The 2022 midterms will be a major test for TikTok – Protocol

TikTok was a blip in 2018, and still growing in 2020. How will it handle misinformation around the 2022 midterms, especially with high turnover in its trust and safety teams?
“Platforms often tend to start the interventions too late, and then exit too early, and don’t recognize that election misinformation is an incredibly durable piece of information.”
As the midterm election nears, TikTok has faced unrelenting scrutiny about the role it plays in spreading misinformation and the way influencers and political operatives skirt its advertising rules. But according to seven former employees from TikTok’s trust and safety team, the company may have an even more basic problem inhibiting its efforts to secure the midterm election: High turnover among the employees who are supposed to carry out that work.
TikTok is still the new kid on the social media block. In 2018, the up-and-comer was barely a blip in the conversation about U.S. elections. By the 2020 election, it had built out its trust and safety team. But since that time, former employees told Protocol, members of that team have scattered, leaving TikTok with limited muscle memory just when it needs it most. “Since so many people are new, they don’t necessarily have the history or institutional knowledge,” one former employee said.

These former employees attributed the trust and safety team’s high attrition to TikTok’s grueling work culture and a lack of transparency from leadership about access to and policies around user data. “If they don’t stem the tide of all the people they’re losing, it’s going to be hard for them to be effective,” another former employee told Protocol.
TikTok refused to say exactly how many employees have left its trust and safety teams, or how many are employed now. The company also declined to specify exactly how the U.S. trust and safety team is structured, and if that structure has changed since 2020. In September, chief operating officer Vanessa Pappas told Congress that trust and safety is “our largest labor expense for TikTok’s U.S. operations,” with “thousands of people working across safety, privacy, and security on a daily basis.”
Protocol identified 239 people worldwide on LinkedIn who left TikTok’s trust and safety operations since 2021, with 94 of those leaving just this year and 67 based in the U.S. (LinkedIn member information may not fully represent staffing or attrition, due to the potential for fake accounts.) The company posted listings seeking to fill election misinformation roles as recently as October.
“We encourage a culture of transparency and feedback, and are committed to building an equitable platform and business that allows both our community and our employees to thrive,” a TikTok spokesperson told Protocol.
Civil rights groups have been sounding the alarm about election misinformation for weeks. The Leadership Conference on Civil and Human Rights recently addressed a letter to social media companies urging them to tamp down on the “Big Lie,” false claims that President Joe Biden lost the 2020 election to former President Donald Trump, in addition to new misinformation. Conspiracy theories about general fraud within the U.S. election system abound not only on social media but also among a majority of Republican candidates on the ballot this fall.
Every platform is working on ways to tackle mis- and disinformation related to elections, but there are a few factors that make it even harder on TikTok than elsewhere. For one, video can be a challenging medium to analyze: It’s harder to extract information and search for keywords in images and audio than in text. YouTube faces similar challenges, but it’s been around for far longer than TikTok.

And then, of course, there are the challenges that have nothing to do with technology and everything to do with humans. Karan Lala, a fellow at the Integrity Institute and former software engineer at Meta, noted that mass enforcement is difficult because people might tell the same lie in completely different ways.
“Let’s say you review one video and say, ‘oh the content of this video was a lie,’” Lala said. “How do you effectively link that decision to all the videos that might be coming from different creators that phrased the lie in a different way?”
TikTok’s algorithm also largely displays content from strangers, which means information spreads far beyond a person’s social circle. You don’t necessarily need a following to go viral, so any video might have infinite reach. Because of this — and the fact that researchers don’t have access to TikTok via an API, though TikTok promises to release one soon — it’s especially hard for outside researchers and experts to recreate what an average “For You” page might look like.
“How do you keep TikTok’s For You page from picking a relatively obscure video that is harmful and blasting it to millions of people?” Odanga Madung, a researcher with the Mozilla Foundation, asked. “Because that’s essentially what I was seeing on a consistent basis.”
Empowering trust and safety teams is critical in halting misinformation. TikTok is not very transparent internally, as it doesn’t provide an organizational chart to employees. Several former employees told Protocol they felt disconnected from the teams working on TikTok’s algorithm in China, often having to wait for engineers in China to respond to crises such as unflagging critical keywords.
“You need that team to have as much power and be as closely situated to the team that is building the algorithm in and of itself,” Lala said. “You need to be able to disrupt or slightly tweak the outcome of an algorithm based on integrity signals.”

TikTok’s ties to China have also led to heightened scrutiny of its content moderation decisions, even above and beyond accusations of “censorship” that routinely get leveled at other platforms. “TikTok has received a huge amount of criticism for both moderating too much and moderating too little,” said Casey Fiesler, an online communities professor at University of Colorado, Boulder.
All of this makes for a complex trust and safety landscape inside TikTok, which was just beginning to take shape during the 2020 election. Like other platforms at the time, TikTok’s employees had to decide how to handle videos discussing Hunter Biden’s laptop. “Do we just take it down and assume it’s all misinformation because it’s unverified?” a former employee told Protocol. “What do we do so that we’re not ‘big bad China’ and we’re not censoring everyone?” The team eventually decided not to fully take those videos down, unless they seemed egregious.
Another challenge during the 2020 election: handling political party-based hype houses. The former employee told Protocol that the Republican Hype House was especially difficult to deal with. The house members kept referencing unsubstantiated QAnon-related claims, but TikTok didn’t want to be accused of suppressing partisan speech. TikTok employees warned the house several times, but never took the account down.
Several told Protocol they were worried about the company’s ability to handle these types of issues with high turnover. One former TikTok employee said only one of the U.S.-based employees currently working on the threat analyst side worked at TikTok during the 2020 election. TikTok declined to comment on this claim.
David Polgar, founder of All Tech is Human, said one of the reasons for high trust and safety attrition more broadly is the explosion of the field. Every tech company worth its salt is looking for quality trust and safety employees, he said: “If you’re doing trust and safety for a major platform that is on the up-and-up like TikTok, you are also a really hot commodity for any startup.”
Burnout is common among trust and safety professionals and may also be a factor in high churn. Even if you’re not a direct content moderator, you’re working in a constant flow of disturbing content.

That type of turnover isn’t always a bad thing, said Katie Harbath, founder of Anchor Change and former public policy director at Facebook. “You are seeing people that were incubated in some of these other platforms, particularly your Metas and Googles, and also your Twitters and TikToks,” Harbath said. “They’re able to take that experience to other companies that may actually have nothing.”
TikTok, for its part, says it’s learned a lot from 2020 and is putting that knowledge to use this year. The company has already publicly released some of the lessons it learned after the 2020 election, including the need to improve its disinformation detection systems and educate creators on TikTok’s zero political ads policy. TikTok released its in-app election center six weeks earlier this year than in 2020 and is labeling content related to the 2022 midterms with a button leading to the information center. Hashtags like #elections2022 will also lead to the center and TikTok’s community guidelines. While content is in the process of being fact checked, it will be excluded from For You feeds.
Around the world, TikTok has hired more trust and safety employees, opening a Europe, Middle East, and Africa hub in Dublin and expanding its hub in San Francisco. It also launched content advisory councils in the U.S., Asia, and Europe. But former employees fear none of that will be enough without a battle-tested team in place.
Two years since the 2020 election, misinformation about the process and outcome still abounds. Mozilla’s Madung said TikTok will need to remain vigilant in the weeks following the midterms. The overarching goal is to avoid violence on or around election day, but Madung said TikTok needs to think about the deeper, pervasive damage caused by misinformation. Lies are persistent.
“Platforms often tend to start the interventions too late, and then exit too early, and don’t recognize that election misinformation is an incredibly durable piece of information,” Madung said.

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She’s a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school’s independent newspaper. She’s based in D.C., and can be reached at
Many crypto industries quietly depend on oracles, the data feeds that smart contracts tap into. Startups are challenging dominant player Chainlink, saying they can do it cheaper, more transparently, and with less centralized control.
As institutional players get deeper into crypto and regulators dig in, critical pieces of infrastructure like oracles are certain to get more scrutiny.
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. He was also as a staff writer at Forbes covering social media and venture capital, and edited the Midas List of top tech investors. He can be reached at or
Data oracles, the automated feeds that provide crucial price data to smart contracts and enable trading on blockchains, are drawing increasing scrutiny over their roles in recent hacks and the vulnerabilities the industry’s reliance on them creates. They’re also attracting more investment from VCs and larger crypto players who see an opportunity amid these fears.
Two hacks this month illustrated the crucial role oracles play in crypto. A $114 million hack of Solana trading service Mango Markets took place after an attacker caused the price of a token reported on an oracle to triple. A smaller attack, on Moola Market, also centered on oracle price manipulation.
Oracles provide data that is not on the blockchain — off-chain data — in order for the blockchain to perform some action. Even crypto price data comes from oracles: Blockchains can’t execute or record trades without the market prices provided by oracles. They’re a critical piece of infrastructure, in other words, though it’s rare for anyone besides smart contract developers to pay attention to their value or dig into their vulnerabilities.

Virtually every crypto application needs data to operate but it has to get it from a trusted source, and ideally fast and cheap. Many DeFi protocols rely on Chainlink, an open-source technology, to provide prices. Oracles, which aren’t a new concept in computer science, are named that because they “know things that the system can’t know,” said Sergey Nazarov, co-founder of Chainlink Labs.
Founded in 2017, Chainlink uses a network of interlinked oracles to provide 60% to 90% of market data across all of DeFi, according to Nazarov. This year it has helped process more than $6.4 trillion in transactions, he said. Chainlink started on Ethereum but is now on more than 15 blockchains.
Chainlink is hoping to extend this approach to other types of data and other financial applications, like insurance. Some new insurance providers such as the Lemonade Foundation and Arbol are using weather data provided by Chainlink to pay out insurance claims, dispensing with the need for traditional inspections. In blockchain gaming, Chainlink also offers a type of oracle that provides randomly generated numbers used for generating awards, characters, maps, or other parts of games.
Crypto applications such as derivatives protocol Synthetix, DeFi lending protocol Aave, and decentralized exchange PancakeSwap also use Chainlink for price feeds, automation, and random number generation, among other services.
Despite — or because of — its ubiquity, there appears to be growing interest in alternatives to Chainlink. Binance launched a native oracle service last week for its BNB Smart Chain, taking in-house a system that had previously run on Chainlink, the largest oracle provider.
Protocols like API3 and Flux have first-party oracles, which provide more transparent data direct from the source, instead of data aggregated by nodes, which is the approach used by Chainlink and others, said Flux co-founder Jasper de Gooijer.
“The main advantage if you’re not using a third-party layer [is that] you remove a whole attack vector that’s intrinsic to basically every other oracle project,” said Dave Connor, co-founder and business development lead at API3. Connor also helped run an early Chainlink node.

API3 and Flux also argue they are more decentralized than Chainlink. While Chainlink’s oracles are spread out among various nodes, their selection is still controlled by Chainlink, Connor said. API3 is trying to address this by managing its oracles with a decentralized autonomous organization.
Connor pointed to an incident with Chainlink where the price of gold was substituted for the price of silver to derivatives outfit Synthetix, which could have led to massive losses. “The exploit didn’t really cause many people to lose anything,” Connor said. “But it’s an example of what happens when the governance isn’t out in the open.” Chainlink said this was due to human error, not a problem with the oracle.
“Chainlink Data Feeds are decentralized at the data source, oracle node, and oracle network levels, generating highly reliable and accurate market data with strong protections against downtime and tampering,” Nazarov said.
This debate between efficiency and decentralization is common in crypto. “The reality is, over time, everything gets more centralized,” said Boris Wertz, who invests in crypto at Version One Ventures, citing bitcoin mining and ether staking as examples. “The question is, then, what’s the right balance between something that is efficient versus something that is sufficiently decentralized? Every single validator network has a balance between decentralization and efficiency.”
Some insiders say having one major provider or a small number of providers undergirding the industry presents a risk for a new industry like crypto. “I think that that’s why there’s a lot of venture money that’s going after alternatives,” said Shawn Douglass, CEO of Amberdata, which provides data to oracle networks.
There’s always a “good news, bad news” debate when one big player in a category does well, Wertz said. “Obviously, that player is most likely stronger in terms of security and scale than others. At the same time, if it gets manipulated, then lots of people will get affected.”
The risk of that happening depends on what sort of back-up options oracle users have, but not all have enough redundancy, said Austin Campbell, head of portfolio management at crypto infrastructure firm Paxos. “It’s critical for protocols to have a resilient set of data providers in order to have multiple redundancy options in the case of outage or failure. This will reduce risk in DeFi, given most protocols do not have circuit-breaker-like technology that halts trading,” he said.

But Nazarov said Chainlink’s size isn’t a risk, because it can be customized to be as secure as developers want it to be. “Chainlink is actually an open-source framework for people to make their own oracle networks,” he said. “It’s actually a way for people to compose the degree of decentralization and risk management that they want.”
In the Mango Markets attack, Mango shouldn’t have allowed such a large withdrawal based on that oracle pricing. So the oracle, Pyth, wasn’t at fault, according to FTX CEO Sam Bankman-Fried. Still, the incident and similar hacks show that even if an oracle is correct, the way it is used can present “very significant risk,” Campbell said.
Nazarov pointed to the Mango incident as well, noting that Chainlink’s design prevents that type of price manipulation from happening. “I think it’s a larger risk to make a faulty oracle and get hacked,” he said.
These kinds of debates are likely to continue. As institutional players get deeper into crypto and regulators dig in, critical pieces of infrastructure like oracles are certain to get more scrutiny. Oracles may know things that aren’t on the blockchain. But their ultimate test may come in knowing themselves.
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. He was also as a staff writer at Forbes covering social media and venture capital, and edited the Midas List of top tech investors. He can be reached at or
Jason Zins is a Partner at SkyBridge Capital where he leads the firm’s venture and growth equity investing with a focus on crypto and fintech companies. Prior to joining SkyBridge in 2014, Mr. Zins worked at Bloomberg L.P. Mr. Zins received his B.A. in Government from Dartmouth College.
The flow of capital and talent into Web3 startups continues, pulled through this crypto winter by conviction in the generational technology transition it represents. Capital is in place and looking for an early-stage home. Valuations and expectations have normalized, and that is facilitating rational, purposeful engagement with Web3 startups. We believe the Web3 investment environment is riper than ever.
At SkyBridge, we have invested over $400 million in leading crypto and fintech startups since 2020. We expect to accelerate our efforts following our partnership with FTX Ventures, which recently bought a 30% stake in SkyBridge. Our collective goal is to grow the ecosystem, and we’re here for the long term.
SkyBridge Capital’s Anthony Scaramucci and FTX’s Sam Bankman-Fried at Crypto Bahamas
To founders and operators, now is the time to invest in Web3 builders who are focusing on real-world impact. Investors are looking for tangible use cases, including in the physical world. The recent SALT New York conference, for instance, featured two projects that are interesting to investors at the moment:

As an investor at SkyBridge, I have seen countless pitches, read my fair share of term sheets, and developed a good sense for what makes Web3 founders more likely to succeed — and more likely to fail.
If you are a Web3 entrepreneur, here is our advice for you:
1. Focus on the product.
Demonstrate economic value. The crypto winter is proving once again that token price is the last thing we should care about. The VC correction is proving once again that valuations are not an indicator of success. While money continues to flow, the crypto winter and VC slowdown have forced even the most committed Web3 venture capitalists (and their investors) to proceed with more caution.
Valuations have become less hype-driven and more realistic; the amount of time spent on due diligence has increased substantially; and every founder needs to directly, clearly, and concisely answer the question, “Does this project have any real-world utility, and does it create economic value?”
Just as you would with any other tech product, focus on the fundamentals: user growth, customer acquisition cost, burn rate, and all the rest of that really boring stuff that drives return on investment and really matters.
2. Embrace transparency.
Our LPs want to know that their money is safe with us — and we need to know it is safe with the companies we invest in. That means a couple things for you.
Be as transparent as you can be about custody and security, especially if tokens are part of the deal structure. Where are the assets held? What measures are in place to protect them? We have a long history of operational due diligence, and we place a premium on careful control over the assets.
Don’t underestimate the business impact of regulation. Incorporate its advent into your thinking. We believe, as many investors do, that regulation is coming — it’s just a matter of time — and that it will have a positive impact on the industry. Embrace it; don’t try to hide or operate in the gray area.

3. Play the long game.
Believe it or not, we’re still early in the age of Web3. That has several implications for founders.
Keep your nose clean. Good character is hard to find and selling at a premium in this space (see: 3AC). The majority of Web3 founders are unfamiliar to most investors. That means a clean track record, references, and being able to demonstrate trustworthiness are more important than ever.
Play nice. Whether it’s an investor who rejects you or a competitor you feel like you’re racing against, don’t sling mud or burn bridges. The landscape is constantly shifting, people move around in this industry all the time, and your paths will almost certainly cross again. The borderless economy isn’t a zero-sum game. Don’t treat it like one.
Protect your culture. Make sure your employees share the same values and standards of conduct. The talent pool is deep right now, but remember that, for startups, every single hire has an outsize impact on the culture (and chances of survival). If you make one bad hire in a company with 10,000 employees, you won’t feel it. But make one bad hire in a company with 10, and it’ll probably kill you.
Projects built on financial engineering are a thing of the past. The excess and easy capital has left the system. This is a good thing. Focus on building great products or protocols, and the valuation will take care of itself over time. Obsess over valuation, and you may find yourself a zombie without access to capital.
We want you to succeed, whether that translates to capital investment or not. Because every win in this space, no matter where it comes from, pushes the tide a little higher.
Jason Zins is a Partner at SkyBridge Capital where he leads the firm’s venture and growth equity investing with a focus on crypto and fintech companies. Prior to joining SkyBridge in 2014, Mr. Zins worked at Bloomberg L.P. Mr. Zins received his B.A. in Government from Dartmouth College.
After buying Figma for $20 billion, Adobe will have no clear competitor in its quest to dominate the design industry. But to succeed, the company will need to execute well and find sources of organic innovation.
“While there were questions perhaps about the purchase price, and questions upfront about what that said about our core business … it’s now about the excitement of what [we] can do together,” Adobe CEO Shantanu Narayen told investors.
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She’s based in Los Angeles and can be reached at
For decades Adobe has completely dominated the creative software industry. The company’s impressive community of designers, communications, developers, and artists have propelled the company to becoming a $14.6 billion giant with no clear rival.
Although discontent over pricey subscriptions, steep cancellation fees, hard-to-use software, and slow innovation hasn’t made Adobe’s customers the happiest in enterprise software, there weren’t many alternatives.
But one emerging alternative was Figma, the web-based product design startup with a cult following that Adobe acquired in September. The massive $20 billion acquisition reflects Adobe’s intent to revinent itself around collaborative web-based design.
Adobe still faces potential challenges in making the deal a success, including Federal Trade Commission scrutiny, pushback from designers wary about its history, and a challenging macroeconomic environment. But if Adobe can succeed, it will only further entrench the company’s unrivaled dominance among creative professionals.
It’s easy to forget that Adobe has been a major part of enterprise tech for decades. Founded in 1982, the company’s imaging, video, illustration, and 3D products have become the de facto standards for artists, illustrators, and designers all over the globe.

Throughout its history Adobe has acquired a number of smaller competitors to grow its reach, including Marketo, Behance,, and others. Today Adobe’s portfolio includes products in imaging, video, photography, marketing, commerce, and others that sit across its three clouds: Document Cloud, Experience Cloud, and flagship Creative Cloud.
Adobe’s Document Cloud, which is the smallest, generates about $2 billion in revenue annually for the company, driven largely by PDF reader Acrobat and its e-signature product, Adobe Sign. Although Document Cloud delivers the lowest revenue of its three clouds, the product suite is integral to Adobe’s broader growth strategy, which hinges on bringing Acrobat to every user across every device, and then funneling them throughout Adobe’s broader product suite.
“The demand for PDFs has never been greater,” said digital media president David Wadhwani, who oversees Document and Creative Cloud, during the company’s financial analyst day earlier in October. “It’s a very productive engagement and up-sell motion for us.”
Experience Cloud comes in second, with $3.9 billion in revenue last fiscal year, propelled by digital marketing products for audience analytics and content management, and underpinned by its customer data platform.
But the true driving force of the company is Creative Cloud, which houses products such as Photoshop, Illustrator, Premiere, and XD; it generated $9.5 billion for the company last fiscal year, the majority of its overall revenue.
Over the past several years, Adobe has been focused on moving its creative suite into the cloud, launching web-based versions of Photosop, Acrobat, Illustrator, Premiere, and others, although the majority of its core applications are still desktop-only.
As an attempt to remedy that, and compete with startups such as Canva and Figma, the company launched Adobe Express in December of last year. The free app that lets users easily design graphics, edit photos, trim videos, and more.
Adobe Express is distinct from the company’s other Creative Cloud products because it doesn’t require a pricey subscription or years of expertise to use, making it more accessible to a wider swath of users. “Express has definitely expanded the top of the funnel,” Wadhwani told investors. “We’ve removed all barriers to adoption.”

Based on comments from CEO Shantanu Narayen, CFO Dan Durn, and others during the company’s annual MAX conference earlier in October, it’s clear Adobe believes its future hinges on web-based collaborative design. That’s why the acquisition of Figma, which has been both web-based and built around simultaneous multi-user collaboration from its debut, will be so central to Adobe’s success moving forward.
Figma was established in 2012, and found success by putting easy-to-use creative tools in a browser for low prices. Bolstered by a freemium model and an intuitive interface the company grew from $0 to $400 million in annual recurring revenue in only a few years.
“One of the things that I remind people is, Figma didn’t even start to monetize until I think very late 2017. So they’ve gone from zero to over 400 million in ARR in something like four years,” Adobe senior vice president of digital media Ashley Still told Protocol. “That is very unique. If you go look at Atlassian or Slack or others, it is just rare to have the type of growth rate that Figma has,” she said.
Now Adobe is hoping it can capture some of what makes Figma special, along with $400 million in additional recurring revenue.
Investors, analysts, and others in the tech community have questioned Figma’s massive purchase price. At $20 billion, the deal is 50 times Figma’s annual recurring revenue and would set a record as the largest private tech acquisition in history at the time of announcement.
If you go look at Atlassian or Slack or others, it is just rare to have the type of growth rate that Figma has.”
But Adobe executives remain confident about the purchase price and value of Figma. “If you went out 12 months you can easily get to discounted cash flow models that [justify that amount] over time,” said Still.
But some industry analysts aren’t buying that calculation.

“When you consider what Figma is adding as a percentage of Adobe’s total ARR and even factoring in an expectation of robust growth for another two, three years, it’s still in our view difficult to truly rationalize the amount that is being spent,” said Gregg Moskowitz, managing director of enterprise software research at Mizuho.
The real reason Adobe paid so much, of course, is because Figma was a serious competitive threat. While Moskowitz hadn’t necessarily seen enterprise customers leave Adobe entirely, “We were hearing on some occasions that customers were curbing the amount of growth in Adobe licenses and funneling more of their budget towards Figma,” he said.
Plus, if Adobe didn’t buy Figma now, it might never have been able to.
“Think about the opportunity cost of not getting Figma right now,” said Valoir research analyst Rebecca Wettemann. Sure, Adobe “spent a lot of money for it, but compared with what right? With missing out on the opportunity,” she said.
Adobe, of course, is aware of all this. “While there were questions perhaps about the purchase price, and questions upfront about what that said about our core business … it’s now about the excitement of what [we] can do together,” Narayen told investors.
That may be true. Adobe knows that it needs Figma to remain the software of choice for designers and creatives, and Figma will benefit from Adobe’s customer base and financial muscle.
Already, Adobe is taking a number of steps to become more like Figma. During Adobe’s annual MAX conference, the company announced a number of new product features with Figma-like flavoring, including new collaboration features for Photoshop, Illustrator, and PDF reader Acrobat. Adobe also expects that Figma is going to help make real-time co-editing a reality across its product suite.
Adobe still faces some challenges in propelling itself into its next stage with Figma’s help.
Since Adobe largely dominates the design field, the FTC will probably keep a close eye on the proposed Figma acquisition. Earlier this year the FTC sued to block Meta’s acquisition of VR company Within, which was arguably more tangential to the company than Figma is to Adobe.

But Adobe executives don’t agree. “We’re confident that the businesses and the products are really adjacent,” said Adobe’s Still. That sentiment was echoed by Narayen to investors, even though Adobe has products that compete directly with Figma.
For example, Adobe XD, which is a desktop product for user experience design, essentially does the same thing as Figma. Case in point: When Figma built similar functionality but offered it collaboratively over the web, Adobe slowed down its investment in XD.
“[Figma] totally reframed the whole industry to the point where XD became a company that was just not growing or working, frankly, and we started to wind down our focus on that,” chief product officer Scott Belsky admitted during a press conference at Adobe MAX.
We were hearing on some occasions that customers were curbing the amount of growth in Adobe licenses and funneling more of their budget towards Figma.”
Designers are also broadly opposed to the Adobe-Figma deal, because many viewed Figma as a cheaper and easier-to-use alternative than Adobe. Designers have voiced concerns about everything from pricing changes and high cancellation fees to fears over losing the vibrant Figma community.
Those fears aren’t entirely unfounded. “Adobe is not great to do business with,” said Valoir’s Wettemann. Since Adobe has been “ostensibly the only game in town for professional designers and developers, they’ve been able to dictate terms to a certain extent,” she said.
Although Adobe is committed to maintaining a free tier for Figma and other products, some investors and analysts are convinced the price will go up anyway.
As much as designers don’t like price increases, it probably won’t lead to much customer churn. For example, after Adobe raised prices on its Creative Cloud suite about six months ago, there was some customer pushback, but not enough to cause concern for Adobe, said Moskowitz. He also pointed out that price increases in this environment aren’t uncommon, and that companies like Microsoft have raised prices on some products by 10% or more.
Adobe has also tried to convince designers that it intends to preserve the sense of innovation and community Figma has thrived on. But large-scale integrations always present challenges to corporate culture, and corporate red tape and bureaucracy slow down innovation.

Allowing Figma’s Dylan Field will remain CEO, he will still have to squeeze into Adobe’s culture. “I wouldn’t say autonomous,” Adobe’s Still said of Figma’s operating structure. “There are definitely very specific areas of synergy that we’re excited to drive together.”
Adobe is not great to do business with.”
Stitching together acquisitions is never easy, but Adobe executives have pointed to the company’s track record of helping startups in the past. For example, Behance, the social media platform for creatives founded by Adobe chief product officer Scott Belsky, grew its community from 1 million to 31 million members since its acquisition by Adobe.
“The product is better and tighter and faster-growing than it’s ever been before right now,” said Belsky during a press conference. “So Behance has not only benefited its community from the acquisition, but it’s also a better product.”
Adobe also has a history of installing the leaders from those acquisitions as key executives. “You’re talking to someone who came in through an acquisition,” said Belsky. “David Wadhwani, president of our digital media business, came in through Macromedia. A number of our leaders came in through acquisitions. And so in some ways, we have that playbook.”
Some analysts agree that Adobe has done well in its past M&A strategy, but still think Figma is a different story. “You’d have to look at Marketo as the most expensive, but even that was less than one-fourth the size of what Figma is costing them,” said Mizuho’s Moskowitz. “Any way you slice it, this is a different animal, there’s going to be more complexity with respect to integration,” he said.
Despite the challenges Adobe will face moving forward, the company has several key advantages. The company still has a large community of designers, artists, and developers; a dominant market position; a sprawling product suite; a strong cash position; and healthy revenue.
After acquiring Figma, Adobe will have no serious contender, aside from startup Canva, which is used primarily by average consumers and not professional designers. It has both the ambition and resources to define the next generation of creativity and design.

Adobe started supporting NFTs last year, and at Adobe MAX it announced a slew of product features and enhancements intended to power the metaverse. Those include new additions to its generative AI product, Adobe Sensei, partnerships to help authenticate digital content, and updates to 3D design product Substance, which will integrate some apps directly into Meta’s Quest platform.
Although analysts know the enterprise software industry is tougher to navigate today than in the past, they remain optimistic about Adobe’s future.
“Overall we didn’t [see] that there are any deep concerns. I still think that Adobe carries unrivaled breadth [and] unrivaled brand awareness in the markets in which they play,” said Moskowitz.
Still, while ideas are easy, execution is hard. The good news for Adobe is that the only true barrier the company faces is itself.
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She’s based in Los Angeles and can be reached at
A prominent private-sector voice amplifying rhetoric that pits the U.S. against China in a battle for AI supremacy, Schmidt’s borrowing from a Cold War-era playbook to urge the government toward decisions the AI industry wants it to make.
Since 2017, Eric Schmidt has taken part in investing more than $2 billion in AI-focused companies, either personally or through funding rounds joined by his VC firm Innovation Endeavors.
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of “Campaign ’08: A Turning Point for Digital Media,” a book about how the 2008 presidential campaigns used digital media and data.
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Eric Schmidt has prodded the Pentagon for years to hurry along its software-buying process.

Today the AI tech investor and former Google CEO is more determined than ever to urge government decision-makers to pick up the pace, but not just when it comes to buying more software for the Defense Department.
Schmidt wants the government to implement his sweeping blueprint to fight what he considers an existential threat to democracy posed by China’s AI plans, an effort that could also bolster his own commercial AI interests.
He says the U.S.’s national security and economic leadership are dependent upon spending billions to procure smarter software, bolster AI research, and build the country’s computer science talent pool. And he says he knows better than the Pentagon itself how to remove the bureaucratic blockades preventing more agile use of AI by the government.
But at the same time, Schmidt’s venture capital firm Innovation Endeavors has invested in companies that have received multimillion-dollar contracts from federal agencies. Some of those investments and contracts — reported here for the first time — were granted between 2016 and 2021 while Schmidt chaired two influential government initiatives, the Pentagon’s Defense Innovation Board and the National Security Commission on Artificial Intelligence.

Work that Schmidt carried out at the NSCAI has made its way into hugely influential legislation: The 2023 National Defense Authorization Act, which determines government defense spending, contains amendments that reference specific recommendations of the final NSCAI report. If passed, it would authorize $95 million more than requested (and a total of $368.3 million) to fund the activities of the new chief digital and artificial intelligence officer, Craig Martell, who has publicly said Schmidt all but hand-picked him for the role.
Today Schmidt is among the most influential private-sector voices sowing a sense of urgent concern that the U.S. is losing a battle against China for AI supremacy, and helping lay the groundwork for a windfall of government funding for AI software. He also happens to be one of the most prominent investors in the AI sector.
“Dr. Schmidt has worked across many presidential administrations and with members of congress on both sides of the aisle – his work has and remains bipartisan and focused on supporting the country,” said Tara Rigler, a spokesperson for Schmidt’s new think tank, Special Competitive Studies Project. “He has been asked to serve on federal advisory boards to provide his advice on pressing technology issues before the country. In line with every other private citizen who has, and does serve on these federally appointed boards, he is an advisor, not a federal decision maker.”
The threats posed by an AI-dominant China — from AI-supercharged cyberattacks and disinformation campaigns to invasive surveillance tech deployed to monitor marginalized populations and development of fully autonomous weapons — should not be ignored. However, Schmidt’s proposed solution hinges on allocating massive government spending to unregulated AI, some of which could benefit companies he has connections to or directly invests in.
“Conflict of interest [concerns are] right at the center of this — not only with his venture investments,” said Merve Hickok, senior research director and chairwoman of the board for the Center for AI and Digital Policy, a nonprofit AI policy and human rights watchdog.

In response, Rigler said that Schmidt had “complied with all Federal ethics requirements during his service on the DIB and NSCAI.”

To assist in disseminating his ideas in Washington, Schmidt has cultivated a cadre of influential insiders. “When I hear people who know, like Eric, talking about the race with China on the technological side, we’d better get our act together,” former Secretary of State and frequent media commentator Condoleezza Rice said at a D.C. event held in September by SCSP.
Schmidt has spread his message for years among people with direct influence over national security policy and spending.
“Without some type of unified, broad adoption of an AI foundation for the entire department, DOD will soon reach a tipping point after which it will be unable to catch up to its competitors,” Schmidt said in 2018 while testifying before the House Armed Services Committee. Schmidt spoke in a personal capacity, but was chair of the Pentagon’s Defense Innovation Board and on Alphabet’s board at the time.
A key influencer in Schmidt’s inner circle, Ylli Bajraktari, believes China has told the world exactly how much time its adversaries have to win the AI race. A member of the White House National Artificial Intelligence Advisory Committee and the CEO of SCSP, he cites a 2017 policy document that stated the Chinese government’s goal of achieving major AI breakthroughs by 2025 and leading AI by 2030.
“We only have one budget cycle to get this right between now and 2025,” Bajraktari told Protocol. SCSP, which got underway in October 2021, is designed to sunset in March 2025 in the hopes of compelling time-sensitive results.
People like Rep. Ro Khanna, a Democrat representing Silicon Valley, are listening. “Now, the problem is that China, as Eric Schmidt says, does one of these Chips Acts every year,” Khanna, who sits on the Armed Services Committee, said in a Washington Post Live talk in October, suggesting the recently passed Chips Act may not do enough to counteract China’s tech investments.

Schmidt stands to benefit from the dissemination of his message. He has taken part in investing more than $2 billion in AI-focused companies, according to data provided to Protocol from analyst firm CB Insights and presented in detail here for the first time.
To combat China’s AI prowess, the NSCAI called on the federal government to prioritize AI and other emerging technologies at the Defense Department, and double annual non-defense funding for AI research and development to $32 billion per year by 2026.
Eric Schmidt waits to hear Barack Obama speak in the East Room of the White House in 2009. Eric Schmidt, the former CEO of Google — seen here at the White House in 2009 — still owns stock in Google parent company Alphabet and has invested in its AI-related spinoffs. Google Cloud stands to benefit from federal investments propping up AI. Photo: Brendan Smialowski/Bloomberg via Getty Images
Schmidt’s VC firm, Innovation Endeavors, joined funding rounds in 2019 and 2021 worth at least $150 million for military AI software provider Rebellion Defense, CB Insights data shows. While Schmidt led the NSCAI in 2020, Rebellion was chosen to receive up to $950 million in contracts from the U.S. Air Force to help construct its Advanced Battle Management System, a system that incorporates cloud AI and advanced data analytics to deliver tailored information to forces on the battlefield.
Innovation Endeavors also participated in funding rounds totaling nearly $40 million in 2016, 2019, and 2020 for Citrine Informatics, a company that uses AI to pursue the discovery of new chemicals and materials. Citrine scored Department of Energy contracts in 2015 and earlier this year amounting to $3.6 million to develop safe storage materials for waste from nuclear energy production.
Schmidt also sits on the board at AI and quantum computing company SandboxAQ, an Alphabet spinoff that has received funding from the CIA’s tech investment arm, In-Q-Tel. Sandbox and cryptographic security company Cryptosense, a company it recently acquired, are both on a short list of vendors working on a National Institute of Standards and Technology project.

Innovation Endeavors also has ties to encryption AI company Duality Technologies, which was awarded contracts from the Defense Advanced Research Projects Agency while Schmidt chaired the now-defunct National Security Commission on Artificial Intelligence — including one worth $14.5 million in 2021. Team8, a cybersecurity tech incubator partially funded by Innovation Endeavors, joined a funding round in Duality Technologies worth $16 million in 2019.“We have a national, bipartisan priority to win in establishing technology platforms for the globe that we invent, that we drive, that we make money from,” Schmidt, whose representatives declined requests for him to be interviewed for this story, said at the September SCSP event.

Schmidt still owns stock in Google parent company Alphabet and has invested in its AI-related spinoffs. As a major provider of cloud computing power and AI tools, Google Cloud stands to benefit from federal investments propping up AI.
Bajraktari, who served as the NSCAI’s executive director while Schmidt chaired the commission, which sunsetted in 2021, suggested Schmidt’s investments are an acceptable, even necessary part of the U.S. government’s integration with the private tech sector — which must happen if America is to prevail in its competition with China.
“I understand the optics of how this looks, but let’s be realistic,” Bajraktari said. “How do we stay ahead and compete against China if we’re not able to utilize our private sector’s expertise and knowledge and advantages in this space?”
Bajraktari added that the NSCAI’s recommendations to Congress were “all high-level recommendations,” rather than suggestions promoting particular companies, products, or services. “None of them advocate for anything in particular, let alone telling DOD you should use this cloud or that algorithm or that thing,” he said.
While keynoting the SCSP event in September, national security adviser Jake Sullivan said he wanted advice from Schmidt’s tech industry cohort. “What we also need from the private sector is to tell us, ‘Hey, you guys are missing things we’re seeing and you’re behind the curve, and here’s how we can help you get ahead of the curve,’” Sullivan said during his speech.

Schmidt also has the ears of top executive and legislative branch officials controlling federal policy and purse strings. Deputy Secretary of Defense Kathleen Hicks, Deputy Secretary of State Wendy Sherman, Speaker of the House Nancy Pelosi, and Senate Majority Leader Chuck Schumer — all Democrats — spoke at the SCSP event.

This year alone, Schmidt gave $1.15 million to Democratic candidates and party organizations, including $365,000 to the Democratic National Committee, $250,000 to the Senate Majority PAC, and $50,000 to the Nancy Pelosi Victory Fund, according to Federal Election Commission data analyzed by Protocol. Some of Schmidt’s political donations this year came in the form of data and analytics technology and services rather than cash.
While pushing his AI agenda, Schmidt visited Ukraine in September, and perceived the country’s rapid wartime repatriation of government data to the cloud as a model in tech agility the U.S. should adopt.
“Within two days [of Russia’s invasion], every piece of information in the [Ukraine] government was in the cloud out of the country. Boom — shows you how quickly you can move when you’re at war,” Schmidt told the audience at the SCSP summit.
Schmidt has admitted fear can be a motivating factor in convincing government leaders to invest in AI research and talent to maintain dominance of U.S. tech businesses. “Whether it’s from a position of fear, or people are afraid of something, or whether it’s a position of leadership, I don’t really care how we get there,” he told an audience at the Center for a New American Security’s Artificial Intelligence and Global Security Summit in 2017.
He’s also looking to the Cold War for inspiration. The think tank Schmidt bankrolls, SCSP, is directly modeled on an initiative funded by the Rockefeller brothers. Launched in 1956, the Rockefeller Special Studies Project buoyed efforts to increase U.S. investment in defense science and technology research by reinforcing a key message it defined bluntly: “The United States is rapidly losing its lead in the race of military technology.”
We have a national, bipartisan priority to win in establishing technology platforms for the globe that we invent, that we drive, that we make money from.

On Jan. 6, 1958, a front-page New York Times article sounded a dire warning: “Unless the United States acts immediately, military superiority — and with it the world balance of power — will shift within two years to the Soviet bloc, a Rockefeller Fund report warned yesterday.”
The cure to preventing further Soviet advancement, the article stated, was a $3 billion annual increase in defense spending recommended in the Rockefeller report.
Schmidt’s SCSP is guided by the same playbook employed last century: convincing government decision-makers to move faster by amplifying fears of the U.S. losing a tech war with national security implications. A 501(c)(3) private foundation, SCSP is a subsidiary of Schmidt’s Innovation Fund, which is funded by Eric and Wendy Schmidt and the Schmidt Investment Fund.
“The Rockefeller Special Studies Project has a cold war objective to it as does the Special Competitive Studies Project. How can the U.S. stay on top, how can the U.S. protect itself and lead globally — that’s an undercurrent,” said Barbara Shubinski, a historian who directs the Division of Research and Education at the Rockefeller Archive Center.
On behalf of oil tycoon and presidential hopeful Nelson Rockefeller, the Rockefeller project assembled a wide range of panelists tasked with addressing the foreign policy, economic, social, and civic challenges that the U.S. would face in coming years.
The message of the Rockefeller Special Studies Project reached the coffee tables and nightstands of a curious American public. Content from its six panel reports was compiled for “Prospect for America,” a 1961 book that sold over 400,000 copies, according to the Rockefeller Brothers Fund.

“The organization of the Special Studies Project represents a really classic Rockefeller approach going back to the earliest days of Rockefeller philanthropy,” Shubinski said. “There was always a survey, always a committee, always a panel of experts. This was the way that influencers worked at that time.”
Eric Schmidt arrives at the White House in 2017 to hear senior adviser Jared Kushner speak during an event with technology sector CEOs. Reviving Cold War tropes gives Schmidt’s goal of garnering more government AI investment gravity it may not otherwise have. Photo: Brendan Smialowski/AFP via Getty Images
A foreign policy academic by the name of Henry Kissinger, who was serving as associate director of Harvard’s Center for International Affairs, brought those influencers together in 1956. The Rockefeller project launched Kissinger’s political career, and he went on to serve as national security adviser and secretary of state under Presidents Richard Nixon and Gerald Ford.

Kissinger, a polarizing figure both honored by the Pentagon and reviled as a war criminal, will turn 100 in May. He is a living thread tying the Rockefeller project to Schmidt’s SCSP. Kissinger and Schmidt collaborated on a book, published last year, praising the power of AI.

Kissinger recalled the project’s origin story while speaking via video conference at the SCSP summit, explaining that it came about because “[Nelson Rockefeller] could not convince the president to undertake the expenditures that the panel sought to be taken.”
The 60-year-old Rockefeller project was “a “fitting model” for SCSP, said Bajraktari, who told Protocol, “Towards the end of the [NSCAI] commission, Eric was like, ‘Hey, Kissinger really liked that model because he thought it brought together a bipartisan focus on a competitor in the ’50s.’”
The SCSP is molded in the shape of the Rockefeller project, featuring six panels of experts dedicated to foreign policy, intelligence, defense, economy, society, and future tech platforms. And many of the NSCAI’s cast of characters are now working at SCSP. Along with NSCAI veteran Bajraktari, Schmidt serves as SCSP chair. Robert Work, former NSCAI vice chair and deputy defense secretary under Presidents Barack Obama and Donald Trump, is on the SCSP’s board of advisers. Several other ex-NSCAI staffers are now at SCSP.
Reviving Cold War tropes gives Schmidt’s goal of garnering more government AI investment gravity it may not have otherwise.
“Any time you create a new body, you want to think you’re fighting a greater fight,” said Jeffrey Ding, a China AI expert and associate professor of political science at George Washington University, who has spoken to SCSP staff about his research.
“The Cold War analogy is just so present in national security discourse,” Ding said, “that it’s easy to just attach a hook there. It’s more compelling than saying, ‘Keep the U.S. ahead even though it’s already in a good position even if none of us did anything.’ That’s my stance, but it’s hard to get people rallied around that.”
Wealthy industrialists like Rockefeller and Big Tech execs like Schmidt have dabbled in government policy influence-peddling for as long as they’ve had the money and power to do it. But Schmidt’s SCSP group also serves a special purpose: to sustain the efforts of the NSCAI, the short-lived government initiative he chaired.
The NSCAI’s final report, issued in 2021, put China in the crosshairs. “China’s plans, resources, and progress should concern all Americans,” it noted. The report depicted an epic AI battle for individual liberty in the face of a “chilling precedent” created by China’s use of “AI as a tool of repression and surveillance.”

In addition to boosting annual non-defense funding for AI, NSCAI wanted Congress to fund a giant AI research hub, establish new government agencies to cultivate computer science talent, and — of special interest to Schmidt — boost integration with the private sector to accelerate procurement of commercial AI software.
“I would like to take credit that we started building the urgency with NSCAI. Our mission — it didn’t end,” Bajraktari said.
Even though it influenced legislation, Schmidt and others worried some of the NSCAI’s recommendations would sit on the proverbial congressional shelf.
Towards the end of the [NSCAI] commission, Eric was like, ‘Hey, Kissinger really liked that model because he thought it brought together a bipartisan focus on a competitor in the ’50s.’
Thomas Creely, an associate professor of ethics and director of the Ethics and the Emerging Military Technology graduate program at the U.S. Naval War College, who sits on SCSP’s defense panel, supports Schmidt’s approach.
“Eric, through his foundation, decided to fund [SCSP] because it’s too important not to do this,” Creely told Protocol. “We have to come up with ideas and put these before the leaders and thinkers of DOD and the White House and Congress to get their attention that there has to be changes.”
“We can’t depend on government to make the investment. You’ve got to have people who have a sense of patriotism or preserving democracy and national security,” Creely said.
In Schmidt’s story of the showdown with China, the U.S. is portrayed as a white hat AI hero and China as the AI bad guy.
Earlier this year during a panel discussion at the Aspen Institute’s Security Forum, Schmidt referenced Microsoft software that automatically writes programming code, implying it would be inherently nefarious had it been built in China: “Now imagine if all of that was being developed in China and not here. What would it mean?” Schmidt said.
“If you’re going to play the game of policy opiner, it’s very difficult to take a measured stance on China,” said Nathan Myhrvold, who helped launch Microsoft Research — including its celebrated lab in Beijing, whose researchers have contributed to AI advancements for decades.
At the same time that Schmidt questions the ethics of AI made in China, he hopes to woo the people making it.

He co-authored an opinion piece in Foreign Policy in July calling for the Biden administration to build “Team USA” by creating a “million talents program” — a direct allusion to China’s Thousand Talents Program. Schmidt’s idea would eliminate a cap on immigration that he argued disadvantages the U.S. because it blocks entry to skilled scientists and engineers from countries such as India and China.
And he wants computer engineers from China to stay in the U.S. “If we’re busy educating graduate students from any country, and in particular China, unless there’s some massive national security concern, we need to keep them in our country,” he said during a Defense Innovation Unit talk last year.
We can’t depend on government to make the investment. You’ve got to have people who have a sense of patriotism or preserving democracy and national security.
But Schmidt’s nationalistic warnings against AI made in China risk fomenting negative attitudes toward the very AI researchers in China he says the U.S. needs.
Myhrvold questions the logic. “I’m totally in favor of U.S. support for this stuff, but the problem is when you obtain that by scaring people with warmongering and fear and the language of conflict, you have this real problem that you might shoot yourself in the foot,” he said.
Meanwhile, even as Schmidt has implied that AI developed in China is ethically flawed, he’s argued that regulatory guardrails for AI in the U.S. would impede progress in the face of China’s competition.
“Why don’t we wait until something bad happens and then we can figure out how to regulate it — otherwise, you’re going to slow everybody down. Trust me, China is not busy stopping things because of regulation. They’re starting new things,” he said during an interview last year. Schmidt reiterated his antiregulation stance in October when the White House unveiled a nonbinding “Blueprint for an AI Bill of Rights.”
Schmidt’s frustration with what he sees as bureaucratic ineptitude blocking AI advancement in the U.S. has propelled his aggressive efforts to facilitate staffing and financial support for key government agencies he believes need his assistance.
His tech talent nonprofit Schmidt Futures has served as a direct pipeline into the halls of government, including into the Defense Department’s new Chief Digital and Artificial Intelligence Office (CDAO), which oversees its adoption of AI and data analytics. Schmidt Futures served as a de facto headhunter, bringing Craig Martell to the chief role, according to Martell.
Martell shared the story while onstage at an October AI tech event, recalling his volunteer work collaborating with people from Google and Amazon at Schmidt Futures.
“The one and only thing I did for Schmidt Futures was help them evaluate the kind of person they want for this job,” Martell said, referring to his current job leading the CDAO. “We were talking about what this job should look like, and then about two weeks later I got an email from the deputy secretary of defense asking me to apply. So I’m pretty sure the whole thing was set up to be a covert interview.”
“Schmidt Futures’ mission is to find and connect talented people to solve hard problems in science and society,” a representative for the nonprofit said in response. “Dr. Craig Martell has participated in our programming but has never been an employee of any Schmidt organization nor received any compensation. Schmidt Futures did not make or participate in any of the DOD’s hiring decisions, were not privy to any of their deliberations, and learned of his hire from public sources.”
When you obtain that by scaring people with warmongering and fear and the language of conflict, you have this real problem that you might shoot yourself in the foot.
Schmidt Futures also helped staff a key White House-level tech agency. When Politico reported in March that Schmidt Futures indirectly paid the salaries of more than a dozen White House Office of Science and Technology Policy staffers, the nonprofit justified the practice, noting in a blog post that OSTP “has been chronically underfunded, and for decades.”
“You have a number of people who are doing the revolving door between private and public sector,” Hickok, the AI policy and human rights advocate, said regarding Schmidt’s network. “If you’re using that as the revolving door to establish and deepen the relationship for future contracts, for future engagement, then it’s a huge ethics, conflict of interest, and accountability issue.”
But Creely, the military ethics professor, sees it differently. He emphasized the need for the military to rely on the tech industry and its leaders.

“I don’t know what his [Schmidt’s] agenda is, and I would not see a conflict of interest at this point in time,” Creely said. He added that some Pentagon insiders and watchers believe “we have to collaborate with corporations and academia and think tanks in order to stay ahead of our adversaries.”

Monday, Oct. 31
Inside Eric Schmidt’s push to profit from an AI cold war with China

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of “Campaign ’08: A Turning Point for Digital Media,” a book about how the 2008 presidential campaigns used digital media and data.
Great senior HR talent is scarce these days, headhunters say. Not everyone agrees on why.
Executives and recruiters say there’s a shortage of strategic, business-oriented HR talent prepared to take over as the next generation of senior people leaders.
Britt Sellin wasn’t sure if she was going to retire in 2019. But between ambitious acquisition plans at Cloudera, parents who were getting older, and kids in high school, she knew she couldn’t “do another big year” as the company’s SVP of HR, she said.
Months after she left, the COVID-19 pandemic hit, and with it a tidal wave of new challenges crashed into HR teams. As Sellin reflected on her next career move, she said she couldn’t get her “mind wrapped around another job for that amount of work.”
“You can be on vacation, but you’re going to get a call that somebody died in Brazil, and you don’t have a death benefit. Or you’re doing an acquisition and they wanted to let you know that it’s got to be done in 27 days — those 27 days happen to be over the long weekend you were planning to spend with your family,” Sellin said. “When you sign up for a job, you sign up for that.”

Many of the extraordinary challenges of the last two and a half years have fallen on the shoulders of chief people officers like Sellin, leading some of them to step away from operating roles or leave the workforce altogether.
At the same time, executives and recruiters say there’s a shortage of strategic, business-oriented HR talent prepared to take over as the next generation of senior people leaders. The dearth of great chief people officers is leaving companies scrambling — and in some cases, pulling in HR leaders from nontraditional backgrounds.
“Talented HR professionals in general are in high demand, and there’s just not enough of them,” said Brian Kropp, managing director at Accenture. “One of the biggest lessons that I think CEOs have really had is, great C-level HR talent can make or break a company.”
The last few years have brought a world of macro-level uncertainty, shifting power dynamics, and political tensions, both within companies and in the world at large. Between the pandemic, the economic downturn, and social changes, HR leaders are tired.
“A lot of them have decided, ‘Yeah, it’s been a pressure cooker for a number of years now, and I need to step back,’” said John K. Anderson, managing director in the HR practice of the search firm Allegis Partners.
Talented HR professionals in general are in high demand, and there’s just not enough of them.”
HR leaders have been “literally dealing with the life and death of their employees,” Kropp said. Not to mention taking teams remote; hiring rapidly; planning for hybrid work when employees don’t want to return to the office; facing slow gains around DEI; and supporting employees through everything from social justice movements and U.S. political tensions to inflation, economic downturn, and war.
All of this is pushing senior HR talent to leave operating roles, either for retirement, sabbatical, consulting, or VC jobs. Greg Selker, managing director and North American technology practice leader for the recruiting firm Stanton Chase, has seen many HR leaders opt to go into consulting rather than another operating role.

“A lot of them are stepping away to do something else, taking a break for a year from work, whatever it may be,” Kropp said.
Traunza Adams stepped down as chief people officer of the software maker H1 after realizing her “values no longer aligned with working in corporate America,” she said. She still advises startups formally and informally, and while she says she “absolutely loved” being a people leader, she’s not planning a return to an operating role anytime soon.
“Once I stopped working, I realized just how stressful it was,” Adams said. “And how nice it is to not have people depending on you every day and being beholden to people and having to fight for what you feel is right.”
HR also tends to take an outsize amount of flack from employees when things aren’t going well — but when things are going well, HR doesn’t get credit, Sellin said.
“If people liked the culture, they would say the CEO and the founders have done a fabulous job,” Sellin said. “If they did not like the culture, their experience wasn’t good, they blamed it on HR.”
Fighting for diversity, equity, inclusion, and belonging initiatives can be particularly trying for HR leaders. Adams said she had to “continually convince” other executives of the business case for building a diverse team, making employees feel included, and implementing equitable policies.
“That’s just continually an uphill battle,” Adams said. “Industrywide, the gains are small, so you get tired of always trying to convince people of the ‘right thing to do.’”
People leaders aren’t just fleeing for more work-life balance when they go to other roles. Tracy Keogh, for example, left her role as the CHRO of HP last year after what she said was an “amazing” decade with the IT giant.
But her transition hasn’t been one oriented toward more work-life balance: Keogh said she’s working just as hard as the chief people officer of Great Hill Partners, a $4.65 billion private equity firm that’s backed companies such as Wayfair, Zoominfo, and Bombas.

“I started my career at a startup, so I have a sensibility around small companies and how to help them,” Keogh said. “Very few people have a role like mine, where they do the inside HR and work with portfolio companies. They’re usually dedicated to one or the other. I really love that aspect of this job.”
Keogh said opportunities are opening up for people leaders in private equity; though Great Hill was founded in 1998, the firm never had a chief people officer until she joined. Keogh is a member of a network of HR leaders in PE. The group recently had to break into regional chapters because it got too big to coordinate nationally.
Chris Tobin, who stepped down from his role as SVP of people at Intercom in July, also said his departure was a long-planned transition away from being a full-time HR leader within a company. Now he spends his time advising entrepreneurs and people leaders at high-growth startups.
Despite the “very atypical and nonstop” demands of the last few years, Tobin said he didn’t leave Intercom exhausted.
“I’m not burnt out. I’m excited to focus on this next phase of my career,” Tobin said.
Not everyone said they’re noticing a postpandemic exodus of senior HR talent. At a certain point in executive careers, retirements and moves to consulting roles are to be expected. But departures aren’t the only explanation for the tight executive talent market.
Kathy Zwickert retired from her role as chief people officer of NetSuite in 2017, not long after Oracle acquired the company for $9.3 billion. Now she’s on the board of tax software company Avalara, and she’s seen the difficulty of hiring HR leaders from the other side.
Avalara struggled to find a people leader who was qualified, had led an HR organization before, and was willing to relocate to Seattle, Zwickert said. But she attributed the slow recruiting process not to an exodus of HR leaders, but to a pandemic-era hunkering down.
“When the return to the office started happening, people were deciding they didn’t want to and they were going to leave. That was a huge challenge for HR,” Zwickert said. “I think it made [senior HR leaders] more attached to their company. They just felt like they’d been through a war together, and a lot of them are just sticking around.”

With strong senior HR talent in short supply, some companies are choosing to hire HR leaders who don’t have HR backgrounds — both from traditional disciplines like legal or finance, and other less intuitive ones like marketing.
“Marketing executives have really been thinking about the customer experience, and how do you create an incredible customer experience,” Kropp said. Marketing leaders can apply the same principles of customer experience to employee experience, “Because at some level, it’s the same thing, right?” he said.
Zwickert even recalled a head of engineering colleague who complained “just nonstop” about the company’s HR leader, to the point where the CEO told him, “Guess what? It’s your job now.”
Zwickert herself went into HR over 25 years ago after starting her career as a CPA, a skillset that she said always gave her a leg up as a people leader. A two-week crash course through the Society for Human Resource Management helped prepare her to handle technical HR issues around compliance, employment law, and EEOC and HIPAA requirements.
When the return to the office started happening, people were deciding they didn’t want to and they were going to leave. That was a huge challenge for HR.”
“I don’t think you need a degree or a master’s in HR to run that function,” Zwickert said. “What’s more important is the ability to listen, the ability to understand the business and what the business imperatives are, and then understand your role in that context.”
Adams said she supports bringing in non-HR leaders, especially from departments like marketing or customer success, to run the people function. The basics that execs need to learn are “the easy stuff,” she said.
But not all people leaders agree that executives from other functions becoming heads of HR is a good idea.
“I don’t think marketers or legal folks should be heads of HR, nor do I think HR should report to the CFO or legal,” Tobin said. “The companies who understand the importance of people, talent, and culture, and how it moves the business forward, are companies that have a bit of a competitive advantage.”

Sellin, too, expressed concern that leaders of other functions think they can run HR programs or departments without any prior experience or knowledge.
Robert David, executive director of the nonprofit Community for Strategic HR Partnership, has noticed rising leaders from sales, marketing, and finance moving to HR. “It’s a way to get to the C-suite. It’s a way to get onto a board, if that’s a goal in your career,” David said. “What used to be seen as old, stodgy, fill out the forms and get benefits, it’s really become strategic and tactical, tying in to all parts of the organization.”
If CHROs are in short supply, it’s not just because established leaders are staying out of the job market. Some HR leaders say there’s also a lack of upcoming talent.
Compared to some other fields in tech, getting a job in HR doesn’t require much specific education or training, and as a result, many of the field’s professionals aren’t strategic enough to succeed as business leaders, Adams said. Rank-and-file HR jobs can be “really easy,” according to Adams, if you can master the basics of recruiting, putting in human resource information systems, running performance reviews, and ensuring employees have their benefits.
“That doesn’t make you a good leader,” Adams said. “What makes you a good leader is being able to think ahead, and being able to understand what the business actually needs, and being able to understand what employees are looking for, and what they’re going to be looking for two years from now.”
Most people leaders cannot manage the gray areas. They’re very black and white.”
This isn’t new: Over the last 15 or 20 years, the demands of people leaders have grown beyond administrative and compliance work to strategizing for the business. But the talent pipeline hasn’t kept up with these increasingly strategic responsibilities.

At the same time, there’s been a shift away from what Keogh called “academy companies” known for training up-and-coming HR talent. GE was one such company, she said.
Sellin named Cisco and Sun Microsystems — where she worked from 1995 to 2007 — as other companies known to have a strong HR function.
Yahoo, Intel, and HP have all produced an outsize number of successful people leaders who have taken leadership roles at other companies, David said. And younger HR pros are now staying at these companies for only a couple of years before moving on to a startup and learning in a “trial by fire” environment, he added.
Making HP an academy company was a goal of Keogh’s when she was leading HR. More than 40 of her employees have gone on to head HR departments at other companies, she said.
“A lot of my people got recruited out. There’s HP people all over the place,” Keogh said. “One of the headhunters said to me, ‘We love your people because they can deal with complexity.’”
Keogh isn’t the only CHRO working to develop the next generation of leaders. Tammy Polk, the CHRO of Formstack, said she has her team do yearlong rotations through different specialties within HR: recruiting, learning and development, HR insights, total rewards, benefits and compensation, and HR business partner generalist roles.
Polk’s use of this “rotations” practice has already led to one of her reports being made a director of total rewards at age 28.
“Most people leaders cannot manage the gray areas. They’re very black and white,” Polk said. “They have to manage the gray areas and live in risk, frankly. If you can train people to live in risk, they’re going to be a much stronger business partner.”
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