Facebook’s level headed founder Jason 16 Nov 2005

71 comments Latest by Don Wilson

Chalk up another victory for the college drop out entrepreneur. Zuckerberg knows his company could sell for hundreds of millions today, yet…

“I know that Facebook’s valuation is higher now than it will be a year from now,” he says, suggesting that mammoth buyouts of companies like MySpace and Skype have blown air into a new Internet bubble. “But I don’t care. I suspect it won’t be this high for four years. I’m in this to build something cool, not to get bought.”

Good for him. He’ll get paid one day one way or another. Now’s the time to enjoy building. Being able to build something from scratch and see it thrive is one of the most satisfying things any entrepreneur can experience. Selling is short-term satisfaction. Building is long term enjoyment.

71 comments (comments are closed)

Anonymous 16 Nov 05

Just talk to Shawn Fanning about that…

Don Wilson 16 Nov 05

I love the last bit…

“As for the long-term growth plan? He’ll let you know when he’s ready … bitch.”

Spike 16 Nov 05

Selling isn’t short term satisfaction. Selling is becoming a multi millionaire (for him). That’s enough to set him - and any other startup ideas he has - for life.

JF 16 Nov 05

Selling isn’t short term satisfaction. Selling is becoming a multi millionaire (for him). That’s enough to set him - and any other startup ideas he has - for life.

That’s your opinion, not his (at this time at least). He values building over a cash out. Building gives him more enjoyment than selling.

Steven Woods 16 Nov 05

Yea but if he sold out, he could make something potentially even better, while knowing the bills were paid well, forever.

Its one thing to not ‘sell out’, its another to not look after your own interests whenever you get the chance.

Erp 16 Nov 05

So he goes to work with a smile on his face – so would I with $12m+ startup cap. to play with!

Apart from when he sells the place and makes his zillion bucks, how is it going to pay that money back? Stumping up a couple of million each year to pay back the VCs is going to put a dent in his bottom line. But still, best of luck to him.

It really is Web 1.0 all over again – hurray! :)

Mike Rundle 16 Nov 05

Plus who’s to say he’s not already a millionaire (for real, not just on paper with VC money.) His company makes BANK every month from corporate-sponsored groups on Facebook, so I’m sure his salary is up there pretty high :)

Good for him though. Damnit. He’s younger than me and more successful, time to get back to work!

JF 16 Nov 05

Would the folks here saying he’s wrong not to sell right now also say that money *is* everything?

boombox 16 Nov 05

Come on, don’t be so naive. What he is telling is, “I was approched by a big company who wanted me to seel the company for a ton of money. My VC told me I could get tons and tons if I stay put.”

People people people. They say one thing and mean something else.

Don Wilson 16 Nov 05

I wouldn’t take the moral high ground if it dealt with hundreds of millions of dollars going into my pocket.

Don Schenck 16 Nov 05

I could not disagree more with you on this one, Jason.

It’s the same as foolish athletes who stay in school to complete their degree instead of turning pro. Dude, GET THE BUCKS while you can … you can always go back — or, in this case, “Build something cool” — later. After you’re “set” for life.

Sheesh … put me in that position, I’d sell so fast it’d make your head spin. Look for me at the beach or on the golf course.

“Youth is wasted on the young” — too true … too true.

Don Wilson 16 Nov 05

Regarding business, money is the name of the game.

Nick D 16 Nov 05

So I guess being a serial entrepreneur is not his plan. That is to bad. I would jump at the chance to make all of my ideas into reality.

Steve Akers 16 Nov 05

Peter Drucker said, “Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in directors’ charis, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.”

What better way to make a profit than to sell. Selling does not kill the product, it just puts in someone elses hands. Also, as others have already said, selling would mean a guaranteed opportunity to build something else. Or MANY something elses. If Zuckerberg values building then it seems like selling facebook would be is top priority.

Andrew 16 Nov 05

There is something to be said for sticking to your beliefs and doing what you want, escpecially if Facebook is already making decent income.

There is also something to be said for waiting until the product is right and ready for selling. A good example would be Flickr. Yes, they could’ve taken it further without Yahoo!’s cash, but it was sellabel as-was. Not to spark a “Yahoo! is screwing up Flickr” debate. Nor am I saying that Facebook isn’t great as it is.

But perhaps Mark isn’t ready until he’s ready. I could only hope to have his predicament.

(this same opinion goes for when the “Google should buy 37signals” thread starts up again.)

NoamL 16 Nov 05

It’s probably nothing more than your average recruiting technique, but Facebook tells a very different story in the company overview document it sends to prospective hires:

“Facebook.com has done something that the world’s leading media corporations have not been able to achieve. Facebook has branded themselves in this lucrative demographic. It would be a no brainer to cash out and continue building under a bigger umbrella and to that point, Facebook founders have already received nine-figure acquisition offers from leading media corporations. Instead, they have decided to continue to grow the business towards their goal of it being a $1 billion+ company.”

Last I heard, they were offered $250M. Mark doesn’t really strike me as the modest type and there is no need for him to be so. I don’t believe this quote represents his true feelings.

rob poitras 16 Nov 05

Regarding business, money is the name of the game. But different people go into business for different reasons. Some of those reasons being money, and some reasons aren’t money.

Anonymous Coward 16 Nov 05

Having met this fellow, I can tell you those statements are bullshit. He IS in it for the money. He IS planning to sell it. Their VC deal this summer was to pave the way for some upgrades and boost their presence in the expected “high school facebook” battle that Classface, xuqa, and others planned to battle over.

Andrew 16 Nov 05

Steve:

Selling can TOTALLY kill a product. Not always, but it can. Putting your product in the hands of someone else without the same vision, dedication or wherewithall to continue making it a killer product can cheapen and demean it, effectively killing it.

At the same time, finding the right buyer, or cash-infuser can stimulate the product and make it even greater. Blogger is a decent example. They were fine on their own, but given the volitile nature of the web, could’ve been toppled at any moment by a larger company buying out one of their competitors. Google bought them, encouraged their habits and now, they are as stable as they can be and continue to get better.

I agree that not ever selling Facebook due to selfish reasons is not the best plan for the continued growth and lifecycle of the product. Unless Mark is one of the lucky ones and succeeds on his own, looking at sublemental income to support the business is usually necessary. I think Mark was simply saying he’d rather not “buy low and sell high” just for the sake of selling.

tom 16 Nov 05

For some reason I suspect he doesn’t exactly need the money. Maybe it’s the fact that he went to Exeter and then Harvard?

Lisa 16 Nov 05

Take money out of the picture — maybe he’s already wealthy.

Tim 16 Nov 05

“…but Facebook had the advantage of a highly targeted youth audience…”

See? He’s not in it for the money…he doing it for the most important thing of all…the children.

Spike 16 Nov 05

> Would the folks here saying he’s wrong not to sell right now also say that money *is* everything?

No. There are more important things in life than money. But why pretend that working with a smile on your face and having fifteen million dollars are mutually exclusive? It’s inarguable shortsightedness.

Darrel 16 Nov 05

You can use Facebook to:

* Look up people at your school.
* See how people know each other.
* Find people in your classes and groups.

I’m still struggling to see how this is worth $25 million.

Jamie 16 Nov 05

Darrel, “eyeballs”. It’s a huge audience for companies to market to. Apple, Napster, etc. You name it. They want those teenage/young adult dollars! :P

boombox 16 Nov 05

By the way, we saw thro your “We are not for sale” post too Jason.

The $1500 table told the story.

Michael McDerment 16 Nov 05

Is it not possible that he sells to a partner that helps him grow the business and leaves him largely in the driver’s seat? Surely if his company is so valuable he can find a partner who recognizes a big part of that value is him, his team and the way they do things…Not every purchaser is short sighted. Contrariwise, what if HE is short sighted and wakes up in four years and says, “I missed my chance” because those who want to buy just buy somebody else then squash Facebook like a bug because they can.

I’m not saying he should or should not sell. But the way I see it, being purchased is like hiring new staff. You need to find a good fit for your organization, and an integral part of the decision making process knowing that you don’t have to hire anyone. So, you don’t have to sell if you don’t want to. It’s your choice to make.

PJ Hyett 16 Nov 05

Darrel, I’ve heard comments similiar to yours all over the web.

As a college student, all I hear about is FACEBOOK, FACEBOOK, FACEBOOK….that site is the biggest thing to happen to campuses since textbooks and I’m furious I didn’t come up with such a simple concept first.

Darrel 16 Nov 05

Darrel, “eyeballs”. It’s a huge audience for companies to market to. Apple, Napster, etc. You name it. They want those teenage/young adult dollars! :P

Very true. And, I suppose if they have 25 million users, maybe a buck an eyeball is a good deal.

pwb 16 Nov 05

They state their goals as “To be acquired.” That’s not entrepeneurship — that speculation.
Starting something to flip is perfectly reasonable. Not every great idea is amulti-nillion $ company. Sheesh.

And I finally agree with both Darrel and Schenk. Take the money. Your audience turns over every 4 years and you could easily end up like Friendster (which has more eyeballs and 1/5 the valuation).

Steve 16 Nov 05

Lucky enterpeneur…… take the money now!

Brendan 16 Nov 05

Jason,

Are you saying that if someone offered $250,000,000 to purchase 37signals right now, no strings attached, for you to walk away and start the next new big thing… you’d turn them down?

$250,000,000?!?

I get it: less is less and less is better. Money is not everything. However, at some point the opportunities provided by that much cash have to be considered. Everybody’s got a price. Perhaps his (and yours) is just more than $250,000,000.

Or am I wrong?

ajr 16 Nov 05

That deal blew my mind… for online greeting cards!!!

MSF 16 Nov 05


Just like in real estate investing: some buy and flip, some build/buy and hold.

This post fits right into the threads on “lifestyle business” and the issues with accepting VC money (and accompanying influence).

fwiw, I’m a build and hold kind of guy. Depending on my level of personal and financial ownership, however, I’d carefully consider a substantial cash buyout if it helped to grow our original creation to a point _greater_ than what we could do on our own.

I would then proceed directly to the nearest Aston-Martin and Lotus dealers to help compensate for any loss.

Christopher Fahey 16 Nov 05

I also think this kid is, well, um, lying for strategic advantage. Either that or he’s just cocky to the point of insanity. Either way, I wouldn’t quite call him “level headed”.

I am not ultra-rich. I still have to worry about how I am going to pay my bills next month, how I will take care of my family over my lifetime, and how I will pay for myself when I’m old. For me, no decision about building a great project, product, or company should be allowed to trump my personal and my family’s financial security.

If you are a smart person with good ideas, you will always have another good idea. You’ll have millions of them throughout your life. Building something great that you’re proud of is something that you can do over and over again. In fact, it’s easier to build great things if you’ve got some cash and financial stability from a previous project you’ve built.

But selling something for enough money that you don’t have to worry about food and shelter ever again? (and, arguably, for thousands of times more money than it’s probably actually worth?) That’s an opportunity that might only come once in a lifetime.

The only excuse to pass up such an opportunity is that you think there’s a good chance that there is even more money to be had. Some may call that greed, but it’s not. This is a perfectly legitimate and honorable strategy, and is sometimes the smartest strategy. There’s nothing to be ashamed of about it, but I get the feeling that this kid is trying to rationalize something.

Another possible explanation is that this kid’s parents already gave him millions of bucks anyway, and as a result it’s easy for him to flippantly kiss millions of dollars goodbye just so he can keep having fun working on his baby. An alarming number of famous entrepreneurs began their careers with piles and piles of money from their families to begin with — the “2 kids in a garage” mythology usually omits the less glamourous “who didn’t ever have to worry about money” part. I wonder if this is the case for Zuckerberg.

Andy Crouch 16 Nov 05

May I say that I don’t think the adjective “level-headed” can properly be applied to someone whose business card says, “I’m CEO … bitch.”

grundle 16 Nov 05

he might blow it. I started a company in 1999 that was offered $50M at 20 employees, $100M at 80 employees, and then was worth effectively zero in 2001. We thought “hey if blue mountain is worth $100M we are worth $110B.” Whoops.

I lost $40,000 and have never recovered financially.

Anyway, I doubt he’s really wanting to stick with it. There is only so much you can do with facebook or any social networking site.

Clark 16 Nov 05

I think I would rather sell, laugh that someone would actually give allot of money for such a product, and live the rest of my life doing something truly rewarding.

Bryan Veloso 16 Nov 05

That’s why I love working for him. :)

JF 16 Nov 05

Are you saying that if someone offered $250,000,000 to purchase 37signals right now, no strings attached, for you to walk away and start the next new big thing… you’d turn them down?

This post wasn’t about me. It doesn’t matter what I’d do — I don’t have anything to do with facebook.

Anonymous Coward 16 Nov 05

Good thing, because you’ll never have to worry about being offered $250,000,000 LOL

Don Wilson 16 Nov 05

That comment was so childish, it ended up being more funny than hurtful.

Anonymous Coward 16 Nov 05

That’s good, it wasn’t meant to be hurtful. All this talk about jumping the shark, signals getting bought out by Apple or Google, comparing them to companies valued at 250 mil, etc. is just that - funny. I’m not saying facebook is worth 250 mil, but they are worth at least 10x more than signals from an economic standpoint. So yeah, I was trying to funny … like most of the posts on this blog lately.

Someone Somewhere 16 Nov 05

I’d be curious to know who on this post uses Facebook or MySpace with any regularity? I’m doubting very, very few.

What Zuckerbrug is saying is ” i haven’t gotten a big enough offer yet”…look at Friendster, rumor has it they’re trying to sell for around 50 mil., a year ago they were trying to sell…for 200 mil.

Btw, i use Facebook and MySpace every day…meet girls, plan parties, look at pics…but mainly to meet girls.

Don Wilson 16 Nov 05

I’m on MySpace every day.

Brian Breslin 16 Nov 05

two things: 1 Zuckerberg’s VC backers are probably waiting for a fat deal with an established media company. mtv/viacom, universal/nbc, etc. facebook will never get as much moola as myspace did because I can’t see the extensions of its product selling as much “product” as myspace’s record and entertainment projects will. but with 12m in vc cash, that means these greedy VCs are looking for over 100m cashout, maybe 200m since they have to maintian ridiculous returns on a small % of their investments to cover some of the other crap they invest in.

2. greeting cards for $750million, deals like that make me wonder why we idolize these guys who make those deals? What compells one to spend 3/4 of a billion on a product whose barriers to entry are zero? although mad props to the original owners of bluemountain who made a billion, then bought back their site a few years later at bankruptcy proceedings for $20 million or so. they turned their 2million or 1 million investment into a 730million profit.

Shooter McGavin 16 Nov 05

If I were one of Facebook’s VCs who coughed up the 13M last year and I read that I’d flip my shit. That’s not levelheaded, that’s talking like a programmer who doesn’t know how to run a bussiness. It doesn’t matter if its how he really feels— it’s fucking stupid to say something like that.

Bryan Veloso 16 Nov 05

I really dislike some of the comments that people too scared to reveal their real names have put down. Everybody believes that people are in this business for money and it isn’t that way. I work directly with Mark daily, and he’s not just some programmer that doesn’t know how to run a business. Facebook is Mark’s company, and he has more than just a monetary attachment to it. I can’t see why anybody can’t see that. He won’t sell the company because he’s not even done growing it yet. Why the hell let some other company ruin it when he still has ideas that need to go into effect.

Shooter, I’m certainly glad you’re not one of Facebook’s VC’s or I’d have to deal with you myself. That any half the people here, you’re all blind to the passion that CEOs are SUPPOSED to have.

John 16 Nov 05

This post wasn’t about me. It doesn’t matter what I’d do — I don’t have anything to do with facebook.

That’s a politician’s answer if i’ve ever heard one… You spend most of your time on this blog asking people what they think. Someone asks you a hypothetical question (the audacity), and you conveniently dodge it. Ask yourself why.

Don Wilson 16 Nov 05

Everybody believes that people are in this business for money and it isn’t that way.

No, the general commentors have come to the conclusion that there are some people for money and some for the benefit of making a great product.

I can’t see why anybody can’t see that.

Because not all of us have the ability to work with the guy every day and meet him in person.

That any half the people here, you’re all blind to the passion that CEOs are SUPPOSED to have.

“Supposed to” — meaning that most CEOs don’t align with what you think how the business world should be?

Splashman 17 Nov 05

Holy schmoly. I had no idea so many 37S commenters were still living in their mothers’ basements.

Well, live and learn.

lurker 17 Nov 05

Hey it’s got it’s own entrance!

Brendan 17 Nov 05

This post wasn’t about me. It doesn’t matter what I’d do — I don’t have anything to do with facebook.

Yes, but you’re endorsing his pass on a buyout offer of (possibly) $250,000,000. I’m wondering what you would do given that scenario with 37signals.

That’s a politician’s answer if i’ve ever heard one… You spend most of your time on this blog asking people what they think. Someone asks you a hypothetical question (the audacity), and you conveniently dodge it. Ask yourself why.

Agreed!

Christopher Fahey 17 Nov 05

You spend most of your time on this blog asking people what they think.

Um, Jason spends an awful lot of time saying what he thinks, too. He certainly doesn’t have to answer every little question from the svn community.

The politician analogy is interesting, but in a bizarro-world kind of way: Jason has been more forthcoming about his plans and opinions than most of our elected officials have been, especially in recent years.

meet Paul Scrivens 17 Nov 05

He’s no Paul Scrivens. Paul doesn’t think of himself as a designer, but rather a connoisseur of good design. Paul discusses design because he can.

Tom 17 Nov 05

Selling isn’t short term satisfaction. Selling is becoming a multi millionaire (for him). That’s enough to set him - and any other startup ideas he has - for life.

I agree with this, if I was given the opportunity to sell for a few million I would take it and then make something better. For 200 million I am not sure, at this level the site is probably making loads of money and he is already set for life. I guess it depends on how much you love the company you have built and if you have ideas for other businesses or not.

Vera 17 Nov 05

Don Schenck and Don Wilson: I am so glad I don’t know you in person. You both strike me as real ****’s.

Don Wilson 17 Nov 05

Thanks Vera for your insightful comment; what karma you have left has immediately disappeared.

David 17 Nov 05

I get the impression that Mark is more or less a programmer who tried the right idea at the right time, and now he’s just holding on for the ride. Not to discredit his concept, it’s solid.. but there’s nothing particularly innovative about it, it’s just a clear example of first mover’s advantage.

3/4 of the people commenting here could code a perfect clone of Facebook in a week’s time, but it wouldn’t have a fraction of the impact that Facebook has. Not knowing Mark personally, I’d dare say he is more or less a programmer that had excellent timing with his idea, and is now reaping the rewards. I think the companies best suited for choosing not to sell out are those with a sustainable innovation or technology that no one can just replicate. Sites like Facebook need to keep in perspective that they’re offering nothing particular innovative, and are at the mercy of the wax and wane of what’s hot. If it’s all about traffic and marketing demographics, it’s more fragile than a solid new idea that you’ve been the first to tackle.

In his situation, given what Facebook actually is, I would personally spend a little more time refining then cash out.. and move on to bigger, more significant, more innovative endeavors. That kind of financial cushion lets you take a tremendous amount of entrepreneurial risk towards creating something huge, without much fear of failure.

Carpe effing diem.

JP 17 Nov 05

There’s always fear of “failure” … at least with me. Not necessarily a financial issue, but there is always a lost opportunity cost. I don’t need to worry about money, but if I spent 1-2 years working on a “big” project that didn’t work out, I would sure be pissed that I wasted all that time. Obviously you would learn some things, etc. and if you put that to use in the future it could be helpful, but it’s still a waste of 1-2 years if you ask me unless you are having loads of fun and don’t care about anything else.

Anonymous Coward 17 Nov 05

“Btw, i use Facebook and MySpace every day…meet girls, plan parties, look at pics…but mainly to meet girls.”

You mean stalk girls.

Don Wilson 17 Nov 05

You mean stalk girls.

Yep, because that makes sense.

Ed E 17 Nov 05

Do any of these social networks sites have business models other than “get as many eyeballs as possible and try to sell out to some big company” ? Aside from showing AdSense ads or the rare corporate sponsorship it doesn’t seem like sites like del.icio.us, facebook, etc. have real potential? Or are they really able to make millions selling ads?

I’ve had numerous ideas for “viral” sites like these, but have never taken the leap because I just can’t figure out how to make decent money from this type of a site, and like a previous poster said I’m not sure I want to work on the thing for a year or two, making chump change, just praying that some day some big company offers to buy the site…

Jakob 17 Nov 05

David said: …but there’s nothing particularly innovative about it, it’s just a clear example of first mover’s advantage.

Not true. At each school, Facebook restricts itself to people who have an address at that school. This makes users feel much more comfortable and safe than on Friendster and MySpace. Did you know that many Facebook members actually list their phone #s and dorm addresses?

Another innovation: with their new photo feature, you can tag pictures with the name of whoever is in the photo. This photo will then appear on a page linked from that person’s profile. I haven’t seen that useful, innovative feature on any site before. Flickr doesn’t even have it!

Anonymous Coward 17 Nov 05

Innovative? If you insist. Valuable? No. How can you make a big deal about a feature that could be added to any similar site with a few hours of coding?

Don Wilson 17 Nov 05

For the love of god, please post another post so we can move on.

Sam Robbins 17 Nov 05

What I want to know is, how do these types of social networks get kicked off? I mean, who wants to join when there are no existing users? Is it pretty much a given that to start this type of community based site you have to seed it with tons of bogus users in the beginning?

Don Wilson 17 Nov 05

Indeed, I wonder the exact same thing.