While I was doing my research upon problems Mark Zuckerberg faced during early days, I came across a website commenting on him that ‘the guy’ doesn’t care much about making money. It is indeed a stunning remark for someone who made it to the Forbes list seven times since last year. The way in which Mark Zuckerberg operates has been totally different since he has started working. The co-Founder, Chairman and CEO of Facebook, Mark Zuckerberg started it small in 2004 while he was a college student. Little did he know that his idea would reach this level and also he was unaware about the hardship and problems of Business life. He always was into innovation but making money was never his forte. But as we all know, with great power come greater responsibilities. Mark Zuckerberg’s journey from ‘Facemash’ to ‘Facebook’ has not been entirely smooth. Mark Zuckerberg faced millions of problems during his early days.
To begin with, Mark Zuckerberg said once that one hurdle for him in the early period of his success was – “not knowing enough”. He said, “When I was getting started, I didn’t want to build a company and I didn’t know anything about building companies.” He also stated that his intention was to create a universal website that can connect people around the university.
I want to make Facebook a world power. To do that, I need to pay top people and buy companies and fend off competition. To do that, I need a high stock price that keeps going higher. To have a high stock price that keeps going higher, I need a healthy and growing money-making operation. Therefore, I will care enough about money-making that I will hire someone I trust to care about it. Now leave me alone.
Looking at the success of Mark Zuckerberg it is nearly impossible to imagine him having gone through any hardships during his beginning stage of Facebook. But for every entrepreneur facing multiple challenges is inevitable. This is what makes a strong player. The following lists the major problems faced by Mark Zuckerberg in the early days of the launch of Facebook.
1. Dealing with Criticism, Being called a “Toddler CEO”
- How to face media after the blame of idea theft.
- What to say about the hidden partners in public.
Talking about CEOs our minds jump to the names of Steve Jobs or Bill Gates. They co-founded their companies at the age of 20. Both were unusual. It was until late that he got real respect and recognition from the world. Even in the beginning phase when Mark Zuckerberg was a college student, he faced lot of criticism for getting the blame of having stolen the idea of Harvardconnectins.com and building a competing product. The Twins from Mark’s senior year claimed that Mark sabotaged their project and betrayed them. Mark Zuckerberg confronted yet another challenge when the 2009 book The Accidental Billionaires, by writer Ben Mezrich, hit stores. Mezrich became intensely infamous for his re-telling of Zuckerberg’s story, which had fictionalised scenes, imagined up dialogues and fictional characters.
Related- The Frugal Habits of Mark Zuckerberg
2. Funding and Investment
- How to transform Facebook into a Must-Own stock.
- Finding lead investors for Facebook was a challenge.
One of the biggest problem Mark Zuckerberg faced was how to attract investors and bring money to the company. The problem of funding is one such issue which Mark Zuckerberg overcame by running a few advertisements on its website initially. In 2004 when there wasn’t any outside funding available, Mark put his own money into his business. It was a challenge for Mark Zuckerberg to find potential lead investors and it was required that Facebook must reach 1.5 million users by the end of 2004 in order to get the first angel Investment which they narrowly missed but the loan was still allowed to them. When in 2005 the Accel Partners agreed to make venture capital investment deal with Facebook, they expanded its board to five seats out of which two were still empty and it was on Mark Zuckerberg to nominate anybody for the seats. At the time Microsoft invested in Facebook in 2007, it bought the ‘preferred stock’ and had the ‘liquidation preferences’ over the common stockholders; it was a risk to Facebook if any day Facebook gets sold. It was until later that Zuckerberg filed for an IPO which raised 16 Billion dollars, making Facebook the third largest in the U.S history, but it also required Facebook to add bold revenue streams to justify such big valuation.
3. Mark Zuckerberg has a genuine distaste for financial concerns
- How he handles the financial affairs for company’s benefit.
- Dealing with the risks of IPO process.
Mark Zuckerberg’s attitude towards money showed that his major interest lies in the development of Facebook and not making billions. His distaste for financial concerns has been obvious in the way he’s set up the company. He has Sheryl Sandberg who is not only the COO but essentially the CEO of the company’s business where she runs all the sales and monetization operation on her own. He has always been questioned upon the handling of financial affairs. He never wanted Facebook to be a publicly renowned company; all he wanted was to create ‘something cool’. But as Facebook was getting expansion in Ivy League and all Boston schools, he had to deal with bigger issues like choosing president for the company. And he did it wisely when he chose the entrepreneur Sean Parker as the company’s president in the summer of 2004. Getting started with the IPO was the most difficult task on the universal platform. It was as if Mark completely divorced himself from the IPO process and delegated it to the very capable CFO, David Ebersman.
Related- CEO Qualities of Mark Zuckerberg
4. Mark Zuckerberg needed Critical Mass of Users to be Successful
- How to create hype among users.
- Mark wanted to overcome people’s tendency to be lazy.
Critical mass means getting a sufficient number of adopters or long term users of any innovation in the social system in such a manner that the rate of adoption becomes self-sustaining and it leads to further growth. Before the launch of Facebook on the big platform, Mark Zuckerberg knew his start-up would have to face this obstacle which can be resolved only by achieving critical mass. If good ideas would just market themselves then the energy could be solely devoted to making cool things, said Zuckerberg, but this is something which needed to be garnered by efficiency and hard work, in order to survive, which Mark did. Due to critical mass, Facebook will never have to charge people for the access to basic tools.
Related- Mark Zuckerberg’s Secrets of Success
5. Decision Making was the toughest part for Mark Zuckerberg
- What will be the consequences of turning down acquisition offers from every big company?
- Whom to hire for the most important post of the company, i.e. The COO & CFO.
As the business starts to grow it becomes more and more critical to make decisions on every level. Each decision opens way for numerous other decisions. It is always necessary to ask the right question in the face of any problem. A former employee said that in the early days of the company, Mark Zuckerberg approached every problem by asking “Does it help us grow?” The genuine value of business planning and basic leadership is to distinguish the difficulties and pitfalls and plan around them before they happen, instead of getting caught unaware by them when the business is already set in motion.
6. Choosing What To Sell and To Whom
- How to protect Facebook from the rumours of its sale.
- Announcing the verdict of Facebook being an independent company.
Developing organizations confront a scope of difficulties. As a business develops, distinctive issues and opportunities demand diverse solutions because what worked a year back might not be the best approach now. Like every entrepreneur Mark Zuckerberg was also having problem in deciding what to sell and whom to sell during his early days of Facebook. As he was one only one of his kind. The sales negotiation of Zuckerberg’s company was a major challenge when MySpace was sold to NewsCorp in 2005. At first there were rumours of the possible sale of Facebook to a larger media company wherein Mark had already stated that he didn’t want to sell the company. Later in 2006, there were serious talks between Yahoo and Facebook for the acquisition of Facebook. It was in 2007 that Zuckerberg totally took the chance and shut the doors in the face of buyers by saying that he wasn’t looking to sell Facebook and he wants it to remain independent, at the time when the company’s worth was around 8 billion dollars.
7. Mark had to prevent the Invasion of Privacy
- How to confide in 500 million users.
- What strategy to implement for 100% protection of information.
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