Ten-Year Billionaire: Mark Zuckerberg

My 2011 challenge is to become a vegetarian and only eat meat if I kill the animal myself. The reason for this is that I feel lucky for having such a great life. In order to practice thankfulness, I want to be more connected to the food I eat and the animals that give their lives so I can eat them. Mark Zuckerberg, January 1, 2011

There are certain business leaders who make impact on their companies and often on the world of business because of their philosophies, action, and businesses they lead. Among the more recent top performers is Facebook founder, Mark Zuckerberg, who took an idea and transformed it into a billion-dollar empire in less than 10 years. To gain some new insights into how Zuckerberg leveraged his modest concept into the world’s most popular social media network, this paper provides a review of the relevant literature concerning his businesses, how he got started and three major business challenges he managed to overcome in establishing Facebook. An analysis of Zuckerberg’s leadership style and discussion concerning how he has adapted to cultural differences and how he operates the business effectively in global markets is followed by an evaluation of Zuckerberg’s theory of business leadership, management, and methods for motivating individual and group behavior. Finally, a discussion concerning how this business leader has made an impact on the world through his vision, business, and through other areas is followed by a summary of the research and important findings in the conclusion.

Mark Zuckerberg’s Beginnings and Challenges

According to one of his growing number of biographers, “Mark Zuckerberg, the founder of Facebook, was born in 1984. He is the son of a dentist and has three sisters” (p. In reality, Zuckerberg’s rise to fame and fortune was not a rags-to-riches story. After all, the young man had a lot going for him even before he created Facebook, with a degree of computer science from Harvard University and the ability to speak Mandarin Chinese, but Zuckerberg identified a need and developed a timely response to it where others failed. More importantly, he quickly learned how to make money — lots of it — with his innovative social media network. For example, the editors of New Statesmen recently named Zuckerberg as one of the “50 people who matter today,” and observed that, “In 2008 Mark Zuckerberg, founder of Facebook, was named the world’s youngest billionaire, with a net worth of $4 billion from his 24% share of the company — not bad for a 26-year-old. Zuckerberg created the website with his Harvard room-mates in 2004 and it now has 500 million active users” (The 50 people who matter today, 2010, p. 33). This designation is congruent with Zuckerberg’s current status as the richest entrepreneur today as shown in Table 2 below.

Table 2

Mark Zuckerberg’s Ranking in Top Ten Richest Entrepreneurs

Rank

Web site

Age

Net Worth

1

Mark Zuckerberg

Facebook

28

$13.5 Billion

2

Andrew Gower

Runescape

30

$650 Million

3

Chad Hurley

Youtube

30

$300 Million

4

Blake Ross and David Hyatt

Mozilla

22

$120 Million

5

Andrew Michael

Fast Hosts

29

$110 Million

6

Angelo Sotira

Deviant ART

26

$75 Million

7

John Vechey

PopCap Games

28

$60 Million

8

Alexander Levin

Image Shack

23

$56 Million

9

Jake Nickell

Threadless

28

$50 Million

10

Greg Tseng and Johann Schleier-Smith

Tagged

28

$45 Million

Source: http:/ / www.retireat21.com/top-young-entrepreneurs

Since its founding in 2004, Facebook has experienced meteoric growth, but its beginnings were fairly rocky and one of the first business challenges faced by Zuckerberg was the need to expand membership beyond the original Harvard-student only format. For example, Edosomwan, Prakasan, Kouame, Watson and Seymour (2011) report that, “Facebook was founded by Mark Zuckerberg and others when he was a student at Harvard; though when the site was initially launched, it was restricted to Harvard students only” (p. 80). The next challenge faced by Zuckerberg was to move the Facebook platform off of the Harvard resources and into the private sector, which took place in 2006 (Edosomwan et al., 2011). In this regard, Edosomwan and his colleagues confirm that, “Later the [Facebook membership] privilege was extended to high school students and later to everyone that is 13 years or older” (p. 80). Although Zuckerberg likely did not expect that 500,000,000 people 13 years and older would flock to his creation by early 2012 at the time, he has already managed to persuade more than 6.25% of the world’s population to join together on Facebook and millions more are joining each month (Edosomwan et al., 2011). These trends are reflected in Table 1 and depicted graphically in Figure 1 below.

Table 1

Number of Facebook Members: July 1, 2006 to Date (Approximate)

Number of Facebook Users (in millions)

July 1, 2006

14

September 1, 2006

16

November 1, 2006

17

January 1, 2007

19

September 1, 2007

40

September 1, 2008

November 1, 2008

Current

Source:

Figure 1. Active Membership Levels in Facebook: July 1, 2006 to Date

Source: Smith, 2008 and Edosomwan et al., 2011

Another significant challenge faced by Zuckerberg in developing the Facebook image and attracting new members was assuring consumers of their privacy while ensuring that people were who they really said they were when they enrolled for membership while still managing to make money off of this information — and this slope has been particularly slippery. In this regard, Conner (2009) reports that, “Founded in 2006 by former Harvard student Mark Zuckerberg, Facebook became a free, image-based utility that relied upon users’ thumbnail portraits to secure online social connections. It also embraced multi-media, similar to MySpace, but set itself apart in an attempt to achieve a sense of authenticity within a highly pirated, dishonest, and potentially ominous online environment” (p. 12). Despite these challenges — and several others that have followed, Facebook has managed to keep its image basically intact and remains the most popular social media network today. In this regard, the editors of New Statesmen recently conclude that, “Despite concerns over privacy, the site has some of the world’s heaviest traffic and is widely regarded as an essential tool for business, media and politics (The 50 people who matter today, 2010, p. 33).

Mark Zuckerberg’s Leadership Style and Adaptation to Cross-Cultural Differences

Close associates suggest that Zuckerberg is a visionary leader who models the way for others. Besides taking his business model to the entire Western world it seems, the platform is highly attractive to consumers in other countries where the ability to forge communities of interest and share information with others is a universally recognized resource. In this regard, Edosomwan and his colleagues report that, “Facebook also became the top social network across eight individual markets in Asia – the Philippines, Australia, Indonesia, Malaysia, Singapore, New Zealand, Hong Kong and Vietnam” (2011, p. 80). In fact, by modeling the way for other social media networks, Zuckerberg has created an entirely new business model that apparently transcends geopolitical borders. For example, Edosomwan et. al. emphasize that, “Microsoft’s purchase included rights to place international ads on Facebook; other companies have equally followed suit. For example, just during the 2010 FIFA football world cup, Nike did an ad with Facebook, and within minutes, an average of 8 million viewers had registered with Facebook” (2011, p. 80). Indeed, all Facebook members are offered their choice of languages for use on their pages and for communicating with their circles of friends and associates on the site, and they can customize their pages in other ways that take into account the cultural differences that exist in the various markets in which it competes for membership and additional advertising revenues.

Mark Zuckerberg’s Theory of Business Leadership, Management, and Methods for Motivating Individual and Group Behavior

It would be tempting to simply pigeonhole Zuckerberg’s leadership style as charismatic, because he does in fact have a loyal-to-a-fault leadership team and legions of employees who nearly idolize the man given his accomplishments to date. In reality, though, there is nothing particularly “charismatic” about Zuckerberg despites his boyish good looks. According to one biographer, “Interestingly enough, as ‘open’ as Mark Zuckerberg is, he rarely talks to the press and resists public appearances. The New Yorker describes Zuckerberg’s personality as ‘distant and disorienting, a strange mixture of shy and cocky.’ In that same interview with The New Yorker, Mark Zuckerberg describes himself as, ‘awkward'” (Vogel, 2011, para. 3).

This lack of people skills might suggest that Zuckerberg is more of a situational or transformational leader, but Facebook’s CEO has been known to turn his attention to more interesting things during a face-to-face conversation with his underlings, suggesting that even this characterization is off base (Vogel, 2011). Although it is true that, “Transformational leaders motivate others to do more than they originally intended and often even more than they thought possible. Such leaders set more challenging expectations and typically achieve higher performances” (Avolio & Bass, 2002, p. 1), it is also true that many transformational leaders possess at least some charisma to help them sell their message throughout an organization, but this quality is not necessarily at work with Zuckerberg.

In fact, what appears to have motivated Facebook’s leadership team and employees is the fact that what they are doing is having a global impact and generating enormous revenues in the process. Moreover, it would be unfair to categorize Zuckerberg as this type of leader or that, because he has not had that much opportunity to develop a mature leadership style of his own that can be cited as a relative constant. At present, then, Zuckerberg appears to be a situational leader who combines transactional and transformational leadership techniques and who relies on his own business savvy and intuition for the big decisions, while delegating the nuts-and-bolts operations wherever possible.

How Mark Zuckerberg has made an Impact on the World through His Vision, Business, and through other Areas

First and foremost, Facebook is changing the way people interact and socialize around the world. With more than half a billion members as of July 2010, Facebook ranks as the largest social media network in the world (Edosomwan et al., 2011). In fact, by May 2010, research by analysts at Google determined that Facebook was the most visited Web site in the world (Edosomwan et al., 2011). By any measure, the fact that more than half a billion people from around the world are congregating in one spot on almost a daily basis has profound implications for the future, and more and more businesses are finding ways to make money, establish supply chain networks and forums, and facilitate their recruiting functions using Facebook (Edosomwan et al., 2011). In this regard, Edosomwan et al. add that, “Social media such as Facebook have become major sources of hiring. Social media has also become one of the easiest ways to improve productivity and to generate a natural interest in the work carried out by the employees. Using these media, companies can track employee’s creativity and enthusiasm” (2011, p. 80). In terms of the actual value involved in the enterprise, Edosomwan and his associates add that, “On October 24, 2007, Microsoft announced that it had purchased a 1 .6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion” (2011, p. 80). Likewise, Facebook is increasingly being used for marketing applications and has been determined to be among the most cost-effective approaches to “getting the word” out by companies of all sizes and types. In sum, “Social media is not only a place to market the products and services of a company, but also a place to interact with the customers to try and solve their problems. Yes, social media is now a major player in most people’s business lives (Edosomwan et al., 2011, p. 80).

Finally, with respect to Facebook CEO’s personal philanthropic activities, among other corporate citizenship activities promoted by the company, Turnamian (2011) reports that Zuckerberg personally sponsored a struggling school district in Newark, New Jersey which was the focus of a million-dollar community outreach initiative that was entirely funded by his donation.

Conclusion

Organizational behavior theorists will probably be writing about Mark Zuckerberg as an example of the new type of successful leader that emerged during the early 21st century. By joining the leagues of industry giants such as Steve Jobs, Steve Wozniak and of course, Bill Gates, Mark Zuckerberg has translated his vision for the future into big bucks today. It is reasonable to suggest that given Facebook’s current membership growth rates, there may be more Facebook members in the near future than there are non-members. The implications of these emerging social media networks are just beginning to manifest, but it is also reasonable to conclude that Mark Zuckerberg will be credited with much of the benefits — as well as the drawbacks — that are created in the process.

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Facebook Now Growing by Over 600,000 Users a Day — And New Engagement Stats

Justin Smith•Dec 16th, 2008 http://www.insidefacebook.com/2008/12/16/facebook-now-growing-by-over-600000-users-a-day-and-new-engagement-stats/

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