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Here’s What Entrepreneurs Can Learn From the Facebook Privacy Scandal


last yearBusy6 min read

Hey there,

You're probably already familiar with the story. A group of political consultants working during the 2016 election harvested data from nearly 90 million Facebook users, most of whom lived in the United States.

The data was used by the now defunct consultancy Cambridge Analytica to create psychographic models that would aid campaigns in crafting messages that appealed to their target audiences.

Facebook was aware of the breach months before it was made public. Users who were upset with Facebook for concealing this information started the #DeleteFacebook movement, and Mark Zuckerberg was called to Congress to testify about the incident.

Now the storm seems to have passed more or less. Facebook has issued tools to help users better control their privacy, and has launched a PR and ad campaign to try and win back the hearts of unhappy users.

There’s no denying though that the company took a big reputation hit. Whether you handle peoples’ sensitive data or not, as an entrepreneur or small business owner it’s worth taking a look at the scandal so you can avoid one of your one someday.


Photo by Tim Bennet on Unsplash.

Embrace transparency when confronted with an issue that impacts customers.

Facebook knew about the data breach months before it was reported to the public. Rather than immediately issue a statement, the company tried to cover it up. While some within Facebook argued that the company should be forthcoming, senior leadership vetoed the recommendation.

Many Facebook users felt that the company’s refusal to act forthrightly was just as bad as the negligence which caused the breach in the first place. Should you face a choice about notifying users of a compromising incident, always choose the more transparent option. In the long run, it will help your organization to maintain the trust of users or customers.

Surround yourself with colleagues who will challenge your thinking.

Facebook did have some senior people who thought the company should immediately disclose the breach once it was discovered. In light of this, one could argue that surrounding yourself with those willing to challenging the thinking of a founder isn’t enough to avoid scandal.

This may be true, it should be noted that founders need to listen to those willing to challenge their thinking in order for the challenge to be worthwhile.

It also remains to be seen whether much internal discussion occurred when the company made decisions to give third-party platforms access to such large amounts of user data. It’s possible that this choice, which in hindsight was more consequential, received little pushback from senior leaders.

Entrepreneurs must build a culture that values dissent and that listens to those who share inconvenient, but important truths.

Invest in data privacy and security.

Privacy and data security will continue to ensnare even the most successful companies, there is no reason to believe that your organization will be spared from these issues. Invest in creating a business that is hardened from hackers, and that takes the privacy of customer information seriously.

Tech companies should consider taking a security and privacy audit to ensure that their product is capable of protecting sensitive information in the face of malicious actors.

And in the event that data is compromised, you and your team should create an emergency response plan well in advance. Use the lessons learned from notorious breaches like Facebook or Equifax as a guide “what not to do” guide.

Make your terms and conditions easy to understand.

Customers are understandably skeptical when presented with unintelligible terms and conditions written in small print. Work with your legal team to produce terms and conditions that protect your organization, while clearly outlining what the customer or user is agreeing to.

If a customer is interested in reading your terms and conditions, it probably means that they are more skeptical than most. Providing them with terms and conditions that are easy to read will help your organization to earn the trust of your most skeptical customers.

Give users the tools to easily manage their privacy.

Provide your users and customers with the tools to manage their privacy within your product. Not only this a requirement thanks to GDPR, but it is the right thing to do. If users don’t want their information shared with third parties, or if they are not interested in receiving marketing communications from your organization, you’re only degrading their trust if you share their data or send them unwanted emails.

As an alternative, by providing users with easy to use privacy controls, they will be more likely to willingly engage with your partners or subscribe to your newsletter themselves.

Facebook is an inspiring example of entrepreneurship and innovation, but it is also a cautionary tale about the perils of growing at all costs. Readers should use the recent data breach as a reminder that acting transparently, and putting the well-being of customers or end-users first is usually the best choice, even if it means slower growth.

Thanks so much for your support. Please check out some of my more recent writing:
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