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'I Sold My Users' Privacy To a Larger Benefit. I Made a Choice and a Compromise. And I Live With That Every Day': WhatsApp Cofounder On Leaving Facebook (forbes.com)
Brian Acton, a founder of WhatsApp, which he (along with the other founder) sold to Facebook for $19 billion four years ago, has grown tired of the social juggernaut. He left the company a year ago, and earlier this year, he surprised many when he tweeted "#DeleteFacebook", offering his support to what many described as a movement. He had started despising working at Facebook so much, that he left the company abruptly, leaving a cool $850M in unvested stock. He has also invested $50 million in encrypted chat app Signal. In an interview with Forbes, published Wednesday, Acton talked about his rationale behind leaving the company and what he thinks of Facebook now. From the story: Under pressure from Mark Zuckerberg and Sheryl Sandberg to monetize WhatsApp, he pushed back as Facebook questioned the encryption he'd helped build and laid the groundwork to show targeted ads and facilitate commercial messaging. Acton also walked away from Facebook a year before his final tranche of stock grants vested. "It was like, okay, well, you want to do these things I don't want to do," Acton says. "It's better if I get out of your way. And I did." It was perhaps the most expensive moral stand in history. Acton took a screenshot of the stock price on his way out the door -- the decision cost him $850 million.
He's following a similar moral code now. He clearly doesn't relish the spotlight this story will bring and is quick to underscore that Facebook "isn't the bad guy." ("I think of them as just very good businesspeople.") But he paid dearly for the right to speak his mind. "As part of a proposed settlement at the end, [Facebook management] tried to put a nondisclosure agreement in place," Acton says. "That was part of the reason that I got sort of cold feet in terms of trying to settle with these guys."
It's also a story any idealistic entrepreneur can identify with: What happens when you build something incredible and then sell it to someone with far different plans for your baby? "At the end of the day, I sold my company," Acton says. "I sold my users' privacy to a larger benefit. I made a choice and a compromise. And I live with that every day."
Facebook, Acton says, had decided to pursue two ways of making money from WhatsApp. First, by showing targeted ads in WhatsApp's new Status feature, which Acton felt broke a social compact with its users. "Targeted advertising is what makes me unhappy," he says. His motto at WhatsApp had been "No ads, no games, no gimmicks" -- a direct contrast with a parent company that derived 98% of its revenue from advertising. Another motto had been "Take the time to get it right," a stark contrast to "Move fast and break things." Elsewhere in the story, Acton has also suggested he was used by Facebook to help get its 2014 acquisition of WhatsApp past EU regulators that had been concerned it might be able to link accounts -- as it subsequently did.
Update: Facebook Executive Hits Back at WhatsApp Co-founder Brian Acton: 'A Whole New Standard of Low-Class'.
He's following a similar moral code now. He clearly doesn't relish the spotlight this story will bring and is quick to underscore that Facebook "isn't the bad guy." ("I think of them as just very good businesspeople.") But he paid dearly for the right to speak his mind. "As part of a proposed settlement at the end, [Facebook management] tried to put a nondisclosure agreement in place," Acton says. "That was part of the reason that I got sort of cold feet in terms of trying to settle with these guys."
It's also a story any idealistic entrepreneur can identify with: What happens when you build something incredible and then sell it to someone with far different plans for your baby? "At the end of the day, I sold my company," Acton says. "I sold my users' privacy to a larger benefit. I made a choice and a compromise. And I live with that every day."
Facebook, Acton says, had decided to pursue two ways of making money from WhatsApp. First, by showing targeted ads in WhatsApp's new Status feature, which Acton felt broke a social compact with its users. "Targeted advertising is what makes me unhappy," he says. His motto at WhatsApp had been "No ads, no games, no gimmicks" -- a direct contrast with a parent company that derived 98% of its revenue from advertising. Another motto had been "Take the time to get it right," a stark contrast to "Move fast and break things." Elsewhere in the story, Acton has also suggested he was used by Facebook to help get its 2014 acquisition of WhatsApp past EU regulators that had been concerned it might be able to link accounts -- as it subsequently did.
Update: Facebook Executive Hits Back at WhatsApp Co-founder Brian Acton: 'A Whole New Standard of Low-Class'.
I feel sorry for him. He only made $19 billion instead of $19.85 billion.
on his giant pile of money
Someone impresses me! He gave up 850M for a principle. I have to give the man his due respect.
So how was he planning to make money from WhatsApp?
... but not bad enough to do anything that's not symbolic. Like most CEOs, the guy has no moral compass.
That is all.
Buy low, sell high.
What makes up the other 2%, if not from ads?
Investing the money they made from Ads. They also might have other miscellaneous things like peering/licensing agreements, renting out unused space in property they own, etc...
was going to come from? If the users don't pay, their privacy will. Until someone figures out a biz model that actually makes the users customers instead of the product, this will continue.
This isn't a very hard business model. Facebook makes less than $2/month per user. They could easily offer a version of their service for $2/month where they stopped tracking, stopped displaying ads, and protected your privacy. Even at $5/month or more there would likely be some users that would pay for it. Many other companies already offer an ad-free version of their product.
Money is wasted on the Successful workaholics.
Seriously, give me a few million in the bank to return about $100K of income and I'm retired and traveling.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
People who signed up for WhatsApp prior to FB were told that their privacy would be respected. This promise was clearly broken, but unfortunately due to out last-century legal system such robbery is not illegal.
It is not illegal to collect and sell your personal metadata. Only PHI under HIPAA is somewhat protected, but this is limited to medical field.
No, just you grandpa.
http://www.acetonestudio.com
What did he think was going to happen? Of course Facebook was going to do these things. What planet is he from? Victim Centari?
Standard human behavior. Apologize after the fact. Not that I think this guy is bad in any way. He's a normal dude responding to incentives. Capitalist system, eat what you kill, blah blah blah. This is the way it works. At this point, user data is valuable and ads are valuable. Any who can accumulate what's currently valuable and sell it at a high price, does exactly this. It's also human behavior to find your humanity AFTER you've taken care of business.
Actually, there's one other lesson here. This is one of the most "normal" human reactions he could have taken. This is just a normal guy, with the usual human flaws, who happens to be sitting on 19 billion dollars.
Most of these high flyers and successful tech people bill themselves as geniuses. Not the case. They took business risks and got lucky to be in the right place and the right time. At the end of the day, these are normals who gambled and won. It wasn't destiny and it wasn't because of their special visionary genius. For every one of them, there are about 100,000 similarly smart, energetic businesspeople who took a similar visionary gamble and lost.
I never had a FB account.
When those I knew were hot about it around 2009, I decided not to join because of its "keeping up with Joneses" and fake "happy sunshine" vibe. I could see how people were creating this unreal facade of themselves and it really irritated me.
From 2009 to around 2014 People were astonished I didn't have an account.
Another reason I didn't have one was because I saw how much strife was there. I would hear stories from friends/relatives about the arguments and drama, whether political or personal. I would look around on peoples accounts and I saw how the nutty political side was coming out.
Again, people couldn't understand why I didn't have an account on FB.
Then I started noticing that many organizations of all stripes were migrating away from email logins to FB logins, which to me was reprehensible. FB was taking over the online sphere of influence and that irritated me greatly.
Again, people couldn't understand why I didn't have an account on FB.
Then I heard about all the privacy implications, and the underhanded shit FB was doing with user data. The shadow accounts, etc. Yes, I'm sure FB has a nice, juicy dossier on me as well.
Again, people couldn't understand why I didn't have an account on FB.
Then I started hearing from Gen Z that FB was for older peeps, and that they were using other platforms. I also heard they didn't like the underhanded shit FB was doing, which surprised me.
Still, people couldn't understand why I didn't have an account on FB.
Then during and after the election of Trump the shit hit the fan with how slimy FB really was.
So by 2017, people were no longer surprised that I didn't have an account.
We play the game with the bravery of being out of range
Right but the friction and cost of payments and the regulation involved with becoming a payments processor erases the possibility of utilizing micro transactions. So our micro transaction conduit is ad revenue.
I object to power without constructive purpose. --Spock
I don't have FB and never signed up for it as I have clearly understood its business model. However, I can't force others into making good choices. Making shitty choices that have long-term consequences is a fundamental freedom in any civilized society.
All "moral" after selling out for NINETEEN BILLION. These are the kind of people, once they reach this "status" that: Attend all the high price social events, travel in private planes, have gated home(s), huge security, have a staff to wipe their butts and on and on that say that we need to "give this or that" to the citizens bla bla bla. If he's so worried about anything, donate your money to the IRS to help bring down the debt. Another rich smug liberal who now thinks he has a moral compass.
Right but the friction and cost of payments and the regulation involved with becoming a payments processor erases the possibility of utilizing micro transactions. So our micro transaction conduit is ad revenue.
$2-$5/month is above the microtransaction level. Redbox has a very successful model with those amounts and Netflix is only slightly higher. Microtransactions sound great in theory and I would occasionally pay 25 cents to read a random article but something like Facebook would likely not work well with microtransaction even if they existed. Would you charge 5 cents a page load? This would literally reinvent the term "nickle and diming". A small monthly or yearly subscription would make more sense. Lots of people would pay $20/year to remove ads from Facebook and the friction would be minimal on a yearly subscription.
The guilt that torments him is in truly homeopathic amounts in ratio to that sea of money. It's roughly equivalent to the guilt I feel when I'm not sure if something is recyclable and it doesn't say on the package, so I throw it in the trash rather than check on Google.
You mentioned going over a moral cliff. In my own experience, I tend to slide down a slope more often than I jump off a cliff.
Years ago, I was a serving as a middle-man of sorts collecting money daily on behalf of someone, and about once per month I'd send it to him. Sometimes it was two months in between - he wasn't worried about exactly how often it was sent. He wasn't at all tight on cash, so he didn't care if it was four weeks between payments or six weeks. One day I had to pay my payroll two days before my own funds became available. So in order to pay my employees on time, I borrowed from the "middle man" money for 48 hours. He didn't know or care. It helped my employees, who needed tonoay their bills on time, and nobody was hurt. But it wasn't the right thing to do.
The problem was once I borrowed money that wasn't mine, even though it didn't hurt anyone, and even for just 48 hours, that's a slippery slope.
In this instance, Facebook promised to not map user data from WhatsApp users. They probably made other promises to out his mind at ease. That plus a huge pile of money could be very tempting indeed.
Another rich smug liberal who now thinks he has a moral compass.
As opposed to the rich smug conservatives who don't have one?
I don't know anything about this guy, or really any billionaire. I would imagine that much money would change a lot of what you do, and might even change who you are as a person. Maybe it depends on if you made it yourself over a long period of time, a relatively short period, if you inherited it, or have a trust fund you were born into. But I think there are billionaires of all types, and their opinion of things is really no different to me than anyone else's. Especially people who turn everything into an opportunity to insult those who don't believe what they themselves believe.
My beliefs do not require that you agree with them.
Now Facebook can show extra $850 million in profit. Under GAAP, stock based compensations are counted as expenses, so this directly translates to profit.
Brian Acton, a founder of WhatsApp, which he (along with the other founder) sold to Facebook for $19 billion four years ago, has grown tired of the social juggernaut. He left the company a year ago, and earlier this year, he surprised many when he tweeted "#DeleteFacebook", offering his support to what many described as a movement.
All good and well after he got his $19B. Will he be donating that to charity?
Lots of people would pay $20/year to remove ads from Facebook and the friction would be minimal on a yearly subscription.
I wouldn't. Facebook has already shown itself to play fast and loose with users' privacy, and I couldn't trust that they wouldn't continue to try to monetize users' data even if a subscription fee had been paid. I don't think I'm alone in this assessment.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
The slippery slope fallacy is assuming a slippery slope *when there isn't one*.
In my experience, once I "borrow" a dollar without permission, it becomes easier to later "borrow" $5, then later $20. For me at least, there is a bit of a binary choice between "I'm not a thief, period" and "well sometimes I kinda ...". So there actually IS a slippery slope. It's not a fallacy to recognize a slippery slope that is actually there.
You seem to be using a different definition than I am for "slippery slope".
The Oxford Dictionary defines "slippery" as "difficult to hold on to" (not impossible), and "slippery slope" as "one action likely to lead to another" (not guaranteed).
https://en.oxforddictionaries....
It would be error to assume that something WILL happen because it is MORE LIKELY to happen.
It would also be error to ignore something that increases the probability of a bad outcome, only because it doesn't GUARANTEE a bad outcome.
and then sell it to someone with far different plans for your baby?
"No ads, no games, no gimmicks"
Did he not know he was selling to Facebook???