"BOY CEO" MARK ZUCKERBERG'S TWO SMARTEST PROJECTS WERE GROWING FACEBOOK AND GROWING UP

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03/26/2012

"BOY CEO" MARK ZUCKERBERG'S TWO SMARTEST PROJECTS WERE GROWING FACEBOOK AND GROWING UP

The "Boy CEO" Mark Zuckerberg of Facebook

Mark Zuckerberg, oft-parodied young CEO, didn't build the most important company of the Internet era by accident. How he fashioned Facebook--and himself--for success.

It was a minor meta moment, the perfect inside joke to kick off a September day that was otherwise all business. The occasion was f8 2011, the erratically scheduled, mostly annual conference for Facebook developers and social-media innovators, a gathering that now has a pilgrimage-like quality for the Facebook faithful. It is one of the few opportunities for legions of Mark Zuckerberg fans viewing the event live online to observe their spotlight-averse hero perform a rite native to the CEO species: the keynote address.

"Ladies and gentlemen, Mark Zuckerberg."

The whoops turned to laughter almost immediately; it took only a few seconds for the assembled engineers, designers, brand stewards, marketing mavens, nonprofiteers, pundits, bloggers, and investors to realize that they were being punked.

On stage was the comedian Andy Samberg, fully in character as "Zuck Dawg" in a hoodie, jeans, and Adidas sandals. He said.

"I want to start by focusing on some key issues. The first is the importance of authentic identity. I . . ."

He paused, hand over heart,

". . . am Mark Zuckerberg."

Saturday Night Live comedian Andy Sandberg (right) impersonates Facebook CEO Mark Auckerberg (left) at F8 2011

It was a delicious moment for the Facebook staff, now 3,200 strong. For them, it's always been about identity. Since Facebook's February 2004 launch, the company has succeeded because hundreds of millions of people--slowly at first and then in crashing herds--became comfortable sharing their true selves on the site. It is precisely that authenticity that makes Facebook matter to its 845 million users. If Marshall McLuhan had lived long enough to have a Facebook profile, his status might read thus: The medium isn't just the message; the medium has become us.

But the moment belonged first and foremost to Zuckerberg, who for years has had his own identity problem: "Boy CEO." Young, arrogant, and awkward--no one believed that Zuckerberg could survive the adult swim of real business, and thanks to his depiction in The Social Network, some folks will forever see him as the fatally flawed psychopathic robot nerd looking to steal your code, your personal data, your girlfriend. He once told me when I asked him how he handles all the noise, measuring his words as he always does.

"I don't think about it . . . much. I understand why people need to have these dialogues, to ask these questions. We have so much to do here, we don't think about it if we don't have to."

The Facebook Nation - Comparative Based on Population, Market Capitalization and Number of Employees - December 2011 - Bloomberg

I first met Zuckerberg and his colleagues five years ago, when Facebook had just 19 million users and was on the verge of opening up its platform to outside developers. Looking back on more than 400 hours of reporting with Facebook staffers, investors, and people in the site's ecosystem, including a visit in late December, plus more than seven hours of one-on-one interviews with Zuckerberg, one fact is clear: The only thing that could have derailed Facebook's climb to Internet domination was the inexperience of a young CEO. He had never held a proper job before and, by virtue of his own ballsy negotiations, could not be ousted from his position. (Facebook, citing IPO-quiet-period restrictions, declined to make Zuckerberg available for this story.) But what was largely interpreted as control freakery in service of a bigger exit strategy turned out to be a real vision. He told me after the company moved into its first grown-up tech campus, on Palo Alto's California Avenue, in 2009.

"So many businesses get worried about looking like they might make a mistake, they become afraid to take any risk. Companies are set up so that people judge each other on failure. I'm not going to get fired if we have a bad year. Or a bad five years. I don't have to worry about making things look good if they're not. I can actually set up the company to create value."

This February, as part of his effort to ensure that this remain true, Zuckerberg asked investors to back a company in which he will retain 57% of the voting stock. He outlined the company's guiding principle, which he calls the Hacker Way, in a personal letter to potential shareholders that accompanied the IPO filing. This is the idea that gives Facebook its identity--as a company that questions assumptions, moves fast, takes risks, shares information, and learns from other smart people. Nowhere does this manifest itself more clearly than in the company's regular hackathons, extended coding sessions where employees race to invent new products. HR chief Lori Goler of a culture filled with millennials (average age: 28) who question the purpose of every feature and expect a logical answer says.

"What you'll hear over and over and over again is 'why?'

Turning that "we're all coding together in one big room, and we get great ideas and move fast because anyone can walk up to anyone else" ethos into a business required the young CEO to turn his hacker sights on himself. An experiential learner, Zuckerberg transformed himself with astonishing discipline into a CEO worthy of the company he was building. Zuckerberg told me back in 2007.

"Look, we were so young. When we first got here [to Silicon Valley], we knew that there was so much we just didn't know."

He was 22 years old when he made that poignant observation. He had arrived in Palo Alto when he was 20.

Zuckerberg is one of the few CEOs in history to come to significant power without his personality fully formed, and he was smart enough to take himself on as a project. His maturity as a CEO and Facebook's open culture are the result of what can be considered the longest hackathon in history.

My first visit to Facebook, in February 2007, started as a typical one. I was to begin and end the day with a one-on-one with Zuckerberg, with a series of get-to-know-the-company meetings in between. He arrived 20 minutes late for our first meeting, holding a paper bowl of Cheerios and looking more like an overworked paperboy than a new-media mogul. (Later that day, then-COO Owen Van Natta, a Valley veteran and early Facebook "adult," (would roll his eyes and tell me, "The kids eat way too much cereal around here.")

Zuckerberg confessed that he'd been up early to "work on something" and had fallen back asleep. He appeared to be telling the truth: Sleep creases surrounded his red eyes, and he was wearing the same thing he'd worn at the Fast Company photo shoot the day before. He was an odd mix of friendly, quirky post-teenager and philosopher king in training. He would talk about his love of Guitar Hero and Chicken McNuggets, yet he'd always return to the ideas that openness and connecting people were all that really mattered to him, and that he thought Facebook could change the world. Zuckerberg had already faced numerous tests as the site grew, from opening it up to any person over the age of 13 to jumping into the crowded digital photo-sharing market with a simply designed product (tag your friends!) that blew the others away.

Zuckerberg's most important lesson as a "Boy CEO" came from Facebook's first flush of popularity in corporate America. He spent a lot of time in 2006 talking to the likes of Viacom and Yahoo, both of whom were kicking the tires on acquiring Facebook for up to $1 billion. The mogulizing had taken him away from the company, which was burning through cash; his absence sent waves of discontent through a staff that didn't know what its leader was thinking. Are we selling? Not selling? Raising money? Recalls Facebook cofounder Dustin Moskovitz, defending his friend.

"What were we going to do, not take the meetings? We were learning about the world by talking to these people."

But Zuckerberg got the message. he told me.

"I needed to be more open."

Encouraged by legendary Silicon Valley recruiter Robin Reed, he hired an executive coach to help him identify and hone the essential skills of running a fast-growing company. He began to study and evaluate the successful people and companies around him, tapping them for insider lessons in leadership. Accel partner and early Facebook investor Jim Breyer told me.

"He is a sponge for process--in a way I've rarely seen."

Zuckerberg instituted regular all-hands meetings so people could hear directly from him what was happening, and he began to tackle the tough issues of organizational design and personal accountability. (One of Sheryl Sandberg's first great acts as COO was to hold a public forum exploring women's issues, including their scant numbers in the engineering ranks, with Zuckerberg's support.)

As public interest in Facebook grew, Zuckerberg had to master grace under the judgmental glare of the public spotlight--amplified in large measure by Facebook's own success as a platform to share information. He sometimes seemed like a boy trying on the role of a CEO. He overrelied on jargon and talking points during public presentations, and he exhibited anxiety, even in front of audiences of his peers, making him seem shifty, fragile, and untested. His first appearance on the Today show took so much out of him that he pushed back that day's meetings to walk the New York City streets and decompress. He told me, recounting the story later.

"I'm trying to get Dustin to do more media so I don't have to do it as much. It's not the most fun thing."

Though the protective cocoon that formed around Zuckerberg and his young cohorts (Moskovitz and fellow cofounder Adam D'Angelo had little interest in speaking to the public) had the unfortunate effect of obscuring his more heartfelt motives, it provided much-needed room for him to work on the product and gave him time to prepare for the crucibles to come.

Back at headquarters, the young Zuckerberg could be his true self and could help his company define its own true self as it grew. In 2007, MySpace was the dominant social network, with Facebook but one of many upstart competitors. Zuckerberg needed the smartest people; to hire them, he had to make the case that Facebook was their best bet. When Zuckerberg and I circled back that first day we met, I sat in while a fairly sophisticated HR team updated its CEO on hiring. Zuckerberg ran the meeting with a good-natured crispness. Facebook's early-recruiting efforts focused on employee referrals, which were a good way to create a pre-vetted band of brothers. Zuckerberg said as they ran through the list of names.

"Oh, that guy? He taught me and D'Angelo at Exeter!"

The hiring strategy netted essential employees such as Andrew Bosworth, who had taught Zuckerberg at Harvard and is now the company's director of engineering. (He's also the one who later invented the company's all-important BootCamp program, where new hires learn the history of Facebook's code.)

They knew they were going to run out of former teaching assistants to hire. The company set up a recruiting program that deeply involved even rank-and-file engineers in the process of finding their future peers. All had interviewing duties. The normally reticent and overworked programmers did campus visits, attended tech meetups, and even traveled to a little event in Austin called South by Southwest (which was explained in detail to Zuckerberg). Knowing that their efforts were important and appreciated, they took on the recruiting effort with unalloyed enthusiasm.

Two things made all this effort remarkable and essential to Facebook's success. For starters, the team built the first of many tools designed to help everyone work together efficiently. They cobbled together a wiki that let everyone share feedback, recommendations about candidates, and ideas of how to persuade the undecided to fall their way. The wiki made the lives of the recruiting team infinitely easier. To this day, regular employees are critical to finding and wooing potential hires. More important, perhaps, the team approached every hire with an eye on the future. Bosworth explains, launching into a high-level riff on cognition theory and communication biases before boiling it back down.

"The people we hired were capable of solving the problems we knew were coming. You have to be prepared to jump in, make stuff, and grow."

When I visited with Zuckerberg in late 2009, almost three years after our first meeting, he was more seasoned and yet very much the same. This was the year he wore a tie every day, to telegraph that it was a serious year for the company. As always, he had a good story to tell, this one about bumping into Intel's bellicose former CEO Andy Grove, who was visiting an executive at Facebook's new headquarters. Zuckerberg had been studying the history of Intel's strategy, and after they were introduced, Grove offered some unsolicited feedback. Recalled Zuckerberg.

"I said something about what we were trying to do, not just trying to build the biggest business, but do things that were really good. Then Andy said . . . 'Oh, that's the biggest bullshit.' "

Zuckerberg then modulated his voice to mimic the septuagenarian Hungarian-American's. Zuckerberg laughed, at the memory and his own impression.

"Andy went on to say, 'All these companies pretend that they're trying to do something good and really they just need to be competing and killing each other.' "

Zuckerberg wiped his eyes.

"I totally like him. He yells at me no matter what we're talking about."

President Obama at dinner party held by Kleiner Perkins venture capitalist John Doerr with Facebook CEO Mark Zuckerberg in business suit and tie (Click Image To Enlarge)

Though grateful for the feedback, Zuckerberg didn't change course. He was still exceptionally focused on Facebook's culture. As the company and service grew--it had 1,200 employees and 400 million users around the time we met in 2009--he and his colleagues worried endlessly about the death-by-meeting blues. Facebook had grown into 135,000 square feet in Palo Alto and many locations around the world. It was a quarter-life crisis in the making, the sinking realization that you can't stick it to the man if you become The Man. In Facebook's world, Google had become The Man. Engineers there checked in code, then waited as it disappeared for days, weeks, even months. Tales of the company's bureaucracy were becoming legend--especially at a company loaded up with Google refugees. Mike Schroepfer, Facebook's VP of engineering said .

"You feel like you have to make a choice at some point. Will the system be reliable or will the innovation be fast?"

The Hacker Way was designed to sidestep this Faustian bargain; Zuckerberg's bet was that the guiding essence of Facebook could be baked into a new type of management system for a new type of company. The philosophy respects efficiency above all else. And that could be applied beyond engineering. Zuckerberg told me, recounting a conversation he had with an engineer running the tools group about a better system for the customer-service team.

"Can we take what used to take 10 clicks for someone to get the information they need and reduce it to three? It saves time over thousands of operations. What can we do with that time?"

Everything about how professionals interact and communicate was up for grabs. Goler explained.

"We were born out of a mission, so any process we have must serve a clear purpose. Since we started with none, we really thought everything through."

The only thing that mattered: Help people do their work faster. Nothing was too sacred. Reported Zuckerberg, citing a study the company had conducted.

"Most subject lines are 'hi,' 'hey,' or left blank. What's that tell you? Email is poorly designed and useless."

Instead, a series of internal tools evolved to let people communicate in a way that was more informal and more natural to the projects they worked on, such as a quick acknowledgment-badge system simply called "thanks." The company then embraced a comprehensive feedback tool called Rypple, much of which was built and evolved within Facebook, with engineering teams as guinea pigs. (It has since been acquired by Salesforce.com.) Gone are the workflow management systems of a manufacturing age. Instead, says Rypple cofounder Daniel Debow, the software created a social environment where people and projects can keep in touch in an easier way.

"We're just amplifying existing behaviors--like texting, posting on walls, and looking at photos--that help people communicate more efficiently in ways that they already do."

Molly Graham, then the head of culture and engagement at Facebook, citing another standard management practice that was up for, well, review, asked.

"What should reviews look like? We struggled hard. In the end we developed a system that's meant to fairly reward people for their contributions to the company and is meant to help people grow."

The company encourages employees to form teams around projects of passionate interest, a natural way to craft a nontraditional career path showcasing competence, not brandishing credentials. Joey Flynn, a product designer on Timeline says.

"As we like to say, 'Pixels talk.' You can do anything here if you can prove it."

The company delivers promotions (and bonuses) twice a year. For millennials, who have grown up with the constant micro-interactions of pokes, badges, texts, tweets, and wall posts, the system fits their need for feedback and validation. As Graham points out,

"This is a company designed by millennials for millennials."

The company does still make traditional calls--the era of riding RipStiks down the hall, for example, came to an end when an intern broke his wrist. But for an idea that has turned into a company, Facebook has done a remarkable job of using its collaborative philosophy to develop the workforce it had into the innovators it needed. Back in 2007, Matt Cohler, Facebook employee No. 5 (and currently a venture capitalist who invested in both D'Angelo's and Moskovitz's startups), put a very flat, bare-bones management structure in place. There were few vice presidents, for example, and Zuckerberg had only five direct reports. Cohler told me.

"We were determined to keep things as flat as possible. The harder we make it for people to invent together, the faster we fall behind."

When I last visited Facebook in December, employees were packing up "the Bunker," as they call their old digs, in preparation for a move to a 1-million-square-foot campus in Menlo Park. Sitting amid the packed boxes and lightbulbs with some A-players, including Flynn and engineer Josh Wiseman, it became clear that the foundation that Cohler had put in place had held up under the weight of rapid, enormous growth. One of our group was former Google superstar Lucy Zhang, who decided to come to Facebook in 2011 when it bought her group-messaging startup, Beluga. She said unironically.

"I left Google because I couldn't take enough risks there. Here, I can really do things."

At the end of my first visit, back in 2007, Zuckerberg spent the last hour quizzing me about what I had picked up about the company. He asked me about the themes that we'd talked about in the morning, particularly openness. He asked me.

"Did you find that to be true? How did you know? What were people saying? How did they talk about the culture? Like, specifically?"

It was the first of many times he's turned the table on me, and one of the best ways a non-Facebook employee can feel what it's like to have assumptions dissected by one of the sharpest minds in tech. He nodded as I spoke, listened, laughed at my impressions of his friends. But what he wanted to know was simple: Could my experience confirm what he hoped was true of his fledgling company?

And then he gave me a piece of advice, meant for my writing of the Facebook story. But it serves just as well as the underlying force guiding Facebook and Zuckerberg himself: He said.

"It's iterative, right? You'll write it, then next year you'll write another story, and another, and eventually, the story will be the way you want it."

COMMENTARY: What people seem to forget is that Facebook's original mission was to help Zuck and his dorm friends at Harvard find chicks. In short, get laid. For Zuck, this included finding good looking Asian chicks. This was amply demonstrated in the film "The Social Network."

The fact that users freely provided information and uploaded picture of themselves on thefacebook.com (the original name lanched in January 2004) was a bonus. It wasn't until later that he realized the real value of Facebook--the data about users that is really where Facebook's value truly lies. I wished I had joined a lot sooner, but the site was originally only for Harvard students. In March 2004, Facebook expanded to Stanford, Columbia, and Yale. This expansion continued when it opened to all Ivy League and Boston area schools, and gradually most universities in Canada and the United States.

In June 2004, Facebook moved its base of operations to Palo Alto, California. The company dropped The from its name after purchasing the facebook.com domain name in 2005 for $200,000.

On October 1, 2005, Facebook expanded to twenty-one universities in the United Kingdom, the entire Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM) system in Mexico, the entire University of Puerto Rico and Interamerican University of Puerto Rico network in Puerto Rico, and the whole University of the Virgin Islands network in the U.S. Virgin Islands. Facebook launched a high school version in September 2005, which Zuckerberg called the next logical step. At that time, high school networks required an invitation to join. Facebook later expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.

On December 11, 2005, universities in Australia and New Zealand were added to the Facebook network, bringing its size to 2,000+ colleges and 25,000 + high schools throughout the United States, Canada, Mexico, the United Kingdom, Australia, New Zealand, and Ireland. Facebook was then opened on September 26, 2006, to everyone of ages 13 and older with a valid e-mail address. In October 2008, Facebook announced that it was to set up its international headquarters in Dublin, Ireland.

In my opinion, the key members of the executive management team that allow Facebook to humm and operate efficiently include: