STORY AND LESSONS FROM THE YOUNGEST BILLIONAIRE: MARK ZUCKERBERG

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Mark Elliot Zuckerberg is an American computer programmer and Internet entrepreneur. He is a co-founder of Facebook, and is currently its chairman and chief executive officer. Zuckerberg launched Facebook from his Harvard University dormitory room on February 4, 2004 with college roommates and fellow Harvard students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. The group then introduced Facebook to other college campuses. Facebook expanded rapidly, reaching one billion users by 2012. During this time, Zuckerberg became involved in various legal disputes brought by his friends and cofounders, who claimed they were due a share of the company based upon their involvement during its development phase.

Early Life

Mark Elliot Zuckerberg was born on May 14, 1984, and grew up in the suburbs of New York, Dobbs Ferry. He was the second of four children and the only son in the educated family. Mark’s father, Edward Zuckerberg, is a dentist and mother, Karen Zuckerberg, is a psychiatrist. His father owned a dental practice next to the family house. Mark and his three sisters, Arielle, Randi, and Donna, were raised in Dobbs Ferry, New York.

Mark got interested in programming yet in elementary school. The fact that the world is divided between programmers and users, Mark found out when he was 10 years old and got his first PC Quantex 486DX on the Intel 486.

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From Mark Zuckerberg biography we found out he was taught Atari BASIC Programming by his father, and when Mark was about 12, he used Atari BASIC to create a messenger, which he called “ZuckNet.” It made all the computers connected to each other and allowed to transfer messages between the house and dental office. His father installed the messenger on his computer in his dentist office, and the receptionist could inform him when a new patient arrived. Mark also enjoyed developing games and communication tools and as he said he was doing it just for fun. His father, Edward Zuckerberg, even hired a computer tutor David Newman, who gave his son some private lessons.

Also being at high school, Mark wrote an artificially intelligent media player Synapse for MP3-playlists that carefully studied the preferences of a user and was able to generate playlists ‘guessing,’ which tracks a user wanted to listen to. Microsoft and AOL got an unusual interest in Synapse media player and wanted to acquire it. However, the young talent rejected the offer of the IT-giants and then politely rejected their invitation to cooperate. Just like that, Mark Zuckerberg refused from dozens, maybe even hundreds of thousands of dollars, and work at one of the top IT-corporations.

In 2002, after graduating Phillips Exeter, Zuckerberg entered Harvard University. By his second year in the Ivy League, he had gained a reputation as a software developer on campus. It was then when he wrote a program CourseMatch, which helped students choose their subjects on the basis of lists of courses from other users.

FaceMash – A Fun Site for Voting

In 2003, once summer evening when Mark Zuckerberg suffered from insomnia in the Harvard dormitory room, he got an idea to create a site called FaceMash. Mark decided to hack the database of Harvard, where the students uploaded their profile pictures. He quickly wrote a program that randomly selected two pictures of two random female students and put them next to each other, asking “Who is hotter?”, giving the option for voting.

The process was in full swing and site was visited by most of the students at Harvard. When the number of visitors exceeded the limit, the server crashed due to overload. Mark appeared before the committee on computer hacking. Of course, nobody told Mark Zuckerberg ‘Well done!’ and he received a disciplinary action, and had noticed that such kind of things cause stormy interest in society. By the way, Harvard has refused to comment on the incident up till now.

The Rising of Facebook

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About ten months before the Zuckerberg’s FaceMash epic, one of the students of Harvard – Divya Narendra – had already spoken with the idea of creating a social network exclusively for Harvard students, many of whom were suffering from emotional stiffness. And not have ‘aliens’ engaged into the network, Narendra suggested using Harvard email address as the main username.

Divya Narendra’s partners were twins Tyler and Cameron Winklevoss. The father of the Winklevoss twins, Howard Winklevoss, is a successful financial consultant and put in his sons a lot of efforts and money – so the problem with the initial capital for the future network could be solved easily.

How Facebook Makes Money

In 2013, the turnover of Facebook, Inc. reached $7.87 billion and net income – $1.5 billion. The growth rates are also impressive: three years turnover has increased six-fold.

The basic earnings of Facebook come from contextual ads on the pages of the social network. Growing number of users and the time they spend on the site is converted into advertising revenues. 85% percent of cash-flow that went through the company last year was earned through contextual advertising.

The most of the rest 15% are deductions from purchases made through the Facebook payment system. These are mostly not real, but virtual goods. For example seeds, fruits and vegetables, purchased by fans of the popular game Farmville developed by Zynga

Despite the apparent frivolity, virtual goods is a serious business, and the Facebook report confirms that. The company estimated that in 2010 the global market turnover for virtual goods reached $7 billion, and by 2014, it rose to $15 billion.

At the beginning of January 2013, Facebook Inc. started testing the service of paid private messaging. Facebook charges $1.00 for a private message that you can send to the users who are not in your friend list. And the message goes directly to their Inbox folder, instead of Other one. But Facebook went further and realized that some users are worth more than a $1. If you want to send a message to Facebook CEO Mark Zuckerberg and get into his inbox, you might have to pay $100 for this exclusive option. This is another very simple way to generate additional revenue.

Acquisitions

Mark Zuckerberg is a great strategist, and he keeps acquiring companies that continue their operation as independent entities under Facebook’s umbrella.

In April 2012, acquired mobile photo sharing app Instagram for $1 billion in cash and stock. Initially, it was an iOS application developed by Mike Krieger and Kevin Systrom. Now the Instagram application is available on Android OS as well.

In March 2014, Facebook closed the acquisition of Oculus Rift for $2 billion. Oculus Rift is a virtual reality hardware engineered by Oculus VR Company headed by Palmer Freeman Luckey. Facebook paid $400 million in cash plus 23.1m Facebook shares, with a further $300 million in incentives if it hits certain milestones in the future.

In October 2014, Mark Zuckerberg completed the purchase of WhatsApp for $22 billion. Facebook paid $4.59 billion in cash and 177,760,669 shares in the company. WhatsApp is an instant messaging application founded by Jan Koum and Brian Acton in 2009.

Life Style

 Zuckerberg lives in the Palo Alto in a $7 million estate that features 5 bedrooms a saltwater pool, and over 5,000 square feet of property.

On May 19, 2012, Mark Zuckerberg married his longtime girlfriend Priscilla Chan in Palo Alto, California and finally they happily live together.

Lessons

1. Believes in his Product

Facebook was all of four months old when an investor offered Zuckerberg close to $10 million dollars for the website. As tempting as the offer was, he declined and stuck with his baby. After that there was Google, Viacom, News Corp. Then, Yahoo came by in 2006 and decided that millions were just not good enough and offered Zuckerberg a cool $1 billion. But, Zuckerberg knew that Facebook was his baby and he hadn’t even tapped its potential yet. He stuck with Facebook and watched it rise in popularity. In 2007, Microsoft came knocking with a $15 billion offer, but this, too just didn’t cut it. Even though these were still early days for Facebook, Zuckerberg believed in his product and he believed in his vision. And then, a few years later, the Facebook surge conquered the world and how. Suddenly, $15 billion seemed like poor man’s play!

2. Eye on the Clock

You could have an IQ that challenges Albert Einstein but you’ve got to have an uncanny knack to own time. Mark Zuckerberg has aced this and made it an art almost. Whether it came to ignoring Facebook buyouts or buying Instagram – time was of essence and in both cases, Zuckerberg owned time. The fact that he didn’t sell Facebook has made him one of the most powerful and wealthiest individuals on earth and of course his ability to buy Instagram for half its asking price is proof enough that Zuckerberg knows when to wait and knows when to move. Besides this, he has an innate ability to recognise the one thing, maybe two that really matter and he acts. This is a man who knows all the cards he holds but knows what someone else is holding even better! 

3. Do what it takes to get what you want

If you have ever watched an interview with the Facebook founder you will notice how determined and focussed he is on driving Facebook perpetually forward. This has been true since day one. To get the growth he wanted Mark used his computer programming skills as a type of currency to trade for exposure or favours, offering hours of coding time in exchange for a contact or other favours.  To get what you want, and to take your vision in the right direction, you have to be able to use what you’ve got. Without this smart use of social currency, Facebook may not have been as big as it is today.

4. Go Big or Go Home

Facebook may be a huge internet and social media phenomenon now, but it wasn’t always that way, and while it grew quickly, what made it stand out was Zuckerberg’s drive and vision for where his dorm room start-up would end up. When you are building a company, you have to dream so big that you fear telling small minds. Zuckerberg dreamed of connecting hundreds of millions of people around the world, and he succeeded.  Working towards a goal takes a lot of small steps, but they all add up. Use Mark as an example and go big.

The question Zuckerberg asks himself to make sure he’s going big: “The question I ask myself like almost every day is, ‘Am I doing the most important thing I could be doing?’”

5. Listens to His Employees

They say that good bosses follows his instincts but great bosses listens to their employees. As far back as 2005, when Mark Zuckerberg was busy meeting with venture capitalists for Facebook, he was known to disappear for long stretches of time, leaving his employees with no plan and no vision for the future. Seeing that most of his then staff was getting demotivated, a senior executive told him about his lack of CEO-like behaviour. Zuckerberg listened, found himself mentors who helped him improve his communication skills and now, he’s a pro. In fact, current Facebook employees laud him for giving them a clear picture of where the company is and where it’s going.