December 12, 2017
Foundation Capital
Each quarter, Foundation Capital’s Marketing Collective brings together the marketing leads of our portfolio companies to hang out, and talk tactics and strategy with special guests like Mike Hoefflinger. Mike is my former colleague and an engineer-turned-marketer who led business marketing at Facebook for nearly seven years. During that time, Facebook’s user base grew by a factor of ten, revenue grew by a factor of a hundred, and the company became Facebook, and Facebook Messenger, and Instagram, and WhatsApp, and Oculus VR, and much more.
In Mike’s eyes, that success didn’t happen by accident. As he shares in his new award-winning book, Becoming Facebook, Mike learned tangible, repeatable lessons that anyone trying to build a product or a company could benefit from hearing. In our wide-ranging discussion about the book, during our most recent Marketing Collective, we focused on which such lessons were most helpful for enterprise marketers. The following four stood out.
1) Think Simple – Then Go Simpler
Sometimes we have to remind ourselves that back in 2009, Facebook wasn’t really in the advertising business. In fact, many advertisers still weren’t clear what value Facebook offered from a marketer’s perspective. Facebook had been building sophisticated products that promoted social connectivity, but many would-be advertisers found those features hard to understand and predict, and therefore hard to budget for and justify buying.
Even when Facebook was about to IPO in 2012, they knew they weren’t on the right path and wondered which direction to take. Should they improve features they had already created? Or should they do something else entirely?
They could have focused on simplifying existing, but complicated, features like sponsored stories – which amplifies the audience of one of your posts, by sharing it with the networks of people who liked your post. Instead, they chose to lean harder into Facebook’s superior ability to deliver the right ads to the right people, right in their newsfeeds. This radically simplified their advertising.
Suddenly any advertiser, whether you were a Fortune 500 company or the local dentist, could leverage Facebook’s highly targeted platform by writing one message and making a couple of clicks. It made for an advertising product that was simple, powerful, and, above all, profitable. Just three years later, it’s a ten billion dollar business and one of the world’s most successful mobile products.
Entrepreneurs will always have a tendency to build sophisticated products that show off the potential of their ideas. Mike’s lesson: that doesn’t mean you should build them. It’s one thing to think to yourself, “But I could build something much more robust!” It’s far worse to keep saying to investors, “Our potential customers just don’t understand the product yet.” (In which case, of course, it’s not them – it’s you.)
2) “Doing” Is Better Than “Dogma”
It’s one thing to make assumptions about how things will play out, based on what’s worked in the past. It’s another to deliberate – or worse, pontificate – about how things should be done because it’s the way they’ve “always” been done. But nothing beats kicking the tires yourself – actions over words, doing over dogma.
Mike and I recalled the time when Facebook doubled down on reinvigorating its ad model in advance of the IPO. Up until then, the product had been undervalued by the company. Mark Zuckerberg changed that when he got involved in the product himself. And that meant using it for himself, by creating a page for his dog, Beast.
Today, Beast is a celebrity. CBS profiled him. Vanity Fair marked his birthday. The Daily Mail did reported on his Star Wars costume (Beast dressed as a Sith). And to some small degree, Beast owes his celebrity to the early Facebook ads Mark created for Beast, just to understand how the product worked – and how to make it better..
I’ve seen a similar story play out a number of times through our work at Foundation Capital. Frankly, I’ve been amazed by how much faster progress happens when small teams realize that they’ve talked enough—when deliberation and distraction give way to the “go” of action.
That applies to everyone, including CEOs. I’ve made the case before that companies ought to mystery shop their own products. The lesson is that, if you simply assume something important is working, put down what you’re doing and test it out – or ask a trusted friend to do the same. It’s an efficient way to find – and then fix – your customers’ pain points.
3) Failure Isn’t
Mike believes one of the defining strengths of Facebook has been their willingness to make big bets and then recognize when to move on.
Facebook Home is one of the more prominent examples. It was Facebook’s attempt to enhance the mobile experience by replacing a user’s home-screen with a Facebook interface. It launched to great fanfare in 2013, including a conference with CEOs from multiple leading telecommunications companies. But it didn’t catch on. By the end of the year, Facebook shifted gears, and Facebook Home is no more.
Of course, at the same time, another big bet was paying off – the acquisition Facebook made the previous year of Instagram. At $1 billion, it was a much bigger bet than the most every entrepreneur will make. As Mike puts it, you have to separate the “stupid from the interesting.” Before you can separate those two things, you have to make more than one bet.
All it takes is one right bet, one magic moment with a user. That’s why we forget flops like Facebook Home, Google Glass, and the Amazon Fire Phone. It’s also why we’re more than familiar with Newsfeed advertisements, YouTube, and Amazon Prime.
4) Don’t Worship, Work
In most contexts, people in the valley recognize titans of tech by their first names alone – Mark, Larry, Sergey, Steve. It’s easy for the majority of us who don’t run hundred billion dollar businesses to think, “That will never be me. These guys are immortals.” But Mike doesn’t believe that’s so true.
Mark Zuckerberg gets plenty of credit for vision. But what he doesn’t often get credit for is dedication – his day-to-day commitment to leading his team toward a larger goal. It’s the reason he not only works long hours like everyone else, but also works them from the same shared desk setup as everyone else, instead of having his own office.
The first-name folks aren’t there just because they had a great idea – those are a dime a dozen. Instead, they do the day-after-day work required to reach their larger vision. So instead of seeing first-namers as gods, see them for what they really are: work horses. Sure, they had some luck along the way, but that doesn’t discount the countless, tireless hours they put in when others would have called it a day.