Intentional Consequences

by Charles Harris

  “It almost sounds like you need a campaign based on something like the old Coke commercial, recast to apply to America. Remember I’d like to teach the world to sing?

  He remembered it. “I like that.”

  Valerie said, “If you decide to move forward, map out an aggressive schedule. You have less time than you think, and things are getting uglier by the day. I’m not sure you can wait until Memorial Day to meet with people.”

  Chapter 13

  Susan Ward stepped out of the car and climbed the stairs to the walkway along the Bund, a mile-long stretch of promenade along the Huangpu River in Shanghai, China. It was 8:00 p.m. local time, or 5:00 a.m. some 6,000 miles back home in California. Fog swirled silently above the river, sometimes masking and sometimes revealing the towering skyscrapers across the river in Pudong. The lights on the buildings illuminated the fog, the river and the faces of the crowd in a kaleidoscope of changing colors. Moisture from the fog and the river combined to put a chill in the air. Ward tightened her trench coat as she walked south through the throng of humanity that filled the promenade. They were mostly Chinese, with a smattering of Brits and Aussies and an occasional American or two. To her right, on the Old Shanghai side of the river, a golden strand of historical buildings stretched along Zhongshan Road, mingling the China that used to be with the trendy boutiques, bars, restaurants and promises of today. She could have had the car drop her off at her destination, but she never missed a walk on the Bund. In her earlier years, she would have been here alone. Tonight, her bodyguard trailed several steps behind her.

  Ward was the chief operating officer of PaprW8, the only social media company in recent years to give Facebook and Instagram a run for their money and not sell out for a few billion dollars while it was still privately held. The company had gone public two years earlier, shortly after its founder, Mike Hastings, turned 30. Often viewed as a junior version of Facebook’s Mark Zuckerberg, Hastings was a brilliant visionary driven to move his ideas from concept to reality. Unfortunately, he was also impatient, impetuous and stubborn. He disliked everything associated with Wall Street and struggled to deal with the nuances of running a public company.

  Ten years older than Hastings, Ward was often considered the adult supervision in the room. With brown eyes and short black hair with side-swept bangs, she was tall, thin and disarmingly attractive. She had a gold-plated resume that included senior roles at Amazon and Google. Perhaps most important, she was tough as nails, with focus, tenacity, control and effectiveness few executives of any sex could bring to bear. Critics said she knew it and she cultivated it. Divorced with no children, she was a popular subject on the internet and not always in a positive way.

  She left the promenade and crossed Zhongshan to the Nissin Shipping Building, where she took the elevator to the seventh floor. In the restaurant lobby, she removed her coat and handed it to her bodyguard. She was wearing one of her China business outfits, a black skirt hemmed appropriately below the knee and a matching black suit jacket over a well-buttoned white long-sleeved shirt, with black low-heeled, closed-toe pumps. As she turned to walk toward the concierge desk, a well-dressed Chinese man walked up to her and introduced himself.

  “Miss Ward? He said. She nodded. “My name is Wang Jian. Mr. Chen asked me to meet you and escort you to his table.”

  They were dining at one of Shanghai’s finest western restaurants. Her dinner partner was Chen Jen-Sung, who was Senior Managing Director of a Chinese-based investment fund that held a significant investment in CnEyeco Tech, the creator of the technology she had come to see. Born in Hong Kong and wearing an expensive dark blue tailored suit, Chen fit his part well. In his mid-fifties, he was short and heavy-set, with thick black hair, brown eyes and a gregarious manner. In America, he would have been in sales. He spoke the Queen’s English, reflecting his schooling in Hong Kong and London. Like many Chinese with extensive business connections, he had adopted an Americanized given name, Jason, to make spelling and pronunciation easier for his overseas colleagues. To many in the United States, he was simply known as Jason Chen.

  Chen and Bernbach had several business relationships. Bernbach’s hedge fund was an investor in Chen’s China partnership fund and Bernbach had done additional “side car” investment deals with Chen on several Chinese tech company startups. Bernbach had sought Chen’s advice on potential synergies before he bought his first shares of PaprW8 stock several months ago. Most importantly for Bernbach, Chen was involved in implementing China’s contributions to Bernbach’s 2020 election strategies.

  As part of that role, Chen had contacted Bernbach about CnEyeco. “Their search technology is amazing,” he had said. “It uses AI and facial recognition to aggregate personal data that can be sorted down to the individual level. We use it over here for state security applications. We can deliver a license deal for the system and assure access to extensive personal information.”

  Bernbach had not shared any of this background with Ward. All she knew was Bernbach had accumulated just under ten percent of PaprW8’s stock and had been pushing PaprW8 to expand their advertising revenues from political marketing and to evaluate opportunities that would increase their capabilities in AI, facial recognition search and microtargeting. After Chen had reached out to him, Bernbach had suggested Ward look at CnEyeco as one opportunity. He had also hinted his Chinese connections could assure a licensing deal if Ward was impressed. A week later, Ward had booked her trip to Shanghai.

  After the traditional two-handed presentation of business cards, Chen and Ward engaged in some pleasantries and small talk. Most of the conversation was about Chen’s time in Hong Kong. They hit it off well. As they completed their main courses, Chen approached the reason they were dining together. The conversation followed typical Chinese choreography, with courtesy and understatement preserving face for both sides and the word ‘no’ never being spoken.

  Chen said, “Our portfolio company has developed AI-based software that greatly increases the effectiveness of social media microtargeting based on multiple categories of personally-identifiable information. We believe it is a significant breakthrough that would be very valuable to your company. Because of our company’s experience with facial recognition, location-based ID tracking and other security tools that, shall we say, have special interest in China, we believe the ability of the algorithms to integrate both database and real-time information is much higher than anything you have seen in the States.

  “These capabilities offer special benefits in political and propaganda marketing. Obviously, our company will need to demonstrate this effectiveness and we will do that, with suitable protections for both sides, if your present trip goes well.”

  Ward said, “Thank you for your explanation. We are honored to have the opportunity to discuss this with you.” Chen nodded. She said, “As I am sure you know, David Bernbach has made a significant investment in our company.” Chen nodded again. “So, we are of course interested in increasing our revenue and cash flow. We believe political advertising could be a market where we could achieve considerable advantage over our larger competitors, like Facebook.

  “One of the things we need to understand is how your portfolio company’s technology could be used effectively with the strict privacy standards that are emerging in the EU and the United States, which could be a small problem in deploying your company’s technology.”

  Chen said, “We have some ideas with respect to the privacy rules, which would be good to discuss once your company feels comfortable with the capabilities of our technology. Without getting into the details, it may be more effective for you and your customers to achieve absolute security of PII than to worry about full compliance with confusing and constantly changing privacy rules. This approach could also make it easier to merge PII from multiple sources, including sources with possibly-tainted user consents, to achieve more effective microtargeting.”

  Ward said, “What you say could be interesting. Back on trying to maximize the v
alue of a proposal from our company, does your portfolio company have specific interest in any of our company’s technology, data or other assets?

  Chen sat back for a moment and said, “Possibly so. Access to personal and political data of U.S. residents could be of interest, even if the data are not fully compliant with the latest EU privacy rules. Access to photos and videos with enough personal granularity to assist in refining and logging facial recognition could also be of interest. We want to avoid any investment or transfer of critical technologies that might be constrained by your country’s foreign investment and technology transfer regulations.”

  Ward said, “I understand. We would need to see whether we have any such data and, if so, how it might be shared.”

  Chapter 14

  The next morning, Chen picked Ward up at her hotel at 7:30. His car was a black Audi A8L, driven by a large muscular man who served Chen as a bodyguard as well as a driver. Dressed in a dark suit and tie, Chen stepped out of the car and shook Ward’s hand in the motor court. She was wearing the dark blue version of her China business outfit from the night before, trading the skirt for slacks and adding a red scarf at her neck.

  After making their way through the city traffic and across the ring roads, they headed southeast on the G60 toll road toward Hangzhou, a city known as much today as the birthplace of Alibaba as the home of the beautiful West Lake World Heritage Site. The trip took two and a half hours, door-to-door.

  Along the way, they talked about China’s dramatic changes and its ambitious goals for China2025 and the Belt and Road initiative. When Ward tried to steer the conversation toward the slowdown in the Chinese economy or trade and intellectual property issues with the U.S., Chen offered only general comments, all politely supportive of President Xi Jinping. Chen was more responsive about his college education at the University of Chicago and his first job at J.P. Morgan in San Francisco.

  CnEyeco Tech was headquartered in a long one-story tech center that housed several startups, all founded by young entrepreneurs who had commenced their careers at China’s Alibaba or its affiliate Ant Financial, known earlier as Alipay. The electronic access process to the office included index finger scans, 3D facial scans and printed photo IDs.

  After receiving their entry credentials, Chen and Ward were escorted to a conference room where Chen introduced her to CnEyeco’s two founders, a man and a woman who looked about 30. Both had black hair and were wearing wire rim eyeglasses. The woman spoke good English. The man’s English was less proficient but passable.

  They reviewed CnEyeco’s vision and objectives, then moved into a high-level explanation of its global markets, technology and products. Nothing very exciting with any of that, Ward thought. Then the founder pulled up the photo of Ward from her guest access badge. The woman pressed a few buttons. After about 10 seconds, a stream of information about Ward began to scroll across the screen on the wall. Name, email addresses, age, hair color, eye color, race, birthdate, birthplace, social security number, IP address and geo-location history, sexual preference, marital status, employer name, home address, business address, mobile phone number, voter registration, driver’s license number, vehicles registered in her name, credit score and credit file information.

  The woman looked at Ward for a response. Ward said, “That’s very impressive. What did you use to trigger the search? Did you have that information on file, or did you pull it real time as we watched?”

  The woman said, “The search was triggered by the facial scan we took today for your access badge. The information on the screen was created real time from our global sources. The process is faster if we limit the search to our local databases.”

  Ward said, “Could you trigger the same results by using my name or some other identifying information like my social security number?”

  The woman said, “Yes and no. We can use other identifying information, but the facial recognition algorithm significantly increases accuracy where we are able to access data linked to a photo or video of you. This is part of the unique capability our technology brings. In many countries today, very little personal data are linked to a photograph, but where the data are linked, we can tie disparate database sources together using facial recognition as the common verifier. In China, a lot of personal data is linked to a photograph and this is increasing rapidly.”

  “The information I showed you only touches the tip of the iceberg, as you say. Once we have identified the person, we can drill down in any number of areas.” She typed additional commands into her laptop. Almost immediately, the screen on the wall displayed a dashboard of charts showing scores for psychographic factors for personality, values, attitudes, interests and lifestyles. Typing again, she pulled up a dashboard for various political factors, including social conservatism, fiscal conservatism, voting frequency, stability, social media activity and voting frequency and method.

  She said, “These are just examples. In addition to the charts shown at this level, you can click on any chart to drill down further. For example, going back to the psychographic dashboard, we can click on lifestyles and see ratings on a number of more detailed factors.” She clicked on the lifestyles chart and additional tables appeared showing factors for sexuality, reading, movies/tv, sports, fashion and adult media. “As this shows your actual data, I will stop here to avoid any discomfort.” As she spoke, one of the dashboard charts on the screen showed Ward’s sexuality rating as “high”. Before Ward could comment, the woman cleared the data on the screen.

  These really are my data, Ward thought. What the hell happened to the Chinese ethic of saving face? With an edge in her voice, she said, “That’s amazing but it’s also very invasive. Where do you get the data?”

  The woman said, “We can only display data we can obtain, of course, so our accuracy ratios improve as we obtain access to more data sources. Most of the data fields are customizable based on our client’s specific needs and the data available. The system can blend data compiled by the client, internal customer data for example, with public records data and PII from our other database sources.”

  Question after question ran through Ward’s mind. Her first thoughts bordered on disbelief. Could they truly do all this? How much of the data they displayed was actual and how much was just made up to look impressive? Perhaps most important, how much of this data could be accessed or used under the tougher data privacy laws? Once she fought through those, her next thoughts fueled her competitive instincts. If we could get access to all this, we could have a huge advantage in the marketplace. What would the politicians pay for this information?

  Watching Ward think in silence, Chen looked at her and said, “As amazing as these capabilities are, the value comes from what people do with the data these algorithms produce. In China, for example, the data can be used to compile a threat rating for a person. If a threat rating exceeds a specified threshold, the algorithm can trigger any number of actions, from a visit from the police to a lockdown on the person’s bank card or resident identity card, making it impossible for the person to access his money, buy an airline or bus ticket or even ride the subway.

  “While the U.S. is not ready for actions like that, the personal political data the system is capable of producing can be used to significantly improve microtargeting and the effectiveness of marketing designed to influence voters to vote, stay home, support different candidates and even participate in protests or other disruptive activities. We should discuss some of this separately as the sensitivity is quite high.”

  Ward said, “I understand we’ll have time for due diligence, but could we spend a little time reviewing the data for some other people so I can look at the how the customization and drill down options work? Given the granularity you have already shown, I am not sure I want to do this with my own personal data.”

  “Yes, of course,” the woman said. “I apologize if the data we showed you caused any embarrassment. We would not have done that in a larger meeting, but we have found executives li
ke yourself are more impressed with our technology when we use their own data in our demonstration.”

  The woman brought up digital photographs of five data subjects and ran searches using the system. As the data flowed in, she showed Ward how the dashboard could be used to drill down into the psychographic and political factors. At Ward’s request, the woman ran searches on American subjects and photos of people Ward supplied from her iPhone Photo Stream. The results showed less data, but still included a lot of information.

  Ward asked, “I can see how the facial recognition element would be useful. Are you concerned about altered photographs? Does the system have a way to detect those?”

  The woman said, “Altered photos could be a problem, especially if the system only has access to a single photo. When multiple photos are available, the algorithms run comparison routines to identify outliers. We are working to create better capabilities to detect digital editing. Because our technology is used for security and control, we are most concerned about faces. This could be an area where we could work together to develop improvements.”

  ◆◆◆

  The meeting ended around 12:30.

  On the way to lunch with Ward, Chen asked, “What did you think?”

  Ward said, “It was very impressive, so much so I wondered whether the system was really doing all this or whether the demo was wired as we sometimes say. I don’t want to sound disrespectful, but we will need to do some detailed testing to validate this system is as good as it seems to be.”

  “What do you think about the business prospects?” Chen asked.

  “Ward said, “The business opportunities could be strong, both in the commercial and the political spaces. Of course, much will depend on the availability of data we can actually use. I will tell you we are interested and willing to move quickly to see if we can find a mutually-beneficial relationship.”