Lessons From Tech's Last Political Crisis

"A very, very serious hit," says Mark Penn.

Politics and tech have long occupied uneasy, parallel worlds. Politicians are painfully clueless about the basics of technology; technologists are, as we are seeing, painfully naive about politics. Companies born in the '00s and that grew up in the '10s were, until recently, often under the blissful impression that what happened in politics didn’t much matter as long as regulators stayed away. That’s changed.

One of the first big-league political operatives to cross that divide was Mark Penn. He went to work for Microsoft during the last great confrontation of government and tech: the 1990s antitrust battle. He was Hillary Clinton’s 2008 strategist and after that defeat — he returned to Microsoft full time, and brought with him all the aggression he’d been talked out of directing at Barack Obama: From 2012 to 2014, he ran the company’s marketing and directed a political assault on their core rival, Google, under the characteristically subtle moniker “Scroogled.”

“They read your mail!” he still points out.

Today the crisis of tech and politics has hit a new peak for Google, Twitter, and — especially — Facebook, and so I asked Penn what he’d advise the embattled and largely silent social media giant do.

First, he said, it’s not clear what Facebook actually stands for.

“I think it's a problem kind of like Microsoft had,” he said. “I don't think it fundamentally undermines their platform — but it's a very, very serious hit for their image. Their company is built on openness and authenticity. If they believe in openness they better defend it. And if they believe in authenticity I think the better they better make sure their accounts are real.”

But he also suggested a deeper problem: a company so totally identified with its founder that the two rise or fall together.

“The Facebook image is driven largely by both Mark Zuckerberg and Sheryl [Sandberg],” he said. “Microsoft is not uniquely identified with Bill Gates.”

“Part of what they need is to create a long-lasting image of the company built on principles that they articulate and they execute,” he said.

Penn is now fully in the private sector, running the Stagwell Group, a holding company for, among others, digital political operations that’s funded by former Microsoft CEO Steve Ballmer.

(In that capacity, he heard a pitch last year from a firm that boasted its crucial role in Trump’s election. The company was Cambridge Analytica. “It was really weird,” he recalled. ”What they had to say just didn’t make sense.”)

Penn had come up to New York to sell his new book, Microtrends Squared, and we spoke over breakfast under what he described as the “Bob Woodward rules — it’s off the record as long as it’s not very interesting.”

In his new book, he adds depth and a darker tone to his 2007 book, Microtrends. Then, he advanced a cheery vision of a society happily splintered by infinite choice into a kaleidoscope of subgroups; the new vision is less cheerful, but similarly paints a society best influenced through groups like Bikers to Work, Pro-Proteiners, and Second-Fiddle Husbands.

“We expected that the advances in our ability to customize goods and services would open us all up to a new world of never-ending experimentation,” he writes. “A decade later, exactly the opposite has occurred, and our society has become increasingly polarized, with people finding the choices they like and picking them over and over again.”

Some of those choices have come in the information economy, and Penn offered a prescription to get Facebook out of that business.

“Facebook never should've gotten into news — that was a huge mistake,” he said. “The only way out of it,” he said, is to treat the platform as the federal government does the airwaves. “Auction off 10 channels, agree to promote 10 channels equally, let people choose, and get out of the news publishing and sorting business.”

In the short term, though, Facebook is more or less scroogled, “trying to row against the narrative that — whether it’s true or not — is almost impossible to row against.”

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