Founders’ Reading List: Five Lessons from the Facebook Scandal

The dust from the Facebook and Cambridge Analytica scandal isn’t close to settling. However, if you’re a leader it’s worth asking: what can my company learn from this?  To help, we’ve put together this reading list.

Tech is Hard to Explain

Media firestorms contain a lot of hyperbole and soundbites are half-truths almost by definition. What’s happening with Facebook is particularly complex. It’s important for tech companies to realize that communicating complex information is difficult, and if companies don’t explain things for themselves, other people will. This is a good starting point.

The Truth Can Sound Worse Than It Actually Is

Yes, Cambridge Analytica got 270,000 people to share their Facebook friend lists. And yes, that meant they had some data on as many as many as 50 million Facebook users. But as this article explains Cambridge Analytica didn’t have access to the full Facebook profiles of those users and they didn’t have much in the way of identifiable information. But any effort to explain that (see our first point) means Facebook still has to repeat a really terrible-sounding truth. And any attempt to mitigate that truth is lost in the media hysteria.

Leaders Must Lead, Especially During Crises

Until Zuckerberg’s CNN interview aired five days into the crisis, it seemed he and Sheryl Sandberg were MIA. Without the Facebook’s leadership taking control of the story, it spun far out of the company’s control, the stock tanked, and #DeleteFacebook started trending. That’s why it’s important to put a crisis management strategy in place now and start practicing it. In much the same way that scheduling a fire drill once you smell smoke is much too late, putting together a crisis management strategy once the crisis begins is silly. Consider your strategy now; here’s how to start.

Big Data is Cool, But It Can be Scary

The cloud is enabling uses of big data that deliver real benefits to society. But it has implications that can creep people out. Remember that time Target figured out how to identify pregnant women and marketed infant supplies to a teenager before her father knew what was going on? This is what every customer should know about big data. If your company is in the business of using (or selling) big data, it is incumbent on you to communicate how you are using it to your customers.

Nobody Reads Your Terms of Service

Studies confirm this. But that doesn’t mean that customers won’t get mad when you’re doing something that seems bad even if your terms of service say it’s okay. Or if someone else violates your terms of services and it negatively impacts your customers, as Facebook’s general counsel argues Cambridge Analytica has done. But what to do about customers not reading your terms of service? It comes down to making your notices as simple as possible.