Social Network (7)
He held out his hand to me.
“Hello. I’m Mike Goldenberg.”
I got to my feet and shook his hand. “Nice to meet you. I’m Han Miru of Continue Capital.”
Mike Goldenberg—founder and CEO of Facenote. He was one of Silicon Valley’s true prodigies, one of the most successful men of the twenty-first century. He wasn’t even in the same league as a fraud like Rolf Buchi.
Born into a Jewish-American family, he had two parents who were doctors, and even his older sister worked as a physician. From a young age, though, he’d been fascinated by computers.
He started coding in middle school and was already building his own programs by high school. Even if he hadn’t founded Facenote, he would have ended up starting something of his own—and he would have succeeded anyway.
His stake in Facenote was 15 percent, which translated into a personal fortune of $150 billion. That made him the fifth-richest person in the world. Compared to him, most Korean chaebols were practically charity cases.
And he was only thirty-six. At an age when most people still had plenty of room to go out and have fun with their friends, he had built a massive social networking empire and become a global billionaire.
For reference, I’d been frying chicken with all my heart at that age.
“I happened to have some free time, so I dropped by. You’re on a company tour?”
“That’s right.”
“Then I’ll take it from here.”
With his arrival, Director Hank stood up and headed outside. Goldenberg sat down in his place, dressed in baggy jeans, a T-shirt, a zip-up hoodie, bare feet, and Adidas slides. Even his clothes radiated a kind of careless freedom.
For the record, he was also the man who had made that style fashionable throughout Silicon Valley. Young founders copied him so completely that they wore short sleeves in the middle of winter and shuffled around in slippers with bare feet.
When emulating skill was impossible, I supposed all they could do was copy the look.
As I stared at him, he smiled and asked, “Why are you looking at me like that?”
I answered honestly. “It’s a little surreal seeing someone I’ve only ever seen on TV.”
I hadn’t expected him to show up like this, either.
“I feel the same way. I’ve heard quite a lot about you, Han Miru.”
“You have?”
I hadn’t expected the CEO of Facenote to know my name.
Was that why he’d come down here in person?
“Yes. I understand you’ve been spotting problems in a number of startups and exposing Rolf Buchi’s fraud. That incident was quite shocking.”
It would have been. Rolf Buchi was a well-known name in Silicon Valley.
I gave him a modest shrug. “It was really thanks to everyone working hard together.”
Although, of course, I had worked the hardest.
“What brings you to my company?”
“I had a few things I wanted to ask.”
“Go ahead. I’ll answer whatever I can.”
That worked out nicely. It wasn’t every day I got the chance to speak directly with the CEO of Facenote.
“I heard you’re planning to acquire LinkLabs. Is that true?”
At my question, Goldenberg nodded. “Yes. We’re currently in negotiations.”
Mergers and acquisitions were usually handled in secret; once word got out, every opportunist on the planet came crawling out of the woodwork. The fact that he admitted it so readily probably meant he didn’t think he had any real competition.
Then again, how many companies would be willing to throw $40 billion at a business that wasn’t making a single cent?
“I understand there’s also strong opposition. Why acquire it at all?”
“Facenote’s goal is to connect the world. We’ve connected billions of people across the globe. But there’s still one problem we haven’t solved.”
“And that is?”
“Connecting people and computers.”
“So that’s why you acquired Valhalla and invested in VR hardware?”
He nodded. “The VR hardware market is growing rapidly right now. Valhalla’s HMD sales have already passed ten million units. But the limitations of hardware that only displays video are obvious. That’s why we’re planning to acquire LinkLabs, which is researching BCI.”
“Do you really think that technology can be commercialized?”
Most experts were skeptical. There were far too many technical hurdles before BCI could become a viable consumer product.
Even an analyst at Merrill Lynch had warned that this acquisition could become a disaster for Facenote.
“Do you think it won’t work?”
I already knew the answer, but I gave neither a yes nor a no.
“Hard to say. I’m not really familiar with that market.”
“We don’t expect immediate results, either. But if we invest now, we’ll be able to reap the payoff in the future.”
“You’re certain it’ll succeed?”
Goldenberg shook his head. “No. No one can be certain of that. The same was true when we acquired Linstagram and WhosApp. It might fail. But if you do nothing, nothing happens. So rather than sit still and do nothing, it’s better to take the risk and fail.”
……
Honestly, I was a little surprised.
I knew he was brilliant, but I hadn’t expected this level of insight.
If I hadn’t known the future, I never would have even considered the LinkLabs acquisition. But he’d reached that conclusion on the strength of his own judgment alone.
For Facenote, it was by no means an easy decision. The company’s annual net profit was around $30 billion. And yet he was pushing to spend $40 billion on a firm with no clear path to profitability, so the board and shareholders pushed back hard.
Still, Goldenberg forced it through.
And the result?
I thought back to my first life.
The LinkLabs acquisition would later be remembered as the greatest M&A deal in Facenote’s history. In time, LinkLabs’ value would even surpass Facenote’s.
If Facenote hadn’t bought it, the company would have remained just another social network. But thanks to the BCI VR headset LinkLabs released—the device everyone would later call Helm—it came to dominate the VR hardware market entirely.
Snow Crash created a metaverse world where everything was connected. But to access that world, you absolutely needed LinkLabs’ Helm.
If Snow Crash controlled the software, Facenote controlled the hardware.
Other companies, including Snow Crash itself, eventually made their own BCI VR devices, but all the crucial patents belonged to LinkLabs, and there was no easy way around them.
Thanks to that, Facenote overtook Enple, Guble, and the rest, rising to second place in U.S. market capitalization, just behind Snow Crash.
Snow Crash’s cloud and Facenote’s social network.
Their starting points were different, but their destination was the same: the metaverse. So this time, I had no intention of letting him swallow LinkLabs whole.
If I was going to eat, I was going to eat all of it—software or hardware, it didn’t matter.
Just as I was thinking that, Goldenberg smiled and said, “May I ask you a question now?”
“Go ahead.”
Still smiling, he asked, “I heard Continue Capital shorted Facenote. Is that true?”
……
So the rumor had already spread that far?
It made sense. We had shorted a staggering $42 billion.
No wonder the rumor had spread.
Very few firms in the world could pour that much capital into a single short position.
No—realistically, Continue Capital was probably the only company that could make a move like that.
There was no proof, but he almost certainly knew I was telling the truth. His mouth was smiling, but his eyes weren’t smiling at all.
Really, the fact that he wasn’t already shouting at me was impressive.
If someone shorted roughly $45 billion against the company you ran and openly hoped it would collapse, wouldn’t most people understand if you cursed them out and threw them out the door?
I didn’t bother denying it. “That’s right.”
“Why? Is it because you think the LinkLabs acquisition is too much?”
“More because I think Facenote has a fatal flaw in its business model.”
“What flaw?”
“NS, Enple, and Guble are all platform companies. Each of them controls its own operating system. Facenote, on the other hand, is just an app running inside those OSs. If Enple were to tighten privacy protections and block Facenote’s user tracking, what would you do?”
Goldenberg’s brow furrowed slightly. He already knew the risk I was pointing out. But there wasn’t much of a response to it.
“Who told you that?”
“Toby Bryce told me.”
……
Toby Bryce—the current CEO of Enple. Naturally, he hadn’t actually told me anything, so he probably thought I was being sarcastic.
But at last year’s International Data Protection Conference, Bryce had said, “Data containing user preferences—websites visited, app usage history, purchases, search information, and the like—is traded for tens of billions of dollars. Big tech companies such as Facenote are abusing personal information as a commercial weapon.” He was likely to stop user tracking on every app except his own at the right moment. Facenote currently depended on advertising for more than 95 percent of its revenue. Plenty of companies would take a hit, but Facenote would be hit the hardest.
Of course, Enple was just as ruthlessly intent on collecting user data, but that wasn’t the point.
When I did it, it was romance; when someone else did it, it was adultery.
“That’s why you shorted us?”
“There’s one more reason.”
“And that is?”
“Because Facenote is an immoral company.”
At that, Goldenberg burst out laughing.
“Ha! I never expected to hear that from the head of a bloodless Wall Street private equity firm.”
Come to think of it, I hadn’t expected to say something like that to his face, either.
I handed him the tablet. “This is an internal report my team put together last week.”
He took it and skimmed through it for a while. Then he let out a short scoff.
“Algorithms that cause depression, anger, and hatred, and encourage toxicity? That’s a funny story.”
“So you’re saying it isn’t true?”
Goldenberg replied as if the answer were obvious. “It’s all nonsense.”
“There have been several articles on the subject.”
“Journalists writing malicious pieces is nothing new.”
It wasn’t some grand secret; experts and reporters had pointed it out more than once.
And yet Facenote still hadn’t changed its algorithm.
There was a very practical reason for that.
The reason Facenote had designed its algorithm that way was because it was the best way to maximize profit.
Facenote’s stock price already reflected the assumption that its growth would continue, along with the profits it would earn in the future.
If they changed the algorithm and user numbers and usage time dropped, the stock would plunge immediately.
So even when they knew it was a problem, they couldn’t stop.
And on top of that, they probably believed no one would ever be able to bring down the giant empire called Facenote anyway.
When you stayed high enough for long enough, morality naturally went numb. I was sure he’d started out as a pure young founder, someone who truly believed in connecting everyone through Facenote beyond the matter of money alone.
But what about now?
“We’re planning to keep digging into this issue.”
“A waste of time.”
I smiled. “Maybe. But if you do nothing, nothing happens. So isn’t it better to take the risk and fail than to sit still and do nothing?”
……
“And my hobby is finding the truth.”
Because truth was profitable.
Goldenberg smiled with easy confidence. “Then by all means, do your best. I’d be curious to see whether you can actually find it.”
I stood up.
“I enjoyed talking with you today.”