What are the management keys that have guided Facebook’s continued iterations of growth at the age of 13?
What Mark Zuckerberg can’t stand is for his company to slow down.
“Move fast and Break things” has been the company’s go-to phrase for years, plastered on the walls of Facebook’s office campus. It’s also the hallmark of Zuckerberg’s business philosophy, which has transformed a social platform that was born in a male college dorm room into a world-class technology company with more than 2 billion active users and 1.32 billion daily active users.
Over the past 13 years, Facebook has gone through several transformations, including some “life-or-death” hair-raising moments, but it has weathered them and demonstrated its value strongly — just before it went public in 2012, Few people thought Facebook would ever become a company worth more than $200 billion. Now, Facebook’s market cap is approaching $500 billion and growing.
But as the company gets bigger and reaches users around the world, Facebook’s problems are far more complex than when it was born. Even if Zuckerberg is no longer the kid he once was meeting investors in his pajamas, it’s not easy to apply the “move fast and break things” principle to a high-value global company with more than 20,000 employees.
Clearly, from its DNA to the methodology that keeps the company going, Facebook has built a system that keeps it growing forever. This system was refined over the course of Facebook’s life, and it still works today.
If you look at the company in terms of corporate growth, Facebook’s ability to maintain rapid growth iterations is commendable. What are the key elements? Will these lessons serve Facebook well into the next decade? During our geek Park overclocking tour in September, we took executives from some of the country’s top tech companies and chatted with the Facebook management team. Here are three core elements of the company’s past management experience that you might find answers to.
When you decide to transition, you have to be extremely focused
In fact, Facebook has a lot of experience with “transformations.” Since its inception, Facebook has undergone at least three necessary transformations, both active and passive.
These three conversions, which combined incremental increases in user size and activity, are emblematic of Facebook’s expansion. They occurred around 2006, 2008 and 2011. In the first two moments, Facebook has gone from campus utopia to global, fully social expansion. In 2008, When Facebook reached 100 million users, it surpassed My Space to become the largest social network in the world.
But the real challenge comes around 2011. At the time, the mobile Internet was on the rise, and Facebook was facing a big test in moving from desktop to mobile. At the time, internal company data showed that many users had a poor experience with the APP version of Facebook, preferring to log in with their smartphone browser Browser Browser.
At the time, this was not a clear signal. Even for Facebook, the push from Twitter is even more serious. But Zuckerberg believes Facebook doesn’t exist if it doesn’t make the transition to mobile.
At the time, the company didn’t realize how urgent the need was. While working on mobile products, some employees also delved into what new features could be offered on the desktop. An executive who has lived through Facebook’s transformation tells us that six years ago, in the PC era, engineers were excited about the idea of video.
At its core, Facebook is not a company that relies heavily on the will of its CEO. But in a rare display of toughness, Zuckerberg told his enthusiastic team that the video feature was a good idea, but that the company must now focus on the mobile transformation.
In order to smooth the transition, Zuckerberg even stipulated that Facebook should not innovate any more for two years. “Don’t talk to me about any projects that are not related to mobile transformation.” This was a very risky decision for Facebook at that time, innovation is almost the life of every silicon Valley technology company. And no matter how big a company is, the resources managers can mobilize are usually limited.
However, when the company’s survival is at stake, choice and abandonment are essential, focusing, improving efficiency and focusing on the bottom line is the most important proposition. In an effort to improve communication, Zuckerberg announced early on that the company would eradicate powerpoint culture. He even instituted strict training programs and said that during routine product reviews, everyone must show the mobile version first, “or I’ll kick you out of the office.”
As a leader, you also need to convey confidence in your team. When Facebook went public in 2012, its shares lost more than 25% of their value in 10 days. The main reason is that investors are worried about the advertising value Facebook can create on mobile. It was around that time that Zuckerberg, who has traditionally been dismissive of revenue and profit, decided to add more ads to the NewsFeed.
Before that, Facebook was sensitive about AD placement and content in the NewsFeed because Zuckerberg thought inappropriate ads would hurt the user experience, but zuckerberg decided to reach customers beyond social and even started giving revenue targets to some product teams. He wanted to signal that top management was concerned about the financial pressures on engineers on the ground.
As a result, Facebook navigated the transition to mobile and retained its ability to make money. According to its q2 2017 earnings report, Facebook’s mobile AD revenue accounted for 87% of AD revenue, with 1.15 billion daily active users on mobile, accounting for 93% of total users.
Only data decisions are correct
User growth is a constant topic at Facebook. Facebook’s proudest management miracle of the past decade has also come from its innovative management of user growth.
In 2008, Facebook created its growth division. The reason was that there was a bottleneck in user growth at the time, but Zuckerberg wanted to use a few dozen engineers to achieve the same online user growth effect as thousands of marketing campaigns, rather than relying on hiring and spending a lot of money on marketing campaigns.
Typically, Internet companies hire more sales and marketing staff and spend a lot of money on marketing campaigns to expand their users. At least some Chinese tech companies have large sales teams. According to media reports, the total number of baidu employees reached 40,000 in 2016, and sales staff has seen the fastest growth in several years, accounting for almost half of the total workforce.
But Zuckerberg couldn’t tolerate inefficient expansion, arguing that as a tech company, hiring too many marketing people would hurt Facebook’s proud engineering culture. By 2017, Facebook, 13 years old and already expanding globally, had just over 20,000 employees, according to the data.
The user growth group has a huge voice inside Facebook. It works by constantly using A\B tests, experiments and data analysis to inform many of Facebook’s decisions. Inside Facebook, the data is extremely transparent. The company’s philosophy is “Everthing must be tested.” The team believes that every decision has to be tested by a small number of users, and if the experiments are done fast enough and often enough, one in a second, Then the team has a chance to prove a lot of ideas wrong.
Facebook’s calculation is that the key to success sometimes isn’t making the right decisions, but rather trying to filter out the wrong ideas so that the right ones survive. It’s even built into Facebook’s corporate culture: learn as quickly as possible what users want them to do, and encourage people not to keep trying and failing.
This principle of scientific experimentation runs through every product improvement decision at Facebook, and even affects the way advertising, the company’s main revenue stream, is delivered.
In feed-streaming products, with hundreds of millions of users, the platform often faces a three-way game between advertisers, user experience and platform tonality. At Facebook, however, the frequency and placement of ads in the NewsFeed is generally dominated by the product group responsible for the NewsFeed, which determines the threshold of how ads harm the user experience and develops a unified metric. The product department then scores the user experience and the value of the AD, and finally makes the right decision through A/B test to ensure that the AD’s harm to the user experience is within the range that the company values can tolerate.
It also goes some way to saying that there is little room for “philosophical” decisions at Facebook, even if they come from Zuckerberg. In another very typical example, in 2013, the growth division, based on test results, suggested that Messenger, an instant messaging feature, should be spun off from Facebook’s platform into a separate APP. At first, Zuckerberg was strongly opposed to the risky idea because of conventional wisdom, but the results showed that Facebook, which is essentially a news feed, is very different from Messenger, which is essentially a mobile messaging feature.
Zuckerberg was eventually convinced by the data. And Facebook Messenger has proven to be growing well, even though users have to re-download it to use it. By 2017, Facebook Messenger was generating $1.3 billion in monthly activity, and advertising revenue from Messenger was also strong.
Facebook engineers tell us that the same growth methodology continues to be used on New Facebook fronts like Instagram and WhatsApp, And in Facebook Live, its recently launched Live streaming service, and Watch, its hosted TV platform. These services are the next frontier of growth that 13-year-old Facebook has chosen for itself.
Creating a consistent sense of purpose is more important than you think
Silicon Valley tech companies generally have a strong culture, and Facebook is the poster child for that. Since Facebook’s inception, Zuckerberg has defined the company’s mission: to empower people to share and make the world more open and connected.
Everyone knows what corporate culture means to managers, but few companies have implemented it as thoroughly as Facebook. For Zuckerberg, the company’s mission is not just an empty slogan, but an important methodology at the genetic level of the company. At Facebook, the company’s mission is plastered on the walls and often spoken by the company’s top brass, including Mr. Zuckerberg. Over time, almost every engineer can blurt out this sentence.
In addition to the overall Mission of the company, the team has a clear Mission for each business line, including the advertising department, the open platform cooperation department, and the growth department. This is unusual for most domestic tech companies. But Facebook argues that such “brainwashing” indoctrination is necessary to create a coherent sense of mission. The mission of a company and what it stands for cannot be overstated, and they should not only exist in the minds of executives. Because only when the whole company is clear about this goal can they work together in the same direction.
This “metaphysical” aspect of corporate management is still being emphasized in the wake of Facebook’s transformation. In June, Zuckerberg first changed the company’s Mission to “empower people to build communities and bring the world together” for the 13-year-old.
“It may not seem like much has changed, but now we have to not only provide the ability to connect, but to actually bring people together.” “A Facebook executive told us. This means that Facebook is starting to think about where the “results” of connections are going. Since its birth, Facebook has faced accusations of exposing users’ privacy, and the spread of fake news during the US presidential election put Facebook and Zuckerberg at the center of a vortex.
Zuckerberg has also said publicly, “We feel like our responsibilities are growing, especially as we hit 2 billion active users. We’re always thinking about our responsibilities in the world and the steps we need to take.”
As with any previous transition, Zuckerberg began sending very strong signals to his team. He even tweaked its internal metrics in response, and Facebook now increasingly looks at “how happy and retained” users are in the community, “rather than just measuring the work of engineers based on clicks on ads.” Facebook is trying to make changes to its products and algorithms to give people a more comprehensive view of the world, rather than the kind of information that tends to incite bias, in order to eliminate the social impact of inappropriate speech while preserving freedom of expression.
Another thing Mr. Zuckerberg has emphasized to the outside world and the company over the past year or two is Facebook’s next decade. The initiative, which covers areas such as virtual reality, artificial intelligence and computer development, represents Facebook’s focus over the next decade. But unlike Google X, zuckerberg’s goal and logic are clear: all future plans revolve around Facebook’s “social” nature.
Facebook’s next big goal, for example, is to invest in satellites, drones, base stations and more to help connect underdeveloped areas to the Internet, so that Facebook services can reach local communities. However, the investment in Oculus and the research on AR and VR is also aimed at social interaction. “It is related to how to let people deeply experience our services. Twenty years ago, we used words, which belong to the one-dimensional category, and later became two-dimensional pictures. People’s experience is definitely going to go three-dimensional.”
Over the course of 13 years of operation, Facebook’s product DNA has become so strongly embedded in the company culture that it has even become a part of the company. Facebook engineers told us that the essence of Facebook is a company with a strong social nature. “There is a strong connection between departments. People communicate with each other every day. “Facebook will never be Apple because of the team culture, so it will never be a successful hardware company, just like Apple will never be a successful social software company, because in Apple’s culture, teams don’t talk to each other very much.”
It also makes up one of the most striking features of most Silicon Valley tech companies: a corporate culture that is impossible to ignore and an area of intense focus. Facebook’s business has always been and will always be centered around “social” and “connection.” This focus creates an invisible border that prevents Facebook from aimlessly searching for ways to monetize traffic in order to make a better financial statement.
But this strong cultural attribute and sense of boundary also partly determines the fate of a company from the beginning: once the era has nothing to do with it, it is almost doomed to be obsolete.
Facebook executives are well aware of this and are constantly reminding themselves to be vigilant. In 2015, Facebook moved to a new headquarters in Palo Alto, Calif., next to a bay that was once the home of Legendary Sun Microsystems, the IT and Internet services company that nearly took apple down, but as the software industry changed, Sun Microsystems went into decline and was eventually acquired by Oracle.
But Facebook hasn’t really let Sun Microsystems disappear from the campus: In the center of the campus, behind Facebook’s iconic “Like” sign, there’s still a street sign with the Sun Microsystems logo. But few of the visitors who come to Facebook every day to take pictures are aware of it.
It was an ominous metaphor, but one that Facebook executives chose to use on purpose. It’s Zuckerberg’s way of reminding himself and everyone else at the company that Facebook must continue to focus on social. “We know every company is going to disappear, but what Facebook is trying to do is make that happen later by any means possible.”
This is part of a series of articles on the Geek Park Frontier society’s overclocking tour. In September this year, we went to Silicon Valley together with the managers of outstanding domestic start-up companies, and had in-depth communication with Google, Facebook and many cutting-edge technology companies. For now, we’ve chosen some of the most valuable thoughts from the trip to share with you. Stay tuned for further reports from Frontier news and Penthouse.
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Article: Zhou Xiaodan
