Oculus founder Palmer Luckey is having a bad day, and it’s going to get much worse

While I don’t claim to know him, I’ve met Palmer Luckey several times in the course of my work. The first time was during the early days of the Oculus Rift. I was covering CES for another site, and I had the opportunity to interview Luckey to discuss what would be the second generation of his company’s VR headset, codenamed Crystal Cove. I had met with others from Oculus, but this was the first time I interviewed Luckey himself.

I was there with a video crew, and we were told that we had 30 minutes with him, even though we were just looking for a three or four-minute clip. So while the video guys set up, Luckey and I just chatted about nothing in particular until we hit on our mutual love of Doctor Who. We traded theories about where the show was headed, discussed why we both loved the show, and talked at length about why the show was a hit.

I met and interviewed him a few more times over the years, and we even traded an email or two, mostly about TV shows. I also adamantly defended him after Oculus VR was sold to Facebook and early supporters labeled him a “sellout” (I still think it was the best business move given Oculus VR’s competitors). After getting laid off from my former outlet, he even sent me a nice email of encouragement. So when I saw the news about Luckey’s involvement in an alt-right group, I was sad for him – not because of what he did, but because of what comes next.

Palmer Luckey’s very bad day

If you missed it, Luckey was revealed to be bankrolling an organization known as Nimble America, an alt-right group that is best known for its pro-Trump memes that states, “We’ve proven that shitposting is powerful and meme magic is real.” The Urban Dictionary defines the act of “shitposting” as “Worthless overly offensive generally racists [sic] posts written in a manner which aggravates others.” The memes range from funny to shocking to blatantly offensive, and they are generally all pro-Trump/anti-Clinton and conservative leaning.

The “shitposts” come from the fringes and are meant to anger liberals and rally conservatives. More than that, they exist under the idea that a powerful meme is more effective than a lengthy argument. Nimble America is well known among the alt-right, and has the blessing of many alt-right leaders, including Breitbart editor Milo Yiannopoulos.

Luckey has been funding them anonymously, posting on Reddit under the name “Nimble Rich Man” (the account has since been deleted, but Luckey did confirm that he was the author). Unlike on his personal social media accounts where he rarely posts anything controversial, Luckey wasn’t shy about letting his political colors show under the pseudonym. He is a staunch Trump supporter, and referred to Clinton as a “corrupt, warmonger, a freedomstripper. Not the kind you see dancing in bikinis on Independence Day, the bad kind that strips freedom from citizens and grants it to donors.” He also claimed to

Now, to be clear, Luckey’s political affiliation is not an issue, nor should it be. Granted, the country is as polarized as it has ever been, but the odds are that things will settle down a bit after the election, regardless of who wins. It might not feel like that right now, but it will, it always does.

It’s also not an issue that Luckey is supporting a group that specializes in memes that rub many people the wrong way. If anything, it’s actually a smart investment for a political donor. The NY Times recently reported that a large number of Americans don’t know the positions of either Trump or Clinton, instead they remember pieces of headlines. They remember Trump’s accusations and his wilder statements, while for Clinton it’s questions about her health and a vague wariness over emails. Memes are an effective way to color a candidate or idea that sticks with people. They don’t even need to be true.

Facing the problem

Luckey’s problems go far beyond that. He’s not just the founder of Oculus, he is the face of it. He created the prototype Oculus Rift, saw it through its initial Kickstarter campaign, led it from nothing to a company with dozens of employees, and then oversaw the company’s purchase by Facebook for $2 billion in cash and stock. More than that, as Oculus has led the way for the emergence of VR, and Luckey has been described as the “face of virtual reality.” Like the memes he supports, people connect Luckey to VR based on images and impressions, even if there is much more to the story.

Luckey’s actions reflect on Oculus. Maybe in a vacuum that wouldn’t be the case, but in reality, he just alienated at least half of his potential and current user base in America. He didn’t just casually say he is supporting a candidate, he financed a means of attacking someone using what many believe to be an unfair and underhanded method. That may be debatable, but ironically, the same “snapshot” mentality that makes memes successful is the same mentality that will likely give Luckey a bad reputation.

For Oculus VR, this is a PR disaster. Luckey inadvertently made his company a politically active one, and so also made it a divisive one. It can only hurt Oculus VR. People aren’t going to be more willing to buy an Oculus Rift because Luckey is a Trump donor, but there are a lot considering buying one that will now instead look at competitors like Valve and HTC’s Vive and countless others on the way.

There’s plenty of historical precedent to suggest this is a bad move too.

Bad press is still bad press

In 2012, days after the last presidential election, Papa John’s CEO John Schnatter publically decried that the Affordable Care Act – aka Obamacare – would lead to ruin. He announced that because of ACA, he would be forced to cut back the hours of hundreds, possibly thousands of workers to keep them under 30 hours a week, the legal minimum at which companies are required to offer employees health benefits. Schnatter also said he would be forced to raise the price of every pizza by $0.14.

The backlash was immediate and fierce. Schnatter was accused of being part of the “corporate blackmailing of America,” and he eventually wrote an op-ed claiming he didn’t really mean what he said. It didn’t matter though, and shortly after the election a market survey showed the favorability rating for Papa John’s to go from an all-time high of 32 on election day to an all-time low of four following his statements.

Applebee’s CEO Zane Terkel echoed Schnatter’s fear of ACA, and said that despite his company being one of the fastest growing food franchises in the country, he would not build any new restaurants or hire any additional workers. Applebee’s market score went from 35 to five in response.

Those cases are little different from Luckey’s though. Both companies eventually bounced back in favorability, but neither Schnatter nor Terkel were as closely identified with their companies as Luckey is. Plus, both brands are service related in industries that are disposable. It’s less of an investment to buy a $15 pizza, it’s another to buy a $600 piece of hardware. Regardless, it’s almost never a good idea for a high-ranking representative of a company to come out and make political declarations.

Just look at Elon Musk, a man that – like Luckey – is the visible face of a company (or companies). Musk actively contributes to politicians, but he is deliberately silent when it comes to taking sides. There are even dozens of articles asking about his political leanings, and yet none have a conclusive answer. He knows better.

Consequences

There is also a mounting backlash against Luckey from gaming developers. Some like Insomniac Games have been content to simply issue a statement condemning Luckey, others like Fez developer Polytron are actively withdrawing support for Oculus. Fans on social media have also expressed what we can politely call “displeasure.” Luckey’s Wikipedia page was also altered to represent the opinions of many, and his official occupation was listed as “white supremacist.” (Yes, it was misspelled, but if you focus on that, you’re missing the point.)

Like it or not, Luckey represents Oculus VR, and his actions have hurt the company. People have short memories, but impressions last a long time, and this may cause Oculus long-term problems. That may not seem fair, but it was also completely and totally avoidable.

The real question is what happens next. Facebook has three options: It can wait to see if this all blows over, it can publicly support Luckey, or it can force him out. All three are problematic.

If Facebook chooses to wait and see what happens, it is rolling the dice on a company it purchased for $2 billion that is the leader in the emerging VR field. Waiting to see what happens is not just risky, it borders on irresponsible. Plus, the longer Facebook remains quiet, the more chance there is of this truly catching fire online, as stories involving outrage tend to do. And that’s assuming there isn’t any more to this.

This could just be the beginning, and if Luckey has any other secrets – if, for example, his support even indirectly appears racist or anti-Semitic (an accusation the alt-right faces constantly) – this story could explode. And given that it will explode on social media, Facebook will know the dangers better than anyone.

The second option is to publicly support Luckey. The problem with this option is that Facebook has been going to extremes to paint itself as politically neutral following accusations of liberal bias. It went so far as to require many of its employees to undergo training to show them how their statements could reflect a bias. If it chooses to support Luckey, it will need to do so in a way that clearly makes it appear that Facebook is supporting the man and his rights as a citizen, not as a Trump supporter. This is also a risky move, as many will accuse Facebook of ignoring its own vow to stay neutral by supporting someone that clearly isn’t.

Facebook could also try to rehab Luckey’s image beginning with an apology, but there isn’t really anything he can apologize for. He didn’t hurt anyone or specifically attack an individual. He chose an unpopular side and backed a group whose efforts many dislike. That sounds innocent enough, but that’s just not how the world works. He could always offer a non-apology apology (“I apologize if I hurt anyone…”), but people tend to see through those, and they can make matters worse.

The third option may be the most likely, although possibly the most dangerous: they could fire Luckey.

I don’t claim to know how Facebook’s purchase was structured. It may be very difficult to oust the founder, but there are always loopholes. Facebook may try to reason with Luckey and ask him to voluntarily leave for the good of the company, but Luckey is 24-years old, and he built Oculus VR from scratch. That would be a difficult pill for even the most seasoned veteran to take. Steve Jobs was forced out of Apple and spent years plotting how to return and destroy his rivals. Luckey may not be on Job’s level, but something like that leaves major scars.

If Facebook tries to force the matter, Luckey could always sue, which would make an embarrassing story for Oculus VR a catastrophic one. The courts might pick one side over the other, but there would be no winners.

A fourth option may be a compromise of sorts. While Luckey is a major presence at Oculus, Brandan Iribe is CEO, John Carmack is CTO, and Michael Abrash is Chief Scientist. Facebook may insist that Luckey take an extended leave of absence and let the others continue the work he started.

None of the options are ideal, but there is no perfect answer in this scenario.

No one wins in politics

Intentionally or not, fair or not, Luckey’s own actions have divided the Oculus VR community and inadvertently hurt the reputation of the company he founded. And given that there may be more to come from this story, things could get much worse.

I run a small, underfunded website with a relatively small readership. I am not a mover and shaker and my opinions won’t make much difference to the people that read this site, but I made a conscious effort to keep politics out of it for two reasons. First, politics are inherently negative, and there’s enough of that around already. Second, I’ve learned through experience and age that there is no good reason to alienate a huge chunk of people when you need those people to help you succeed.

Even in this story, a story all about the consequences of political declarations, I’ve tried my best to remain neutral. My opinion here doesn’t matter, my goal is just to highlight some of the bigger points of Luckey’s actions. I have my opinions and if there was a concrete benefit for my expressing them I absolutely would, but there hasn’t been yet and probably never will be. My vocally supporting a candidate or political issue won’t sway anyone to my side. Instead, it will do the opposite.

I don’t claim to know Palmer Luckey, but I’ve met him and I liked him. He’s young, and like many in his position he makes decisions without thinking about the consequences. This one will come back to haunt him, and may cost him the company he built.

Update: Palmer Luckey posted the following statement on Facebook.

Update 2 – 9/25/16: Shortly after Luckey posted his apology, in which he claims he did not post under the name Nimble Rich Man, the author of the piece from The Daily Beast released copies of emails between himself and Luckey. In those emails, Luckey says he did, in fact, write them, even though he claimed he didn’t in his apology. I’ve also added the NImble Rich Man post in question in the main body of the article.

Update 3 – 9/25/16 Oculus VR CEO, Brendan Iribe, came out in support of Luckey:

“I want to respond to the recent press stories involving Palmer. I know that Palmer is deeply sorry for the impact this situation is having on the company, our partners and the industry,” Iribe wrote in a Facebook post.

“Everyone at Oculus is free to support the issues or causes that matter to them, whether or not we agree with those views. It is important to remember that Palmer acted independently in a personal capacity, and was in no way representing the company.”

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