How to Create the Next Facebook: Seeing Your Startup Through, From Idea to IPO (2 page)

The revolution is not an apple that falls when it is ripe. You have to make it fall.

—Che Guevara

If you go to Mark Zuckerberg’s Facebook page, you’ll see that it says: “I’m trying to make the world a more open place.”
¹
It’s a grand mission for any person. But, of course, it is essentially the mission of his company. In Zuckerberg’s letter to shareholders in Facebook’s initial public offering (IPO) prospectus, he says: “Facebook was not originally created to be a company. It was built to accomplish a social mission—to make the world more open and connected.”
²
This is not the kind of mission you often associate with a company, but all great companies are about a cosmic vision, and that vision is always based on the power of a founder like Howard Schultz, Walt Disney, Henry Ford, Steve Jobs, and Bill Gates. They are more than just chief executive officers (CEOs). They are revolutionaries.

Every day, Facebook affects the lives of millions of people. It helps make friendships strong and even leads to marriages. Facebook makes it possible to understand different cultures and ideas. In some cases, its impact can be game changing. Facebook is an essential communication tool in times of disaster, such as when the horrendous tsunami hit Japan in March 2011. It can even lead to radical changes in societies, as seen with the Arab Spring.

In Facebook’s IPO prospectus, Zuckerberg wrote:

By giving people the power to share, we are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over
time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few.
³

Now, it is true that, despite its mission, Facebook is no utopian paradise. Change can get messy. Facebook can actually destroy friendships or lead to bullying or divorce. It is a place where mean, terrible things happen. Yet on the whole, Facebook has been a positive force in the lives of countless people around the world. Why else would more than 500 million people visit the site every day?

The popularity and empowering nature of Facebook has turned Zuckerberg into one of the towering figures of his generation. Besides being one of the richest people on Earth, he has many other notable accomplishments, such as being selected as
Time Magazine
’s Person of the Year in 2010. He even got to meet the president. All of this and Zuckerberg is only 28 years old.

But it all started with a mission—something that resonates with everyone on Earth—and that’s a big lesson for entrepreneurs. You need to create something worth working for. You must want to wake up every morning with a sole and abiding obsession with your mission. The mission will drive your employees, it will get your customers excited, it may even change the world.

Zuckerberg’s mission was not necessarily original. In fact, the concept of a social network had many historical precedents, the first of which—the telegraph—sent electronic messages across wires and required the knowledge of a special language called
Morse code.
The mastermind of this technology was Samuel Morse. While attending Yale in 1808, Morse became interested in the concept and uses of electricity. Then, in 1832, Morse took a voyage that would change his life and the course of history. On this trip, he met Charles Thomas Jackson, an expert in electromagnetism, who showed Morse several experiments with his electromagnet. It was then, after he began to understand the physics of electromagnetism, that Morse started to develop the idea of a telegraph, which would use electromagnetism to send messages across long distances using cheap, low-quality wire. There were several other inventors who had the same idea at the time, but Morse had more financial resources and was quicker than the others to share his invention. Morse launched the telegraph in Morristown, New Jersey, in 1838, and the technology spread quickly. It even led to the creation of a fast-growing communications business—Western Union.

The telegraph was only the jumping off point in the history of social networking. In 1876, Alexander Graham Bell invented the telephone. As was the case with the telegraph, there was someone else, Elisha Gray, who had the same idea at
the same time. However, Bell got to the patent office first—by only a few hours—which demonstrates that speed is always crucial in technology!

Zuckerberg had the same kind of experiences with Facebook. There were other sites, like Friendster and MySpace, that were also based on the same concept of an online social network. But Zuckerberg did things better and faster. Is it any wonder that one of his favorite songs is Punk Daft’s “Harder Better Faster”?

As is the case with all great new technologies, Facebook had many doubters. It’s natural for critics to doubt anything that is truly innovative. When Western Union evaluated the telephone, its conclusion was: “It has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
⁴
With regard to Facebook, critics doubted that people would put all their personal information on a web site. But when Zuckerberg launched Facebook, he was convinced of his mission and that Facebook would be the best way to pursue it.

Facebook is not alone in the determined way it seeks to fulfill its mission. All of today’s successful companies—companies of all kinds and in all industries—similarly air their commitments to the world and then strive, day in and day out, to keep them.
Table 1-1
contains the mission statements of just a handful of today’s most successful companies.

You may have a great mission but it must be something you are extremely passionate about. If not, it will be mostly hollow. As a blogger for Forbes.com, I hear a lot of pitches from startup entrepreneurs and it is usually clear when they are not excited about their mission or that they do not even have one!

I can only select a few startups about which to write, and they need to catch my attention quickly. If the first few sentences of their pitch e-mail are not interesting, I’ll probably just transfer the message to the “Media” section of my Gmail account. Rarely do I look back at any of them. And even those companies that pique my interest and with which I agree to set up a meeting to hear what they have to say, I find that many of the presentations are lackluster. The founders usually spend too much time on their background and the technology of their product. When it comes to explaining their company’s vision and strategy, their message is usually muddled, which is an ominous sign. Based on my experience, I know that many of these companies eventually just fizzle out.

I could go on for several pages documenting all the dud presentations I’ve seen and heard, but let’s focus on the positive, shall we? Let’s look at one of the exchanges I’ve had that stood out. In September 2007, I had a phone interview with Mint.com’s founder, Aaron Patzer. The company, as most people know by now, allows users to manage their finances better by importing their financial information from banks and credit cards into one central database. Mint.com then provides helpful reports, charts, and financial tips and suggestions to its users.

Although the product itself was intriguing—and a possible disruption to Intuit’s Quicken franchise—this was not what made the call memorable. Instead, it was Patzer’s pure enthusiasm for what he had created. He talked about how Quicken didn’t work for him and how he wanted a product that could help solve his own problems with managing his finances. Simply put, Patzer had made it his
mission
to make it easier for people to manage their finances.

During a later demonstration of the product, Patzer showed me his personal Mint.com account. His enthusiastic presentation revealed that he had a classic case of “eating his own dog food”—that is, he had become a passionate user of his own product. What’s more, by showing me that he, himself, used Mint.com to manage his personal finances, Patzer was making another statement to bolster his product: It was secure. Security is a big-time concern for users, but Patzer talked about some of the Herculean efforts he had made to ensure that Mint.com would keep its users’ personal financial information safe. All in all, it was an impressive demonstration and I was not surprised that Mint.com became an instant hit. Fearing the disruption, Intuit shelled out $170 million to buy Mint.com in September 2009.

Although passion is not a prerequisite for success—I personally think nothing really is—passion is high on my list of factors that ultimately help good companies thrive. Passion is infectious. It fosters enthusiasm among the employees, the customers, and the media. It’s a powerful force. Perhaps most important, passion helps founders maintain their drive to work hard and succeed. Wouldn’t you rather spend your time working on something you love? No wonder top entrepreneurs often say they would work for free.

There are few entrepreneurs who are more passionate about what they do than Rick Alden, who took up skiing at a young age in 1970 and then got hooked on snowboarding in 1985. Wanting to bolster the sport, Alden formed National Snowboard, a marketing company that specialized in snowboarding events. Ultimately, National Snowboard’s work became a key factor in making the sport a huge success. After he sold the company in the mid 1990s, Alden then started Device Manufacturing, which focused on developing snowboard boots and bindings. He sold that company as well. Then, in 2003, Alden got
the idea for his next venture, and it would be his breakout hit. At the time, he was listening to his iPod while on a chairlift in Park City, Utah, and he wondered: Why aren’t there premium headphones for this device? Again, Alden wasted little time and started a company called Skullcandy. In the company’s early days, it was not easy to get traction in the market, but he was persistent. It was his passion, after all! Over time, Skullcandy caught on and became a top lifestyle brand. By 2010, sales reached $35.7 million; a year later, the company went public. Cool, huh?

Let’s look at another example. When Zuckerberg started Facebook, it was not his full-time gig. He was a student at Harvard and had his hands full with a number of other projects, one of which was Wirehog, an app that enabled users to share files of all types, with a focus on music files, and Zuckerberg found it to be more interesting than Facebook. Even as Facebook began to take off, Zuckerberg still thought Wirehog would be his breakout idea. Eventually, though, he realized it was a mistake and abandoned the project. Wirehog never caught on, and this was probably for the best, because Zuckerberg was concerned that entertainment companies might sue him and his company for copyright infringement. In addition to Facebook and Wirehog, Zuckerberg created a tool called
Synapse
, which played music based on user’s interests and which caught the eye of companies like Microsoft. He also built some other highly popular apps, all of which allowed users to share with one another. CourseMatch, for example, made it easy to see who was taking what courses in a given semester, whereas Facemesh showed pictures of two students of the same gender side by side and allowed viewers to vote on who was the more attractive of the two. Even though not all of his programs and applications proved to be enduring, the fact is that all of Zuckerberg’s entrepreneurial activities revolved around his deep passion for coding and his special interest in creating apps that allowed for sharing with other people. The software apps he developed were tools that allowed him to pursue his goal of connecting and sharing with others.