Miriam Meckel is a German publicist and entrepreneur. She is co-founder and CEO of ada Learning GmbH. She also teaches as a professor for communication management at the University of St. Gallen.
(Photo: Klawe Rzeczy)
At the business schools of the US elite universities, this is sure to turn into a “case study”. An example that young managers can use to learn how not to do it. The story of the rise and fall of the US media company Ozy Media could become the most glamorous case of the decade – as a prime example of deepfake business.
Ozy Media wanted to reinvent journalism and grew within a few years, especially with YouTube shows, as a prime example of the fact that digital journalism can also work. That summer, the company was valued at $ 450 million. The charismatic founder Carlos Watson turned the big wheel: newsletter after newsletter, one show after the other moderated by him. Many stars from politics, business and the start-up scene came as guests. The widow of Steve Jobs invested as well as the ex-chief legal counsel of Google and the Springer publishing house.
But Ozy Media was just a dummy business model, just the illusion of growth. A dismissed employee referred to the successful show that Watson had put on around Ozy as a “Potemkin village”. The big disenchantment came when Ozy tried to pull off another $ 40 million financing round with Goldman Sachs. The only thing missing was the confirmation of how incredibly successful the Ozy shows were on Youtube.
In the final meeting, a YouTube manager should be connected to witness live the millions of views for Ozy videos. After a couple of supposed zoom problems, they switched to a normal phone. The man delivered the intended buzz, but something struck goldman investment bankers as weird. So they got back to Youtube later. There they met a perplexed person who had never spoken to them before. So it turned out: The co-founder of Ozy had pretended to be a Youtube manager in the call. “Fake it till you make it”, as they say in Silicon Valley.
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The saying does not come from Carlos Watson, but from Tesla founder Elon Musk, to whom everyone forgives everything as long as he always manages to eventually actually achieve the promised performance, the promised technical breakthrough. Others who fail, for example Theranos founder Elizabeth Holmes, can hope for less reputational grace. She is currently on trial for fraud.
Ozy Media: There were rumors of embellished metrics as early as 2017
Ozy Media is a particularly interesting case. On the one hand, because it is an outright cheek to replace an external expert with your own people in an investment round in order to get through the fraud story that has built up. On the other hand, because there are now technologies for such purposes that make it particularly easy. An AI-generated voice had already led the managing director of a British energy company to transfer 220,000 euros to a Hungarian account in 2019. Allegedly, the CEO of the German parent company had given him instructions over the phone. But that was simply a scam who sounded confusingly similar to the real manager with the help of AI-supported voice technology.
The same succeeds, with more time and technical effort, in the production of fake videos in which voice and body gestures can be combined into an impressive deception maneuver. In times of digital media you have to ask yourself before making any decision: Who is it really?
After all, Ozy Media grew right in the center of one of the industries that are particularly affected by the possibilities of fraudulent manipulation. Click fraud is particularly widespread in the digital media and advertising sector. By using bots, which repeatedly activate certain links, advertising revenue, search engine rankings and user numbers can be manipulated rapidly. As early as 2017 there were rumors that Ozy Media was using questionable means to push its own metrics up. It wasn’t until four years later that the company was blown and perished.
The delusion is a topos of human and corporate history. And it affects not only those who act deceptively, but always also those who allow themselves to be deceived. In the past, it took a good story that was quickly disenchanted. Today, in the deepfake business, history can be technically inflated with wrong numbers and metrics until the belief in the fake itself seems inconceivable.
For everyone who wants to retrace the borderline between real and fake economy: It is enough to answer a single question. Am I creating value that exceeds the company’s capitalization?
In this column Miriam Meckel writes fortnightly about ideas, innovations and interpretations that make progress and a better life possible. Because what the caterpillar calls the end of the world, the rest of the world calls a butterfly. ada-magazin.com
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