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Leadership

Think Like Zuck: Leadership Insights From Facebook's Early Years

When Mark Zuckerberg first started Facebook, he knew he didn't have the experience necessary to run a major company, Ekaterina Walter says in her forthcoming book "Think Like Zuck." Here's how he triumphed anyway.

In the first several years of Facebook’s existence, multiple journalists portrayed Mark Zuckerberg and his friends as party lovers who would code all day and stay up all night. Mark liked to have fun just as much as any other college freshman, but he was also very focused. He knew that he needed to keep the company moving forward, and he didn’t hesitate to put the rest of his colleagues on the lockdown until something got done. Early on, he showed qualities of a natural leader, according to his friends. Sean Parker, former president of Facebook, remembers: "The leader of a company needs to have a decision tree in his head—if this happens, we go this way, but if it winds up like that, then we go this other way. Mark does that instinctively." Zuckerberg also made sure every angle was covered. Parker continues: "He liked the idea of Thefacebook, and he was willing to pursue it doggedly, tenaciously, to the end. But like the best empire builders, he was both very determined and very skeptical. It’s like [former Intel CEO] Andy Grove says, ‘Only the paranoid survive.’"

Even though MySpace (with over five million users in 2004) seemed like Facebook’s main competition at the time, Zuckerberg worried more about collegiate competition. He saw similar local networks pop up here and there on different campuses, and he devised a strategy to establish Facebook’s universal dominance. As a particular network became prolific at a certain school, Facebook would make itself available not only in that school but in other schools in the immediate vicinity, thus creating a cross-network pressure that favored Facebook over the other network. Despite his age, early on Facebook’s founder displayed true strategic thinking in his approach to business growth.

As the fall 2004 semester approached, Zuck and several of his colleagues decided to stay in Palo Alto and continue to build the service. By October, the site had reached half a million users; by November, it registered its millionth user and continued to grow at a rapid pace.

At that time, Facebook introduced another new product feature—Groups. Anyone could create a group for any reason. Group pages looked similar to personal profile pages. Groups became the early version of Brand Pages and enabled brands to build student communities on Facebook. Brands saw the value not only in advertising to their target audience on Facebook, but also in building communities around particular topics. Paramount Pictures, Apple, and other brands were among the first to join Facebook for marketing purposes.

By February 2005, the site had two million active users with 65 percent of them returning to the site daily. Facebook had been deployed at 370 schools. In March, Viacom offered to buy the company for about $75 million. If he accepted, Zuckerberg would have pocketed $35 million for a year’s work. This was the second offer to buy, and just as he had with the first one, Zuckerberg declined. He wasn’t in this for a short-term profit; he wasn’t interested in selling out.

Later that spring, the Accel Partners venture capital firm and Zuckerberg agreed on an investment deal where it would invest $12.7 million in Facebook. The deal valued Facebook at about $98 million post-investment. But high valuation isn’t what drew my attention to this deal. What really impressed me was the fact that one of Zuck’s demands was that Jim Breyer, Accel’s co-managing partner and a shrewd investor, join Facebook’s board of directors. Zuckerberg surrounded himself with smart people, and he invited seasoned veterans of Silicon Valley to join the board. He knew that he was lacking specific knowledge internally, and he wanted to bridge that gap by having access to sharp, experienced people inside and outside of the industry.

He also understood that he lacked leadership experience. He started asking questions, shadowing the best leaders he knew, and reading up on the topic. He also reached out to Steve Jobs, Bill Gates, and others who not only built their own companies but created platforms for new industries to thrive on. Zuckerberg is a sponge for learning, and he is innately curious. He doesn’t shy away from admitting what he doesn’t know, and he isn’t afraid to ask tough questions, with "Why?" being his favorite.

As the company grew bigger and stress mounted, Zuck didn’t lose his nerve. He remained calm. The bigger the company grew, the more focused he became on user experience and long-term strategy. At some point, he started carrying a little leather diary that he called "The Book of Change." On the title page, he inscribed Gandhi’s quote: "Be the change you want to see in the world." The book detailed his thoughts on potential new site features, his belief on opening up the service to the whole world, and his ideas for turning the site into a platform for developers. As he and his team continued to push small and big changes to the site live, Zuck was looking ahead, building a vision and strategy for Facebook in his mind that was far bigger than just a collegiate social network.

Mark preferred to call Facebook a utility. "We wanted to build a new communications medium," said Parker. "We knew we’d be successful when we were no longer cool—when we were such an integral part of peoples’ lives that they took us for granted."

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—Ekaterina Walter is the author of the forthcoming book Think Like Zuck, ©2013, McGraw-Hill Professional; reprinted with permission of the publisher.

[Image: Flickr user Nicolas Mirguet]

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