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Today, we’ll discuss Meta and stories that illustrate its greatness in just 4 minutes to read.

— Matthew

QUOTE OF THE DAY

“Go confidently in the direction of your dreams. Live the life you’ve imagined!”

— Henry David Thoreau

WHAT ELSE WE’RE INTO

📺 WATCH: How will China’s real estate crisis impact the world?

🎧 LISTEN: Charlie Munger’s only dedicated long-form podcast interview

📖 READ: Ben Graham and the investor who toughened his shell

META’S ROAD TO DOMINANCE

Photo by Brett Jordan on Unsplash

Facebook is winning again.

Last month, Meta Platforms reported its latest quarterly revenue since going public, with sales up to $34.1 billion — a 23% jump from a year ago. CEO Mark Zuckerberg’s “Year of Efficiency” and a turnaround in advertising have propelled Meta to new heights, with its share price up 150% this year after falling roughly 75% from its 2021 peak.

No matter what one thinks of “Zuck” or the harmful impacts of the site — which cannot be ignored — Facebook has more than 3 billion active monthly users. From its humble beginnings in a college dorm to today’s $800 billion market cap, it offers a few business lessons worth exploring, studying, and even emulating.

“In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks,” Zuckerberg has said.

A hole to fill

Before he was worth $100 billion, before he became one of the world’s most powerful people, and before he was embroiled in questions about his company’s side effects, Zuckerberg was a college student at Harvard when he launched the site in 2004.

The internet was around but still relatively untapped. Few people knew how big it would become over the next decade. He says his goal wasn’t to start a company; it was just about connecting people at a few colleges and harnessing the power of the web.

“That was a basic need,” he said, adding that on the internet, you could find music, news, and information, but “you couldn’t find and connect with the people that you cared about, which as people is actually the most important thing. So that seemed like a pretty big hole that needed to get filled.”

On Feb. 4, 2004, he and his roommates hunched over their computers, watching about 1,200-1,500 students join their site within 24 hours. It expanded to other Boston-area schools and the Ivy League that semester.

In its first year, it had grown to 1 million users. Peter Thiel invested $500,00, and Zuckerberg left Harvard — a fast rise, true to the company motto “Done is better than perfect.”

“Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works,” he said.

Staying focused

Facebook has evolved, adding Facebook Marketplace, Messenger, and many opportunities for small businesses to advertise. The interface has improved. The number of users has soared. But when you zoom out, the product is incredibly simple and easy to use — an online forum to connect with others.

That’s a priority for Zuckerberg, who is ruthless with his time and schedule.

“The question I ask myself like almost every day is, ‘Am I doing the most important thing I could be doing?’ … Unless I feel like I’m working on the most important problem that I can help with, then I’m not going to feel good about how I’m spending my time.”

The latest example: Early 2023, when Zuckerberg cut about 10,000 jobs behind the idea that “leaner is better.” Meta streamlined businesses and canceled low-priority and duplicative projects.

It can be easy to lose sight of the company’s core, which is the same concept it’s always been: social media apps, and connection.

Feedback and no fear

Advertising is Facebook’s breadwinner. Its roots trace to November 2007, when the site grew around 3% per week, and Facebook introduced social ads.

Former chief operating officer (COO) Sheryl Sandberg created the core of Facebook’s advertising business that made the company wildly profitable.

Sandberg once took a company field trip to a Marine base, where they learned how Marines debrief after every mission, calling out what went well and where they erred. At first, Sandberg thought publicly calling out mistakes was too harsh. But then she saw its value in mitigating future mistakes.

“When done insensitively, debriefs feel like public flagellation, but when expected and required, they no longer feel personal,” Sandberg once said. “When it’s safe to talk about mistakes, people are more likely to report errors and less likely to make them.”

At Facebook, Sandberg pushed her employees to iterate, try stuff, and make plenty of mistakes. Many employees don’t push the boundaries because they’re fearful of making a mistake and being punished.

But Sandberg incentivized creativity and mistakes by asking colleagues to share mistakes each week in a meeting. Then, they’d vote on who had the biggest screw-up. The winner got a stuffed animal by their desk for the week.

That’s how you incentivize risk-taking and pursuing ideas, even if they don’t work.

As Sandberg puts it: “What would you do if you weren’t afraid?”

Dive deeper

For more, here’s Zuckerberg’s in-depth conversation with Lex Fridman.