In the eight years since he founded Facebook, Mark Zuckerberg has become one of the richest men on the planet. Facebook is on target to earn over $4 billion of revenue this year. How many startups do you know can claim that track record?
Nevertheless the stock price of Facebook dropped 20 percent within a week of the IPO. A confidential memorandum from a Morgan Stanley analyst suggested that Facebook may not be able to increase revenues in the future as dramatically as it has in the past. Why?
Two reasons seem to be driving this analysis. First, people are spending less time on Facebook than they did historically, despite the fact that the overall number of users continues to increase. More importantly, most people are using Facebook on their cell phones. Using Facebook as an application on a cell phone does not show the advertising in a very attractive or dramatic fashion. As a result the Morgan analyst predicted corporate advertisers may dial back signifi cantly the amount of ads on Facebook.
The speed of technological change even impacts the fastest-growing entrepreneurial companies. With that said, I suspect that Mark Zuckerberg will figure out a solution.
Let’s all agree that Mark Zuckerberg is a genius. But that does not necessarily translate into someone who can scale a company as rapidly as he did.
One characteristic above all else that great entrepreneurs share is humility.
Why do I say humility? It takes a lot to admit that you don’t know something. Yet most great entrepreneurs see no irony between their genius and their willingness to reach out to learn new things, which often involves seeking help from others.
Call this a lifelong commitment to education.
In a recent piece appearing in the New York Times one of Mark Zuckerberg’s friends described him as a “sponge in terms of learning.” He is constantly asking: Why? Why? Why?
Early on we all know from the movie Social Network how he hooked up with Sean Parker, cofounder of Napster, and the company’s fi rst president.
What’s not so well known is that he traveled to Washington D.C. to meet with Donald Graham of the Washington Post in hopes of luring them as investors.
Zuckerberg would later shadow Graham for four days sitting in meetings and analyst presentations trying to learn what it was like to run a large company. Try explaining that to your employees! Zuckerberg also sought out Steve Jobs early on and the two were known to take afternoon walks in Palo Alto. Zuckerberg adopted Jobs’ “walkabouts” approach to hiring. He would take high-level recruits on hikes along the wooded trails near his offi ces. Walking reveals a lot about the character of a person that might not surface in an office interview. How many of us can say we interviewed employees that way? How much more could we learn?
We also know about Zuckerberg’s many failures. When Facebook introduced its News Feed feature in 2006 Zuckerberg was convinced it would be a hit, but users were outraged that their homepages would automatically broadcast every profile change and activity. Palo Alto California’s Police Department asking if the company would turn off the news feed. People were threatening to stage a protest march downtown!
Eventually he apologized and dialed back the intensity of the promotion.
We hear a lot about companies as “learning organizations.” For that to happen, leadership must start at the top. If the president is a know-it-all who has all of the answers, you can bet the culture of the company will not refl ect the spirit of inquiry so necessary to innovation. So let’s take this advice from Facebook’s page:
- Read. Read everything you can get your hands on: business books, novels, newspapers and magazines blogs to give yourself a full awareness of rapidly moving world we live in.
- Wing man. Joe Sweeney in his book Networking Is a Contact Sport recommends fi nding an advisor or confi dent that has your back. They can give you unequivocal and honest feedback. They have to be credible with a track record of theirown. Meet with them regularly. Ask good questions. Share your plans and inner fears and be willing to listen and learn.
- Adjust fast. When you roll out an innovative product or service and market reacts negatively, listen to what customers are saying and then alter your offering. Very few entrepreneurs who receive capital from venture capitalists follow their business plan without alteration based upon market acceptance or rejection. While the IPO has received a lot of negative press, the playbook Zuckerberg used to build Facebook into a multibillion dollar company are worth replicating especially in an era when differentiation is critical to ongoing success.
Daniel Steininger is the president of Biz Starts Milwaukee, managing partner of the Wisconsin Early-Stage Fund and managing director of the Successful Entrepreneur Investors Angel Network. He can be reached at Dan@BizStartsMilwaukee.com