Welcome to the Business Insider's series on Innovation. I am Henry Blodget. Our guest today is Mark Zuckerberg. He is the founder and CEO of the modestly successful Facebook. Mark founded the Facebook when he was nineteen, as a sophomore at Harvard. He ended up quitting Harvard, moving to California, building the company and they now have more then 250 million users worldwide.
So, obviously, a lot to talk about on the Innovation front. Let's jump right into it. So Mark, when a company like Facebook, gets to this size, gets to this level of maturity. A lot of people will start looking at it and assume that this was the direction you set out to go the whole time.
Take us back to the dorm room at Harvard. Talk about the intial idea and what the intial idea looked like relative to where you are today. Well, so my sophomore year at Harvard when I first built this, there were a lot of really interesting stuff going on. I mean, there were two primary things that were happening, kind of, at the same time.
The first was, like any college student, I just spent a lot of time hanging out with my friends while people were studying Computer Science, Psychology, the things that I studied and other stuff.
And we just spent a lot of time of talking about what we thought were the big issues with the world. And how the world was gonna change over the next five, ten, twenty years.
And, you know, a lot of cool stuff has come out of college conversations like that in the past. And for us, what we discussed was that, the biggest trend that was going on right now, was that more and more information was becoming available.
All right, so going back to, kind of, the start of the internet and mainstream, when browsers were available and since then, people have just been sharing more and more information and a lot of that was still being shared by a small number of companies or content producers.
But that over time, people would be sharing more and more information themselves and how that happened was a really important thing. All, right so people care a lot about controlling information about themselves, their reputation, their privacy.
And there was just, kind of, that big question about whether the world would evolve in this way, that people would have control over that themselves or if that information would just be available.
And so that's, kind of, on the one hand. We spent like all this time discussing that and on then on the other hand, I just built this little thing. So we kinda had those converstaions at the back of my head but, what I was building was this application for Harvard students.
Six thousand people to share some information about themselves and stay connected with their friends and family. And what we basically just found since then is that that application is something that almost everyone wants to use.
Everyone has an identity that they want to express and friends and family that they wanna stay connected with. And it has grown from that original six-thousand-person student body to more than and friends and family that they wanna stay connected with. And it has grown from that original six-thousand-person student body to more than 250 million people across the world.
And the cool irony in it is now we've actually had an apportunity to shape how that first, sort of, big trend that my friends and I discussed five years ago about more information being available and people having more control over the information. We've now been able to shape up a bit how that plays out. So it's been a really fun part of this. And so go back,. I remember my sophomore year, we definitely had those kind of conversations and I'm glad you had them, in your satellite, a lot more philosophically helpful to the world than otherwise what I remember having been imagined. So where did this idea to build the application come from? I mean, were you setting out to build a company? Was it, "Hey, I can build this cool, little technology thing that people can log into. I mean, where did that motivation come from?
Well there are a couple of things, I mean, I didn't want to build a company. Well, I actually explicitly did not want to build a company. It wasn't even that I, kind of, was thinking about building a company.
And that is why, early on, where most people would probably launch it at schools, that they thought it would have the highest chance working? What I did was, I launched it at the schools that I thought would have the lowest chance of working.
So those were schools that already have some kind of school community. And the reason why I did that was because I wanted to know, early on, if this was something that was just worth spending a lot of time on as a project.
You know, in college, I just built whole lot of different things. And that's just a passion of mine. It's, kind of, building things very quickly.
Yeah the first person on Facebook, I built in 2 weeks and then we improved the application and when it worked and spread extremely quickly to these other colleges that already had something similar to it that people are using.
We figured, "Okay, this is something that may be could grow to be a lot bigger." And that's what when my roommates joined me and we really started growing it aggressively. If you listen to people talk about Entrepreneurship and Innovation, there's always this tremendous focus on the idea. Is it the idea that is sacred and is the person who thought of it the one that should get full credit for it and so forth.
From what you're saying, it sounds like the concept of hooking people up on Facebook and so forth was already out there. So what was it that enabled your version of it to take off where everybody else was stuck.
Well, I think, it's just a combination of execution and an idea of where you want it to go. So from those conversions that I had with my friends in college, we had this very broad idea of where we thought the world should go and not just, kind of, guide at Facebook's development to this date. But a lot of it was also just good technical decisions, getting really smart people in to work on it. Some of the smartest people that I've known were a lot of the original people involved in Facebook and a lot of them are still here. I mean, people who were my teachers in school, people who were my classmates.
The people, who I thought were the smartest around and, I think, that's a lot of what gets it to where it's gonna go. And so you in the beginning you didn't want to form a company. In fact you went out of your way to not make it that. You wanted to control the world. What made that change? Well, eventually what I realized, once we started getting a bunch of really smart people together, that a company is really...
These were during your sophomore years?
Yeah, I mean, it started off with my room mates and a few other people. It occured to me that building a company was the best way to align a group of people towards building something great. And its really.. it's a good organisational structure where you can really reward people. If they're building something that's good, you can you work with partners and reward them if the product that you're developing work well. It's a good way to get the best people involved to build something very good.
And where did you think of that? I mean, again, I'll take myself back to sophomore years and I may have been retarded in a lot of ways, so what is the idea of building a company come from? Sophomore year in college. Were people suggesting it to you? I mean, on the outside, did you always have these bugging entrepreneurial fantasies and where does it come from? Well, I mean, so I build the first version of Facebook in a couple of weeks. It was was pretty quick, especially for the scale that it eventually was offering. I mean, I started at just, I rented a server for $85 a month. And on that, we were basically doing, I think, millions of page views a day. Because we have, I think, at some point like 10 or 20 percent of all Harvard students were logged in at the same time. This was just in the first week. So I mean, so there was a lot of stuff that went into building the first version. But that was pretty quick.
And that has expanded, I just got more and more smart people around me to join. Eventually we moved out to California. Originally when we went out there, we weren't expecting to move out there, we wanted to go out there for the summer because we had this feeling like, "Okay, all these great companies come from Silicon Valley. Wouldn't it be cool to spend the summer out there and get that experience."
But we expected to go back to Harvard in the Fall and the thing that made it so that... that we didn't was that Harvard has this great policy that let's you take as much time off as you want. So we decided, "Okay let's go ahead and take one semester off and continue just building things out."
And more people joined our team and at that point, we formally incorporated the company and got our investment from our first investor, Peter Thiel. And then things were just growing and we got up to a million users on our first year of running the site.
And then we decided, "Okay, let's take a second term off from Harvard." And then, you know, just things kept on growing and we got up to about 5 million users and we were like, " Okay, let's take a whole year off." And then like, "All right, I guess we're not really going back."
But I mean it was never this big decision where it's like, "Okay, at this point, I am going to drop out of school and then I'm gonna start a company and its gonna be this crazy thing." It just happened very gradually and at each step, we were just, kind of, doing what made sense to do next.
Its sounds like... in talking to a lot of entrepreneurs, it sounds like that's actually relatively similar occurance to what [xx]. The grain of an idea that really takes hold, especially on the internet. You see this all the time. If you think about a small product, takes off, suddenly it becomes something huge.
Did you think that that's helpful way to think about innovation, do you fee like some people when they say, "Okay, I'm gonna start a company, there's way too much planning ahead of time, get the business plan perfect, get the products perfect." I mean this sounds like a much more organic way of doing it.
Well, one of the great things about the internet and about how quickly information close now is these markets are very efficient. Right, so with more traditional businesses, it would take often years of investment before you hit some kind of curve where you knew whether you're thing was going to work.
Now it's possible to build something in a weekend or, you know, two weeks as the first version of Facebook worked. And just launch something and see if it addresses the market or that they're really use. And from there you can, kind of, get real time feedback and adjust what you're doing very quickly. But it's possible for a site to get, for example, 250 million users like we have in five years, which is extremely quick.
Things like that just couldn't happen like generations ago, right? So I think that that just leads to a different kind of development now. And I mean, going back, it sounds like the decision to drop out wasn't a one-time thing. It was keep going from there. Were your parents suuport of this? Again, you're a sophomore.
When I talked to my mom after the fact. She tells me that as soon as I went out to California for that summer, she knew I was going to drop out. So, as soon as I went out to California for that summer, she knew I was going to drop out. So, I guess, yeah they are supportive.
And how important, as you look back on Facebook's success or history, how important was coming to the Valley? I mean if you'd stayed in Cambridge, for example, and done it? You know there are companies that do both, I mean some of the best companies are not built in the Valley. I mean, I really admire, both, Amazon and Microsoft, which are companies based in Seattle. You know, for us, I think it was really valuable because I was 19 when I started this
There was just so much that I didn't know. There still is, and Silicon Valley is just a great place to meet a lot of great engineers, there's a lot of infrastructure built up to help support, just getting companies off the ground. Whether it's the investment community or the legal community or, just all these different areas. Undoubtedly that helped us.
In terms of designing our first data center. Just all of these different things. So I think for us, that was a pretty valuable thing. Although, I think, it can work both ways. When you look at the model of successful technology entrepreneurs. You've obviously decided that you want to run the company. Why is that?
Well in just my view of looking through the technology industry and its history, I think the companies that have done who have often been led by their founders or, at least, extremely early in place of the company. And I think that that's because often those people have the better sense of why the company was created, have a lot of creditability within the company in order make the decisions that need to be made.
The world changes so quickly so being able to guide the company efficiently, I think, is an extremely important part of that. Someone showed me an interesting stat once that that out of public companies, ones that were still run by their founders out-performed others.
And, I think, that that would be an interesting thing to look into. I don't know, you know, obviously, thats probably... someone can dispute that or question what it means. But, I think, that the model of having the person who is guiding the direction of the company, run the company.
Well being surrounded by a group of really talented people who are effectively manging the company and running its different areas is a very good model. No matter what the model is, its really important to keep in mind that it's never just one person. So in our case, we have just a handfull of really great executives, you know, whether it's folks like Sheryl Sandberg, who is our Chief Operating Officer or, Mike Schroepfer, our head of Engineering who joined us from Mozilla or, Chris Cox,our head of product who started off as an engineer at Facebook and has built some of the most innovative products here and is now our head of products. You know, it's really, it's always a team of folks and and even more then those that I mentioned who really are running the place.
Right, and I talked to Mark Hendrickson who, in his new venture capital firm actually has an interesting statement, that he's looking for founders who want to be CEO's. Again, certainly in my experience, it's often the VCs come in and they try to find a way to push the founder out gracefully and then install professional management, so it's very interesting to see that, and so forth. But, you started, you're nineteen, you come out here, you got big fast. You didn't have this long period where you can make mistakes quietly or what have you, and it sounds like... No, we make mistakes loudly.
Exactly, that's right and you do have great people around, there's no question. There's some decisions that are just going to come right down to you. Do I sell the company? Are we going to roll this product? Are we going to pull back this product? And it seems to me that requires just a lot of self-confidence and where does that come from?
I mean, how are you confident in your decisions? You're leading thousands of people. These decisions make a very big difference to you and your users and your company and your share holders. Well, I mean, even in the decisions I make, I seek the input of the people around me and the opinion is shaped by just all the smart people that we have. And it's not just the management team, I mean, it goes all the way throughout the company. All the folks that we have here contribute a lot to the strategy and a lot of the ideas that we have.
But, I mean, I think a lot of it is, it goes back to what we were talking right before. It's just how the compnay got started. We we started this because we thought that this was one of most important trends in this generation, it was making it so that as the world became more open. That that could happen in a way that was good for people.
And that they could control their information and be impowered by this and have a voice as opposed to other ways that it could play out and that's always been my for compass for running the company and, you know, the decisions that we've made, whether they seem controversial or not. Some of them are. Some of them, you know, weren't internally. A lot of them were just guided by that compass.
And you look back not based on what you knew. Not based on everything's 20-20 hindsight, obviously. There are there things with the experience that you have now, that you would have done differently? So for enterprenuer coming up right out of school, running around a company, gets big fast. What would your advice for that person be as you look back?
Oh, I mean there are so many things that I would have done differently, I mean, in general, it's just that you make a lot of mistakes and those are valuable mistakes. We're better off for having made most of those but, I also think that we've done a good job of staying true to do who the company is and what we started off to do.
And we've also made a lot of very good technical and product decisions along the way and good cultural decisions to make sure that we can make it so the best people can come and work here. And have a very big impact very quickly. I think that those are the most important things. And if you get those right then you can actually make a lot of mistakes. Actually one of the core values of Facebook is is "Move fast". And we used to write this down by saying, "Move fast and break things." And the idea was, unless you are breaking some stuff you are not moving fast enough. I think that's still basically true. I mean, right now, we've optimized so much of our culture around just making it so that people can come and build things quickly. Right, whether it's everything from having the right tools in the right development environment to build things quickly, to nightly code pushes, hiring the best people who have a bias towards just pushing things very quickly, very entrepreneurial. The whole culture is tuned around that. And I think there's probably something in that for other entrepreneurs to learn which is that making mistakes is okay. At the end of the day, the goal of building something is to build something not to not make mistakes.
Right, so, in order to get any reasonable conclusion, you're going to make missteps along the way. And as long as you learn from them and those become valuable in getting to where you want to go then, then I think that's fine.
And how do you build up a skin thick enough? I mean you have been through already, just huge craze, huge criticism of every decision you make, second guessing all that stuff. You probably get more advice than anyone ever should get in a lifetime, most of which is probably BS.
How do you sort through that and just sort of say, "Look I know I am young, I get it but, I'm going to trust my gut. I got good people around me. I'm going to make the decision." How do you basically tune it out, which is what any successful leader has to do?
Well, I think a lot of it is, you have to kind of stay grounded with what you're trying to do. A lot of it is just what you just said, right? I wanna listen to the people around me as opposed to what, you know, a lot of people outside who know less about what our business is doing and what our goals are and, kind of, have their own opinions on how stuff should work.
What would they think about things and, I think, that that' one of the tings that we've always done very well here is, we have a strong sense of purpose as a company. You know we didn't start Facebook to build a website or even start Facebook to build a company. We started this because we wanted to make the world more open and connected. Building a site is the first step towards that.250 million users is a start. I think. You know , I mean I think over time a lot more people will be using it. And I think over time a lot more people would be using it beyond a website, I mean , I think that the platform that we're developing and Facebook connect are some of the things that I'm most excited about.
And we have almost a million developers right now who are building things, ranging from small, you know, just groups of people building things in college, getting started like I did, to small businesses, to large businesses that have hundreds of millions of dollars in revenue , that are primarily built on top of Facebook platform.
And, I mean, that's really exciting. And I think a lot of that just comes from staying grounded, having very good people around who share what you're trying to do. And for us, it's like, we have very strong sense of purpose in the culture.
So Facebook has this tremendously vocal user base. Anytime you make a change, people scream. It doesn't matter what it is. And the years that I've been watching the company, you watch news feeds , huge screaming, you stuck with it.
A million people that's screaming.
Screaming and you stuck with it and, it's been now one of the core attributes of the company that everybody talks about. Beacon came out, big announcement, lots of people screamed. That one you backed off on.
And said, "Okay, we'll do it differently or we'll revisit it or, what-have-you." How do you make these decisions and what accounts for the difference there?
Well, one of the interesting things is just the volume of the feedback that we get and I think that that's a testament to what we're trying to do as a company. We're trying to give everyone that voice. Right, and make it so that people who wouldn't have necessarily otherwise had a venue for communicating or sharing that information about what they think, now have that.
So, you know, when we look at that, when we see the feedback, I mean, part of us is just , "Okay it's working. It's working well." You know, but then a lot of it is, we really listen to what people are saying and then we think about, "Okay, this is where it is today, we know where we want to go in the future. What if their feedback is going to be very valuable in helping us build the best product for the long term? And in which pieces do we think that over time they'll get used to?"
Or, you know, when I say they'll get used to, I think a lot of it is because we're building this network, right? Where something may end up, you know, one thing that users ask for a lot, for example, is they want, like, just different designs on their pages.
And we've routinely said "No" to that because we just think it's actually better for everyone if the pages stays clean, right. So we make a lot of decisions that optimize for the network as opposed to what a specific user is asking for that given point in time.
So news feeders are an example of something where, I think, it just changed some of the social norms. People put up information, they work structing to share it with people, newsfeed completely respected all the privacy settings and it made it so that the information was easier to get access to for the people that you decide to share something with.
So, if I decide to put a photo album up and said that you can see it. Then that will just go to you a lot more easily. And that was different from what people expected but we figured it was a more efficient way for the system to work.
So, they freaked out but in that case you said, "Whoa, it's going to work out, just watch it, get used to it." Maybe you gave them little ways to take them with it, you stuck with it. On Beacon, you didn't, you said, " You know what you're right. I went a little too far, let's change it." And so your users, sort of, say, "You know what, that's actually a good point." Yeah. Well, I think that, you know, they're speaking, there are lots of examples, where we've gotten feedback from users on large projects and little ones as well, that have changed our decisions. That's one of the great things about the internet is you can launch something and immediately get feedback and immediately react and build something good and launch it the next week. Right?
Which just wouldn't have been possible with more traditional businesses. But, yeah I mean, one of the things through all these though , one of the things that we talk about a lot, is giving users control over their information. This is a really fundamental thing on Facebook, because you know, the more control people have , the more comfortable they are of sharing things. Right?
I can... I'll put up a photo album from my vacation because I know that I can share it with exactly the people that I want. I can control those privacy settings. But even more importantly, I can take it down if I don't want it to be up anymore.
And on a lot of the rest of the web, you don't have that flexibility. You don't have that kind of control and that's one of the things that drives all the sharing that exists here. One of the things that's interesting is, we talk about this constantly and we realize that its a very important thing.
A lot of the times when we get feedback from users, it's just to remind us of how important that is to them. So I'm gonna round news feed or beacon or just any of these different things. A lot of or beacon or just any of these different things. A lot of the message that we got from users was "we want even more control."
You know, so that's just a big part of what we spend our time developing on, it's constantly adding features that give people control of their information in different ways and we know and we, kind of, have this formula that we give people control, they are comfortable sharing more, that makes the site more valuable and, just becomes a better product for everyone and then more people use it.And that is just the huge part of what we do. And do you're used to this for now, so when you come to launching and you have a big new feature and what-have-you, you know, theres going to be screaming. You get the screaming, you then have sort of a war room meeting to evaluate the screaming and say, "Well, this is something that we should think of..."
Well, we like to think we're getting a little bit better at this, you know. The interesting thing is that, it's such a different scale at which these products launch. So when we launched news feed, we had only 10 million users, which is pretty hard to imagine given that it was only 2 and half years ago and now have 250 million users.
I mean, this scale is so much different now than it was back then. So if we launch something now, we will get a lot of feedback but, it's a much smaller percent of the user base. And I think that a lot of that is because we're getting better at communicating with users, understanding the ways in which they want control over the information.
Building them in when we launch products, or in a lot of cases even before, we launch products just continually launching things that are giving more control in helping them share information in different ways that either they want.
And I don't know, I guess, I would hope that over time the trend is that we have fewer of these.
As a preset, see, you talked a lot about how important the culture is, getting the right people, the big company. Elsewhere, in the valley of Google, that has made huge to do about 20 percent time. The developers have had time to dream and think of their products, projects and so forth. What do you think about that? Do you have 20 percent time here?
Well, we do things a bit differently. We have a culture that is very focused on, being very focused on what we're building . Focus is a really important part of it.
Wasn't it Google for a long time? It seems to be in vogue so they may be saying, you know, "the focus is better but..."
So, but at sometime we want to make sure that everyone can come and add their ideas. I mean, some of the best ideas throughout the company's evolution, they have just been from just places all throughout the company, whether it's an engineer or someone on the customer support team or just different areas around the company. So we've always had these hackathons that are basically time that we allocate that, the only rule is that you don't work on what you work on the rest of the time.
It's basically an incubator for people to prototype different ideas, much in the spirit of how Facebook got founded originally. You can build anything good in a day, or a couple of days, right and get version of that running.
So you get it running, you then test it internally?
Yeah and then we can see. That helps us shape the road map in what we want to do in the future. But, we also have a culture where we want to stay very focused and we don't want to run with a lot of projects that we don't expect to launch.
So we want to get a lot of ideas, help those ideas shape to where we wanna go and execute in a very focused way on the stuff that we're gonna do. But, I mean, our culture, I mean, we have a few values that are really important to us. One, which I talked about before, is just moving fast.
The whole company is really optimized around someone joining, being able to build something very quickly, be able to launch it quickly, iterate very quickly on that. Get feedback quickly. That moving fast ethos is a huge part of what we do.
And another big part of it, which we kinda talked about, is just this idea of wanting to be bold in writing the decisions that we make. And we have this belief that you never build something great by doing the same way that other people have done it. So, there are a lot of things that... there are best practices around but for the core things that we wanna do, when we have the decision to either do it the same way that someone else has done it or do it in a different way, we're gonna choose to do it in a different way. And we really encourage people all throughout the company to think about things in that way and make bolder decisions.
But, it's "think about it, come up with ideas, execute it in very small form and then we'll decide as a company whether we're gonna go for it". It's not, everybody has their own pet project that they're working on and we're going to have 78 different products in beta, and we'll see what works and, and so forth. Well, I mean, we encourage people to build things in their free time as well. Right? And I think that that's a lot of what Google has done with their program. So, we have that all the time. People here are just building stuff, like, night and day. And there are venues where people can experiment with that publicly or privately inside the company. There are a lot of different things going on.
One of the big advantages that, I think, we have as a smaller company is just focus. We've a very focused mission. I mean what we want to do is make it so that people can share more information and control their information and can stay connected with the people they care about. And those are, kind of, two core use cases of the product and almost everything about what we were doing is focused on optimizing those 2 things. Great. So, you're five years into your career as a founder and entrepreneur of this massive global organization, which is amazing but we'll leave that aside, so what do you think the three keys to Facebook's success at innovativing have been thus far, if you had to really narrow it down to three.
Well, I mean, I think it's a lot of the cultural values that we've talked about so far. So I mean, I think making it so that it's the place where people can move quickly its just key, having an emphasis on making bold decisions and, and being bold in the products that we build.
I think it's why we have products like news feed, which at a time was controversial but, now is one of the core part of the product and has been emulated by a lot of other start-ups and companies.
Worldwide we have platform. When we built our first version of the development platform, I mean people weren't thinking about social networks as social platroms for social software development. And that was a pretty controversial decision and we decided to go for it, now we have a development in community of, you know, almost a million developers.
So that is, kind of, a direct by product of that, kind of, line of thinking. And then I think, just also focusing on leverage and impact, you know, the best people want to go to the place where they can have the biggest impact. And we have always focused on this ratio here of the number of engineers that we have to the size of the user base for the impact that they're gonna have.
And what we found is that, you know, each engineer here is roughly responsible for more than a million users, if you do the calculations, thats much more than the smaller companies that have smaller user bases within a smaller employee basis. And much larger then larger companies that have, maybe, more users but also a lot more employees. So, we're kind of in this sweet spot and we've always focused on building the company in a way where there is just a lot of leverage and that that would encourage just the best people to come join the company.
And so, speak personally, and talk about the three keys to your own success. I mean, there have been, again you're wonderful at attributing the success to everybody else. Which is great, and they deserve it and appreciate it and so forth. On the other hand, you've taken this thing of going after an opportunity that thousands of people have gone after, and you are the one who has led this company to be the world dominant player in this, right now. There are a million ways you could have screwed up. So, what do you think the three keys to your success are?
Well, I think a lot of it goes back to those values. And the values often come from the founder or the person running the company. So, I think I believe those things probably the most strongly of the the values often come from the founder or the person running the company. So, I think I believe those things probably the most strongly of the people at the company.
Yeah, move fast, be bold. Focus on impact. And, I think , you know, I think long term focus is a really important part of this and we've had a lot of opportunites to optimize for the shorter term whether it's in selling the company or doing in different products that would have benefited us in the short term but not optimized for the long term impact. I just think opportunities like this don't come around that often. So, when you get one, I feel like you almost have a duty to see it through and built it to be what it can be. Thanks, Mark. Thanks again for watching our interview with Mark Zuckerberg. I'm Henry Blodget for the Business Insider. Thanks again.
Read more: http://www.businessinsider.com/mark-zuckerberg-2010-10#ixzz1hjeGC2AZ