Tuesday, September 21, 2010

The Facebook Book Reviews

Seeing how that weird movie about a website is coming out, I went and bought some books a little while ago.  Now that I've read both books, it seems ironic that I probably won't be able to see the movie (at least, not on the big screen).  After all, if China blocks Facebook, why would they want to allow people to see a movie about it, right?

Reading the two books was interesting, but they're of course very different from each other.  Ironically, the differences aren't so much in the versions of truth.  There are some incidental differences in what is presented as historical fact, but nothing that one could consider significant contradictions (eg. who attended a specific dinner at a restaurant, who had to appear before the academic board, who pitched Wirehog to Sequoia, etc).  It doesn't help that Mezrich, the author of The Accidental Billionaires, states that he deliberately recreated scenes and dialogue as he saw fit to tell the story better; you're not sure what to believe, but it's spicier reading, which is why it's now a movie.

The big differences between the two books are really in timeline and conflict.  The Accidental Billionaires focuses on the story before Facebook started generating major revenues, and The Facebook Effect focuses on the transition into a major revenue generating and game-changing company.  So there's a slight overlap in time, but really, the latter really could just pass as a less exciting and more academic sequel for the former.  The second big difference, conflict, is something that The Accidental Billionaires really embraces and explores, while The Facebook Effect really shies away from it and does a lot to ensure Zuckerberg, his cohorts, and Facebook don't fall in a bad light.  Sometimes, it tries too hard, vaunting Facebook's lack of tolerance for hate speech, but conveniently forgetting Facebook's tolerance for antisemitism.  This is probably to be expected, given that Mezrich was declined interviews with Zuckerberg multiple times, while Kirkpatrick wrote his book with the full blessing of the Zuckerberg empire.  However, that does nothing to help us to discern what the truth of all the Zuckerberg-Saverin conflict was (Eduardo Saverin was the co-founder who fell out of favour and ended up engaging in legal action).  You can't get both sides of the story because The Facebook Effect doesn't even bother writing about a side, save a few token words to acknowledge that something happened.

We'll probably never know the full truth of the matter, as it's often difficult to discern what's truth and what's not in any he-said she-said argument.  But the fact is, there was a lawsuit and statements were made.  Those things don't happen for no reason.  My take on the whole matter of Zuckerberg vs. Saverin?  Given it's lack of content on the matter, The Facebook Effect does nothing to help me draw any conclusions.  So given that The Accidental Billionaires was written with a lot of input from Eduardo Saverin, you'd think I'd come out with a good opinion on Saverin, right?  Man, so wrong.  Reading The Accidental Billionaires has only reminded me that if you want to be part of something, you need to bring value to the table.  Saverin provided the original funding for the company and tried to drum up ad sales, but he did nothing to develop the product or enable Facebook to become the revolutionary product it has; he couldn't see it being anything more than a website that showed banner ads for revenue.  He overrated the value he brought to the company.  Full stop.  That value disappeared as soon as Peter Thiel was brought on board.  Heck, it probably disappeared when Sean Parker was brought on board.  He should be happy to sit on his laurels with the equity he still has and enjoy the money when the company experiences its IPO.  According to The Facebook Effect, Saverin had 5% of the company's stock at the time of the book's publishing.  Let's say that dilutes all the way down to 1% due to stock options granted to new employees, etc.  1% seems a bit extreme, but hey, possible.  If the company really is going to hit $2 billion in revenue this year, a conservative 10x multiple would give it a $20 billion valuation.  1% of that is $200 million.  Dude, not bad for originally investing 5 figures.  Heck, it could be even better.  Most of us can only dream of being backstabbed that badly.

OK, this post was originally going to be about technological disruption, innovator dilemmas, and business longevity.  Facebook is doing some amazing stuff to the Internet, and is posing a very interesting threat to the king of the Internet, Google.  The post was originally titled "Why Corporations Die".  But then I got really tired because of how late it was.  So I've renamed the post to be "The Facebook Book Reviews".  Even though it's hard to call this stuff I wrote a real review.  I'll write my actual intended post another day.  :)

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