Yesterday, Facebook founder and CEO Mark Zuckerberg took the stage at Y Combinator’s Startup School in a candid interview with Y Combinator Partner Jessica Livingston. You can watch the full interview here, and it starts around the 43 minute mark, and lasts for roughly 40 minutes. If you have some time to spare, it’s well worth a look.
Zuck revealed a number of fascinating things about entrepreneurship, founding Facebook, and product development, but one of the more interesting (and surprising points) came at the end of the interview when Livingston asked him what he would do different if he could go back in time. Zuck replied: If I were starting now I would do things very differently. I didn’t know anything. In Silicon Valley, you get this feeling that you have to be out here. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.
He explained that he had a conversation once with Amazon founder and CEO Jeff Bezos about this, and the average time someone stays in job at Seattle is twice as long than it is in Silicon Valley. “There’s a culture out here where people don’t commit to doing things, I feel like a lot of companies built outside of Silicon Valley seem to be focused on a longer-term,” he explains. “You don’t have to move out here to do this.”
“There’s this culture in the Valley of starting a company before they know what they want to do. You decided you want to start a company, but you don’t know what you are passionate about yet…you need to do stuff you are passionate about. The companies that work are the ones that people really care about and have a vision for the world so do something you like.”
Zuckerberg also talked about the early days, when he was at Harvard, thinking of the idea for what would become Facebook. I was in denial that we were going to make a company early on. When I was in college, I had a lot of conversations with my friends about the direction the world was going to go to and we cared more about seeing this happen. We built it and we didn’t expect it to be a company, we were just building this because we thought it was awesome, he explained
When Zuck moved out to Silicon Valley in his sophomore summer, he thought that maybe one day he and his team would develop a startup, but didn’t think Facebook was that startup. “It was not like in the movie, there was no drinking. We all just lived in a house, iterated, kept going,” he said candidly. “It wasn’t until we got our first office in Palo Alto where things became more like a company. We never went into this wanting to build a company.” But a company is the best vehicle in the world to align a lot of people to achieve a mission, he said.
Livingston asked Zuckerberg about how he pitched Facebook when he first pitched the business to Battery Ventures in Boston in 2004. “I barely remember that but I agree that it happened,” he recalled. “I don’t think I said anything and Eduardo said some things but it was fine because I didn’t want to do that anyway.”
Zuckerberg said that Eduardo early on said that Facebook needed to raise money, and he was skeptical of VCs. “That was one of the reasons that we accepted from Peter Thiel, because he could relate to us on a founder level,” he explained, referring to Thiel co-founding his own companies, including PayPal. Zuck said that in Silicon Valley, everyone was talking about flipping companies and he found that to be unattractive. Another potential investor Zuck really was passionate about was Donald Graham, CEO and chairman of The Washington Post. He explained that he came close to taking money from Graham, but Graham actually encouraged Zuckerberg to take money from Jim Breyer at Accel Partners. Zuck saw this as the “best of both worlds.”
He also gave startup founders advice how to guide on how to handle acquisition offers, and gave interesting insight on how he look at Facebook’s own acquisition offers. We really had one phase of this and the only reason why its’ this big story that everyone knows about us turning down a lot of money is because I messed up the process. It’s one of the biggest management mistakes I made through Facebook’s whole history. I learned a lot about the team at that time, and ended turning over a lot of that same team. I wasn’t in it for the acquisitions, and I wanted people around me who were in it for the long-term, he said.
It’s not clear that you should turn down offers, he explained but you should take it if it means the company can go in the direction you want it to go on. “If you go through some big corporate change, it’s just not going to be the same,” Zuck said.”If we sold to Yahoo, they would have done something different, if you want to continue your vision of the company, then don’t sell because there’s inevitably going to be some change.”
One of the key parts of operations is a ‘growth team,’ which is a centralized team Facebook set up to help its users stay connected an engaged. For example, Zuck said that through this team, the company found that members need to have at least ten friends to have enough content in the news feed to come back to the site. So Facebook reengineered the whole flow of the site when someone signs in to focus on having people find other people to connect with, so that people can get connected with friends (and meet that minimum) right away. Zuckerberg said that the company has exported this idea to another startups, including Dropbox. “Once you have a product that you are happy with, you the need to centralize things to continue growth.”
When Livingston asked what surprised Zuck most in the history of building Facebook, he replied honestly, “most things were surprising.” “I don’t pretend that I had any idea that I was doing. I always felt like we were so close to dying in the first years, and were afraid that Google was about to build our product and we were going to be screwed, and look how long it took for them to build our product,” he said laughing, referring to Google’s newly launched social product Google+. “You are going to make a ton of mistakes, you don’t get judged by that.”
As for what Facebook’s future is, Zuck shed some light on his vision for the network. “I think the story that we look back will be the apps and things that are built on top of Facebook. The past five years have been about being connecting people and the next five to ten years are about what are all the things that can be built now that these connections are in place.”
And I’ll leave you with one of Zuck’s more memorable quotes from the talk, “The biggest risk is not taking any risk…In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Y Combinator is a venture fund which focuses on seed investments to startup companies. It offers financing as well as business consulting along with other opportunities to 2-4 person companies looking to take an idea to a product. Y Combinator looks for companies with “good” ideas over companies with experience and a business model. The company made its first investments in Summer 2005. Y Combinator selects companies to finance and consult with twice a year. They are located in...
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...