I wrote this post about a week after Facebook’s initial public offer but did not have the opportunity to publish it until now, so enjoy :)
As you know or may have heard, Facebook went public a few weeks ago and quite a number of investors locally and internationally scrambled to have a bite of the huge pie.
I love Facebook.com (after Linkedin.com), I pop in there, every now and then to see what my friends are up to. I have no doubt that social networking is a great concept but I don’t buy the idea or agree that Facebook is near being worth $100 billion, it’s all some corporate hype in my opinion.
The truth is, if the likes of G.P. Morgan, Goldman Sachs and a host of others, say you are worth a $100 billion dollars then the world has little or no choice but to agree even when believability is low. Anyway, looks like Mark and his team have won (at least in the short term), all they need to do now is focus on making their shareholders happy :-)
Mark Elliot Zuckerberg remains a source of inspiration and business lessons (case studies) for MBAs all over the would. What could possibly drive a 28 year old to take his eight year old company public making billions for himself and others?
Here are 4 Business Lessons from Facebook:
1. Stay Focused
Facebook is a more than just a social network for Mark, he has remained passionate and focused on it, from his days at Harvard when the idea of the site was first conceived.
Had it not been for his focus, he’ll have long given up or probably taken Facebook public in a hurry. All his pains, persevarance, focus, commitment to his dream has paid off because today he has a $16 billion dollars stake in Facebook.
Food for thought: are you truly focused on a particular goal (your dreams)?
One of the greatest challenges I have is that of being focused. I tend to do too many things at the same time and end up losing out completely. In the last 2 years, I changed strategy by concentrating my energy where my strength lies. For example, 70% of all I do now from SEO, Consulting, Public Speaking etc. is Internet related.
So, get focused and stay focused. Refuse to be like me (of the past).
2. Partner with Others
Facebook is a perfect example of partnership that works. I bet you Mark would have long failed if he was a one-man team for a number of reasons, amongst the following;
- He is probably more technical than business minded. (maybe this has changed now)
- He is largely inexperienced. (if you ask me though, I’d say he has gained a lot of experience since 2004)
- He did not have the required capital when the project began to grow. (that is no news)
It would be wrong for anyone to attribute Facebook’s successes to Mark alone. I have always said that behind every successful company/business/project there is always another party in form of a co-founder, partner, board member, investor, venture capitalist, loyal employee(s) etc. Forget the self-made man theory!
Mark Zuckerberg wooed his indispensable No. 2, Facebook’s chief operating officer, away from Google in 2008. Sheryl Sandberg currently holds around 2 million Facebook shares, but has another 39 million that will vest if she stays with Facebook for several more years – you see an idea of a partnership strategy that works.
Food for thought: Don’t be a one man team. Strive to create a business that will stand the test of time. Seek for people who can complement your weaknesses and make them partners in the business.
I am so passionate about this, that’s why I wrote an open letter to membs of FATE Foundation Alumni sometime ago.
3. Have an Exit Plan
You probably think I am talking about the guys at Facebook? Oh no, I am referring to the founders of Instagram (Kevin Systrom and Mike Krieger) who sold their 2-year-old photo sharing start-up in a cash-and-stock deal valued at $1 billion.
Why did I decide to talk about these guys? Because in my view they already had an exit plan before the Facebook opportunity came and when it did……. the rest is history.
A lot of Entrepreneurs (including yours truly) don’t have an exit plan. We assume we would lose control if we don’t hold on to our baby (the enterprise) and this makes us unwilling to accept offers and overtures that will take the business to the next level.
Food for Thought: Are you building your business to be sold? Or better still is your small business sellable or do you have an exit plan?
Selling a business is not common here but does it mean it is wrong, of course not, it’s just a matter of choice. As for me, I think it’s a good business model. Why not take up the challenge of building a business to sell it?
4. Money is not everything
Does the above statement hold true in today’s world?
I’ll leave you to be the judge of that but the story I want you to consider is a guy called David Choe, who was called in by one of the earliest investors in Facebook to paint the company’s headquarters and after he was done, he had a choice between receiving $60,000 in cash or stock. Guess what he chose?
In his words;
I like to gamble, you know … “I didn’t care about Facebook. I’m like, ‘This kid knows something and I’m going to bet my money on him.
Good bet! No one knows exactly how many shares Choe has — he declined to comment when we asked — but the New York Times estimates his holdings at $200 million. WOW!
Food for thought: if you were him what would you have chosen? When dealing with clients are you focused on providing a WOW service or on your fees/cash/payment?
Let me stop here and hand over the baton to you. I am sure there are hundreds of lessons from the whole Facebook experience. Do you mind sharing them by leaving a comment below?