Today Facebook will launch it’s IPO valuing the 8 year old company at over $100bn – that’s more than the likes of Disney and Ford, or the same size as McDonalds.
Is it worth it?
Well Facebook made $1bn profit last year so it’s valuing itself at 100x earnings.
Google valued itself at 67x earnings when it launched in 2004.
Apple valued itself at 90x earnings when it launched in 1980.
In the USA – the S&P’s historical average is 16X.
Legendary investor, The Sage of Omaha, Warren Buffet says he wont be buying any shares. General Motors said on Tuesday that they would no longer be advertising on Facebook and would spend their $100m elsewhere.
Yet Facebook does have 850m users (12% of the world’s population) plus a great deal of information about them – so there is vast potential.
Behind all this is a brand built on a simple ethos. That ethos is based around a single word
HACK
To understand this we need to go back to the start – Facebook was started by a handful of dedicated coders with a work-all-night fuelled by caffeine mentality. Continuing to live and breathe this single ethos/value is the real challenge as the company grows. Hack is about the approach to continuous improvement – not just talking about it, but doing it and doing it quickly.
Those of you familiar with Purple Circle’s approach to brand building will know that we are always banging on about living the values and translating them into behaviours.
Here are some highlights from Facebook’s approach
- – teams of engineers still stay up all night to mock up new features
- – every few months the Hackerthon takes place – a spring board for new ideas
- – successful parts of the Facebook site are unceremoniously scrapped if there’s something better
- – new ideas can, and do, come from any one of the 3,200 employees
- – forced changing of certain project teams to keep a fresh perspective
- – every year/18 months engineers have to leave their teams and work on something different for a minimum of 1 month. More than 1/3rd end up staying on the new project
- – the main road on the Facebook campus is called Hacker Way
- – the word Hack appears around the offices in different creative ways
- – other big visible statements include ‘Done is better than perfect’ and ‘Move fast and break things’
- – a 6 week session for engineering recruits where the big cheeses preach the Hacker ethos
- – new starters are all mentored so it doesn’t all fall flat after the initial session
- – these new engineers receive a series of emails on day 1, one of which asks them to fix a bug on the site and get it live. So straight away they know that they have the power to push changes onto the site – a big deal when 850m people are watching!
- – development teams are kept very small
- – founder Mark Zuckerberg gets involved in day-to-day detail with different engineering teams
- – Zuckerberg has the final say on new features. According to Andrew Bosworth, one of Facebook’s early employees, “the reason Mark has the final say is because he is fucking brilliant”
So what are your brand values and do you live and breathe them?
Do it properly and you can create lasting value.
