</strong><strong> ...</strong><strong> I covered the Microsoft trial. </strong></p>
<p id="4b6OPs">I remember well. I remember seeing you in the halls of Congress. </p>
<p id="tLAtmh"><strong>Yes, I did. I was there the whole time. Just w</strong><strong>a</strong><strong>ndering around, trying to write things for the Washington Post. </strong></p>
<p id="j79p3A"><strong>So let’s start there. Because it was a long time ago, but Microsoft has been through this, and it was Microsoft the scary, Microsoft the monopolist. You got your head handed to you by the investigation. Let’s talk about that experience right now. Because I think it’s a really good thing to think about. That came in really close there, just the camera that came in. </strong></p>
<p id="EK1JLg"><strong>Let’s talk about what happened in that experience</strong><strong>,</strong><strong> from your perspective? </strong></p>
<p id="25B7AV">It’s interesting, because on one level, it feels like yesterday to some of us who lived through it. And for many people who work in the tech sector today and they sort of never heard about it. </p>
<p id="qpqCPQ"><strong>Right. </strong></p>
<p id="OiHNiK">But it was a gut-wrenching experience, I think it’s fair to say for those of us who worked for Microsoft at the time. As I like to say, we went from being the New York Mets to the New York Yankees. You know, we were the little team, and then all of a sudden we were this behemoth that lost everybody’s support. And we ended up with the U.S. government, states, all coming after us, and a case that we lost on an appeal in 2001. And I think as much as anything, there were a couple of things we learned. </p>
<p id="uJfzJi">One is, I think if you create technology that changes the world, the world is going to want to govern you. It’s going to want, in some measure, to regulate you. And you have to come to terms with that and figure out how you’re going to navigate that and step up to the responsibilities that the world wants you to assume. </p>
<p id="nDB8OT">And the second thing was actually very personal, in a way. You have to develop the ability to look in the mirror and see yourself, not the way you see yourself, but the way other people see you. And guess what? They don’t think you’re quite as good-looking as you thought you were. </p>
<p id="ZnULwt"><strong>Right. Right. </strong></p>
<p id="DtLBxt">And you have to ...</p>
<p id="solwrj"><strong>I’m thinking like scary monster was Microsoft at the time. </strong></p>
<p id="JQfV2e">Yeah. I think that’s not an unfair way to characterize certainly the way we were perceived by some, absolutely. </p>
<p id="Au33MI"><strong>All right. But getting away from perception. Let’s talk about what you all did wrong in that. Leading up to it, and then during the trial. We can leave out Bill’s terrible</strong><strong>,</strong><strong> terrible deposition. Or you can talk about it if you want. Go look at it, it was terrible. Talk about what you all did wrong in the lead</strong><strong>-</strong><strong>up to it</strong><strong>, t</strong><strong>he things that you didn’t see coming. </strong></p>
<p id="kKERRL">Well, I think in some ways, one thing that we did at Microsoft that I think perhaps speaks more broadly to tech today is the justice department argued that Microsoft had a monopoly, that Windows was a monopoly. And we said no, Windows is not a monopoly. Look, anybody can come in, things can change, we may have a high market share, but it’s all temporary. Not only did we lose that argument in court, I think we lost it in the court of public opinion. And in some ways, it was maybe the worst argument to lose. Maybe it was the worst argument to make. </p>
<p id="evlImD">Because what people were fundamentally saying to us is, “Look, you have a responsibility. You have a responsibility that comes with this market share.” And what they heard us saying is, “No, you don’t.” And I think at bottom, a lot of what we’re seeing today is people asking the tech sector, “Do you get it?” Do you understand that, perhaps in the history of business, there has never been an economic sector quite so intertwined with every other economic sector. And there’s never been an industry that’s been so global. </p>
<p id="uUV9yR">And yeah, I think that frankly, one of the things that Mark Zuckerberg did well when he testified is he said, “We understand that regulation may be in order.” It’s a way of saying, “We understand that government has a role, and we have a responsibility.” </p>
<p id="CJCtmB"><strong>Right. But is it, I don’t want to get ... what did you do wrong? In terms</strong><strong> of,</strong><strong> you misperceived what they thought of you. </strong></p>
<p id="dSALYx">Well look, the essence of the antitrust case itself, for those who don’t recall their 1990s history because it’s 20 years old at this point, was Netscape arose, it had a browser that gained substantial market share, people saw it as a potential rival to Windows. Microsoft created it’s own browser called Internet Explorer. It put the browser into Windows.</p>
<p id="RzB6IK"><strong>The operating system. </strong></p>
<p id="dhBkoG">And then there were a variety of steps associated with how it was marketed, how it was sold, agreements with others. And the Justice Department argued that in multiple ways, Microsoft engaged in marketing and sales and even product integration techniques that violated the Sherman Antitrust Act. </p>
<p id="k7LKwv"><strong>Right. So what could you, when you were in the meetings with Bill and Steve, what could have changed? Giv</strong><strong>e</strong><strong> people insight now into what they could be doing as this regulation moves forward</strong><strong>. T</strong><strong>hen I want to talk about what you think is happening. </strong></p>
<p id="2Z3fqx">Well, I think at it’s heart, one has to decide. Are you going to fight, or are you going to try to work things out? At Microsoft in 1998, we basically said, “We are going to fight this.” In 1999 and 2000, we said we were going to fight this. And then in 2001, after we lost, we said, “Okay, we’re going to work this out.” </p>
<p id="Huivzm">My advice in general — not always, because you know, it’s like anything, you can oversimplify — but you’ve got to be open to working things out. The truth is, if we had worked things out in 1998, we might well have been able to work them out before it became the antitrust version of nuclear war. Literally trying to break the company up. That’s what the government pursued. That’s what the district judge ordered. You have to solve problems when they’re small enough to be solved. And you’ve got to do that early, not late. </p>
<p id="yyC4xm"><strong>What was in your culture that didn’t? Was it the aggressive nature of Bill, was it sort of the shy and retiring ...? </strong></p>
<p id="PpDC2v">No, I think ... Look, every startup on the planet that succeeds, succeeds with this ambition, this enthusiasm. Maybe it even takes a little bit of overexuberance to change the world. It takes big egos even to change the world. And then there comes a moment in time where you’re not the startup anymore, and you have to recognize when that moment comes and you have to be prepared to shift. You have to be mature. You have to listen. You have to build relationships. And you have to compromise. </p>
<p id="V9k7SC">And I think one of the things one needs to think about in these situations is that it actually, in my view, takes more courage to compromise than it does to fight. But in a company that is built on this enormous energy, it is unfortunately I think sometimes easy to say, “Oh, these people who want to compromise, they’re the weak ones. We’re going to be strong. We’re going to fight.” I think it’s the opposite. It takes courage to compromise. </p>
<p id="gXRcyI"><strong>And it does come from a culture. I remember having lunch with Bill Gates at the Washington Post. I don’t know if you were there. </strong></p>
<p id="jEvZwH">I was not at that lunch. </p>
<p id="DGG8xn"><strong>It was before this, in the mid</strong><strong> ’</strong><strong>90s. And he arrived in a cab, by himself. Fell out of the cab, all sloppy and stuff. He came upstairs and he proceeded to insult the entire Washington Post power structure. Which I was fascinated with. And </strong><strong>he </strong><strong>actually said to the editor of the Washington Post at the time, when he asked a question</strong><strong>,</strong><strong> “That’s the stupidest question I ever heard.” </strong></p>
<p id="MJpUc5"><strong>I’ll never forget it. And I was like, “The stupidest, really? Come on.” It can’t be possibly the stupidest. But one of the things he said is</strong><strong> ...</strong></p>
<p id="A6MmIY">Yeah, it could be, because I was told that I had asked that question, perhaps on one occasion. It was well known in Microsoft, that phrase was used. </p>
<p id="fLu39n"><strong>Yeah, stupidest question. And one of the things he said that stuck me, I’ll never forget it</strong><strong>,</strong><strong> </strong><strong>i</strong><strong>s that</strong><strong>,</strong><strong> “What do we need you people for, we don’t have to both with you.” And I put up my hand, and I said</strong><strong>,</strong><strong> “Except Washington’s full of ex student body vice presidents with subpoena power. So yeah, you do.” It was, after that, it was a downhill relationship with him and me. </strong></p>
<p id="jyAHee"><strong>But right now, let’s fast</strong><strong>-</strong><strong>forward to today. What’s going on</strong><strong>?</strong><strong> What was the impact on you after you compromised? Do you think Microsoft really lost the step it needed? </strong></p>
<p id="gBQp76">Yeah, it’s fascinating because you get a lot of different perspectives on where did we succeed, where did we fail and why, in the wake of the antitrust issues. My own personal view, having been in the middle of it for so long, was the single greatest cost was the distraction. Having a Bill Gates, a Steve Balmer, great engineering leaders at our company, spending so much time figuring out how to prepare for a deposition, how to defend themselves at the witness stand, how to implement this, that or the other thing. And you know, you look at the early 2000s, we missed search. </p>
<p id="ElhyBR"><strong>Yeah. It was a big one. </strong></p>
<p id="eXAu46">It was, and it wasn’t the only thing we missed, obviously. </p>
<p id="duJ68E"><strong>Mobile phones. </strong></p>
<p id="MMBq1j">Yeah. I do think one does have the recognition that nobody is going to catch everything. </p>
<p id="gy9NRz"><strong>Yeah. </strong></p>
<p id="wu0DZa">And there’s no company here or anywhere else, that is going to see every trend before it emerges. But would we have seen these things if we had been spending more of our time looking for them than looking at these specific issues? It’s a great imponderable. It’s a hypothetical. We’ll never know for sure, but I will say, the odds of seeing these things would have been higher. </p>
<p id="hA3x7i"><strong>Would have been higher. So looking forward to today, the company has changed so drastically</strong><strong> i</strong><strong>n terms of how it is. Y’all look friendly now. It’s weird. Remember when Microsoft was scary? And of course all these 12</strong><strong>-</strong><strong>year</strong><strong>-</strong><strong>olds in the room are like</strong><strong>,</strong><strong> “What? What are you talking about? Microsoft’s not scary. They’re lovely.” What does that do? Where do you put Microsoft now, in this group?</strong></p>
<p id="hOtE4z">I would like to say that we are in the top tier, in terms of large companies seeking to innovate. It’s scale. I also think that we took that weakness, that weakness of just not knowing how to deal with the world, and because we were forced to look it in the eye, over time we developed some strengths there. You know. And so we are trying to navigate the world. </p>
<p id="aLY9qY">I think it’s a huge benefit to have a CEO that grew up on one continent and has lived his adult life on another. We talk every day about the responsibility that goes with the opportunities that we have in front of us. And I think we work hard to really try to define what those responsibilities mean for us. </p>
<p id="yJSGRD"><strong>So how do you keep innovation up, then, if you can’t have that aggressive nature within the company? </strong></p>
<p id="N7sFsY">Well, it’s interesting, because your question equates innovation with being aggressive. </p>
<p id="o8yCmD"><strong>Right. </strong></p>
<p id="NDv9Ex">And I think if you think about our industry the way people thought about it 25 years ago, where it was fundamentally, call it young, typically men, right out of college. </p>
<p id="9zWqrM"><strong>Right. </strong></p>
<p id="lUm0Dk">But that’s not who we should aspire to be. I think what we need to build, not just at Microsoft but across the industry, is a more inclusive approach to developing creativity. Frankly, I think it’s an imperative in the world today. We all work around the world. The notion of having some west-coast all-male orientation to how you innovate is actually a huge problem, I mean even just from the perspective of trying to be successful. </p>
<p id="MB2Ns0">I will always remember when Satya Nedella became the CEO in early 2014. You may recall there was a well-known cartoon of Microsoft at the time. It had the different engineering groups all with like guns pointed at each other. </p>
<p id="A2jI5Q"><strong>Yeah. </strong></p>
<p id="o5fiiD">So we had the first meeting of our senior leadership team, and Satya brought us each a book. The book was called “The Art of Nonviolent Communications.” </p>
<p id="0Nizfk"><strong>All right. </strong></p>
<p id="QPcTv8">A rather different book. </p>
<p id="dm3TqS"><strong>For Microsoft as I recall, yeah. </strong></p>
<p id="mqYjnm">Yeah, and you might even say it’s different for a lot of what we associate with tech culture.</p>
<p id="62AK8s"><strong>Absolutely. I just remember the story of </strong><strong>C</strong><strong>oke cans being thrown at each other’s heads. </strong></p>
<p id="blLwYj">So yeah, this was nonviolent communication. You know, and it’s called really bringing out what people have inside them. Especially in a new era, where you have so many young people that have a very different expectation. I think if you’re under 30, you don’t expect that you’re going to have to wait until you’re 40 for somebody to think about your idea. You expect it to be heard tomorrow. So you just need to create a different culture of innovation, and I think that is one thing that we have been working to do. </p>
<p id="8HApWc"><strong>So let’s talk about that. I want to get to the immigration issue first. </strong></p>
<p id="EJ46Gk">Yep.</p>
<p id="3QbpA3"><strong>You guys have been very up</strong><strong> </strong><strong>front compared to most tech companies.</strong><strong> </strong><strong>Talk a little bit about this, because it’s put you at odds with</strong><strong> —</strong><strong> we’re going to have Linda McMahon on next</strong><strong>, f</strong><strong>rom the Trump administration</strong><strong> —</strong><strong> but talk about that. Like what the thinking is behind what you’re going to do with Washington, given the hostility towards immigration. </strong></p>
<p id="dquuIY">I think it’s a huge problem. We’ve adopted a philosophy vis-a-vis this White House, or you could argue, with any government. It’s like, let’s partner where we can, let’s stand apart when we should. And for us, it has been clear since the first month of this administration that immigration was an issue on which we need to stand apart. We always try to keep a principled ... you won’t hear us throwing personal insults. But at the level of principle. We fought against the travel ban, you heard us, you might have heard me the day after the DACA decision was announced saying that if any of our employees who are DACA registrants face deportation, we will defend them in court. We will be there by their side, etc. </p>
<p id="lCIX9B">We have filed our own lawsuit, together with Princeton University and a Princeton student, against DACA. We’ve won that at the district court level. And I fear that this could be a tough summer. Really for three reasons. I fear that we won’t see a compromise come together on DACA. I fear that we may see the administration seek to revoke the work authorization for spouses of H-1B visa holders. Virtually every company has either people who are on H1s whose spouses work today under this H4 authority, or you have your own employees. We have 98 employees who are here on an H4. They will lose their jobs if this administration revokes that authority. So that shoe could drop. </p>
<p id="mN0SSc">There’s another shoe that could drop. The Obama administration extended the time that a student with a STEM background could work under what’s called Optional Practical Training to get an H-1B visa. And that could be cut back, at which point we could have thousands of people suddenly unable to work. And I just think that this is terrible for the country, it’s terrible for the tech sector, and it is a tragedy for the individuals involved. And we may need to use our voice as an industry not just with the public, not just in Congress, but we may need to continue to go to court. </p>
<p id="kUcpjp"><strong>So, what do you do? Talk about that. What are your options? How hostile can you be? How loud can you be? Because I think one of the things, when I was talking to, around the first immigration, and then the transgender thing happened. It was just one thing after the next. Like</strong><strong>,</strong><strong> what</strong><strong>,</strong><strong> do you cut it up among you? Google will do the transgender, I’ll do the immigration</strong><strong>? L</strong><strong>ike what happens?</strong></p>
<p id="U2wKsQ">Well, first of all, I think it’s important that as much as possible, we all stand together. </p>
<p id="Z5eNTL"><strong>Right. </strong></p>
<p id="uHfghd">I think this industry has been united, and I think that’s important, and I think it’s important for us to build alliances with other industries as well. That’s one. </p>
<p id="6WmQRX">Two, I think we need to be firm in our resolve to take whatever action we can. That means using our voice, it means using our lawyers, it means standing behind our employees and, if necessary, giving them the ability to work in Canada instead of the United States. I do think there’s a third dimension. We have to, again, demonstrate that we do understand there are arguments on the other side, and we listen and we get it. </p>
<p id="x7zNEJ">And I think that there’s two arguments on the other side we need to think about and we need to act upon. The first is, look, we don’t want this to be a country where the only people who succeed are people who move here from other places. We need to keep investing in more computer science education, more digital skills, more broadband access for Americans. Including Americans in rural counties, who are being left behind. And we as an industry can and should do more in that space. So that is one thing that I think we need to do. </p>
<p id="RHMyED">Second, I do believe we need to use our voice to be supportive where we can of a reasonable compromise in Congress. I think it would be a great mistake for us to say that people who advocate for border security have nothing to commend in their views. We need to listen and see if there’s a basis for commonality. </p>
<p id="0TshKK"><strong>So what is the compromise? The other side really isn’t very compromise</strong><strong>-</strong><strong>oriented, it seems like. It’s like build a wall, build a wall, build a wall, keep them out. </strong></p>
<p id="RNB0Kq">Well, the first thing one sees when one goes to the border with Mexico is there are many parts of Mexico that have a wall. I mean, this is not a border that is without walls. It may not be in it’s entirety. </p>
<p id="QiQW7m"><strong>Well, it’s political theater</strong><strong>,</strong><strong> what’s going on. </strong></p>
<p id="SKhA2g">It is political theater. And I think that’s part of the problem. I worry a lot that we could just see a lot of political theater across the political spectrum between now and then. </p>
<p id="zbusEE"><strong>You worry a lot that we’re going to see a lot of political theater? </strong></p>
<p id="nYfXWt">Yeah I think ...</p>
<p id="EioR5s"><strong>I think we’re deep, deep into that.</strong></p>
<p id="cASKFj">Into it. Fair enough. But you know, you go to the border, I mean, I’m struck. I’ve been to the border with Mexico. You go to the eastern part of Texas, which is the ... there’s a 40-mile stretch which is the No. 1 entry point not just for illegal migrants, but for drugs. And in this 40-mile stretch, there are 10 miles of wall, there’s 30 miles of open space. If you looked at the technology that is being used to watch what is happening at the border, you would say this was like state of the art 10 years ago. </p>
<p id="QYDK6w">I stood next to a fellow whose job it is to watch these monitors on a 10-hour shift, and he switches between the monitors, manually, with an Xbox controller. Hey look, I love Xbox, but come on. I think we can do a little bit better with Internet of Things. And then we need an orderly process. We should want a process where people can present themselves in an orderly way, they can apply for asylum if they believe they’re entitled to it. They get represented by counsel, especially if they’re an unaccompanied child. There is room, I believe, for common ground if people want to find it. </p>
<p id="5OqR8x">I think the No. 1 problem is basically what you alluded to: In an era of such disagreement, I just don’t know that people are looking to find common ground.</p>
<p id="1wrSFh"><strong>So what do tech companies do, as a group of people. Three things. Give me three things. </strong></p>
<p id="rPoeIe">Well, look, I happen to believe that the most important thing we need to do every day is stand up for our employees. These are people who invest not just their jobs and their careers with us, but when you’re talking about people from other countries, they’re investing us with some responsibility for where they live and how they live. So No. 1, stand up for our employees. </p>
<p id="MTGwXL">No. 2, I think, show that we are committed and are taking action to creating opportunities for everyone in the country. And not just people that come here from somewhere else. And No. 3, to the extent we can, even in an age where it seems like the loudest insult is what ends up as the biggest headline, we need to preserve some sense of normalcy. Of decency. An ability to reach across an aisle and encourage some real dialogue. </p>
<p id="4XV42L"><strong>Well, how did that meeting at Trump Tower go? You know I called you all sheeple when you went. But you didn’t say anything about immigration. You didn’t stand up. </strong></p>
<p id="zTpgVB">No, no, no. You’re talking about the one ...</p>
<p id="NFv0qc"><strong>The first one. </strong></p>
<p id="zYVDHK">No, we actually did. Absolutely. </p>
<p id="Vn2zme"><strong>To him, in a room, without public. </strong></p>
<p id="JHBd0y">That’s true. </p>
<p id="AbFXou"><strong>I love all your little quiet rooms, but I’d love it </strong><strong>if </strong><strong>you said it out loud.</strong></p>
<p id="74xmpa">I will say, first of all, as a matter of operating principle and practice, every meeting that I’ve had with this White House, I’ve always brought up immigration.</p>
<p id="cptMwR"><strong>Right. </strong></p>
<p id="EZrxX8">I just want people to know that it matters to our fundamental ability to be successful as a tech sector based in the United States. And then, do we use our voice outside? Yeah, I think we do, Kara. I mean, we’ve sued the administration. </p>
<p id="k4zSmd"><strong>Right. </strong></p>
<p id="ETbBSg">We’ve gone to Congress. I think it’s fine that we don’t insult people at a personal level. I don’t think that should be the litmus test for whether we’re firm in our resolve. </p>
<p id="F6s0O1"><strong>All right. Let’s finish up talking about what you’re looking at going forward. AI, diversity, you can talk about any of these things. But what do you think the key issues for Microsoft and the tech industry</strong><strong>?</strong><strong> </strong><strong>N</strong><strong>ow there’s a lot of calls for breaking up Facebook, we’re going to ask </strong><strong>S</strong><strong>heryl about that later. And Google, and now there’s</strong><strong> ...</strong><strong> </strong><strong>H</strong><strong>ow do you look at that? </strong></p>
<p id="2MJqDe">Let me just, maybe, pick two things. You know, that you ... but I think are really important for all of us. One is, we need to think about a future with artificial intelligence, which really involves two fundamental things. One is empowering, let’s call it empowering computers to make more decisions that today have been made by human beings. And the second is the massive use of large data sets. </p>
<p id="Xgnq0o">We need to take the kind of approach that will stand the ethical test of time, and that means that we’re going to have to engage in dialogues around the world about what it means to have people’s data. What is the self-restraint we’re going to exercise when it comes to people’s data? What kind of regulatory dialogue will we have around the world when it comes to the use of data? And I think the other part of that is really, you know, developing a set of ethics around what we will empower computers to do. </p>
<p id="fx0oCc">We’ve published six ethical principles that we’re trying to use with our engineers to at least carry that dialogue forward. We all have way more to learn than we’ve learned so far. </p>
<p id="EwjiSA"><strong>How do you assess the impact of what happened around Facebook? When you look at them, what did you think as you were watching those hearings? </strong><strong>“</strong><strong>Thank god it’s not me,</strong><strong>”</strong><strong> or what? </strong></p>
<p id="hgbSfy">I’ve been there. </p>
<p id="ZmgyVC"><strong>Yeah. </strong></p>
<p id="oB2xZE">The first thing I said is that I’ve been there. And I’m not there today, but we all take our turns. It’s easy to say my business model is different from your business model, and it is. I’m doing something that is more responsible than you are, maybe I am. But at the end of the day, a tech company to the general public may just be a tech company. And we all need to just think together about how we manage our way through that responsibility. </p>
<p id="BtyuR6"><strong>Right. One of the tech leaders who is not Facebook said it’s like a viral contagion. They’re making a mess over here and we’re all suffering as a group. So you’re saying that’s okay. </strong></p>
<p id="kKZAlJ">Well, the thing that has bothered me about the dialogue in the industry is, I’ve talked to too many people at other tech leaders, big companies that say, “We don’t want to do anything with them because they have the flu.” </p>
<p id="eK3esN"><strong>Right. </strong></p>
<p id="LdJeBj">You know what? We all have to work together. We are all in this together. And we will all have our days when we need somebody to stand by our side. Which is why I’ve been quick to say, hey, if Facebook is doing something that is important and advancing the good of the world — as they often are, often do — we will stand by them. And we do and we will. It doesn’t mean that we adopt their business model. We need to work together. </p>
<p id="2PAXok">But then I go to the one other issue I would raise. Diversity and inclusion is one of the fundamental issues.</p>
<p id="cRVhLl"><strong>Let me ask you one question before we get to that. </strong></p>
<p id="CTOnJ5">Sure. </p>
<p id="1S5E4i"><strong>So I asked Tim Cook this, on the MSNBC show. What would you have done if you were Mark Zuckerberg</strong><strong>?</strong><strong> </strong><strong>A</strong><strong>nd he made a response that Mark didn’t like, which is</strong><strong>,</strong><strong> </strong><strong>“</strong><strong>I wouldn’t be in his position to start with.</strong><strong>”</strong><strong> And then he had a very cogent explanation of privacy. </strong></p>
<p id="JIbxSD">I remember when I saw a leader of another tech company asked when they were under the antitrust lens whether they would handle it better than Microsoft. And he said, “We’ve studied the mistakes that Microsoft made, and we won’t make the mistakes that Microsoft made.” And I was in the room listening to it, and I said that may be true, but you know what, we all make mistakes. No one should ever assume, in my view, that somehow we’ve got it all figured out and we’re never going to have our difficult days. I think that Facebook is working through a very challenging situation and the rest of us need to work through our own challenging situations. This is not a world where one or two companies have challenges and the rest of us do not. </p>
<p id="0TKXf6"><strong>Right</strong><strong>. F</strong><strong>inish up on diversity, because then we will get to questions. </strong></p>
<p id="m3Z9Vg">I just think it’s one of the fundamental challenges for our industry, of our time. And I think that we all have a lot of work to do, and I think there’s a need for us to come together and change. And it’s not easy, and it takes a long-term commitment, because it is not something that is turned around, at least in Everett’s respect, you know. </p>
<p id="taWHNw"><strong>Numbers for being the same, in all aspects. </strong></p>
<p id="vFFlQH">The one thing that I will say is when I became the general counsel of Microsoft, this was in 2002, 22 percent of our lawyers were women. This is a profession in the United States were 35 percent of the lawyers were women. Two months ago, we reached the point where just over 50 percent of our lawyers are women. It took 16 years of sustained work.</p>
<p id="b0K8Bw"><strong>In a profession where there are a lot. There’s a large pool. </strong></p>
<p id="AM49HC">But one of the things it took was never take the percentage of women in the profession as your own ceiling. You should, at a minimum, seek to perform against the demographics of your profession. And then seek to outperform the profession as a whole. </p>
<p id="FdlhYS"><strong>So why doesn’t that happen, from your perspective? </strong></p>
<p id="bXiK5l">I think we are beginning. I think that we are living at a time when awareness is growing, and I think that’s a good thing. People are feeling pressure; that is not a bad thing. To me, the No. 1 thing that changed at Microsoft, which I was very happy to see change, was two years ago, when we said that we not only were going to measure everybody, but we were going to establish goals, and the annual bonuses of the senior leadership team and the CEO would be based in part on whether those goals were achieved. </p>
<p id="wUo0eI">It’s like everything in business, if you pay people to perform, guess what? They perform. And if you don’t pay them to perform, good luck, I don’t think that the odds of success are nearly as high.</p>
<p id="bOOGcI"><strong>Last question I have, and then we will get some questions from the audience. Years ago, Bill would always say he had various enemies he’d identify with, whether it was Google or blank blank. Who’s your enemy right now? Do you have one?</strong></p>
<p id="YuIPJr">I don’t get up in the morning and think, “Who’s my enemy?” I do get up in the morning and think, “What’s our challenge?” And I think our fundamental challenge as an industry today is that we have gained such a level of impact and influence on a global basis, and we are trying to retain our global character, as the tech sector today, at a moment when almost all the pressures are towards nationalism, populism, unilateralism. And I think one of the great tests we will face over not the next year, but the next 10-15 years, is can we continue to be successful on a global basis, or are we going to see our industry fragment? </p>
<p id="jmIgX4">I think it is such a fundamental test of trust. What does it take to sustain trust around the world when people are not nearly as trusting as they used to be? </p>
<p id="tf9RPK"><strong>All right, on that note, questions from the audience? Ina Fried!</strong> </p>
<p id="7GLAEy"><strong>Ina Fried</strong><strong>: Hey, Kara. Hey, Brad. Ina Fried with Axios. You mentioned the impact that the antitrust had. The work that you were doing at the time, people taking their eye off the ball, and search and mobile, I’m curious: What impact do you think it’s had more recently on the company too shy of putting things together? Did some of the ground it lost at Windows and Apple stem from the processes that came in place? So the later impact it had on the company ... </strong></p>
<p id="4bVAoh">Well, it’s a really interesting question. When you look back today at what Windows was in the ’90s, or even what it is today, you think about what we designed, and we’re then in part forced to continue, because of antitrust regulations. We were forced to ensure that somebody else’s browser could be more popular on our own operating system. That’s called Chrome. That somebody else’s search engine could be more popular than our own search engine. On Windows that’s called Google and search. And then you look at Apple and it’s approach to iOS, or you look at Google and it’s approach to Android, and you just look at the general approach of how the app stores, and you see platforms that are much more curated. </p>
<p id="NX9Uy0">Because the status quo was sort of established by regulation, for Windows, it has required a lot more work and a slower place and even a more measured approach just to get an app store really successful on Windows, the way we’re striving to do. So yeah, the reality is, once you make your bed and the regulators force you to lie in it, you may look across at the hotel across the street and say, “Wow, I wish we could design our rooms that way.” And you don’t necessarily have that opportunity. </p>
<p id="rVzSQN"><strong>Luther Lowe</strong><strong>: Hi Brad, Luther Lowe from Yelp, and sorry to keep drilling on this particular point. But it’s been a very hot debate recently in nerdy antitrust conferences. It sounds like you’re suggesting that antitrust enforcement against big tech firms can have an oxygenating effect on the markets, and you implied that search could have potentially been an area where, for example, where Windows had 90 percent market share. Could have said, why don’t we create, let’s look at the back page algorithm. Throw some research money at that and make that the default search. Do you agree with that? That antitrust oxygenates the markets? </strong></p>
<p id="f704zU">I would say two things that I think are interesting to think about in the world today. One is, look, I believe that antitrust continues to play an important role, and I’m not here to take a position on a case that we frankly settled a few years ago with our friends at Google. So just set that aside. </p>
<p id="zlFKqB">I think there’s a second dimension that is a potentially broad applicability or a potential impact for everybody. Antitrust cases basically are brought a case at a time against a company at a time. And then there are other issues that lead to broad sectoral regulation. Privacy, the general data protection regulation, or GDPR, is in effect a broad sectoral regulation of the entire economy, but with a particular impact on tech. If you look historically at where regulations emerged — especially, say, in the 1930s, ’40s, ’50s and ’60s — in the United States, the radio was regulated. Television was regulated. The one thing that has not been regulated is the internet. </p>
<p id="m7ZoL4">And I think we’re starting to see, some companies that are more in the network business are for sectoral, over-the-top regulation. And so one should think about antitrust, but more and more these broad issues, these broad concerns that people have, we either address them and resolve their concerns or I think we’ll see rising pressure for more sweeping sectoral regulation in ways that will be very challenging for many more companies than an antitrust case will be. </p>
<p id="Ep7rXd"><strong>All right, last question. Don? </strong></p>
<p id="eG2CJx"><strong>Don Graham</strong><strong>: Brad, Don Graham. You are one of maybe three, four people that you could call the co-captain of the team on the issue swirling around DACA. DACA and related issues. There still are attempts at action in Congress. There’s one going on right now, this week. You gave a good set of reasons for pessimism that anything will happen this year. But what should the people advocating your side of the issue be hoping for? Be optimistic for a moment: If a solution is going to be reached, what could that be? And how can the people in this audience that agree with you reach out to their members and their senators and push for something? </strong></p>
<p id="uhzXKI">Great questions, Don. No. 1, there’s only one place where a solution can come, and that’s in Congress. Of course it will take Congress and the White House, ultimately, to do it together. No. 2, by definition, any solution will have to have something for both sides. So it’s got to offer protection for the Dreamers and it’s got to offer some element of reasonable border security, although I would hope that it would be border security that would not come at the expense of children and their legal rights. </p>
<p id="S2h25z">But I think that there is the makings for a compromise, and there has been for months. The question is not whether there is a deal, it is whether there is the political will to embrace it. And I think that what we can all do is at least ensure that our voices are heard, to advocate for that kind of coming together. </p>
<p id="0i9aGM">And by definition, if you’re in California, it’s like, use your voice in California. But if you have relatives in Ohio or Pennsylvania or somewhere else, encourage them to use their voice as well. Because at the end of the day, I just feel like we’ve got to stop putting this political theater — well-chosen words — above the practical needs of so many real people who have never, in many instances, known any life in any country other than this one. It’s just a national and humanitarian tragedy if we fail to let this opportunity come forward in a way that protects them. </p>
<p id="PeJ5K4"><strong>Good answer. If you have two seconds, we just have to bring on Linda. </strong></p>
<p id="PEhHAj"><strong>Linda</strong><strong>: Well, I’m one of the few Europeans here in the audience, I think. So my question is, you talked a lot about the responsibility. When are the tech industry and the U.S. going to pay tax in Europe? </strong></p>
<p id="BWS0xe">I was in Brussels last Friday for the GDPR birthday. </p>
<p id="VOJe6s"><strong>That was fun, right? </strong></p>
<p id="LYzCMW">Yeah. But let me say two things. People don’t decide what taxes they pay. Governments decide what taxes people pay.</p>
<p id="N42Y7F"><strong>Linda</strong><strong>: I don’t agree with that, but. </strong></p>
<p id="jZ3lfT">Well, fair enough, but I don’t know too many people who get their tax bill and say, “Well, I’m going to pay three times what I owe because I love the government so much.” I don’t think you see that in the United States, and I don’t think you see that in other places. But, apropos your fundamental point, I do think the political winds are blowing from a different direction in Paris, say, if you listen to what President Macron had to say last week. You know, at Vivatech and around that, I think that we are likely to see new digital tax proposals. And I think that we may well see a day when we’ll see digital tax proposals adopted. Ultimately, I don’t think it’s a worse world if companies pay a reasonable sum in the countries where they generate income. </p>
<p id="Mx3LER">There’s a huge amount of complexity to be sorted out on an international basis, but you know, when governments see companies generating large amounts of income in their countries but paying modest tax, it’s one of those things where it’s like, that’s a day when you got to look in the mirror and see yourself not the way you hope you look, but the way other governments see you instead. </p>
<p id="gS32Ep"><strong>Great, perfect. Thank you for that question. Brad, thank you. </strong></p>
<p id="rLHAEf">Thank you. Thanks a lot. </p>
<aside id="JJOp61"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"recode_daily"}'></div></aside><p><small><em>This article originally appeared on Recode.net.</em></small></p>
https://www.vox.com/2018/5/30/17397082/microsoft-brad-smith-code-2018-transcriptRecode Staff