entrepreneurship, Facebook, Microsoft, Once You're Lucky, Twice You're Good, Silicon Valley, social networking, venture capital, Web/Tech

My Own Memo to Zuckerberg: Don't Listen to Any of Us

Just wrapping up my morning of blog reading-- amid a flurry of radio interviews-- and I saw Kara's memo to Zuckerberg. I think she made some good points. Particularly about the pressure he'll get if he turns down a Microsoft offer and the point that there's nothing "basic" about whether Facebook should sell. As this news of Facebook traffic falling spreads, the "sell! sell! sell!" drumbeat Kara refers to is only going to grow louder.

So here's my own memo to Mark: On the very off chance you are reading any of this, stop. Don't listen to any of us. It's your company. It's your vision. If we knew what was best for Facebook, we wouldn't be bloggers and reporters. You've gotten this far without us.

The first time I interviewed Mark it was over the phone and he was 19 or 20. He'd just closed his Accel deal and was obnoxiously bragging about how he could never be thrown out as CEO. He was saying things no entrepreneur says in the Valley. In other words, he was being honest, and young, but not playing the game. I hung up the phone and thought "Oh boy, what a train wreck." I thought there was no way possible this would turn into a viable business. I was wrong.

Just like we were all wrong to say Facebook should have sold to Yahoo for $1 billion. The scoop on that deal is in my book. Spoiler: Mark convenes the board meeting by looking at his watch and saying "8:30 seems as good at time to turn down $1 billion as any."

I paraphrase Jim Breyer and others in my book describing Mark's evoluation as a CEO at the time of the deal:

"As a founder, Mark is an odd combination of heart and mind. He navigates product strategy by his gut, but he navigates business strategy via a highly analytical measurement of users, growth, engagement and other stats. Both argued against the deal. His gut was telling him he wasn't finished creating the site, his ultimate vision. His analytical mind was telling him that $1 billion simply wasn't enough."

We can all pretend now we agreed back then it was a smart move. But I know few rational human beings who would have reacted that way to personally pocketing more than $300 million. And that's what makes great entrepreneurs: They are not purely rational beings.

Of course, I have an utterly selfish motive for telling Mark to go his own way: I want to see how it all turns out. But my hunch is finding that out drives him a lot more than a payday or fear of shareholder lawsuits too, for now. But it's the catch-22 of success: If Facebook stumbles, Mark did wrong by his shareholders and is a pariah in the build-em-up-tear-em-down Valley news cycle. If it continues to grow, he just has to grapple with this again, maybe with another company, definitely at an even higher price tag.


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Nice quote on the top of the page from my friend Andy Kessler. If he likes the book then I'm buying it.

btw: here is my memo to Mark :-)


Sarah, I'm currently reading "Once you're lucky, twice you're good" and I love it. I think you are a phenomenal journalist, however, don't you think you should have mentions the botched SXSW interview? The best is just to laugh at yourself..right?
Keep up the good work.

Mark has to ask himself one simple question: is this a real business that can be cash flow positive, pay off its debt, and make money which can then be paid to investors as a dividend? If yes, then go for it. If no, take the money and run. Facebook is still a "hobby." They need to make money to be considered a real business.

in reverse order:

@jason: the problem is he doesn't know. it's too early stage. their revenue strategy is less than a year old and it's ballsy could be huge or a debacle. that's the gamble of startup life! as kara correctly points out google was in the same boat, as have countless other startups who have sold and regretted it, held out and regretted it or done both and been happy. at the end of the day he probably has more of an inkling than any of us on the outside of the company though

@ryan:i finished the book months and months before sxsw and besides really didn't want it to be about me. there are very few first person references, as you have probably noticed. but when i write my memoirs i will! deal?

@john: i love how much you comment! and i love kessler too. i will happily buy you a drink if you are right on fb-msft!! (and maybe eat some sort of hat?)

thanks for the comments all!

Day late on the comment train but kept finding new articles about all the new hype for a buyout. Every time I just kept going over and over in my mind as to how you could A) turn down a billion dollars to begin with and B) even sleep at night with the prospect of $15 billion (though who knows what the real numbers are). Sarah you pointed it out and it's so simple...the entrepreneurs are just a different breed.

@sean: Never too late to comment here! i agree-- it's mostly unfathomable to even wrap your head around that figure! thanks for reading

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Srah Lacy

Sarah Lacy is an award-winning reporter who has covered high-growth entrepreneurship for more than fifteen years. She is the founder, CEO and Editor-in-Chief of PandoDaily.com, the site-of-record for the startup ecosystem. She lives in San Francisco.

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