Surely you've heard news that Facebook is facing extreme scrutiny of its data practices following reports that data firm Cambridge Analytica improperly gained access to the personal data of more than 50 million Facebook users.
This is a serious issue and it has slammed Facebook's stock price, which continues to decline. In fact, Facebook lost over $70 billion in market cap in ten days. Some shareholders have already sued the company for fraud and there could be more fallout as Zuckerberg is set to testify on Capital Hill. The founders of other tech companies are watching this closely, and you should too.
There are a number of lessons that every entrepreneur and business should consider from the events and circumstances around Facebook. I've highlighted three such lessons and hope you consider how to use this event as a learning opportunity.
1. Things are good, until they're not
It's interesting to see how fast things changed at Facebook. One minute they're crushing Snapchat and the next minute people are calling for Zuckerberg to be fired.
As an entrepreneur, I see this and think about how fast things change. I think about how important it is to never let up or rest on your laurels. You need to always question your beliefs, standards and processes. You should never take your customers for granted and you should take every measure possible to protect your customers. This world moves quickly, and you can't afford to sit on the sideline of success for too long.
2. It pays to be paranoid
One of my favorite quotes in business is "only the paranoid survive" from Andrew Grove. It sounds extreme, but I think it's brilliant - and 100% accurate in my experience as an entrepreneur.
In this case, you could consider how an extra degree of paranoia might have helped Facebook see the "worst case scenarios" with their data policies and build contingencies to either safeguard this from happening or mitigate the damage that could be done.
I know it's impossible to prepare for, prevent, or legislate everything, and it's easy to point fingers, yet it's important to push the boundaries in examining what the worst case scenarios might be and to do your best to prepare for them. Everyone makes mistakes, yet when mistakes happen, you want to go to bed at night knowing you did everything you could.
Bad entrepreneurs are scared of this process. They're scared to find vulnerabilities. They're scared to ask the difficult questions. Great entrepreneurs know they're only as strong as their weakest link.
3. Be accountable
Coverage of the scandal was fast and furious, with headlines hitting all major news outlets and coverage has been dominating the news cycles. Yet the one thing absent for days was a comment from CEO Mark Zuckerberg or CFO Sheryl Sandberg.
It's easy to judge others, yet it was disappointing to see many days pass before Zuckerberg made a statement and accepted responsibility. That delay hurt their stock price and likely increased the growing distrust in Facebook.
In the case of Facebook, and since we're the product and it's our data, one could expect that Facebook would show up quickly and be accountable. Even United Airlines quickly owned their latest egregious mistake when a dog died after a flight attended required that the dog be placed in an overhead bin.
Accountability is important. We all make mistakes. The accountability is what helps shift the energy from blame to rebuilding trust and finding solutions.
As of press, it's great to see that Zuckerberg has made a comment and committed to speak in Washington.
My intent for this article is not to pile on Facebook, but to highlight the lessons you can learn to improve your business or your abilities as a leader. Consider how to implement these lessons and avoid the same mistakes that led Facebook to these circumstances.