How Facebook became a social-media behemoth

The Facebook Effect
nolead ends nolead begins The Inside Story of the Company That Is Connecting the World nolead ends nolead begins

By David Kirkpatrick

Simon & Schuster. 335 pp. $26

nolead ends nolead begins

Reviewed by Rickie Roberts

If you read a lot of business books, you will surely be aware that there are a number of subgenres under the overall heading.

There's the self-help business book, or How to Become a CEO in 60 Days or Less. There's the how-to, based on specific disciplines and full of charts, graphs, arrows and such. And there's the biography, sometimes a postmortem of corporations or industries gone wrong and sometimes a reflection on companies and industries remarkably gone right.

David Kirkpatrick brings us an open and honest view of the adventures of Mark Zuckerberg and friends, who started Facebook in Zuckerberg's dorm room when he was a student at Harvard University. The book would read like fiction, if you didn't know it was true.

If I had read The Facebook Effect back in 1978, I would have found it to be future-fiction. I would have likened it to Robert Heinlein's Stranger in a Strange Land (1961) in which an innocent, even naïve, creature comes to our planet and, with little experience of the human race, brings humans together in ways that only an innocent can.

There are no Martians in The Facebook Effect and no one dies, but the innocent nature of Facebook's initial partnering is key to the story past, present, and future.

It took only a few years for Facebook to become the preeminent online social networking site and a global business giant, reaching 500 million users this summer. Facebook is now available in 70 languages to 90 percent of the global population. It has affected the way we communicate personally, professionally, and politically, across nations and continents.

As one of the most successful startups ever, Facebook also has affected the way business executives approach innovation.

Kirkpatrick, who has written extensively about the Internet and technology in his position as a senior editor at Fortune magazine and as the creator of Fortune's Brainstorm conference series, had access to interviews with principal players that no one else has ever had. That access, combined with Kirkpatrick's own experience in the growth and ever-changing nature of the Internet, makes him a master in telling this tale.

The story of how Facebook came to be (beat out various competitors and opened up the world to a kind of scary connectivity unprecedented in any form in history) is among the most compelling business narratives of our time.

As a Harvard sophomore with a genius-sized talent for computer programming and a keen interest in social psychology, Zuckerberg devised a program that would connect students at Harvard in a new way.

Zuckerberg and his roommates/partners, Dustin Moskovitz and Christopher Hughes, played around with various techno-forms of connectivity. Not everything they did, including hacking into the Harvard's student database, was on the up and up, but, in true campus fraternity style, most could be written off to the antics of bright kids pushing the envelope.

Zuckerberg and his friends did not begin their adventure by laying out a business plan, creating charts and graphs, researching profitability trends. They did not do a market analysis, create an executive summary, or identify project requirements.

What they did, maybe because their minds were clear of all those restricting rigors of good business, was focus on who they wanted to be to their customers (college students), what those customers needed (to broaden their social networks), and how to deliver the goods.

The closest they came to corporate planning was when, with remarkable prescience, they anticipated the number of servers their estimated growth would require before they crashed the whole thing. Their focus on customers rather than profits put them miles ahead of the grown-up world of corporate strategy and precisely assured success wherever they broadened their constituencies.

Without one thought toward revenue and actually with a bent against advertising revenue, Zuckerberg proceeded to build what business knows as a true Blue Ocean Strategy, creating untapped market space and producing new demand in a business environment that seemed already saturated with Internet toys and innovation.

In fact, it was Zuckerberg's lack of interest in money, beyond what was needed to buy servers to support increasing demand, that forced his partners to prod him to accept limited advertising revenues. That started the ball rolling toward a level of success that would have corporations nearly begging the group to take billions for the product.

The beginning of Facebook was not without its missteps, but the partners' openness and candor allowed them to reset and correct mistakes as they came. For quite some time, their Palo Alto, Calif., headquarters could be likened only to a frat house, and many lawsuits have found their way to federal court around the birthing process.

The book, however delightfully and warmly presented, could have used a few charts and graphs to delineate the personalities that flew in and out of the picture before the company settled in 2009 into fairly normal offices in Palo Alto.

In the end, The Facebook Effect still leaves us wondering if this stranger in a strange land has true durability. How much candor will the public accept? Is confidentiality a thing of the past or something that can be managed to an individual's taste?

Somehow I sense there will be a sequel to this one.