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Depends whether or not you believe Zuckerberg genuinely wanted to build a world-changing business. If that's his main goal (and the more I hear him talk, the mo

by rewind 16y ago

Depends whether or not you believe Zuckerberg genuinely wanted to build a world-changing business. If that's his main goal (and the more I hear him talk, the more I start to believe it), and he genuinely believes he can do it, then taking the money isn't necessarily what's most important to him. I read a lot about entrepreneurs getting shit on for not swinging for the fences, but then they get shit if they turn down a billion dollar offer when they only see that as a triple. It remains to see how this all plays out, but when you turn down a billion dollars, I think there's a good chance you're doing it for more than the money.

gnaritas 16y ago
Still doesn't matter. Your first shot out of the gate, you take the money because it enables you get money out of the way. Everyone needs money. You swing for the fences the second time out, after you've got cash in the bank and don't need the money. That's the smart thing to do, play the odds. Zuck went against the odds, that wasn't smart, it was immature; he seems to have beat the odds so it worked out, but it was much more likely to go the other way, and it still could. Something could wipe out Facebook just like Facebook wiped out MySpace.
- neilk 16y ago
  I have a feeling Zuckerberg is not going to have to worry about money no matter what happens. Even in 2007 he was clearly headed for multimillionaire status. I don't know him personally but at the time he reputedly lived on a mattress in an empty room in Palo Alto. Maybe he's the kind of guy that values winning more than the accoutrements of success.
  - gnaritas 16y ago
    If facebook hadn't taken off, I doubt anyone here would know who Zuckerberg was. He rode a fad to fame and capitalized on it and made many a blunder along the way. He's no different than Kevin Rose and Digg. Facebook's popularity will wane, people will abandon it; many people already are in the sense that they don't check it much anymore. Something else will come along and the crowd will have a new toy.
    - jambo 16y ago
      I sometimes hope for this outcome, too, but I recognize that, for me, it is as jealousy that I got my project wrong in 03-04.
    - code_duck 16y ago
      I certainly hope so, because I don't particularly like their vision of the internet.
    - dillydally 16y ago
      In what universe is Facebook a fad? There are billion-dollar companies built on their platform, ferchrissakes!
      - gnaritas 16y ago
        Platform, lol. The site was better before the platform enabled apps. The entire platform is faddish, it's popular because it's popular and everyone else is doing it; until they aren't, then you stop. There are billion dollar industries that are entirely based on fads, movies, music, games, or fashion for example. The amount of money has no bearing on whether something is faddish. For most, facebook is entertainment, the entertainment industry in all its forms is all about fads and popularity.
        dillydally 16y ago
        Every company is around until it isn't. Blockbuster just declared bankruptcy -- does that make Blockbuster a fad? Facebook is six years old. 500MM people use it every month. They are profitable and do over $1Bn in revenue. They have a platform, on top of which there is at least one $1Bn company (Zynga). Groupon, also a $1Bn company, owes its success in large part to Facebook's ad platform. Facebook is now moving into location and online payments. They will compete with PayPal, another $1Bn company (before being acquired by eBay). Zynga is PayPal's second largest merchant, after eBay itself. Through Facebook credits, Facebook will be taking 30% of each of those transactions. They are building a database of credit card numbers to do it. Tencent QQ, a Chinese social network with gaming elements -- most of the popular genres on Facebook were taken from popular Chinese social games, e.g., the farming genre -- is 15 years old and did over $1Bn in revenue last year. Tencent's IM product has 610MM monthly active users and 63.2MM people with subscription accounts. http://www.tencent.com/en-us/content/ir/fs/attachments/investorintro.pdf http://www.tencent.com/en-us/content/ir/fs/attachments/inves... When does this stuff stop becoming a fad? Sure, fine, there's some universe in which Facebook vanishes tomorrow. The demand is still there. Social networking is here to stay. The only way Facebook will fall behind is if they slow down and let someone else pass them, but given their history of aggressive and forward-thinking innovation, that seems unlikely for at least the next 5 years and/or until Zuckerberg stops caring. And "it's popular because everyone else is doing it" -- you just described every business built on top of network effects. Craigslist is popular because everyone is using it. Does that make Craigslist a fad? eBay? VRBO? Etsy? YouTube? HN? Pet rocks were a fad. Slap bracelets were a fad. Snuggies are a fad. http://fmylife.com http://fmylife.com is a fad. Do you really think Facebook is that? Really? I also notice that you didn't cite a single piece of data. Do you have any to support your argument, or is it just your "intuition?"
- rewind 16y ago
  Of course it matters, and the only person it matters to is Zuckerberg. I don't understand why anyone should tell an entrepreneur when they should sell and where the threshold is. Off the top of my head, I can't think of any huge, super-successful companies that sold early and became huge after the fact. I'm sure there are, but I can only think of the Googles, Microsofts, IBMs, Apples, etc. I'm sure there are examples, but when I think of super-huge companies, the founders didn't sell out early.
  - gnaritas 16y ago
    We're not talking about super huge successful companies, we're talking about the rational thing for a first time entrepreneur to do, and that's take the billion dollars and run. Zuck followed his heart, not his head. That's perfectly fine to do, but he played against the odds. While it worked out, it's akin to winning the lottery. No one's telling Zuck what to do, so I don't know what it is you don't understand. We're just analyzing the logic of what he did after the fact. You're too hung up on the winners like Google, Microsoft, and Apple, but you're forgetting about the thousands and thousands of never-weres who were sunk because of exactly this kind of rash decision making against the odds. What Zuck did was not good business, it was luck; that attitude is not something to emulate. Had any of his competitors delivered Facebook could have easily gone down in flames and they'd all have been wishing they took the billion. Ask yourself this, would it be wise for the typical startup founder in his early 20's on his first startup to turn down a billion dollar acquisition? I submit the answer is a most definite no. If you disagree, please do explain your rationale.
- mikeklaas 16y ago
  Zuck has, I'm sure, cashed out enough of his shares to be more than comfortable. If you have the ability to do that and swing for the fences, why not?
  - gnaritas 16y ago
    That's true now, but was it then?
code_duck 16y ago
I'm very skeptical when people tell me that their motivation is to 'change the world'. Even more so when they are very dead set to make sure that THEY are the ones who change it vs. their competitors. Facebook is a twist on existing services to share photos, text messages, emails and games. It's not like he's out fighting poverty, political corruption and disease or something.

by rewind 16y ago

gnaritas 16y ago

Still doesn't matter. Your first shot out of the gate, you take the money because it enables you get money out of the way. Everyone needs money. You swing for the fences the second time out, after you've got cash in the bank and don't need the money. That's the smart thing to do, play the odds. Zuck went against the odds, that wasn't smart, it was immature; he seems to have beat the odds so it worked out, but it was much more likely to go the other way, and it still could. Something could wipe out Facebook just like Facebook wiped out MySpace.

neilk 16y ago
I have a feeling Zuckerberg is not going to have to worry about money no matter what happens. Even in 2007 he was clearly headed for multimillionaire status. I don't know him personally but at the time he reputedly lived on a mattress in an empty room in Palo Alto. Maybe he's the kind of guy that values winning more than the accoutrements of success.
- gnaritas 16y ago
  If facebook hadn't taken off, I doubt anyone here would know who Zuckerberg was. He rode a fad to fame and capitalized on it and made many a blunder along the way. He's no different than Kevin Rose and Digg. Facebook's popularity will wane, people will abandon it; many people already are in the sense that they don't check it much anymore. Something else will come along and the crowd will have a new toy.
  - jambo 16y ago
    I sometimes hope for this outcome, too, but I recognize that, for me, it is as jealousy that I got my project wrong in 03-04.
  - code_duck 16y ago
    I certainly hope so, because I don't particularly like their vision of the internet.
  - dillydally 16y ago
    In what universe is Facebook a fad? There are billion-dollar companies built on their platform, ferchrissakes!
    - gnaritas 16y ago
      Platform, lol. The site was better before the platform enabled apps. The entire platform is faddish, it's popular because it's popular and everyone else is doing it; until they aren't, then you stop. There are billion dollar industries that are entirely based on fads, movies, music, games, or fashion for example. The amount of money has no bearing on whether something is faddish. For most, facebook is entertainment, the entertainment industry in all its forms is all about fads and popularity.
      - dillydally 16y ago
        Every company is around until it isn't. Blockbuster just declared bankruptcy -- does that make Blockbuster a fad? Facebook is six years old. 500MM people use it every month. They are profitable and do over $1Bn in revenue. They have a platform, on top of which there is at least one $1Bn company (Zynga). Groupon, also a $1Bn company, owes its success in large part to Facebook's ad platform. Facebook is now moving into location and online payments. They will compete with PayPal, another $1Bn company (before being acquired by eBay). Zynga is PayPal's second largest merchant, after eBay itself. Through Facebook credits, Facebook will be taking 30% of each of those transactions. They are building a database of credit card numbers to do it. Tencent QQ, a Chinese social network with gaming elements -- most of the popular genres on Facebook were taken from popular Chinese social games, e.g., the farming genre -- is 15 years old and did over $1Bn in revenue last year. Tencent's IM product has 610MM monthly active users and 63.2MM people with subscription accounts. http://www.tencent.com/en-us/content/ir/fs/attachments/investorintro.pdf http://www.tencent.com/en-us/content/ir/fs/attachments/inves... When does this stuff stop becoming a fad? Sure, fine, there's some universe in which Facebook vanishes tomorrow. The demand is still there. Social networking is here to stay. The only way Facebook will fall behind is if they slow down and let someone else pass them, but given their history of aggressive and forward-thinking innovation, that seems unlikely for at least the next 5 years and/or until Zuckerberg stops caring. And "it's popular because everyone else is doing it" -- you just described every business built on top of network effects. Craigslist is popular because everyone is using it. Does that make Craigslist a fad? eBay? VRBO? Etsy? YouTube? HN? Pet rocks were a fad. Slap bracelets were a fad. Snuggies are a fad. http://fmylife.com http://fmylife.com is a fad. Do you really think Facebook is that? Really? I also notice that you didn't cite a single piece of data. Do you have any to support your argument, or is it just your "intuition?"
rewind 16y ago
Of course it matters, and the only person it matters to is Zuckerberg. I don't understand why anyone should tell an entrepreneur when they should sell and where the threshold is. Off the top of my head, I can't think of any huge, super-successful companies that sold early and became huge after the fact. I'm sure there are, but I can only think of the Googles, Microsofts, IBMs, Apples, etc. I'm sure there are examples, but when I think of super-huge companies, the founders didn't sell out early.
- gnaritas 16y ago
  We're not talking about super huge successful companies, we're talking about the rational thing for a first time entrepreneur to do, and that's take the billion dollars and run. Zuck followed his heart, not his head. That's perfectly fine to do, but he played against the odds. While it worked out, it's akin to winning the lottery. No one's telling Zuck what to do, so I don't know what it is you don't understand. We're just analyzing the logic of what he did after the fact. You're too hung up on the winners like Google, Microsoft, and Apple, but you're forgetting about the thousands and thousands of never-weres who were sunk because of exactly this kind of rash decision making against the odds. What Zuck did was not good business, it was luck; that attitude is not something to emulate. Had any of his competitors delivered Facebook could have easily gone down in flames and they'd all have been wishing they took the billion. Ask yourself this, would it be wise for the typical startup founder in his early 20's on his first startup to turn down a billion dollar acquisition? I submit the answer is a most definite no. If you disagree, please do explain your rationale.
mikeklaas 16y ago
Zuck has, I'm sure, cashed out enough of his shares to be more than comfortable. If you have the ability to do that and swing for the fences, why not?
- gnaritas 16y ago
  That's true now, but was it then?

code_duck 16y ago

I'm very skeptical when people tell me that their motivation is to 'change the world'. Even more so when they are very dead set to make sure that THEY are the ones who change it vs. their competitors. Facebook is a twist on existing services to share photos, text messages, emails and games. It's not like he's out fighting poverty, political corruption and disease or something.