The Lean Startup model gets borked by investors
Facebook was built in a week.
A week later it had 900 users. Eight years and a bit after that it had 900 million-plus users and is now a publicly traded company.
It accomplished all this as Mark Zuckerberg's start-up - a responsive, quick-moving company that innovated at breakneck speed. Sometimes the innovations worked (Like buttons, Messenger) and sometimes they didn't (Beacon, Timeline), but as the numbers show, it was all for the betterment of his product.
The same week investors spent $30-some a share on Facebook stock, author Eric Ries came to Toronto's MaRS on May 15 to preach about efficient, responsive companies.
His book, The Lean Startup, is a manual for entrepreneurs to build successful businesses right out of the gate by gathering lots of feedback and responding to it in short order.
Ries's methodology is a lot like Zuckerberg's. Except what Ries calls the Lean Startup, Zuckerberg called the Hacker Way.
"Astronomical amounts of attention are going to be paid to Facebook's incredible business results," predicted Ries when Facebook first announced its initial public offering in February. "I hope at least some of that attention will be paid to the culture and process that made those results possible."
Unfortunately, Zuck's way of doing business, the Hacker Way, has received little fanfare since the IPO.
Instead, investors are interested in his company's valuation, its active users and, absurdly, his damn hoodie.
In the run-up to going public, Facebook made a few good moves. It launched a very useful new app to manage pages (simply titled Pages), a dynamic list of topics called Interests, its amazing Messenger service for Windows, and, of course, it acquired Instagram.
The details of the billion-buck Instagram buy are most telling. Zuckerberg, at his own house, hammered out the deal with the photo-sharing app's founder, Kevin Systrom, over steaks and ice cream. All the lawyers typically present for such a deal were in another room watching Game Of Thrones.
With all the investor scrutiny, Zuckerberg and Facebook can't operate that way any more. How can it?
I predict Facebook will slow down on inventing cool features, if not halt altogether. With other people's money on board, the strategy becomes one thing and one thing only: growth.
Facebook has left the fast-paced field of start-ups and entered the slow, frustrating, corporate muck.
"Here's to the Zuck I admire, the one [who] had the courage to launch a simple, useful app in a week, celebrate his first 900 customers, and - for eight straight years - insist on iterating, executing and building for the long term," wrote Ries.
But that was the old Zuckerberg. Start-up Zuck, as investors reminded everyone this week, is dead. Long live corporate Zuck.