Startup School Transcript
October 16 2010
Mark Zuckerberg - Founder, Facebook
Link to video: http://www.justin.tv/startupschool/b/272178321
Jessica Livingston: So, we’re going to do some Q&A and then we’ll open it up to the audience. Someone time-, keep us on track for time over there. So, as you know, I like to talk about the early days ((of when startups have)) started.
Mark Zuckerberg: Yeah.
Jessica Livingston: So, I remember you told us last year that when you first started Facebook you were just building a cool project that you would use. So, what point did you start thinking about Facebook as a business? Do you remember that moment?
Mark Zuckerberg: Yeah. You know, it’s funny, I thought we weren’t going to have to cover the early stuff because there was just a movie made about that [laughter], just 100% accurate and characterizing all the old stuff, so [laughs] [applause]. The-, I don’t know, I mean, I started building because I like building stuff. Alright, so, when I was in college, and even before that, in high school, D’Angelo was up here a few (( )) ago talking, right, and we went to high school together, we built all this stuff together, and when I went to college, I just built a lot of stuff by myself and most of this stuff had this property that I built it for myself, right, so whether there was a music player, or just different tools that I built to make my computer work more the way that I wanted to, I never had to make something that was going to be used by other people.
So, Facebook was different because, you know, that and a couple of other tools and things that I started building when I was in college, they all had this property that in order for it to really work, I mean, get people sharing information with each other, other people had to use them. So, start building products and thinking about consumer products in that way, but, like, the whole time I’ve really just been focused on building this because I think it’s a good thing to do, and it’s fascinating.
And I guess my philosophy towards business has evolved a bit. Where earlier on I just, like, really didn’t think Facebook was going to be a business, I didn’t care about starting it as a business, I wanted to it because I thought it was an interesting and a valuable thing to be building. Now, I guess my attitude is that I think that building a company is one of the most efficient ways in the world that you can (( )) the incentives of a lot of smart people towards making a change, right. So, our goal, still, on a day to day basis is not to make as much money as possible. We run the company around break-even, right, because my view is, at least for the next few years foreseeable future, any money that we’re making, we might as well just invest in something that is either going to make, you know, users’ lives better, or developers’ lives better, or some of our business partners’ lives better. But there’s no real point right now in having some master profit. That’s kind of an extension of how I thought about it early on, was not thinking about making a profit early on, now I think make it so that you can align all these people’s economic incentives, right, employees, business partners, developers, advertisers, making it so you can create value for them is the thing that powers this whole system and makes that you can build this awesome engine of people sharing stuff. So, I don’t know, that’s how I think about it now.
Jessica Livingston: OK, so, back to when you got started. What, if you could do something different from a technical stand point, what would it be, and what was the coolest technical hack that Facebook ever pulled off?
Mark Zuckerberg: There’s a really good one, but I can’t talk about it yet [laughter]. We have these hackathons, every few months it’s like one of the traditions that we have at the company and that’s, like an engineer, they’re completely just organized organically, some engineer will send out an e-mail, alright, we’re going to have a hackathon on this day, and the only rule is you can’t work on what you work on the rest of the time, so it ends up being this huge breeding ground for future new ideas and some mobile stuff is really interesting that people can (( )) making it so that people can build social applications across all platforms it’s a big challenge, things are so segmented.
I mean, back when I was getting started building Facebook, there was really no question about what platform you were going to build it on. The-, most people weren’t building desktop software anymore, the mobile platforms weren’t that evolved yet, so it was very clear, we’re going to build a web thing.
Now it’s just so complicated, you-, people build web stuff, there’s mobile web, there’s versions that support touch, there’s simpler versions for mobile on cheaper phones, there’s iPhone apps, Blackberry apps, Android apps. If you want to build an app to integrate into a social network, you build that. Building stuff that can seamlessly kind of integrate across all those I think it’s going to be a pretty interesting thing. So, that’s like one of the cool things I think will be coming up soon.
In truth, the biggest mistake that we made technically, I think it’s how we architected the first version of the platform. In 2006 we started working on the developer facing version of Facebook so that people can build-, you can build social apps that go inside Facebook and I think we just got it completely inverted, right, and I think we’re actually still paying the cost of this years later in that the interface that developers had towards building with us was this markup that we called FBML at the time, and it was all about developers putting some kind of visual representation or some visual markup on a person’s profile page or canvas pages, and it was not at all about the social graph or the data behind it with the connections that people had. So, you had these applications like-, one of my friends built this Causes application, how many of you guys know about this. It’s basically it’s this way that you can raise awareness, and raise money for different philanthropic causes, and the basic way that it works is they built it as a canvas app and it works inside Facebook and it has tens of millions of users, and it’s working pretty well, but fundamentally, if you’re connected to a cause, that’s not stored in the same kind of social graph stores the rest of our connections, right, so you’ve got to like search for a cause in the typeahead, it’s not there, you want to see a news feed story that shows that five of your friends joined the same cause, that’s not there. I think the fact that we architected that wrong upfront, and made it so that it was all about this visual markup, then made it so that we had to go change all this stuff and thrash a bunch of developers which I think were still kind of paying the cost of now in terms of trying to make the platform very stable and a place where a lot of people want to invest, and obviously it’s not killing us, right, we have-, I think there’s like a million developers or something building on top of the platform, so that’s going pretty well, but it’s taking us years to get to that point. So I think just being careful about how you architect this stuff upfront is very important.
Jessica Livingston: And back when you were starting Facebook, you were just dealing with, like, the web, right. What do you think are the new challenges for people starting web apps now?
Mark Zuckerberg: Yeah, I-, I mean, it was so simple to build a web app back then, right. I mean, the browsers were a lot less different than-, like right now it’s-, to make something work and every browser is very difficult and if you’re building a complex JS app, but at the same time there’s like all these mobile platforms, right, so if you want to build an iPhone version, an Android version, Blackberry, iPad, that’s kind of complicated. So I think that just one of the fundamental things about experiences that people are building now is that, like, your users will experience them in a lot of different places, right, so maybe they’ll use it on the web, then they want to take it with them and use whatever mobile phone they’re using.
One great way to spread your application is to do a social network integration, because what that does is it can expose activity that your users are taking to people who are not yet using your app, right, through their friends and other contexts. So, I think that that’s going to be a pretty big trend for the next five years: not building an app in one place, but building what we call internally these multi-headed apps, it’s like you build something and people experience it in all these different places. So making it so you can build once and kind of have it in a lot of these different places I think it’s going to be very valuable, but in terms of thinking about building your own startups, I would definitely think about the advantages of building in all these different places, web is very easy, mobile makes it so you can take it with you anywhere you go, and building inside a social network makes it so you can get so much more exposure to all these different users who are not yet using your stuff.
Jessica Livingston: Cool. So, Ron Conway was here earlier and he was showcasing some of these successful entrepreneurs that he knows, and he said that when he first met you he was struck by the fact that you said “We’re going to have three hundred million users someday.” Where did you come up with that number and how were you sure about that?
Mark Zuckerberg: [smiles] I have no idea. [laughter] Everyone’s gotta dream, right. Um, I don’t know. Ron is amazing. [laughter, applause]
Jessica Livingston: If you don’t remember (( ))
Mark Zuckerberg: Yeah, honestly, I don’t remember. I guess when you’re talking to someone like that you want to put on your best version of what you think could happen. [laughter]
Jessica Livingston: I’m glad we got to the bottom of that. So, back, you’re at Harvard, you’re building this program and you have the summer off and decide to come out to California. Did you plan to stay, what was it like, was it exhilarating being out here?
Mark Zuckerberg: So, the game plan was to just to come out for the summer to hang out. Alright, so, I was in school, freshman year and then I actually stayed in Cambridge between the summer of freshman and sophomore years, and by the end of sophomore year, it was like alright, want to go somewhere different this summer. I had been out over winter break just to visit a friend who went to Stanford, and I was like, alright, this is so cool, I just remember the first time that I was driving down from SFO to Stanford, I’m on 101, I pass all these companies, wow, this is awesome, you don’t get that in the New York suburbs where I grew up.
I remember thinking I want to spend some time out here so I can learn from these companies, and I remember explicitly the time, being like, maybe one day I’ll build a startup and I’ll want to move out here. But, like, at the time it was just like okay, I want to go out there for the summer because this is a fun thing to do, and this was still in the project phase of Facebook.
So, a bunch of my roommates came out with me, and we would hang out, and it was a pretty fun summer, but then we realized that it was really difficult to scale Facebook from kind of getting it started to I think it was around maybe thirty thousand users by the time that we finished sophomore year. At the time I was taking operating systems and algorithms, like just a bunch of pretty difficult CS classes. So scaling Facebook and taking that at the same time was fairly challenging. I remember this conversation that we all had around our dining room table that was, like, okay, so we’re setting up our data center out here, we are going to go into the school year with a 150.000 users and hopefully grow a lot more, can we really handle a full course load? Probably not, so let’s take one term off. Right, and that was the game plan. Alright, we’ll take a term off.
And then we took a term off and we didn’t really hire anyone, we basically still, we rented a house and we all hung out in that house and coded for a while. We did start talking to Peter Thiel and raise money from him, but we were very clear that we (( )) what we’re gonna do. And, you know, it was just going well, it kept on growing, and we decided to take another term off, and then we decided to take a year off, and then it’s basically like, alright, we’re not going back [laughter]. But it was never like some master plan or anything like that, so, I don’t know, I just think that that underscores that if you just work on stuff that you like and you are passionate about it, then, if it’s going well, you can-, you don’t have to have some master plan for how things are going to play out.
The conversation that you were just referencing with Ron Conway I think is interesting because, I mean, that was like my wildest dream, maybe one day this thing could reach three hundred million users, but the thing that’s interesting is how soon the long term is. I mean, I don’t know when I met Ron Conway, but, I mean it couldn’t have been more than four years ago, right, so the fact that the world changed that much in that period of time, and when we had that conversation I don’t remember, so it’s hard for me to say this definitively, but I would have guessed that probably three hundred million was like decades, something really long. So, I think if you just stay with something that you like, then you don’t have to plan everything out upfront, you can just kind of keep on going until you get to the next level.
Jessica Livingston: Were your parents bummed that you were not going back to school?
Mark Zuckerberg: After I decided that it was highly unlikely that I was gonna go back, I remember this conversation: I was with my younger sister and my parents, and my mom was like “Actually, I knew that you were going to drop out of college.” I was like “Thanks, mom.” [laughter] In fact, I didn’t expect my mom to say that, but before I started college my younger sister made a bet that she would finish college before me. So, I owe her fifty dollars. [laughter]
Jessica Livingston: OK, two more questions, then we’ll open it up to the audience. So, Ron also asked the audience how many of you have seen The Social Network, and most people have, so, I haven’t seen it, but I want to ask you if that’s the picture that people have in their head about what happened at Facebook, what’s the real difference, what is the biggest difference about what actually really happened?
Mark Zuckerberg: I mean, where do you want to start? [laughter]
Jessica Livingston: One of the biggest ones.
Mark Zuckerberg: I mean, I don’t know, it’s interesting what stuff the focused on getting right, like, every single shirt or fleece that I had in that movie is actually a shirt or fleece that I own. [laughter] But, you know, so there’s all this stuff that they got wrong and a bunch of random details that they got right.
The thing that I think is actually most thematically interesting that they got wrong is the whole (( )) starts is with this girl who doesn’t exist in real life, who dumps me, which has happened in real life a lot [laughter], and basically they frame it as if the whole reason for making Facebook and building something was because I wanted to get girls, or wanted to get into some kind of social institution. The reality for people who know me is I’ve actually been dating the same girl since before I started Facebook, so obviously that’s not a part of it, but I think it’s such a big disconnect from the way people who make movies think about what we do in Silicon Valley, building stuff. They just can’t wrap their head around the idea that someone might build something because they like building things. [laughter, applause]
Jessica Livingston: Alright. Last question, about college. You took psychology courses in college, right. And…
Mark Zuckerberg: Yeah, I was actually…
Jessica Livingston: I want to know what something that you learned in your psych class that was useful in building Facebook.
Mark Zuckerberg: Well, yeah, the biggest thing that I took away from the psychology classes is that I took how little we know about how the human brain works. I mean, literally, it’s like, I think that our understanding of the brain is kind of like if you opened up a computer and were like “Oh, when you type in this command, this part gets ((worn)).” [laughter] Right, like, so, it’s interesting. [laughter] I think, it’s like, you read these studies and it’s like some guy got a steel rod put through his head and this function stopped. OK, we understand nothing, right. So, there are all these things that people say.
I think A.I. is a really interesting field, and one of the things that’s interesting as technology is getting better is we’re able to build computer systems that can help people think. So, now I think the best solutions to a large class of problems are ones where humans do the thinking that they are best at, and we can get computers to do the thinking that computers are tuned in for in terms of really large scale computation, deterministic, linear, things like that. Um, where was I going with this? [laughter]
So, there’s this whole movement in the Valley, processors are getting so much faster, if we’re going to continue at this rate for just another ten or maybe twenty more years, we’re going to get computers that are smarter than humans. I don’t buy it. The reason why I don’t is not because I don’t think computers are going to be as fast as people think, it’s because I don’t think that we have a good understanding about how the brain works yet. So, I think that the human brain is probably orders of magnitude more powerful than we think yet and it’s really interesting to design software that takes into account the things that we do know about the brain and psychology.
So, for example, humans are so much more interesting to people than anything else. There are whole parts of the brain that are just totally tuned towards processing, like emotions, there’s a whole part of the visual cortex that’s tuned towards processing facial expressions. Our ability to understand and process someone’s face is so much more rich than our ability to look at a podium and differentiate it from other podiums. But if you think that the facial expressions that people make are so micro, but mean such different things depending on if you move your eyebrows one millimeter in one or two directions.
I think that’s something that we often overlook in designing products and that’s one of the things that I’m really just interested with Facebook. I think people are so interesting to other people, if you can build a product where people can go and learn about people around them and share information, and stay connected with people, then that’s something that’s super important to people, and I don’t know, that’s probably the most thing that I took away. In terms of real lessons, I mean, there’s a lot more that we need to learn about the brain.
Jessica Livingston: OK, then let’s open up for questions. You can take questions and if you don’t mind repeating them. You can…
Mark Zuckerberg: Oh, I have to? [laughter]
Jessica Livingston: Oh, I’ll do it. [points at the audience]
Mark Zuckerberg: I mean, I’m happy to, I just don’t want that responsibility.
Jessica Livingston: You down there in the front. Yes. I’ll do it. [laughter]
Audience: Why did you decide (( )) and how important was that?
Mark Zuckerberg: So why did I decide to move Facebook from Cambridge to the Valley. It wasn’t a conscious thing, it was what I was talking about before where I moved out here for the summer and figured I would go back to school. It ended up working hugely well for us and I think that if I were to start a company today, I’m not sure if I would start it in the Valley, I think that there is pros and cons.
But going back to where I was then, I was 19, I knew nothing, right, I knew nothing about starting companies, nothing about investment, nothing about legal stuff, nothing about renting a data center, nothing about renting an office, nothing about hiring, I had roommates, I was very lucky that they were very smart. One of the best things about Silicon Valley is that it’s such a dense environment in terms of-, it’s like instant startup mix. It’s like everything that you could possibly need to think about starting a company, there’s all these resources here, there is like very sophisticated people to fund your companies, very sophisticated legal practices set up to help you set up your company. For the first couple of years we had an outsourced accounting firm at Facebook, where they were all specialized towards helping startups get off the ground, setting up payroll and stuff like that, I didn’t know anything about that.
So, I don’t know, I guess that knowing what I know now, maybe there are advantages to starting in a place that-, I think there are disadvantages to Silicon Valley, too, so I think it’s like somewhat insular, and I think in some ways very short term focused, like, I think a lot of blogs and things focus on what’s happening this week, as if it’s never going to change and the world changes very quickly.
But, I don’t know, I’m balanced, I think, like, it’s really an amazing place, and I don’t know, it makes it so that people who have education and training and passion to do something can have very little experience leading up to that, and can still build something pretty great in like five or six years. It’s like there’s nothing else like this.
Jessica Livingston: Robert, go ahead.
Robert: Google is doing these (( )) which was developed partially here in Stanford. What kinds of weird (( )) is Facebook (( )) future? [laughter]
Mark Zuckerberg: Well, if I told you, then it would be very difficult for you not to expect it. [laughter]
Jessica Livingston: Alright, I’m going to take a question over here.
Audience: So you said you’re trying to make the world more open. How are you going to do that with countries like China (( )) companies like Facebook and Google?
Mark Zuckerberg: So the question is about if we’re trying to make the world more open, how do we do that in countries like China. Um, you know it’s interesting. Western companies haven’t typically had a huge amount of success in a few of the Eastern countries, not just China, but Japan, Korea, Russia. Facebook historically has been no exception, I mean we focused-, we never focused on growing in a specific place, and we did the college thing early on and the way we prioritized when we could get new colleges online was based on how many people at colleges were requesting it. But once we made it open so anyone could sign up, it was just kind of random which countries blew up. It was like one month it was Norway, then it was Turkey, it’s like no real connection between these places.
So (( )) to this place in the last couple of years where there were really four countries in the world that we aren’t either winning or going to win in, um, clearly on a path to win. And they are China, Korea-, South Korea, Japan and Russia. So we started focusing on them this year, and we kind of carved off China. Alright, this one is extremely complex and has its own dynamics. There isn’t quite as much like that in Japan, or South Korea, or Russia. So we start focusing on those this year, and our theory is that if we can show that we, as a Western company, can succeed in a place where basically no other Western companies have, then that will give us the momentum, I think, to figure out the right partnerships or things that we would need to do in China to succeed on our terms.
On the philosophical question of openness and how we view it, my view on this is that every country is pretty difficult-, different, and we want to be pretty culturally sensitive to them, so I really like-, I don’t want Facebook to be an American company. Right, obviously, we’re in America, but I don’t want it to be this company that spreads American values all across the world. We have our core values, we believe in openness, in transparency, in connecting people, and there are parts of that that overlap with American values, but there are different countries across the world that have different values. For example, we have this notion of free speech that we really love and support at Facebook, and that’s one of the main things that we try to push with openness.
But different countries have their different standards around that. For example, in Germany it is illegal to post anything that is Nazi content. So what do we do? We don’t allow you to post Nazi content in Germany, it’s considered hate speech, they have a different standard for what hate speech is in Germany. Is that censoring? I don’t think so, I think you can make an argument that it is. But I think that it’s clearly the right thing to do. We don’t block Nazi content outside of Germany.
In Pakistan this year one of our users made a group “Everybody draw Mohamed day.” and in Pakistan it’s illegal to draw pictures depicting Mohamed. So we got blocked in Pakistan and then we had some dialogue with them. It’s against the law there, so we don’t let people post pictures of Mohamed in Pakistan, but we let people do that everywhere else in the world, it’s not against the law.
So, that’s our take on this. I think it’s really important that countries can clearly write down what their laws are. Not everyone is happy with what we do in all these different places, I mean, we get complaints in Germany from people that want to post Nazi content, someone in Pakistan right now is going to be sentenced to death [laughter] - no joke, I mean, maybe kind of like a joke, [laughter] I don’t think it’s that funny [laughter] - for our philosophy there in terms of not blocking people from not drawing pictures of Mohamed across the world.
My view on this is that you really want to be culturally sensitive and understand the way that people actually think. China is a very-, I think the values there are somewhat different than what we have in the US, so before we do anything there, I’m personally spending a lot of time studying it and figuring out what I think the right thing to do is. It’s kind of a personal challenge this year, I’m just taking an hour a day and I’m learning Chinese. It’s like part of the-, I’m just trying to understand the language, the culture, the mindset, all this, because it’s such an important part of the world. How can you connect the world if you leave out a billion six people?
Jessica Livingston: Alright, let’s take a question from the center. You, in the green polo shirt. Yes, you.
Audience: What is your attitude towards making acquisitions (( )) companies require to inspect the number of acquisitions (( )) makes (( ))
Mark Zuckerberg: Yeah, so, we’ve ((done)) a lot of acquisitions over the last couple of years and it’s actually one of the things I think is working pretty well for us. We have a specific thesis on how to do this, which is we have not once bought a company for the company, we buy companies to get excellent people. Our view is we want to build a very entrepreneurial company. One thing that a lot-. Mackenzie had this program where people go after college, expecting to only be there for a couple of years, and expecting to pick up very valuable business skills that they can take wherever the want to go after that.
I want Facebook to be the Mackenzie of entrepreneurship, where you come to Facebook because it’s the best place to learn how to build things, and there’s a lot of leverage in terms of making it so you can build something in your first week or over your first months, if you want to have a longer project, and you can work on getting it ramped up, and you can address a large user base, and getting people to use your product.
So, I think the-, in order to have a really entrepreneurial culture, one of the key things is to make sure that we’re recruiting the best people who are very entrepreneurial. A lot of our attitude towards that is that a lot of the best people want to come to Facebook because of the culture that we have and because we just have enormous leverage. I can’t think of another company where the ration users-engineers is each engineer services more than a million users. One of the ways to do this is to just focus on acquiring great companies with great founders, and I think we’ve probably done maybe five or six or seven of them in the last year or so, and I’ve been happy with how every single one of them has worked.
So, to me that suggests that we should do a lot more of them. A lot of it is like, the team come in, they work on projects that they’re passionate about, it’s not necessarily an extension to what they were doing in their startup. I think the calculus on the startup ((founders’)) side a lot of the time is, OK, I’m working on this project, I’m really excited about it, but if I go to Facebook I can have a much bigger impact, and you know, whether it’s Bret Taylor who started off and originally did some of the platform stuff and is now CTO, or, you know, Blake Ross and Joe Hewitt, who joined us from Parakey, who, you know, Blake went on to do a lot of the internationalization and growth work that we did, and Joe is working on a lot of the mobile stuff, he build the original iPhone app, and is working on some really cool mobile stuff that we’re doing now, we bought this company Nextstop.
It’s one of the things that I think is awesome, you know, the fact that so many of the people who are leading products within Facebook are coming from environments where they were most recently at a startup, as a founder, just creates an incredible entrepreneurial environment at a scale where you can build stuff that millions of people are going to be using.
Jessica Livingston: Paul says the time is up. Right? We’re going to end, so thank you.
Mark Zuckerberg: Cool. Well, thank you guys. [applause]
Jessica Livingston: Thank you, Mark, that was awesome.
Mark Zuckerberg: Thank you.