The Facebook Effect

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The Facebook Effect Page 16

by David Kirkpatrick


  In the hectic efforts to keep everything operating despite all the rapid growth, many of the young engineers made serious errors. Some risked bringing down the entire site, since its underlying software code consisted of one very long file of instructions, violating elementary design protocols for such a project. (Marlette and D’Angelo later broke the code up into a more conventional segmented structure.) At one point, source code—the company’s elementary intellectual property—was streaming onto student profiles. One engineer accidentally introduced a bug that briefly enabled any user to log into any account. On another occasion a summer intern made a coding error that meant that no matter which ad on the site you clicked, you were directed to only one advertiser—Allposters.com.

  Dustin Moskovitz was responsible for keeping things running smoothly day to day, so anytime one of these disasters hit it was his job to remedy it, even if doing so took all night. When confronted with a particularly stupid error he sometimes lost his cool, banging angrily on his desk and throwing things. But he always got things fixed. He commanded universal respect for his dedication and work ethic. “Dustin was always the rock,” says Ruchi Sanghvi, a beatific Carnegie-Mellon computer engineering graduate with a round face and long black hair. She was the first female engineer hired by Thefacebook and for years the only one in the company’s inner core.

  Rothschild, trying to figure out who was doing what, discovered that all of Thefacebook’s customer support was being done by a student at Berkeley working part-time from home. The student had a backlog of 75,000 customer support requests. Rothschild advertised on Thefacebook for a customer support representative and hired a recent Stanford grad named Paul Janzer. The two quickly concluded they needed a larger staff. They rustled up six more applicants. Rothschild then held a group job interview and hired them all. Even still, the queue of unanswered requests grew to 150,000 before it started dropping. People had questions about everything from how to change their profile picture to whether they could change their name once they got married.

  Efrusy tried to play the role of company conscience. In return Zuckerberg gave him a business card with the title “Chief Worry Officer.” But he had cause to worry. New features weren’t tested before they were inaugurated. He found it nerve-racking to sit casually conversing with Zuckerberg while he typed away on his laptop making live changes to the site.

  Recruiter Reed was taking longer than she expected to conduct her search. For one thing, experienced engineers didn’t like the idea of working for a twenty-one-year-old who’d never held a real job. And many interested candidates were daunted to discover Parker’s reputation, especially once they learned that his title at Thefacebook was president. It also was unclear to Reed exactly what Zuckerberg wanted. His description of what kind of person he wanted kept changing. He made it clear that he himself would remain in charge of product development. But despite the seeming immaturity and enveloping chaos of daily life at Thefacebook, Reed noticed that things seemed to keep moving forward.

  Zuckerberg asked her to come and work with the company full-time for six months or so, until it filled out its staff. She had never done that before, but she liked the idea of stock options in Thefacebook. She was becoming a believer. “I thought I’d stood at the elbows of a lot of great entrepreneurs and knew how it was done,” she says. “But when I got to Thefacebook I was struck by how much I didn’t know about how twenty-somethings worked. Everybody called them irresponsible. They didn’t come in until late. Some worked only at night. But Mark was actually incredibly responsible. All of them were. So I decided to forget what I knew and have a beginner’s mind.”

  Reed, a Buddhist and meditator, sat in the cafe of San Francisco’s Museum of Modern Art one Saturday morning with Zuckerberg and made a deal. She would join the company for a few months and he would agree to meditate. She was starting to take a kind of motherly interest in his managerial success. She gave him special software for his computer that came with little biofeedback monitors that clip on your fingers and are connected by wires to your computer to measure whether you have calmed down. When they finished and came to an agreement, Zuckerberg said, “I think it’s time for a hug.”

  Though the stresses on him these days were legion, Zuckerberg didn’t seem freaked-out. In fact, he remained peculiarly placid. Even in these most hectic company days, he never lost his temper. (And he shortly reported back to Reed that he was actually using her meditation-assistance apparatus, to good effect.)

  This outward placidity is one key to the peculiar charisma that both draws people to Zuckerberg and vexes them. Not only is he unemotional; he seldom betrays his feelings. His typical way to listen is to stare at you blankly, impassively. It is never obvious whether he hears you. He seldom gives any reaction to what someone says to him right away. If you need to know what he thinks, you may be out of luck. “He’s really hard to read,” says Chris Hughes, the former roommate who during this period was managing PR for the company from his Harvard dorm room. “It’s difficult to have sort of basic communication with him.”

  Thefacebook had stopped being small enough for everyone to know what was going on. Now Zuckerberg had to focus more consciously on communicating, making sure his messages were passing down through the growing number of layers. Efrusy urged Zuckerberg to write down his thoughts about strategy and process. The next week Zuckerberg brought to their meeting a little leather-bound diary. “It looked like what Chairman Mao would carry around,” says Efrusy. “He opened it up and it was page after page of tiny two-point handwritten text.” Zuckerberg’s handwriting is extremely precise, like that of an architect or designer. But he refused to let Efrusy read his notes. “I told him the point was to communicate to everybody else,” says Efrusy. “He sort of looked at me like that was a new thought and said, ‘Oh really?’”

  This book was held closely by Zuckerberg, but some colleagues did get a peek at it. It revealed in detail where he was hoping to take his company. On its cover page it listed Zuckerberg’s name and address, with a note: “If you find this book, return it to this address to receive a reward of $1,000.” It was titled “The Book of Change,” and just below that was a quote: “Be the change you want to see in the world—Gandhi.” Inside, in Zuckerberg’s precise and beautiful cursive script, were lengthy, detailed descriptions of features of the service he hoped to inaugurate in coming years—including what would become the News Feed, his plan to open registration to any sort of user, and turning Thefacebook into a platform for applications created by others. In some sections it became almost stream of consciousness, according to those who have read it. Even Zuckerberg occasionally notes in the margin, “This doesn’t seem to be going anywhere.” But for many of those who read it inside the company it seemed as weighty as Michelangelo’s sketchbook.

  A major new figure joined the life of the company around this time—investor and entrepreneur Marc Andreessen, who became a close adviser to Zuckerberg. Andreessen, one of Silicon Valley’s most revered innovators and entrepreneurs, had come to California as a mere boy, much like Zuckerberg, after he helped invent the first Web browser at the University of Illinois. He co-founded Netscape Communications and later two more important and successful companies, while investing in scores more. Matt Cohler and board member Peter Thiel introduced Andreessen to Zuckerberg, thinking he could help the young CEO figure out how to grow Thefacebook. Zuckerberg immediately took a liking to the tough-minded Andreessen, who never showed the slightest hint of obsequiousness. He was consummately confident himself, in fact, never suffering fools very well. He didn’t care what people thought of him, and Zuckerberg liked that. He was as blunt with Zuckerberg as he was with everyone else.

  Prodded by Parker and Cohler, as well as Andreessen and Efrusy, Zuckerberg started trying to behave like a leader. He had been living in one of the company houses, but moved out in midsummer. Around the same time he proclaimed he would stop writing software. Zuckerberg needed to start focusing on bigger issues. There was a littl
e ceremony to mark the day he installed his last piece of code. At a talk he gave at Stanford shortly afterward, he conceded, with a hint of disappointment, that “the dynamic of managing people and being CEO in a company is a lot different than being college roommates with someone.” Some weekends Cohler, Moskovitz, and Zuckerberg could all be found reading Peter Drucker, the consultant and teacher often called the father of modern management.

  Zuckerberg decided to study his newfound management idol—Don Graham. He asked if he could come visit the Post to observe how Graham worked. Even though at this point he barely knew the difference between profit and loss, he wanted to see what a CEO does. Zuckerberg flew to Washington and spent four days with this mentor. He shadowed Graham for two days at headquarters, then flew with him up to New York to watch him make a presentation to financial analysts. The Post Company’s stock is divided into public shares and a separate class of shares controlled by the family with significantly enhanced voting power. It’s a structure intended to reflect the unique sensitivities of a public company that runs a newspaper—making it a hybrid of a for-profit enterprise and a public trust—and it gives the Graham family effective veto power over company decisions. Because of this family control, Graham has the ability to enforce a long-term view. Zuckerberg started thinking he might someday want a structure like that for Thefacebook.

  Zuckerberg had to figure out how to respond to the people-management challenges that arise in any organization. His approach sometimes was to make a joke out of things others might treat more gravely. A young woman complained to him that an employee had harassed her in the lunch line. His response was to publicly embarrass the perpetrator in front of everyone. “It has come to my attention,” he announced at a company meeting, “that one of you said to a girl, ‘I want to put my teeth in your ass.’” He paused. The room was silent. “So, like, what does that even mean?” Everyone laughed. Then the matter was dropped.

  The corporate culture was an institutionalized, dormlike casualness, oddly fused to intense devotion and exertion. The twenty or so employees moved in packs—to the nearby Aquarius Theater, where they could get in for free because one of the engineers worked there part-time; to the McDonald’s a few miles away in East Palo Alto; and to the University Cafe around the corner, which was the unofficial company meeting room. “We worked here all the time,” says Ruchi Sanghvi. “We were each other’s best friends. Work was never work for us. We worked through Christmas, over the weekends, and until five in the morning.” She herself worked so hard that one night driving home in the wee hours to her apartment in San Francisco she twice ran into the center divider before pulling over and falling asleep on the side of the highway. After that she moved close to the office. Thefacebook offered a $600-a-month housing subsidy to those who lived nearby in Palo Alto, which encouraged the conflation of work and personal time.

  Hardly anyone came in before noon. In his self-published Inside Facebook, Karel Baloun, a company engineer back then, writes that Zuckerberg himself set the tone: “Zuck would come into the office and, seeing every chair full, just lie down on the thin carpet on his belly, sandals flapping, and start typing into his little white Mac iBook.” The place settled into a productive rhythm only in the evening. Programmers fueled by Red Bull would tap steadily into laptops while conversing via instant message. Fiftyish recruiter Reed started staying up at home until 3 or 4 A.M. to engage in the late-night IM back-and-forth. She realized that was when many of the important decisions got made.

  Zuckerberg preferred instant messaging, using AOL Instant Messenger (AIM). One employee a few years older who sat about six feet from Zuckerberg in those days received an IM from the boss. “Hey,” it read. It was the first time he’d gotten such a message. So, seeking to be convivial, this guy stood up from his chair, turned to Zuckerberg, and said out loud in a friendly voice “Hey!” Zuckerberg continued staring blankly at his screen. It wasn’t even clear if he had heard. If you wanted to communicate, you IM’d. Zuckerberg became slightly more animated in the evening when many people had left.

  Thefacebook made explicit efforts to be a cool place to work, almost to the point of caricature. Appearance mattered. When Jeff Rothschild started at Thefacebook he dressed like a typical middle-aged, nerdy Silicon Valley engineer—clunky running shoes and a shirt tucked into khaki pants or loose jeans. About a month later a friend ran into him at the airport. He was wearing designer jeans with his shirttail untucked in the hipster manner. “Jeff, what happened?” his friend asked. “They said I was making them look bad,” Rothschild replied. “They weren’t going to let me back into the office.” The other employees started calling Rothschild “J-Ro.” “Part of our company mission was to be the coolest company in Silicon Valley,” says Parker. “I played up the idea that this should be a fun, rock-’n’-roll place to work.” That’s why he hired graffiti artist David Choe to paint the office and had his girlfriend add a little special something in the ladies’ room. (Choe got a tiny bit of stock for his efforts, now worth tens of millions.) The company continued to rent several houses that employees shared, one of them walking distance from the office. Everybody partied there on weekends.

  Zuckerberg headed to New York to meet with the new ad salesman Tricia Black had hired, Kevin Colleran. Colleran had previously worked in the record industry, and the photo on his profile showed him beaming at a party with his arm around the shoulder of rapper 50 Cent—who was goateed, impudent, and decked in bling. Zuckerberg arranged to meet Colleran in front of the Virgin Megastore on New York’s Union Square. Colleran showed up late and was walking toward Zuckerberg when he got a phone call from his new boss. “Where are you?” Zuckerberg asked. “Zuck! I’m right in front of you!” Colleran replied. Zuckerberg looked crestfallen. He thought Thefacebook’s ad salesman was the tough-looking black guy in the profile photo.

  The unique social functions of Thefacebook were occasionally deployed on its behalf. On the day a new Stanford grad named Naomi Gleit started work at the company, Matt Cohler asked her to get all her sorority sisters to poke Jim Breyer on his profile page. It was a way to keep the board feeling good about the product.

  Zuckerberg’s dry wit and classicism showed then, too, according to author-engineer Baloun. “Around the end of May 2005,” he writes, “Zuck painted the word ‘Forsan’ on his office wall in huge letters.…The word comes from Virgil’s Aeneid: ‘Forsan et haec olim meminisse iuvabit,’ which can be loosely translated to read ‘Perhaps, one day, even this will seem pleasant to remember.’”

  More and more technology and media companies were taking note of Thefacebook’s torrid growth and trying to figure out how they could get a piece of it. In the spring, MySpace founders Chris DeWolfe and Tom Anderson had come up to Palo Alto from Los Angeles to put out feelers about possibly buying Thefacebook. Zuckerberg, Parker, and Cohler met him in a University Avenue coffee shop, but only because they thought these were interesting guys and they were curious about MySpace. Then, in July, MySpace itself was bought. Rupert Murdoch’s News Corporation purchased the social network’s parent company for $580 million to get MySpace and its 21 million users.

  At Thefacebook there was celebration. Not only did the deal proclaim that services like theirs were important and valuable, but they were pleased to think that a big old-line media company would now be mucking around with MySpace. They presumed News Corp. would slow it down tremendously. Parker called DeWolfe and his partner Tom Anderson that day and put them on speakerphone so everyone could hear. The team in Palo Alto was expressing condolences. Since DeWolfe and Anderson didn’t own much of the parent company, they weren’t going to get much money from the sale of their creation.

  The last thing Zuckerberg wanted to do was to sell his baby. At his Stanford talk, someone asked him what he thought might be the best way to “monetize” or make money from Thefacebook, “as an exit strategy.” Zuckerberg’s reply was his only curt one of the night. “I spend my time thinking how to build this and not how to exit,” he
replied. “I think what we’re doing is more interesting than what anyone else is doing, and that this is just a cool thing to be doing. I don’t spend my time thinking about that. Sorry.”

  Though Zuckerberg put minimal priority on advertising, a fair amount was coming in anyway. But even at this early date it was apparent that Thefacebook wasn’t like a typical website when it came to advertising. That was both a good and a bad thing. For one thing, ads on Thefacebook didn’t get clicked very often. Some believed that was because when users were focused on finding out about friends they were unreceptive to commercial messages. A version of the Google model, which charges advertisers only when their ads are clicked on, did not look promising here.

  Colleran, the new ad salesman in New York, was working hard to find brand advertisers who would pay on the basis of CPM, or cost per thousand views. That’s how television ads are priced. The goal of this kind of ad (as opposed to the pay-per-click ones that Google specializes in) is not to get clicked, but rather to be seen by lots of people. But Thefacebook was still an exotic site for college kids that few on Madison Avenue had heard about and even fewer understood.

  For some months Colleran was the site’s only full-time ad salesman, and he quickly became frustrated. This big chummy guy with a blond crew-cut was a gung-ho cold-caller who could get in almost any door. He turned up plenty of advertisers willing to try Thefacebook. But many of their ideas were rejected out of hand by Zuckerberg. He vetoed anything that smacked of interference with the fluid use of the site, no matter how much revenue it might generate. Common practices like pop-up ads that displayed before you saw the content of a page were absolutely anathema, for example. Colleran learned to be cautious about what he even suggested.

  It drove Colleran crazy that Zuckerberg wouldn’t add new schools to Thefacebook more quickly. To the ad guy, more users just seemed better. Zuckerberg and Moskovitz, however, were methodical. Students from schools where Thefacebook hadn’t yet launched regularly came to the site and tried to sign up. They would go on a waiting list and be alerted when it came to their school. When the number on the waiting list passed 20 percent or so of the student body, Thefacebook would turn that school on. “I always thought it was wrong,” says Colleran, “but now I realize it was a major reason for our success.” By keeping the gates closed and only opening at schools once there was proven demand, Zuckerberg and Moskovitz, the expansion guru, ensured that when Thefacebook did open, usage would explode.

 

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