I just finished watching The Social Network, which if you do not already know is about Mark Zukerberg, one of the co-founders of Facebook. It is really a flashback to his days at Harvard, set against the deposition testimony he and others were giving in the two lawsuits filed against him by (1)Eduardo Saverin, his best friend and original business partner, and (2) by Cameron and Tyler Winklevoss, preppy Harvard students who thought he had agreed to develop their proto-Facebook concept.
The story holds many lessons for today's entrepreneurs. Zukerberg's failings (he still ended up a billionaire) are emblematic of the challenges and mistakes many small business people make. Here is my take on the lessons.
1. Know your limitations and the value of trusted associates whose strengths are your weaknesses. Zukerberg is protrayed as a brilliant geek. In truth, he had low "interpersonal intelligence". This is revealed in the opening scene where his girlfriend, fed up, leaves him. Zukerberg cannot read people. As such he fails to recognize the value of his best friend Eduardo, a business major, and fails to see the true character of the flamboyant Sean Parker (the founder of Napster). He is easily manipulated by Parker (brilliantly portrayed by Justin Timberlake) and by the venture capitalists Sean brings to the table.
Someone once told me that the successful law firm has four partners, the finder, the minder, the grinder and the binder. The first three are obvious. The fourth keeps the other three from killing each other. The point is that a successful venture needs multiple skill sets that rarely are combined in one person. A successful entrepreneur needs to understand her own limitations, and the importance of bringing in those who have the missing skills.
2. Be careful what you promise, but carefully put into writing the agreements and understanding with your business partners. Zukerberg make statements to the Winklevosses that led them to believe he was working with them. He then ignored repeated emails from them asking how he was doing with their project. Had Zukerberg been someone different, he would have treated these fellow students with the directness, honesty and respect they deserved. Had he leveled with them, and had he offered them some small percentage of his project, or told them right away he was unable to help them, maybe he would have avoided the expensive settlement and legal fees that ensued.
3. Develop relationships early on with the right professionals, especially attorneys. Both Zukerberg and Eduardo failed to seek independent legal counsel when it could have helped them. Had they spent a small amount of time and money to meet with an attorney early on, they might have known more of what was coming. But like many people, they sought legal counsel only when things had gotten out of hand. In Zukerberg's case, his attorneys defending the litigation finally had to explain to him why he had to settle. By that point in the movie, that this was the right call was painfully obvious. The lesson: find a trusted and qualified legal adviser early on. An initial meeting with an attorney is usually the best value the legal profession has to offer. And developing that relationship early makes it easier and more natural to seek advice when it is needed. In matters of business, ignorance is not bliss. Zukerberg was brilliant as a programmer, but woefully lacking in the most important knowledge of all, awareness and appreciation of ones own failings and ignorance. Arrogance and inexperience in his case resulted in a lot of expensive mistakes.
One final note. In The Social Network, everything turned out all right because Facebook was so wildly successful that there was enough money to go around, and to pay settlements, leaving Zukerberg still a billionaire. But most start up businesses are not so wildly successful. The kinds of infighting and litigation Zukerberg faced would destroy most businesses. Failing to heed the lessons of The Social Network would for most of us be the real tragedy.
No comments:
Post a Comment