There are many reasons why Facebook succeeded where many other social networks failed. MySpace, Friendster, Vine, Peach, Meerkat, Napster, Google+, iTunes Ping, Diaspora, Orkut… Even Twitter is struggling as a social network now, but is finding success with people who view it as a news network, not a social network. You could argue that it was never a social network in the first place but that would be missing the point.
We could talk about timing, engineering talent, advertising strategy, business models or their organizational structure, but each of those very significant areas often overlook one important fact. Mark Zuckerberg has a long term view. And by long, I mean LONG. This is no minor detail.
I mention this for two reasons:
Where Zuckerberg is concerned, I’m sure this geological world view was shaped by the subjects he studied. At Ardsley High School he excelled in the classics before in his junior year transferring to Phillips Exeter Academy, where he won prizes in science (math, astronomy and physics) and Classical studies (on his college application, Zuckerberg listed as non-English languages he could read and write: French, Hebrew, Latin, and ancient Greek). During his high school years, under the company name Intelligent Media Group, he built a music player named the Synapse Media Player that used artificial intelligence to learn the user’s listening habits, which was posted to Slashdot and received a rating of 3 out of 5 from PC Magazine. Microsoft and AOL tried to purchase Synapse and recruit Zuckerberg, but he instead he turned them down and went to Harvard College in September 2002 where he studied computer science and psychology (at Harvard he was known for reciting lines from epic poems such as The Iliad). He’s clearly not your average…
I point all this out because I believe that it’s critically important in business to understand humanity and technology. I’m biased of course because I studied theology, maths and computer science myself, but I thank that foundation of art and science for the way that it has helped me to understand the world of social media and technology. And given the direction that cognitive technologies, AI and VR are taking us in, I don’t think there has ever been a more important time to have a deep understanding and respect of both people and numbers. We need to think with our heads and our hearts.
It’s easy to be skeptical and argue that despite his education, someone like Zuckerberg only cares about selling more ads and making money, but in my opinion that’s simply not true. Of course it’s easy to say that now because he’s allegedly worth over $50Bn, but in the early days of Facebook when he was still a student hitting his friends up for small business loans, he could easily have made bad decisions if financial gain has his primary motivation. This is all anecdotal of course, but consider some of the deals he turned down in those early days…
Some companies that tried (and failed) to buy Facebook:
The most telling piece of evidence about Zuckerberg’s geological view to me was the fact that he turned down $10m from an anonymous New York financier when Facebook was only 5 months old, while he was still a student. At the time, he was apparently more interested working on a photo sharing app that he thought could be as big, if not bigger than Facebook. To me, this all highlights the attitude of a founder who is not driven by money, but by a larger purpose. A vision to stand for something larger than himself. In Facebook’s case – this vision revolves around a fully connected world. (Many skeptics have for a long time seen this as “spin” around PR and clever marketing. I do not).
According to Peter Thiel , the first outside investor in Facebook and co-founder of PayPal, “The most important moment in my mind in the history of Facebook occurred in July 2006”. At the time, Facebook was just two years old. It was a college site with roughly eight or nine million people on it. And, though it was making $30 million in revenue, it was not profitable. “And we received an acquisition offer from Yahoo for $1 billion,” Thiel said. The three-person Facebook board at the time–Zuckerberg, Thiel, and venture capitalist Jim Breyer–met on a Monday morning. “Both Breyer and myself on balance thought we probably should take the money,” recalled Thiel. “But Zuckerberg started the meeting like, ‘This is kind of a formality, just a quick board meeting, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here‘.” At the time, Zuckerberg was 22 years old.
We’ve all heard it many times of course, “Facebook’s purpose is to make the world a more open and connected place”. But their stand against making decisions based upon money is what continues to power their success. They are a publicaly listed company with thousands of shareholders to keep happy, but I it also seems telling that Mark maintains a controlling share that investors are happy with. He has protected himself from the fate that happened to Steve Jobs back in 1985 when he got sacked from his own company, but the most interesting aspect is that the investors and board members are actually OK with this. Deep in their hearts, they understand that they have invested in a company that is being built for the long term.
Short-term companies make quick gains but are quickly forgotten. Significant brands like Facebook are built for the long-term ~ they are built upon loyalty, often as a result of the services and initiatives which they provide. A great example of this is Facebook’s leadership of the Internet.org movement, an organisation who’s mission is to connect the whole world. Similar to Google’s Project Loon, Zuckerberg’s mission is to provide the internet to people in even the most remote places, if necessary by flying connected balloons and drones that create a mesh of networks, allowing anybody with a basic mobile phone the ability to access the internet. He is obviously taking criticism for this initiative as it looks like he doing this to make money for Facebook, but people forget that the internet often isn’t in these regions for good reason.
Listening to Mark speak in a Bloomberg Studio 1 interview with Emily Chang, Zuckerberg explained that there are three reasons why the world isn’t fully connected:
These reasons not only explain why the world isn’t connected already, but suggests why Facebook isn’t likely to make any money in these areas anytime soon. The advertising market, where Facebook would make it’s money from, are so under-developed in the areas that Internet.org is seeking to serve that it makes no commercial sense to be there. There are currently 6.916 billion people in the world but only 2.7 billion of them are “connected”. Facebook believe that if they connect another billion people to the internet, they will provide over 100m new jobs and many millions more will be lifted out of poverty. In some small way, even a button at Facebook can make a difference. Directly after the earthquake in Nepal where thousands lost their lives, the “Donate” button on Facebook raised over $10m in the first 2 days after the disaster.
Facebook want to connect the world even though it doesn’t make any short-term commercial sense to do so. Countries like Zambia that weren’t previously connected are already seeing improvements in education and healthcare.
I use these examples, not just as a fan of Facebook but because it is launching initiatives such as Internet.org that are making a real difference to peoples lives. Short-term ROI driven CEO’s would never invest in projects like this. Whether Facebook maintains its status as the world’s most social network over the next century remains to be seen. If there’s a company that is most likely to dislodge Facebook from their perch, it’s highly likely that we haven’t even heard of them yet. What we do know, is that for any brand that wants to compliment or compete with Facebook, they will need to be built upon the same value system.
This excerpt taken from Facebook S-1 filing prior to when they went public in 2012 gives any aspiring social businesses a good idea of what that vision might look like.
“We don’t make products to make money, we make money to make better products”.
Foundations of the Social Web
We believe that the web, including the mobile web, is evolving to become more social and personalized. This evolution is creating more rewarding experiences that are centered on people, their connections, and their interests. We believe that the following elements form the foundation of the social web:
Authentic Identity. We believe that using your real name, connecting to your real friends, and sharing your genuine interests online create more engaging and meaningful experiences. Representing yourself with your authentic identity online encourages you to behave with the same norms that foster trust and respect in your daily life offline. Authentic identity is core to the Facebook experience, and we believe that it is central to the future of the web. Our terms of service require you to use your real name and we encourage you to be your true self online, enabling us and Platform developers to provide you with more personalized experiences.
Social Graph. The Social Graph represents the connections between people and their friends and interests. Every person or entity is represented by a point within the graph, and the affiliations between people and their friends and interests form billions of connections between the points. Our mapping of the Social Graph enables Facebook and Platform developers to build more engaging user experiences that are based on these connections.
Social Distribution. Over time, people are consuming and creating more kinds of information at a faster pace across a broader range of devices. The growing volume of information makes it challenging to find meaningful and trusted content and to effectively make your voice heard. Facebook organizes and prioritizes content and serves as a powerful social distribution tool delivering to users what we believe they will find most compelling based on their friends and interests.
“I’m here to build something for the long term. Anything else is a distraction”. Mark Zuckerberg
It’s all fascinating stuff. I wrote this piece as much to remind myself of these values as I did for the benefit of anyone reading it. So if you are still with me, then perhaps these values resonate with you as well. If that is the case, please don’t lose faith. It’s hard to keep a long-term view. Keeping a perspective that respects both humanity and technology is important but it’s not easy.
When we’re old, looking back on our lives and assessing all the stuff we did, I’m pretty sure we will value a geological view much more than an economic one.