As Facebook's seventh employee and first advertising sales rep, Kevin Colleran had a front row seat watching Mark Zuckerberg take his dorm room startup from a half dozen employees to more than 3,000.
In it, Colleran talks about a bunch of lessons he learned from Zuckerberg and Facebook, which is now a $100 billion company and will IPO next month.
Here are some highlights from that interview for entrepreneurs looking for pointers:
Put the product visionary in charge, not the business leader. Colleran: "I went into Facebook having been a Babson educated entrepreneur who thought that the entrepreneur is the business owner and you come up with a business plan and you go and build the product.I think having worked for Mark and looking at other examples from the Valley, I’ve realized that it takes the product visionary to be the leader. It’s not the entrepreneur who has the business background to just plan an idea. If I had been in Mark’s shoes throughout the Facebook experience I would have made a lot of by-the-book decisions that would have been the wrong decisions for the company."
Don't get comfortable in a niche market if a bigger one is there for the taking. Colleran: "[Back in 2006] a lot of people felt like we shouldn't expand past college. We owned the [college] market, a hugely valuable market. We could have just stopped there and said this is what we set out to do: To be the biggest US college web site and we’ve got this audience now and that it’s 97 percent penetrated. Now let’s go and figure out how to monetize that market or give them what they want. Mark was very clear that this was not about college, and [he] expanded Facebook to high school. Then he expanded Facebook to adults."
Sometimes, the customers are wrong. Loud wrong. Colleran: "When we launched the News Feed [in 2006] it was midnight in Pacific Time. People had gone to bed with the old Facebook and woke up with the new Facebook. We were all under the impression that it was a great product. But users freaked out. It was the first time that users realized this thing was going to keep changing and Mark was going to keep pushing the envelope. Now, you can’t imagine Facebook without a News Feed. It’s an industry standard thing. But for a while, there were protests and a million people joining the “I hate News Feed” group and every news crew outside of our offices. If you were a public company or not a product visionary you probably would have rolled back that feature when a third of your user base start protesting. [Editor: Zuckerberg did not.]"
Don't sell crap just because people will buy it. Colleran: " [Zuckerberg doesn't] want to splash big disruptive ads on the site. In the older days, that was the only choice you really had if you wanted to monetize the web site. You had to play by the rules of the ad industry. You could sell an [Interactive Advertising Bureau-approved] ad unit and or an even bigger IAB ad unit. That’s what ad agencies would buy. You’d be one site of 20 that were on a plan that you’d get the same creative and targeting requirement that everyone else had. Luckily, Facebook went into a different direction and its continued growth allowed it to rewrite the rules."
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