Zuckerberg had the Facebook platform in his pocket during all those negotiations. It seems like a great bet to me. If Facebook is worth a billion just for audience share of relatively traditional social networking, it should be a billion plus with the release of the platform and a marketplace.
I can't stand FB, but I have to say that was the right move.
I think the best move by FB was buying FriendFeed in Aug '09 a few years after knocking back Yahoo and making Bret Taylor CTO and having Paul Bucheit cultivate an engineering culture. I was surprised by this, because Taylor originally stated he wanted FF to grow into a self-sustaining company. If FB didn't have the pockets to do this, FB wouldn't be nearly as successful as it is today. Today FB is impressively fast, were Tornado + HipHop the keys for this to happen?
If Twitter fixed its UI and fail whales a few years ago, it'd be much bigger today. PG a year or two ago spoke of Twitter as a protocol: yet still I think this hasn't manifested as it's still only used at the presentation layer. It should have or should still look into this path.
Increasingly I'm seeing outcomes determined by the smarts of the CEO who end up having to think for themselves, because eventually they get surrounded by Yes-people. I see a deficit at Google with Eric Schmidt, although I can't say I've met him, Google needs a Jobs at this point. FB just need to put in a search engine (Bing?,) to stop losing users to Google.
If I may continue, the FF acquisition basically allowed FB to compete with Twitter (and not lose users to it.) It was Twitter that undermined Digg, because sharing with people you know is more fun than with sharing people you don't know.
The lessons in strategy here with Digg, Facebook, (and also Yahoo's non-acquisition by MS) is that if a potential acquirer comes to you having in mind that your business be acquired to spearhead or enable massive growth of their own, you say no. Or rather, if they're more (or even less) excited about your business than you are, sell unless you can obtain that excitement somehow, perhaps by acquiring yourself.
It would have been the right move for a more experienced entrepreneur who was gambling with play money; it's the wrong move for a first timer who'd have been wiped out had it failed. He rolled the dice and won, but the odds were not in his favor; it was not smart.
Starting a company is never a safe bet. Every step along the way as you build a successful company, you have opportunities to sell. By your logic, you would sell at the first opportunity in the low millions.
Clearly, that wouldn't have been the right move, but it would have been the safe move.
The right way to think about selling a company depends on what your goals are. People are motivated by different things. Some entrepreneurs are motivated mostly by money, some mostly by recognition, and others by being influential/changing the world.
If you go with the money because you're a first time entrepreneur, there's a great chance that Facebook would be your one significant company in life, and you would have bailed out without seeing it to its conclusion. At the end of the day, depending on your personal goals, that might be a failure for you, personally.
Comments
Zuckerberg had the Facebook platform in his pocket during all those negotiations. It seems like a great bet to me. If Facebook is worth a billion just for audience share of relatively traditional social networking, it should be a billion plus with the release of the platform and a marketplace.
I can't stand FB, but I have to say that was the right move.
I think the best move by FB was buying FriendFeed in Aug '09 a few years after knocking back Yahoo and making Bret Taylor CTO and having Paul Bucheit cultivate an engineering culture. I was surprised by this, because Taylor originally stated he wanted FF to grow into a self-sustaining company. If FB didn't have the pockets to do this, FB wouldn't be nearly as successful as it is today. Today FB is impressively fast, were Tornado + HipHop the keys for this to happen?
If Twitter fixed its UI and fail whales a few years ago, it'd be much bigger today. PG a year or two ago spoke of Twitter as a protocol: yet still I think this hasn't manifested as it's still only used at the presentation layer. It should have or should still look into this path.
Increasingly I'm seeing outcomes determined by the smarts of the CEO who end up having to think for themselves, because eventually they get surrounded by Yes-people. I see a deficit at Google with Eric Schmidt, although I can't say I've met him, Google needs a Jobs at this point. FB just need to put in a search engine (Bing?,) to stop losing users to Google.
If I may continue, the FF acquisition basically allowed FB to compete with Twitter (and not lose users to it.) It was Twitter that undermined Digg, because sharing with people you know is more fun than with sharing people you don't know.
The lessons in strategy here with Digg, Facebook, (and also Yahoo's non-acquisition by MS) is that if a potential acquirer comes to you having in mind that your business be acquired to spearhead or enable massive growth of their own, you say no. Or rather, if they're more (or even less) excited about your business than you are, sell unless you can obtain that excitement somehow, perhaps by acquiring yourself.
It would have been the right move for a more experienced entrepreneur who was gambling with play money; it's the wrong move for a first timer who'd have been wiped out had it failed. He rolled the dice and won, but the odds were not in his favor; it was not smart.
Starting a company is never a safe bet. Every step along the way as you build a successful company, you have opportunities to sell. By your logic, you would sell at the first opportunity in the low millions.
Clearly, that wouldn't have been the right move, but it would have been the safe move.
The right way to think about selling a company depends on what your goals are. People are motivated by different things. Some entrepreneurs are motivated mostly by money, some mostly by recognition, and others by being influential/changing the world.
If you go with the money because you're a first time entrepreneur, there's a great chance that Facebook would be your one significant company in life, and you would have bailed out without seeing it to its conclusion. At the end of the day, depending on your personal goals, that might be a failure for you, personally.