In the wake of the anticipated $5 billion Initial Public Stock Offering (IPO) for Facebook, a revealing portrait of founder Mark Zuckerberg’s management and company philosophy is found in an open letter to future stockholders found here: http://www.bizjournals.com/sanjose/news/2012/02/01/text-of-mark-zuckerbergs-ipo-letter.html?page=all
The letter is alternatively forward thinking and snarky. Perhaps his mantra that “done is better than perfect” symbolizes his engineering-focused rule of computer programmers. Their stated company code to break it down and reinvent, otherwise known as the “hacker way,” seems troubling because of what it does not say. I did not find a long-term philosophy about building a great company. Perhaps this is an archaic business philosophy in a world where get-rich dot-com companies come and go. As a potential investor, I did not find anything reassuring about the company’s attempt to protect consumer privacy or to provide a long-term return on investment for shareholders. Does this sound like a nurturing place to work or one in which confrontation rules and no-holds-barred engineering trumps the value of the people who work there. What do you think?
10 thoughts on “The Hacker Way”
I believe Facebook has come a long way to achieve its social goal and mission, but the scale it is expanding seems to be too early for Facebook to grow in. As mentioned, the primarily intention of Facebook was not to become a company, however, potential growth and its great network for connecting people and businesses derived Facebook to form into a business, which just recently received its IPO worth $5billion. The company’s structure and philosophy don’t seem to have an anticipated future since Facebook culture is revolving around innovation and doing something that is ahead of what normally other companies do. Rumors about Facebook shutting down and then ending up going public has damaged consumers perception about safety of what Facebook is doing and offering over the air. Given that, it would have been a lot more assuring to the consumers or potential investors to see Facebook is focusing on engineering as well as securing the network and improvement in all of the business aspect.
From an investor outlook this letter would not be something that would attract me to this company. Obviously Facebook is doing extremely well and investing into the company, most likely will have returns for the current period. From this letter it is hard to say that Mark Zuckenburg is really defending his company on a level of competitive advantage, and profitability and looking into the future to see where Facebook stands against competitors.
This letter touches a lot on the engineering side of Facebook and what they do to create the user face that has become so popular; it does not really go into the financials of the company and explain where the money is going and how they plan to be sustainable in the future. The assets that Facebook currently has are the members and its popular user face; another company can engineer a user face similar or better to Facebook, and all they will need to take market share from Facebook is enough members to convince others to switch from Facebook.
Most consumers do not use more than one social media site, so they will generally go where there friends and family are; the switch from Myspace to Facebook was an example of this.
I think that a letter to investors should have outlined the ways that Facebook will continue to attain market share, and keep a competitive advantage in the industry. This letter seemed to have a lot of fluff to it, and more personal opinions from the CEO, rather than a strategic plan.
I think this letter was more intended to prep its investors, rather than win a bunch over. If a bunch of shareholders jump ship after the first beta test a company releases, that’ll be harder on the company than the actual beta test release.
Anyone who has a Facebook account knows that Facebook has a tendency to throw out a complete change of coding and formatting, and just put users into a new program while it’s still in Beta phase. This is not new news. Sometimes those developments work, sometimes Facebook has had to pull their “new design” out and bring back the old by popular demand. Anyone who is considering being a potential investor or shareholder should know this about the company.
Being that social media is an ever evolving and continually growing being that thrives on its consumer needs, I don’t think Mark Zuckerberg *could* promise an outline of the future, because the demand of the market is ever-changing. I think Mark Zuckerberg promised exactly what he knew he could, which is showcasing his history of success through this constantly changing expectation driven segment of the social market.
Is his theory of throwing people into a new Beta phas without warning the best? No. But the risk of jumping ship to another social media venue is too high, (otherwise Google+ would be #1), and not only does Zuckerberg know that, but Facebook users do to.
I think if Zuckerberg were to try and promise *how* he plans a great company future, it would sound more like a presidential campaign promise that he might not be able to live up to. This however, sounds more like a promise to stay innovative, which in social media, is probably the most steady promise an investor could ask for.
I felt like in this letter, Zuckerberg was trying to simultaneously look like a savvy businessman to investors, while keep his street cred with coders and hackers, and generally every young person that looks up to him. I agree with what Matthew said about there being a lot of fluff, especially if the point of this letter was to attract future investors, although I’m not entirely sure what the point of the letter was. The whole section about “the Hacker Way,” seemed as though it was almost aimed at the hacker community, perhaps as a tool to attract new talent. On the other hand, the rest of the letter attempted to address the IPO. To me, these separate purposes should have been addressed in two separate modes of communication. While I don’t think that Zuckerberg can predict the future of his business, as technology and social media change so rapidly, I do think he should have addressed his business model a bit more clearly. Sure, common sense says that Facebook earns revenue through its advertisers, there was no mention of future strategies or projected earnings. This letter said nothing that made me want to invest in the company. Perhaps Zuckerberg is so confident that his company speaks for itself that he doesn’t feel the need to address such unimportant details.
I agree with Allison’s point of view that this so called “letter to investors” was trying to communicate too much information and didn’t really address all that needed to be communicated to investors. I think this letter did a better job trying to recruit talent and than it did communicating the value that they would return to shareholders. After reading up on the overall culture of Facebook, I would love to work for a company that is fast paced, innovative and rewarding of risk taking like Facebook. I feel like this letter appeals more to a younger crowd even though we are not the ones that have the opportunity to invest. I think that Facebook will go on to be successful until someone thinks of the next best thing in social media. If Facebook doesn’t attract the best talent they could become obsolete like Myspace in the future.
If Facebook doesnt’ attract the best people to keep innovating and taking risks than eventually someone else will replace them. However, to say that the letter may not attract the right people like those that can invest isn’t necessariy true. The way I see it, just like Facebook is innovative in seeing what’s to come, I think the people that are investing may not be the young hip people Zuckerman markets too, but they are the average user of Facebook. Plus to be as successful as they are to be able to invest one would assume that they are just as forward thinking and innovative as Zuckerman’s peers.
In any case the letter may have not been written in a way to attract a certain investor, but it was written in a way that you can see what Facebook’s culture is all about.
I think there was a lack of compassion because Zuckerman knows that the majority of users have their umbilical cords attached to their Facebook page. Don’t get me wrong I am one of those users and I probably need a support group when I have Facebook withdrawals. But seriously how much time does Facebook have left before it lies in the shadow of the next big thing. What will be in store for the fate of the company or its 800,000,000 users……. I think Facebook will have to move into My Space while hanging out with Napster.
Mark Zuckerberg is one of the most wealthy youngest man on earth, when he first invented Facebook his main goal was that to connect the students at his school with each other, but eventually, his invention became the most used social network on the planet of earth. This letter main goal was to tell everybody that the main goal for Facebook is that we want to connect everybody together in the world not and connect businesses together. According to these days almost every person i know has a Facebook account and Mark is using that benefit for his letter to achieve the best out of everybody.
I agree with Bara HiHi, Mark Zuckerberg is the youngest wealth in the world, but lets be reliability about the social network and how its brain washing the world with its goal to connect people together. As for me i personally don’t have Facebook account, but i truly believe Facebook should connect with Napster, and become the two strong world connect sites.
As a potencial investor, it is a bit difficult to see where the future of Facebook is going. As popularity grows with Facebook, so do entries of competitors. I think that this letter is Mark Zuckerberg’s way of informing investors, and let’s face it, many people will read this letter because majority of the population has a Facebook and know that Mark Zuckerberg is a young wealthy man. Although some, who are interested in investing may read this, but others may just want to know where the company stands and to be in the know of such a popular entity of our society. I think Facebook has a long way to go and has the potential for more growth, however, innovation and being one step ahead will be the key to their success. It paved the way for our social media and how we communicate, it needs to keep that as its competitive edge.