- Becoming Facebook
- Mike Hoefflinger
Facebook wasn't originally started to be a company. It was a plaything for Harvard University students. These days, it's our plaything – something we turn to regularly, often in boredom, to find out the latest news from our friends. But it's also a company of consequence, which has grown not only its adherents but also its crucial ad revenues in startling fashion, riding the mobile wave.
A crucial moment came in 2006 when founder Mark Zuckerberg, then 22, was offered $1-billion by Yahoo for his two-year-old company. Some board members thought they should take the money and run. Mr. Zuckerberg brusquely told then "we're obviously not going to sell." He had things he wanted to build and Yahoo didn't value those objectives, so he believed the business was actually being undervalued.
In Becoming Facebook, Silicon Valley veteran Mike Hoefflinger, who was head of global marketing at Facebook for nearly seven years, says founders need to differentiate between building a feature, product or company – or fulfilling a mission.
"It takes less than a year to build a feature (like FriendFeed or CoverFlow) and you can create tens of millions of dollars of value doing so. In a little more than a year or two, you can create a product (like Siri, Android or Instagram), and we've seen that valued as high as a billion dollars," he notes.
But to build a company can take many years and create tens of billions of dollars of value. Pursuing a mission, however – and Mr. Zuckerberg intends to connect the world, not just our part of it – can take decades and return hundreds of billions of dollars in value. Mission-oriented Mr. Zuckerberg, in his Yahoo moment, sensed that distinction.
He also senses when others have the same urge. He has been remarkably successful in buying new technology and having those founders stick around, comfortable he will grant them space to fulfill their vision in his empire.
Mr. Zuckerberg spent nearly eight years cultivating a relationship with Instagram's Kevin Systrom, sharing and understanding each other's vision, before the two negotiated a deal in an evening, essentially amongst themselves, for Instagram's acquisition. Why did Mr. Systrom not ignore the offer, as Mr. Zuckerberg had done with Yahoo? Mr. Hoefflinger says it was because Mr. Systrom was being offered a "founder-friendly win-win vision that appealed to the kind of builder more focused on all the capabilities necessary to become a truly impactful business than whether or not they rang the bell at the NASDAQ the day of their IPO."
Crucial to Facebook's success has been the News Feed and advertising. Advertising was introduced gingerly and contoured to what it was thought people were interested in, because Facebook's top team is customer-focused. In a sense, it was another form of connecting people, this time to products and services they might like.
Facebook recognizes its strength is when a user encounters friends in their News Feed, so it works hard to get new users to seven friends within 10 days of joining and to 10 friends in two weeks. Allowing for the importing of contacts from other services, particularly e-mail providers, was an important step in reaching that goal.
The Facebook News Feed is a personalized news service delivering more than 200 million stories to screens worldwide every minute, contoured to interests and based on sophisticated algorithms that calculate what other like-minded users are interested in. Mr. Hoefflinger says Google provides a lens to what we need when we know what we want and can search, while Facebook's lens operates when you don't know what you want. We access search on average two to five times a day but Facebook 10 to 15 times. "We don't know what we want three times as often as we do know. We don't know what we want roughly once every waking hour," he reports.
I almost didn't read the book because the cover photo suggested it was a glamourization of Mr. Zuckerberg and, when I leafed through, I couldn't easily find the "10 challenges that defined the company" it promised, instead finding 10 lessons that were simplistically trivial. But it's actually an excellent book on Facebook's growth, deeply knowledgeable, with a good take on future challenges, only marred by those silly attempts at spoon-feeding essentially meaningless lessons.