Hector: Let us pledge that the winner will allow the loser all the proper funeral rituals.
Achilles: There are no pacts between lions and men.
[stabs spear into ground, and takes off helmet, throwing it to the side]
Achilles: Now you know who you’re fighting.
As a fencer—the civilized version of a swordsman—Zuckerberg sometimes saw the world as a fencing match, a forum for combat in which the ideal thrust is the one that catches an opponent off guard.
One battle that had become engaged was the one with the Winkelvoss/Narendra axis. The company had by now hired another law firm just to defend itself against the lawsuit, which was beginning to wend its way through federal court in Boston and had become a significant magnet for the company’s limited assets, costing about $20,000 per month in lawyers’ fees. After a phone call from the lawyers, Zuckerberg would briefly recount the latest news to Moskovitz, then stand up and declaim, “Now you know who you’re fighting!” At other moments, the phrase made even less sense.
But incongruous movie quotes gave Zuckerberg, who could otherwise frequently lapse into long periods of silence, tremendous if inexplicable pleasure. He also inserted them inside Thefacebook. Whenever you searched for something in those days there was a little box below the results. Initially it had some tiny type that said, “I’ll find something to put here.” Later that was replaced with “I don’t even know what a quail looks like.” It’s a throwaway line from The Wedding Crashers. Another quote that appeared there was “Too close for missiles. Switching to guns,” which is spoken at a critical moment in Top Gun by the fighter pilot played by Tom Cruise.
The quotes came to encapsulate, in the fashion of schoolboy in-jokes, the spirit of the company—playful, combative, and despite the technical sophistication, a bit juvenile. Students at colleges around the United States spent hours arguing about the significance of these inscrutable epigrams. Not long afterward, Aaron Sittig designed company T-shirts. They showed a fighter plane streaking past a couple of quails.
The twelve-year-old Ford Explorer they’d purchased over the summer finally gave out. One day it just wouldn’t start, with or without the key. Zuckerberg and Parker brought it up at their next board meeting with Thiel, who approved buying a company car. “Just keep it under fifty,” he exhorted them. They bought a sleek black new Infiniti FX35, a luxury sport utility vehicle. The car has a streamlined, vaguely malevolent look, as if poised on its haunches to leap on top of some unsuspecting Ford. Now you know who you’re fighting! They nicknamed it “the Warthog,” after a tank in the video game Halo, which they played regularly on their Xbox. The toys were getting better.
Facebook seemed to be thriving, but Zuckerberg was thinking about Wirehog almost as much. “What was so bizarre about the way Facebook was unfolding at that point,” says Sean Parker, “is that Mark just didn’t totally believe in it and wanted to go and do all these other things.” Zuckerberg felt he had cause to hedge his bets. He was worried that once Thefacebook began trying to expand beyond college it would hit a wall of resistance. He was genuinely unsure which of his projects would ultimately lead to the best business. And it wasn’t just about business. Zuckerberg hadn’t changed much since he was just out of Exeter and turned down millions for Synapse, the MP3-playing tool he built with D’Angelo. The ideas were at least as interesting as the prospect of riches.
In any case he was confident one of his projects would really catch fire. Maybe it would be Wirehog. “Mark always talked about how he just liked to start things, especially back then,” says Dustin Moskovitz. “He was like ‘My life plan basically is I’ll prototype a bunch of these apps and then like try and get people to run them for me.’”
Parker, on the other hand, remained resolutely opposed to Wirehog. “I specifically said Wirehog is a terrible idea and a huge distraction. We shouldn’t be working on it,’” he recalls. Yet Zuckerberg prevailed upon Parker, who reluctantly hired Steve Venuto, the same lawyer who had set up Plaxo, to create Wirehog the company. In order to try to seduce Parker’s support, Zuckerberg made him one of Wirehog’s five shareholders, along with McCollum, D’Angelo, and Moskovitz, who himself was ambivalent about Wirehog. “I needed Mark’s attention on Facebook,” remembers Moskovitz. Looking back, Zuckerberg concedes that he didn’t always make things easy for his partners: “Dustin was fully bought in to what we were doing [with Thefacebook]. And I was always thinking about the next thing. Until we got to this big inflection point, for my calculus it may have just not been worth the amount of work.”
The group was split. McCollum and D’Angelo focused almost entirely on Wirehog, while Parker and Moskovitz worked only on Thefacebook. Zuckerberg straddled both projects. “Wirehog was more interesting to a lot of us,” says D’Angelo. “There were a lot of social networks. Wirehog was a product I was interested in using myself, and it was more technically interesting, too.”
Wirehog was a stand-alone program that users downloaded onto their computers. The entrepreneurs built a little profile box for it on Thefacebook, so it could figure out who your friends were and whether they too had downloaded Wirehog. It gave you a window into their computer and told you what files they were willing to share. Wirehog was intended primarily for photos, since that was what Thefacebook’s users were most vociferously asking to share with one another. (At the time you were only allowed one photo of yourself on your profile page.) But Wirehog could also handle video, music, and documents. “We kind of thought of Wirehog as the first application that was built on top of Facebook,” says D’Angelo. Zuckerberg also talks about Wirehog as the first example of treating Thefacebook as a platform for other types of applications. D’Angelo kept writing code for Wirehog in the fall after he returned to Caltech.
Over the protestations of Parker and Moskovitz, Wirehog launched in November 2004 as an invitation-only site at a few colleges. A page on Thefacebook explained: “Wirehog is a social application that lets friends exchange files of any type with each other over the web. Thefacebook and Wirehog are integrated so that Wirehog knows who your friends are in order to make sure that only people in your network can see your files.” Its site listed things you could do with it: “share pictures and other media with friends; browse and save files through the web; roll around in the mud oinking and such; transfer files through firewalls.”
But Wirehog was too complicated for most users of Thefacebook, just as Parker had predicted. He was desperate to shut it down, so Thefacebook could avoid the prospect of a debilitating lawsuit. They may have been separate companies, but Thefacebook was where a user went to download the Wirehog software. Soon even Zuckerberg began to cool on Wirehog. “He just like came back to reality on how much time he was spending,” says Moskovitz.
On November 2, MySpace hit 5 million users. The boys in Los Altos Hills were bemused. They saw themselves creating an anti-MySpace. Where that service was wide-open, florid and unconstrained, Thefacebook was minimal, with limited flexibility and no decorative freedom. MySpace was unconcerned with who you really were. Thefacebook authenticated you with your university email, and you had no choice but to identify yourself accurately. On MySpace, the default setting was that you could see anybody’s profile. On Thefacebook, the default allowed you only to see profiles of others at your school, or those who had explicitly accepted you as a friend. A degree of privacy was built in. “On MySpace people got to do whatever they wanted on their profiles,” says Zuckerberg. “We always thought people would share more if we didn’t let them do whatever they wanted, because it gave them some order.”
While Zuckerberg was relatively unflustered by MySpace’s advances, he worried much more about collegiate competition. A variety of other university-centric social networks was quickly rising. It became a top company priority to stamp them out. One, called CollegeFacebook.com, was a pure copycat, in look and tone. Its strategy was to go after less snooty schools that the elite Thefacebook hadn’t yet targeted. It briefly garnered hundreds of
thousands of users until the real thing arrived. The Winkelvoss/Narendra team had finally launched Harvard Connection in May, now dubbed ConnectU to emphasize it was for any school. Columbia’s CUCommunity, similarly renamed Campus Network, was also expanding to other campuses and becoming established. These competitors were expanding more quickly than Thefacebook. They typically had fewer users at each new campus so they could add more users without putting as much demand on their systems as Thefacebook’s hordes did. But their widening presence still made Zuckerberg and his partners nervous.
So they embarked on what they called a “surround strategy.” If another social network had begun to take root at a certain school, Thefacebook would open not only there but at as many other campuses as possible in the immediate vicinity. The idea was that students at nearby schools would create a cross-network pressure, leading students at the original school to prefer Thefacebook. For example, Baylor University in Waco, Texas, had one of the earliest homegrown college social networks. Thefacebook launched at the University of Texas at Arlington to the north, Southwestern University to the southwest, and Texas A&M University to the southeast. This pincer movement tended to work, since Thefacebook typically saw such a viral explosion when it launched at schools that didn’t already have a social network on campus. Zuckerberg was only twenty, but already he was strategically outmaneuvering his competitors.
Zuckerberg took a utilitarian approach to advertising. If costs were going to go up, ad revenues needed to as well. He wanted to make sure Thefacebook earned enough to cover its costs, which were hovering at around $50,000 a month. “If we’re gonna need $100,000 worth of servers or $500,000 worth of new people…then how much advertising do we need now?” he asked rhetorically at the time, in an interview with the Harvard Crimson.
Y2M, the advertising representative for the company, scored a coup in August with a breakthrough ad deal from Paramount Pictures to promote the November premiere of The SpongeBob SquarePants Movie. In those days the only ads on Thefacebook were long vertical rectangles on the lower left side of a page. Paramount paid Thefacebook $15,000 for 5 million impressions (what ad people call a $3 CPM, or cost per thousand views). Paramount also pioneered a concept that would later become a critical piece of Thefacebook’s commercial structure—a special group for fans of the movie. The ad urged users to join the group, which consisted mostly of a discussion board. The “group description” read, “Everyone sing it with me now! ‘Who lives in a Pineapple under the sea?’” Some users thought the whole thing idiotic and said so on the movie’s page. There were as many comments insulting people who liked the movie as there were notes from fans. Nonetheless, the experiment was deemed a success. Over 2,500 users of Thefacebook mentioned the movie in their profile.
By December, Y2M had signed a landmark deal with Apple Computer. Not only did Apple sponsor a group on Thefacebook for fans of its products, but it also paid $1 per month for every user who joined, with a monthly minimum of $50,000. The group was immediately popular, and the minimum was easily exceeded. This was by far the biggest financial development in Thefacebook’s short history. It alone more or less covered the company’s expenses. Executives at Apple were thrilled because they had acquired a powerful platform which allowed them to be in constant touch with Apple fans in college, whom they began offering special discounts and promotions like free iTunes songs. The deal gratified Zuckerberg because it wasn’t a conventional banner advertisement, which he detested.
There were also more modest ads students could buy themselves right on the site, called flyers. A flyer could be targeted just for students at your school. At even the largest campus the ads cost less than $100 per day. It was an effective way for campus groups to promote activities or for a fraternity to announce a big party. The boys wanted to take this further, to create a system so merchants in college towns could buy ads that targeted students. So Parker recruited a new employee, a former roommate of his named Ezra Callahan, who had sold ads for the Stanford Daily when he was a student there. Parker offered him the job by email while Callahan was traveling in Europe. A few weeks later he showed up direct from the airport at 1 A.M. Parker was at a movie with his girlfriend and hadn’t told the others much about the new hire. So when Moskovitz blearily opened the door he had no idea who Callahan was. “I’m Ezra. I work for you guys,” insisted Callahan. Moskovitz let him in. Callahan got a bunch of stock options, which he assumed would be worthless. He planned on going to law school soon anyway. Though the local business product occupied much of his time and that of many others in ensuing months, it never launched. Callahan’s other job was to learn from Saverin how to manage and schedule all the other ads. The “CFO” had been doing it remotely from the East Coast. Even though Zuckerberg had for now reached a détente with his erstwhile partner, he was whittling away Saverin’s remaining responsibilities.
On November 30, Thefacebook registered its millionth user. It had existed for just ten months. Peter Thiel had recently opened a nightclub and restaurant in San Francisco called Frisson. He offered up its VIP lounge for a party. Parker, the organizer, piggybacked on it a celebration for his own twenty-fifth birthday on December 3.
The email invitations were portentous. At top was a quote from Malcolm Gladwell’s The Tipping Point: “Look at the world around you. With the slightest push—in just the right place—it can be tipped.” The invitation continued: “And tip it has . . .” It was indicative of the way Parker talked about the company. In his opinion the company’s success was essentially a fait accompli. Even Zuckerberg was amazed they had gotten to a million so soon.
D’Angelo and Saverin flew in, along with public relations manager and former Zuckerberg roommate Chris Hughes. Investors, friends, and hangers-on drank the night away in glitzy surroundings, regardless of the fact that several of the core team were not yet of legal drinking age. And there were still questions about where priorities lay. One guest at the party asked D’Angelo what he did at Thefacebook. “Oh no,” D’Angelo answered. “I work at Wirehog.”
Facebook’s success was beginning to make waves. And in Silicon Valley, success attracts money. More and more investors were calling. Zuckerberg was uninterested.
One of the supplicants was Sequoia Capital. Among the bluest of blue chip VCs, Sequoia had funded a string of giants—Apple, Cisco, Google, Oracle, PayPal, Yahoo, and YouTube, among many others. The firm is known in the Valley for a certain humorlessness and a willingness to play hardball. Sequoia eminence grise and consummate power player Michael Moritz had been on Plaxo’s board and was well acquainted with Sean Parker. It was not a mutual admiration society. Parker saw Moritz as having contributed to his downfall. “There was no way we were ever going to take money from Sequoia, given what they’d done to me,” says Parker.
But it seemed a good idea at the time to pitch them instead on Wirehog, as a joke. It was ludicrous, but aside from sticking it to Sequoia it had another, more symbolic purpose. Zuckerberg’s acquiescence seems to have been his way to surrender to Parker about Wirehog—to acknowledge that it was dead. “We had done a couple of real pitches for Wirehog, but our theory was that no one cared about that,” says Zuckerberg. “They just wanted to do Facebook.” Sequoia, for its part, was so eager to get close to them that partner Roelof Botha willingly accepted the idea.
The boys hatched a plan. On the appointed day, they overslept. They were supposed to meet at 8 A.M. Botha called at 8:05—“Where are you guys?” Zuckerberg and Andrew McCollum, his Wirehog partner, rushed over to Sequoia’s swanky offices on Menlo Park’s Sand Hill Road in pajama bottoms and T-shirts. Though they said they’d overslept, it was deliberate. “It was actually supposed to be worse,” says Zuckerberg. “We won’t even go there.” Then, as the stiff but attentive partners of Sequoia looked on, Zuckerberg made his presentation.
He showed ten slides. He didn’t even make a pitch for Wirehog. It was a David Letterman–style list of “The Top Ten Reasons You Should Not Invest in Wirehog.” It started out almo
st seriously. “The number 10 reason not to invest in Wirehog: we have no revenue.” Number 9: “We will probably get sued by the music industry.” By the final few points it was unashamedly rude. Number 3: “We showed up at your office late in our pajamas.” Number 2: “Because Sean Parker is involved.” And the number one reason Sequoia should not invest in Wirehog: “We’re only here because Roelof told us to come.”
Throughout it all, the partners seemed to listen respectfully, recalls Zuckerberg, who says he now deeply regrets the incident. “I assume we really offended them and now I feel really bad about that,” he says, “because they’re serious people trying to do good stuff, and we wasted their time. It’s not a story I’m very proud of.” Sequoia never invested in Facebook.
Now, at last, Thefacebook was the sole priority. Not only the world, but Zuckerberg himself had been tipped. President Parker started looking for top talent to fill out its staff. One of the first people he targeted for a senior position was Matt Cohler, Reid Hoffman’s right-hand man, who had attended the Thiel investment pitch. Cohler had a combination of qualities Parker liked. He was a natural intellectual, well-versed in the exigencies of the Internet, with extreme social dexterity. Cohler had a degree in musicology with honors from Yale, so he fit in nicely with Thefacebook’s Harvard crowd. And he even had international experience, having lived in China while working for an Internet company there. But he was pretty happy at LinkedIn, which at the time was seen as one of the hottest and most promising of the Silicon Valley start-ups.
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