Chamath Palihapitiya - how we put Facebook on the path to 1 billion users
Summary
TLDRThe speaker shares a candid journey from a career in investment banking to influential roles at Facebook and AOL, highlighting the importance of core product value and strategic growth. Emphasizing the need to challenge conventional wisdom and prioritize long-term success over short-term gains, the discussion underscores the significance of understanding consumer behavior, embracing cultural nuances, and fostering a culture of experimentation and learning from failure.
Takeaways
- 🎲 Recognize the value of simplicity in growth strategies - focusing on the core product value and consumer behavior is more effective than complicated approaches.
- 🚀 Emphasize the importance of self-awareness and humility in a company's growth - understanding and acknowledging what works and what doesn't is crucial for sustainable success.
- 🔍 Prioritize data measurement and testing - continuous evaluation and iteration based on data insights drive product improvement and growth.
- 🌐 Adapt product offerings to local markets - understanding cultural nuances and tailoring the product to fit these differences can significantly enhance user engagement.
- 🚫 Avoid the temptation of short-term optimizations - prioritizing long-term value and product innovation over quick wins that may harm the brand in the future.
- 💡 Focus on the 'aha moment' - identifying and accelerating the user's path to realizing the product's core value is key to driving growth and retention.
- 🤔 Challenge conventional wisdom and company lore - questioning long-held beliefs can lead to breakthroughs and a more innovative company culture.
- 🌟 Build a diverse and capable team - surrounding yourself with talented individuals who challenge the status quo and bring fresh perspectives fosters creativity and success.
- 🛠️ Embrace the discipline of 'minimum must-haves' - providing a framework that allows for flexibility within a defined set of core principles encourages innovation and risk-taking.
- 🏆 Celebrate learning from failure - creating a culture that values experimentation and learning from mistakes more than success promotes continuous growth and improvement.
- 🌱 Prioritize long-term thinking - maintaining a strategic focus on the future and resisting the urge to be swayed by short-term trends or pressures is essential for enduring success.
Q & A
What was the speaker's initial career path and how did it influence his perspective on growth and product development?
-The speaker initially worked at an investment bank trading derivatives, which he found to be a waste of his time. This experience shaped his cynical view on the financial industry and led him to seek a more meaningful path. He eventually found himself in roles that allowed him to build and scale products, which refined his understanding of consumer behavior and operational leverage in product development.
How did the speaker's experience with Winamp and AOL contribute to his approach to product management and growth?
-At Winamp, the speaker learned about the importance of core product value and creating a real connection with consumers. This experience, combined with his time at AOL where he managed ICQ, taught him about the power of communication networks and how they can accelerate adoption and engagement. These lessons were integral to his approach to product management and growth.
What are the three obvious, brain-dead things that the speaker's team did to achieve growth?
-The speaker emphasizes that the key to their growth was simplicity and consistency. They focused on measuring, testing, and trying things repeatedly. They lacked self-awareness and ego, which allowed them to continue these basic actions without second-guessing themselves, leading to significant growth.
How did the speaker's time at Facebook shape his understanding of virality and product value?
-At Facebook, the speaker realized the importance of not focusing on virality as a primary growth strategy. Instead, he emphasized understanding product value and consumer behavior. He also learned about the long-term consequences of actions and the need to avoid strategies that could alienate users or harm the product's core value.
What was the speaker's approach to entering new markets, such as Japan and Korea?
-The speaker advocated for hiring native individuals who understood the local culture and dynamics. He emphasized the importance of being flexible and willing to adapt the product to meet the specific needs and preferences of each market, rather than simply applying a one-size-fits-all approach.
What was the key insight that led to Facebook's success in the speaker's view?
-The speaker believes that Facebook's success was largely due to its ability to facilitate connectivity and social organization through photos. By understanding and leveraging this core product value, Facebook was able to create a platform that resonated with users and drove significant growth.
How did the speaker's team identify the key factors that led to user engagement and growth?
-The speaker's team focused on analyzing a broad cross-section of engaged users. By working backwards from these users and understanding the different pathways that led them to engagement, the team was able to identify simple, actionable strategies that could be applied more broadly to increase user engagement.
What cultural values did the speaker emphasize as important for success in product development and growth?
-The speaker emphasized the importance of having a culture that values long-term thinking, integrity, and the willingness to experiment and fail. He also highlighted the need for a team that is comfortable with taking risks, challenging conventional wisdom, and focusing on delivering real value over perception.
How did the speaker describe the relationship between product value and company culture?
-The speaker argued that product value and company culture are deeply interconnected. A strong culture that values long-term growth, integrity, and real value creation can significantly influence the success of a product. Conversely, a culture focused on short-term gains and superficial achievements can lead to products that lack lasting value.
What advice does the speaker give to CEOs and founders regarding recruitment and team building?
-The speaker advises CEOs and founders to recruit individuals who are smarter and more capable than themselves. He emphasizes the importance of hiring people with a high IQ, a strong sense of purpose, and a relentless focus on success. Additionally, he encourages leaders to surround themselves with people who challenge ideas and are comfortable with resetting and starting again when necessary.
How did the speaker address the issue of 'growth hacking' and short-term optimization?
-The speaker criticizes the focus on 'growth hacking' and short-term optimization, arguing that these strategies can lead to superficial and unsustainable growth. Instead, he advocates for a disciplined approach that prioritizes understanding product value, consumer behavior, and long-term strategic goals.
Outlines
🎲 Introduction and Personal Journey
The speaker begins by sharing a personal anecdote about playing poker late into the night and sending slides at midnight, hinting at a work-hard, play-hard lifestyle. They then delve into their background, starting from their graduation in Electrical Engineering to their stint at an investment bank, which they found unfulfilling. The speaker candidly critiques the banking industry, stating that bankers are smart enough to be greedy but not smart enough to be useful. They left banking for the tech industry, where they accidentally built something cool. This experience refined their understanding of product development and consumer appeal. The speaker reflects on their time at Facebook and the lessons learned there, emphasizing the importance of core product value and the power of communication networks in accelerating adoption and engagement.
🚀 Growth Hacking and Product Value
The speaker discusses the concept of growth, dispelling the myth that it's a secretive process. They emphasize that their approach was straightforward, focusing on measuring, testing, and iterating. The speaker criticizes the tendency to complicate products and urges for a return to simplicity. They express concern about the lack of self-testing (dogfooding) among app developers and the focus on short-term gains over long-term product value. The speaker advocates for a disciplined approach to growth, prioritizing consumer trust and product value over virality and short-term ROI. They share insights on the dangers of ego and gut feelings in decision-making, advocating for a data-driven, unemotional approach to product development.
🌐 Global Expansion and Cultural Sensitivity
The speaker shares insights on global expansion, recounting Facebook's internationalization efforts. They highlight the importance of hiring native talent and being sensitive to cultural nuances. For instance, they mention adapting Facebook's profiles to include blood types in Japan due to cultural significance. The speaker emphasizes the need to redefine product value in different markets, which requires courage and an open mind. They discuss the success of Facebook's crowdsourced translation effort and the importance of understanding local contexts to unlock product value. The speaker also touches on the universal appeal of Facebook, despite initial challenges in certain markets.
🎯 Focusing on Core Product Value
The speaker reiterates the importance of focusing on core product value, sharing anecdotes from their time at Facebook. They discuss the 'seven friends in ten days' rule and how it became the cornerstone of Facebook's growth strategy. The speaker argues that understanding and iterating around this core value led to Facebook's massive user base. They caution against focusing on low-level abstractions and short-term results, advocating for a strategic approach to growth that aligns with the company's core values. The speaker also emphasizes the importance of culture and capability in a company's success, stating that culture always triumphs over short-term gains.
💡 The Power of Simplicity in Growth
The speaker discusses the power of simplicity in achieving growth. They argue that even when a product seems to work universally, it may not be effective for everyone. Finding a framework that restructures and reorganizes activities to expose value in different ways is crucial. The speaker emphasizes the importance of understanding how to capture core product value and define what it means to onboard users into a product that allows communication and network building. They share the story of Facebook's growth and how a simple rule of getting users to seven friends in ten days was the key to their success. The speaker stresses the importance of focusing on core values and being ruthlessly strategic in product development.
🌟 Building a Culture of Long-Term Success
The speaker talks about the importance of building a culture focused on long-term success. They emphasize the need for a high IQ, a strong sense of purpose, and the ability to resist short-term pressure. The speaker values competitiveness, a high-quality bar, and the willingness to challenge ideas and conventions. They advocate for hiring people who are better than oneself and creating a culture that rewards long-term thinking and perseverance. The speaker also highlights the importance of integrity and surrounding oneself with good people who care about building real value over perception. They share personal experiences of recruiting a team that thrived under a disciplined framework and the importance of celebrating failure as much as success.
🌍 Embracing Global Perspectives
The speaker reflects on their non-American identity and its impact on their worldview. They express skepticism towards the imperialistic attitudes of some Americans and the assumption that outsiders cannot understand or succeed in their markets. The speaker advocates for a global mindset, emphasizing the success of native hires in various international markets. They share stories of hiring local talent in Korea, Japan, and Brazil and the importance of listening to their insights. The speaker highlights the value of experimentation, learning from failure, and celebrating diverse perspectives as keys to Facebook's international success.
🛠️ The Evolution of Tech and Leadership
The speaker discusses the evolution of technology and the challenges of building a company from scratch. They reminisce about the early days of Facebook, where they had to build their own tools and systems, which provided them with unique insights and flexibility. The speaker credits a functional board and a supportive management team for creating an environment that allowed for experimentation and learning. They emphasize the importance of clear communication and the dangers of information distortion as decisions cascade down through the organization. The speaker concludes with a message on the importance of discipline, flexibility, and understanding the true workings of a product for sustained success.
Mindmap
Keywords
💡Growth Actor
💡Operational Leverage
💡Product Value
💡Ego
💡Dogfooding
💡框架 (Framework)
💡Aha Moment
💡Viral Growth
💡Cultural Sensitivity
💡Long-term Thinking
Highlights
The speaker shares a cynical view of the growth actor space, offering a personal perspective on the industry.
The importance of understanding the core product value and its connection with consumer behavior is emphasized.
The speaker highlights the need for repetitive and monotonous efforts to achieve growth through consistent actions.
The dangers of shrouding products in complexity and the need for simplicity in understanding product value are discussed.
The speaker's experiences at Facebook and AOL provide insight into the importance of avoiding common pitfalls in product development.
The significance of operational leverage in scaling a product and its impact on consumer networks is mentioned.
The importance of measuring, testing, and iterating is stressed as a crucial part of product development and growth.
The speaker shares the story of Facebook's growth, emphasizing the value of a simple, elegant understanding of product value.
The need to eliminate ego and focus on core product value is highlighted as a key principle for success.
The speaker discusses the challenges of adapting products to different cultural contexts, such as in Japan and Korea.
The value of hiring native talent and listening to local insights for product adaptation in international markets is emphasized.
The speaker shares the key to Facebook's success in Asia, which was understanding and adapting to local cultural dynamics.
The importance of having a disciplined approach to growth, focusing on long-term value rather than short-term gains, is discussed.
The speaker talks about the need for a growth team to understand and engage with the core strategy of the product for success.
The value of recruiting people who are better than oneself and the importance of building a strong team for product growth is highlighted.
The speaker shares the qualities they look for in a team, including a high IQ, strong sense of purpose, and the ability to challenge ideas.
The importance of focusing on real value over perception and not getting distracted by superficial trends is discussed.
Transcripts
I want some intro music from Ignacio
where is Ignacio first of all I was
playing poker till really late last
night so um I'm a little rough around
the edges I got my slides to you at like
midnight I was at the table doing the
slides okay so I'll just start with a
little bit about myself I'm actually
gonna give you a somewhat cynical view
of this entire space of what it means to
be a growth actor so don't be offended a
little bit about me
I think Aaron just touched upon this I
actually my I graduated from EE and in
the midst of trying to find my way I
ended up working at an investment bank
for a year trading derivatives it was
probably the most insipid idiotic use of
my time and the biggest thing that I
realized was that bankers are like smart
enough to be greedy but not smart enough
to be useful so I quit and I applied to
all these jobs online and I got one it
went out accidentally and we actually
built something really cool but the
thing that I learned it went and all of
this ties together so apologize i
rambling but we actually had one of the
most important and early consumer
platforms available which was the set of
abstractions that we had built to allow
people to customize our product you
build skins you build plugins and what
it actually did was start to refine my
understanding of sort of how when you
develop sort of things that appeal to
specific sets of consumers you start to
get this operational leverage in your
product we were seven people and the
things that we did as a seven person
group were pretty impressive back in the
day 100 million users not as impressive
as it is today as it was back then when
the internet was a lot smaller but it
was still quite an interesting product
and really defined a lot of the
characteristics of how I actually
approached things when I was at Facebook
winamp was acquired by AOL and at AOL I
bumbled along into a bunch of different
jobs and ultimately was able to run a
manned ICQ which was the instant
messaging product and
the takeaway from that were two things
one and I'll get to this a little bit
later most people at most companies are
really
and that was manifested in large degree
at a while so I learned all the things
not to do one and that was probably 90%
of my learnings to be quite honest with
you and then 10% was reinforcing some
things that I learned at winamp which is
really about core product value and what
it means to sort of create a real
connection with someone I think now we
all kind of euphemistically call it
their the aha moment with the consumer
but also the power of how these
communication networks when they develop
create real and trenched usage and scale
and how these things can just
dramatically accelerate adoption and
engagement and and then lastly I spend a
bunch of time at Facebook so the
Facebook story is actually really
interesting and I'll tell it's sort of
inner leave it as I go through the rest
of the slides I spend most of my time
investing in playing poker to be quite
honest with you some of the big ones
that I was a fairly large stakeholder
and played him Yammer which we sold for
about two billion and combined value I'm
a fairly large investor in box and
Palantir and a bunch of very small
companies now some of which where I act
as a co-founder or some of which that I
don't and you know a lot of people like
to tout every return that they have on
their blog I don't blog or use the
Twitter but the track record here is
pretty good I'm a dad I have two kids
another one on the way in January I play
a lot of poker and I own the Warriors I
mean that's what that means baller for
all you for all your people don't use
the urban dictionary just okay all right
so let's talk about growth everyone asks
me because this is like the topic du
jour it's what everyone wants to know
it's like what was a secret it's like
almost as if like you know we're the NSA
and we've like develop something and
like nobody knows or like you know some
secret backroom negotiation between us
and governments and it's like none of
that we did three
obvious brain-dead things and the
reality was we lacked enough
self-awareness and ego to frankly just
continue to do these very simple things
over and over and over again
repetitively monotonous ly to a point
where every time we used to see things
move in one direction or another we
would either keep doing them or stop
doing them and not second-guess
ourselves and so I I kind of tell people
you know look we actually just looked at
a lot of data we measured a lot of stuff
we tested a lot of stuff when we tried a
lot of stuff now that masks over a lot
of more nuanced understanding but at an
extremely high level that's really what
we did and what's shocking to me is when
I see like a lot of products out there
it's unbelievable to me that people are
trying to shroud products in this veneer
of complexity that makes themselves seem
like so good and so smart and you know
I'm this hipster and I'm riding
the Muni in San Francisco and look at my
along green tea that I bought
organically and you know look at these
ripped tight skinny jeans and I bought
and it's like you got to get over
yourself like measure some try some
test some more throw the stuff
that doesn't work it's not that
complicated and I see app after app
after app and I get inundated and when I
download it and I tried I'm like did you
even spend eight seconds using your own
product it's unbelievable the lack of
dogfooding that happens and so most
people when they think about growth they
think it's this convoluted thing where
you're trying to generate these you know
Xtranormal behaviors in people and
that's not what it's about what it's
about is a very simple elegant
understanding of product value in
consumer behavior and when you shroud
yourself and all the veneer and
this is the single biggest problem in
the valley today you will miss the mark
and the problem is is we're in this
massive longtail where you've had these
seminal huge successes occur and now you
have all these people who have two
choices and they're extremely difficult
choices choice number one is you do what
you think is right independent of what
the external feedback loop tells you and
choice number two is you do what you
read about and what you get you know
credit for
what people tell you is interesting and
that second class of things destroys
products and it destroys people's
ability to build something interesting
and it doesn't matter how good you are
at your job if that specific set of
values isn't imbued in what you're
building you will fail and it doesn't
matter and right now that is the one
most important thing that if you're
gonna leave away with this is just don't
believe the hype and the that
we're in right now how do we do this we
didn't even come up with this framework
a guy worked for me I'm not gonna say
who it is cuz I was literally like nine
times I was gonna fire this numbskull
and he once and he came to me and said
she mops at eBay we had this framework
eBay this is 2007 like eBay eBay sucks
what can I learn from eBay and he said
well we had this framework we use that
eBay and we tweaked it a little bit and
what what I realized was oh my gosh you
know there's this massive amount of
complexity when expressed in simplicity
can be extremely useful and the tweaks
that we made the bays a different
product an eBay now is a wonderful
company doing really really well
what come on it's totally well was we
sort of create a framework in which we
applied those three very simple
principles of measuring testing and
trying things and we said okay the
biggest risk that we have is we a lien
eight the people that trust us today and
use the product and when you a lien
eight someone what happens is it's
actually not palatable generally in
top-level metrics but there's just this
extremely long tail so like anecdotally
you can look at companies and you know
you know let's like not to pick on HP as
an example but you look at HP you're
signaling me 10 minutes I've ten minutes
left Jesus Christ okay
and you ask yourself you know and I know
Meg Whitman she's actually a really
great CEO so what happened well there's
no product innovation right now and they
have to figure out where their growth
comes from
well when you trace that thing back well
it's a decision that was made maybe five
or six years ago when it was all about
cutting costs and optimizing for
short-term revenue and so you realize
okay well that's the long tail that's
how long it takes these things to
manifest similarly my biggest fear was
we spam our users and we tricked them
and it will alienate these people you
won't see it today but you'll see it in
three years from now or four years from
now and it accelerates when you compound
that with a competitor who actually
builds a better product that doesn't
alienate people so the most important
thing that we did against our framework
was I teased Alvar allottee and said you
cannot do it don't talk about it don't
touch it I don't want you to give me any
product plans that were revolve around
this idea of virality I don't want to
hear it what I want to hear about is the
three most difficult and hard problems
that any consumer product has to deal
with how do you get people in the front
door how do you get them to an aha
moment as quickly as possible and then
how do you deliver a core product value
as often as possible and after all of
that is said and done only then can you
propose to me how you are going to get
people to get more people and that
single decision about not even allowing
the conversation to revolve around this
last thing in my opinion was the most
important thing that we did and when I
look again in the landscape things that
scale understand that principle whether
it's explicitly or intuitively and
things that don't and also things that
have this amazingly steep rise and then
fall off a cliff and there are really
visible examples of that today also
ignore that principle and it's the
discipline to not optimize for the thing
that gives you the shortest and most
immediate ROI because that is never the
sustainable thing that allows you to
build something useful so when you boil
that all up the most important to
high-level takeaways that we had and
after all of this stuff was you got to
eliminate ego an ego manifests itself
every day so I talked about it earlier
it's the ego of basically living a
lifestyle and a vision and like a
Twitter stream then it is actually like
living the life of an entrepreneur
building
product in trying to deliver core
product value that takes ego meaning you
have to be comfortable not being
rewarded in the short-term and then the
second is to invalidate all the lor in
any given product there's always people
who strut around the office like you
know I have this gut feeling it's all
about gut feeling and most people gut
feeling or morons they don't
know what they're talking about they
just don't if we lived on gut feeling
you can look at what happens when you
live on gut feeling look at the
financial markets look at our government
works look at how all of these
industries that are completely broken
gut feel is not useful because most
people can't predict correctly we know
this so one of the most important things
that we did was just invalidate all of
the lore as much as we didn't do stuff
all we did was disprove all of the
random anecdotal nonsense that filtered
around the company well I think it's
this that few people are using it
because of that I want to do this and
and it's like where did you pull that
out of and you know where they pulled it
out of and they just again wanted to do
it to go back and you know reinforce a
sense of ego and a lot of people don't
have a culture within a company that
allows these two things to happen and if
you can't be extremely clinical and
extremely unemotionally detached from
the thing that you're building you will
make these massive mistakes and things
won't grow because you don't understand
what's happened it takes a really
special type of person to not believe
the and an even more special
person to not conflate luck and skill
you have to be if you're in this type of
job in my opinion relatively cynical and
you can be confident you can be
arrogant doesn't really matter but you
can't believe your own BS because when
you do used
to compound these massively structural
mistakes that again don't expose core
product value and then don't allow real
engagement and real product value to
emerge
you don't listen to consumers because
you think it's all about your gut you
don't bother doing any of the
traditional straightforward obvious
things that would allow you to answer
very straightforward obvious questions
and you lose yourself most people
unfortunately are just don't know what
they're talking about I'm I hate this
letter this letter is the dumbest letter
in the in the alphabet you people are
doing more when you focus on this to
ruin the internet for the entire human
race don't talk about this anymore
just stop talk about being in the weeds
and not understanding what you're doing
there's no context when you talk about
this none whatsoever
you are spammers and spamming is
pathetic and it ruins the experience
don't do it we never talked about this
once it never came up once I didn't have
some little guy you know tickling the
ivories on his little Excel spreadsheet
telling me what K values were tell me
how I'm acquiring people tell me how
we're doing getting them to their aha
moment and tell me core engagement don't
give me these low-level abstractions
that allow you to validate short get
short-term results in ROI that don't
mean anything
don't focus on things that destroy
long-term value don't give me stuff that
allows you to trick yourself into
thinking you know what you're talking
about
I'd rather you say you don't know and
I'd rather us figure stuff out together
but I don't want to have happen is a
culture where you take these short-term
things you start working on it in the
absence of context and you have these
meteoric Rises and what you have is
massive churn and fall off and
everyone's looking around with their
hands in their pockets thinking well
what just happened I thought I was doing
a really great job well you're not doing
a really great job you optimize the
variable
now there may be somebody on your team
that should be doing that but it should
be doing that in the context of
something much more important
so you destroy a lot of value when you
abstract away that high-level goal to
something so ridiculously stupid like
I'm like raining on everybody's parade
today for product value is really
elusive and most products don't have any
I actually fundamentally believe that
but I also believe that most products
can have some value so when you put
those two things together again you go
back to the discipline of do you really
know what you're building and why and do
you really understand how to marry
things that may be non-intuitive for
people but really are the important
things that people need so I remember
when we were launching in Asia we
created a team so the history of
Facebook right just very quickly so I
started a Facebook my team launched
facebook platform huge success then you
know we do this big deal with Microsoft
we generate we raise a huge round and
you know what the tail end of that round
it's like over we're gonna launch a
bunch of ad products to validate this
valuation and you know we're gonna do
all this stuff and you know my team goes
out and we we build three products and
again this is again talk about
conflating luck and skill I had all
these people all of our best guys
working on this product with me which we
called social odds and beacon and then
we had another thing doing sponsored
stories and then we had another team
focused on an online self-service ad
product most of the resources in mind
share none of the resources in my chair
eight people are best engineers product
managers two people fast forward to
today all of the revenue billions of
dollars scaling inordinately lawsuits
FTC suing us
you know people telling me on the New
York Times I lied about how cross-site
scripting we're gonna lie about
cross-site scripting to the New York
Times New York Times okay guys
I mean really like that's what I'm gonna
lie to you guys about so stupid hey it
just goes to show you at that point we
were seeing this like what look like
monotonically negative growth and we
were like oh my god what's happening it
was like 2530 million people so we came
up this idea okay we're gonna focus on
growth and we're wind created a team as
part of that we said we're gonna
internationalize we're gonna launch
we're just gonna go everywhere all over
the world and so we used again we dog
food or their own product and we used
Facebook platform to create this
crowdsourcing translation which was
really successful but long story short
we get to Japan Korea and it's the it's
a constant refrain you know I go around
the valley I talk to some folks who've
done this before the guys at Yahoo you
know the guys at Google the guys at eBay
just to get a sense of like how do you
think about it and all these people had
the same answer well we take these MBAs
who really want to live on an expat
package and we send them out there and
you're just like okay well that's not
the right answer so so you know first
thing we did was we hired only native
people in those native markets so I had
these guys you know try to go I have an
MBA from Harvard you know I really want
to spend time where I'm like get the
out of my office go to be a comm
buy a ticket get out of my face you're
not gonna travel on the company dime so
but you'd hire all these people natively
so we had this amazing guy that we hired
in Japan who raised his hand he said you
know it's really important to actually
have specific elements of the profile be
different because in Japan the cultural
dynamic is different and so we said well
what does that mean to you and he said
well maybe it means you know putting
your blood type on the profile and
you're like that makes no sense but it
makes no sense to us but it makes sense
to him and so you know we developed this
flexibility where we're like okay well
maybe the connections we're trying to
make in that market are a little too
elusive so this product that worked here
just didn't have any context here and so
you would say well Facebook has clear
product value but in Japan at the time
it didn't and so having the courage to
sort of like reset and redefine what it
means in any given market again takes a
lot of courage and we did it and now
it's massively scaling and then all of a
sudden the ah the lightbulb goes off and
you're like oh my gosh it's like we
don't know what we don't know in every
single
market people react differently they
behave differently they speak different
languages Spanish what Spanish is not
Spanish maybe didn't know that five
minutes I got it I'm on it
so the point is even when you think
something works it probably doesn't work
for everyone and finding a framework
that allows you to actually restructure
and reorganize the things that you're
doing to expose value in different ways
to different people in different
situations is an extremely important
thing again goes back to how do you live
in a world where you're willing to
redefine and reset the things that you
do independent of what the short-term
feedback loop is telling you it's a very
difficult proposition we knew we were
gonna beat myspace when he had like 45
million users
they had like 115 million we just knew
we used to just like that was not what
we celebrated we celebrated at a
forty-five million it was kind of like a
high-five we're like alright let's get
back to work and the reason was because
we started to do enough things right
where we could just see now we
understood what we were doing after all
the testing all the iterating all of
this stuff you know what the single
biggest thing we realized get any
individual to seven friends in ten days
that was it you want a Keystone that was
our P stone there's not much more
complexity than that there's an entire
team now hundreds of people that have
helped ramp this product to a billion
users based on that one simple rule so
if you were looking for a lot of
complexity I couldn't give it to you but
we were able to reframe the entire
experience around that one simple
premise a very simple elegant statement
of what it was to both capture core
product value to define what it meant to
be able to onboard into a product that
allows you to communicate to get into a
network defined density and then to
basically iterate around that and then
what we did at that company was we
talked about nothing else
every QA every All Hands nothing was
spoken about other than this
monetization didn't really come up
platform came up but again in a
secondary or tertiary context but it was
the single sole focus but because we had
defined it in this very elegant way that
expressed it
as a function of product value it was
something that everyone could
intrinsically wrap their arms around
again another reason why focusing on you
know abstracting growth down to these
low level things is not right so the
person that runs growth on any team has
to be strategic and capable enough to
engage on the core strategy of the
product because then you allow yourself
to up level the conversation and have it
become the most important framework in
which you organize an entire company how
equity is given how expenses are
generated how things are focused on who
gets hired who gets fired but when you
understand core product value and then
you can basically pivot around it and
create these loops that expose that over
and over and over again this becomes the
most important and obvious thing to do
and in the few companies that I help now
with this context when they do that and
when it's the CEO or when it's the
co-founder who are living in that world
and living in this context they've
consistently systematically every single
one has been successful every single one
of them I've also met a lot of people
who ask all these questions and you know
they're like hey you know I'd love to
really and I meet them and they're kind
of d-bags
and they're like you know way to quanta
and like way to like kind of like
passive-aggressive and a little agro and
it reminds me of something that's
actually again a lot more important than
the short-term ability for people to
focus on short-term results which is in
this battle between culture and
capability culture wins every time and
what you value is really what you
achieve and so when you see these
companies again today that had these
massive ape X's of like rocket ship
growth and now you know some are public
and now we're going through just
unbelievable retching gut-wrenching
change negative spiraling churn
downwards what you realize is that's not
a growth problem although it seems
numerically a growth problem what that
is is a product value and culture
problem
and when you're focused on again keh keh
keh keh keh keh keh well not KKK but you
getbut another reason why case sucks
right I mean use it three times you're a
racist like Jesus but the point is
that's the type of stuff that always
comes back and it gets you so it's a
short term optimization it never works
you have to work backwards from what is
the thing that people are here to do
what is the aha moment that they want
why can I not give that to them as fast
as possible measuring that in days is
unrealistic measuring it in hours is
unrealistic measuring it in minutes is
necessary but not sufficient but like
how do you get back to seconds how do
you get back to hundreds of milliseconds
that's how you win and if you can't even
understand what the thing does
optimizing all of this stuff over time I
think it just it just creates these
really bad crappy companies that all
they do is just spam and destroy the
internet for everybody else so to this
end this is really what I wanted to
leave you with which is you probably
expected a bunch of formulas and stuff
tough you have to really understand this
and go back to that first slide detached
egoless focused on what's important not
living the hype not trying to follow
some lifestyle but doing what you think
is important focusing on core value
ruthlessly prioritizing and getting
people who believe in these things these
are the values that we originally wrote
in terms of how we recruit again may
seem like a crazy thing but for all the
CEOs here all of you people should be
writing this down this is how you should
recruit it worked for us I give this to
every single company I invest in it
works for most of them and these are
things that in my mind are so obvious
blindingly glaringly obvious and people
make mistakes around these things all
the time a very high IQ self-explanatory
a strong sense of purpose are people
that will not buckle under short-term
pressure
a relentless focus on success just so
competitive that you will do whatever it
takes to win aggressive and competitive
people who always respect a person but
constantly challenge the idea a high
quality bar that borders on
perfectionism just nothing is ever good
you win something improves by ten basis
points now it needs to improve by 20
basis points now it needs to improve by
a percent that kind of living in that
world is just a really great dynamic
people who are comfortable taking
something that works and saying it
doesn't work here and let's just reset
and start again and it just takes a lot
of courage when that guy came to me in
Japan said hey I think we need to
introduce a blood type or our team in
Korea came with a bunch of different
ideas or our team in India came up with
this really clever way of engaging with
Facebook over all over a phone you have
to be willing to take yourself out of
your own biases and find people who are
willing to come up with things that
again are unconventional another reason
why you can't live in the bubble that is
the valley there are too many problems
and too many products that are focused
on solving the needs of the 1% of the 1%
that live here and the reality is there
are 7 billion people in the world most
have never even used the PC most are
coming straight into a world of phones
they're living in entirely different
contexts they have completely different
socio-economic paradigms and you have to
be able to be sensitive enough to
empathize with where they're coming from
high integrity I think speaks for itself
it's really easy to kind of you know
focus on short-term results and I just
don't think there's enough of the
long-term thinking being able to take
some arrows along the way in the short
term because you're trying to build
something for the long term and having a
culture and set of values where that's
rewarded perfect example of this is
LinkedIn Reid Hoffman's an extremely
good friend of mine that is an
unbelievable company built over 10 years
11 years of just working working working
Friendster comes out of nowhere we
didn't panic myspace comes out of
nowhere
we didn't panic
Facebook came out of nowhere you didn't
panic just built a great product and
just kept working and working did not
take the short easy way out and you have
to respect that because when those guys
win they win and they went in scale and
they win for a long time surround
yourself with good people seems obvious
but I see a lot of people who are just
like not comfortable recruiting people
that are better than them the best thing
that I did was recruit for people to my
team my original growth team was James
Wang who was an engineering lead on
Facebook platform
Naomi glite who's the most tenured
employee at Facebook and one of our best
product managers Alec Schultz who is
this unbelievable sort of crazy growth
guy and Xavier ol Yvonne who ran
international for me and Blake Ross who
is a product manager also phone and
Firefox all of these guys are
dramatically better than I was all I did
was enable a framework and create
discipline and they all thrived and the
great thing when I left was didn't miss
a beat and that's really really a good
sign and then the last thing is cares
about building real value over
perception I like long green tea as much
as the next guy it doesn't make anything
happen I like skinny jeans too more on
girls and guys but whatever it doesn't
mean anything
and right now we're living in a world
where you can get distracted by things
that don't matter and the superficiality
of how you thinks things should be done
versus the things that need to get done
and that takes a lot of courage so I
think my time is up thank you and I'm
happy to take
a few minutes for questions
and we're trying our new approach here
of reading questions so one of the first
ones we have is what was it about
Instagram that made it worse 1 billion
dollars to Facebook I'll give you my
opinion so again as a person that's not
involved but was there so again when you
talk about core product value at
Facebook one of the key things that it
got right or it understood was the
connectivity around you being able to
associate your friends in social
situations and the simplest
manifestation of that was in photos and
so when we launched our photo feature it
literally was just explosive growth and
so here it is we're in many ways it is
the atomic unit of how Facebook gets
organized as much as people are an
atomic unit it's almost even more
important in the sense that it's even
more element and so all that is great
and we're you know Facebook is
generating billions and billions of
photos a day and all of a sudden along
comes this company who does the
equivalent thing in a slightly different
paradigm a loser privacy model but all
on mobile and in a context where people
enjoy consuming the content as much as
they enjoy consuming the photos on
Facebook and so from my perspective it's
both defensive and offensive one from
the defensive perspective it locks in
that core tenet of behavior and product
value that is essential and the
elemental building block on which
everything else are on Facebook is built
on top and offensively it gets you into
a place where now you have this flank or
strategy where you have a your your main
sort of product you know getting more
and more usage and getting more more
entrenched and you know creating this
fertile ground all over the world on
phones and you have this unbelievable
product specific application that does
the same thing and now you both can go
and sort of thrive but it was a
combination in my opinion of the
offensive capability of what it gave
Facebook as a tool in its arsenal and
defensively protecting this core element
that if all of a sudden that behavior
seated someplace else and photo activity
started to be generated and stayed in
another environment I think it's very
problematic for Facebook or would have
been but I don't think it is in all
right we're actually anyone else were
new
question everyone's busy quoting your
Chum Appa so lots of good quotes today I
don't use the Twitter but all we have
time for one more someone wants to
waiting for an update here well it
actually no that's that's exactly right
so it started with invalidating lore so
we had all of these anecdotes about how
people thought the site work and part of
me is just a cynical part of me which is
like I just like proving people wrong
it's but you know think they know what
they're talking about and so for the
first six months it was like we're just
gonna instrument something and just
prove people wrong because the best
thing is what they do is they shut up
and then then they actually the next
time they speak they try to know what
they're talking about which generally
culturally is just a very good thing so
in that process we're like oh my gosh
there's these weird things that are
happening and you know you rinse and
repeat through all these cohorts and
you're like why does these why did these
people get into a certain space and are
now fully engaged and ramped up and have
these vibrant networks and these people
didn't and we just tried enough things
where we were able to back into that
axiom being that sort of you know the
definitive sort of thing that defined
how things work for us but for you it's
going to be different but it started I
mean if I have to give you a framework
it would probably be you got to start
with a broad cross-section of engaged
users and when you work backwards from
each of those and you are smart enough
and clever enough to really figure out
the different pathways in which they got
to that place you can probably tease out
what those simple things are and then
hopefully and I think most products are
structured this way you can then sort of
path people more and more of those
people into those same click flows that
allow them to get to that state but
again it starts with like looking at an
engaged user not just thinking about how
many emails can I send and how do I you
know trick everyone to like click on a
select all or not unselect to select on
I know offense like we did that too but
I mean we did had after we figured that
out yeah people take one last
question well look I'm the best thing
that happened was like I'm not American
I'm Canadian
but even I'm not even really Canadian
why I'm Katy but I was born in Sri Lanka
so I I like you know I I love America
and everything that is given to me but
I'm pretty cynical about like the
imperialistic nonsense of a lot of
Americans and how Americans treat you
know their place in the world to be
quite honest with you and so I was so my
mental sort of like worldview I think
like was one where that combined with
the feedback that I got from all these
big companies like well you know how
there's really great you know MBA JD guy
that you know and it's just like you're
just like well how is this yt gonna
figure out Korea like no offense
for like the Koreans gonna figure out
Korea before you know what I'm saying
like this guy's brought hey guys we're
coming here to take over and it's like
really that's crazy
that's just absolutely crazy so this is
like let's just hire some really smart
awesome young Korean lady and she's
kicking ass and then it's like let's do
the same thing in Japan let's do the
same thing in Brazil let's do the same
thing it's not complicated
like that's not you know that's not so
hard and then just listen to them and
let them try you know we had a culture
fortunately of experimenting and trying
a ton of stuff and we celebrated failure
more than we really celebrate success
you know we would six we would we would
celebrate these massive landmark
milestones a hundred million two hundred
fifty million five hundred million and
even a billion but a billion was like
this like kind of like ho-hum thing you
know the growth team had a dinner here
at Madeira the Selena we all kind of got
together the original team and kind of
had a polite celebration so we're more
interested in just trying stuff and
learning right and then hat and then
then it was just a matter of having
different people willing to try
different stuff in their own markets and
then us being able to give them a
framework where we said look 99% of the
thing can't change but you have this 1%
flexibility and if you need more justify
it and that was a good interplay but
it's kind of like just part of my
worldview of just like you know
America's great but it's like there's
like a lot of other great people in a
lot of great countries too well I mean I
think that but they're those frameworks
so the great thing is we had to build
all of our stuff ourselves right you're
gonna do that anymore you know like you
know for you guys like even something as
simple as like you know our ability to
like a B test was just a convoluted mess
for you it's like so straightforward you
know I mean you can't even do it
yourself just go use optimizing you know
or you know like now it's like there's
like 19,000 gajillion like Hadoop
companies and hive companies out there
there's nothin we were doing this time
so we did just like we were rolling our
own stuff constantly so like you know we
just had like a lot of delays that you
don't have to suffer from so that
abstraction allows you to free up
resources that you can allocate in
different places it but it just again it
comes back to the discipline of like is
the senior manager of a company fixated
on a goal and then giving flexibility to
someone who has the political capital
and the patience and the resolve to get
there and then the ability to question
and understand really what's happening
in a product and the other thing is you
know this is like a lot of this credit
goes to Jacques because he managed the
board and all of the people around so
that it's like we're doing this you know
I'm saying and sometimes it's like if
you and we had a very functional useful
board you know and a lot of times boards
can maybe distract CEOs as well focus on
this and focus on that and then they
come down they shop for them on top so
here we're gonna do this and then when
it gets filtered down to an individual
person what they hear is KKK okay okay
you know I think and I think that's
where that's where you you you you kind
of like lose your stripe alright thank
you guys thank you
you
[Applause]
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