“He was like a very nerdy movie star,” observed one friend who worked for the start-up and frequented the Palo Alto home Zuckerberg and his roommates had dubbed “Casa Facebook.” “Facebook was still small, by Silicon Valley standards, but a lot of people already saw him as the next big thing.”
The ideas that Zuckerberg would have been absorbing during his junior year at Harvard were replaced with the philosophies of entrepreneurs like Peter Thiel, the cofounder of PayPal, who had invested $500,000 in Thefacebook in August 2004, and Marc Andreessen, Netscape’s cofounder. As two of the most powerful men in Silicon Valley, they did more than just create and invest in new start-ups: they shaped the ethos of what it meant to be a tech ingénue. That ideology was rooted in a version of libertarianism that embraced innovation and free markets and scorned the overreach of government and regulations.7 At the core was a belief in individual autonomy, inspired by philosophers and writers like John Stuart Mill and Ayn Rand and their advocacy of rationalism and skepticism toward authority. The driving goals were progress and profits. The businesses emerging from Silicon Valley were redefining the old ways of doing things, the inefficient and bad habits that needed breaking. (In 2011, Thiel would endow a fellowship to pay college students to drop out to take on apprenticeships and start companies.8)
The education was informal. “I never saw Mark reading a book, or expressing any interest in books,” said a friend, who recalled many late-night video game marathons in which vague ideas around warfare and battles were used as allegories for business. “He was absorbing ideas that were floating around at the time, but he didn’t have a keen interest in the origin of those ideas. And he definitely didn’t have a broader interest in philosophy, political thought, or economics. If you asked, he would say he was too busy taking over the world to read.”
Zuckerberg had few contacts outside the world of tech enthusiasts and engineers. But during the holidays, his classmate Olivia Ma had convinced her father, a vice president at the Washington Post in charge of new ventures, to meet the precocious young coder whose website was sweeping college campuses across the country. Her father, impressed, set up a meeting at the paper’s DC headquarters.
Zuckerberg showed up at the paper’s offices wearing jeans and a sweater, accompanied by Sean Parker, the creator of Napster, who had become Facebook’s new president months earlier. Last to arrive to the small conference room where they had been escorted was Donald Graham, chairman of the Post and the third-generation leader of the family newspaper.
Graham was a fixture in the society pages of New York City and Washington, having grown up mingling with the families of John F. Kennedy and Lyndon B. Johnson and business tycoons like Warren Buffett. Under his leadership, the Post had won more than twenty Pulitzer Prizes and other journalism awards, building on the reputation it had earned for its groundbreaking Watergate coverage. But Graham could see the looming threat of digital media. Advertisers were excited about the explosion of growth in internet use, and sites like Google and Yahoo were scraping stories from CNN, the Post, and other media to draw audiences to their platforms and away from the news organizations’ own nascent websites.
Graham wanted to reach a new generation of readers. Unlike many of his counterparts in the music industry and Hollywood, he hadn’t taken a hostile stance toward the tech platforms; instead, he was seeking information and potential partnerships. He had already talked to Jeff Bezos about Amazon’s distribution of books, and now he was curious about this young techie on a leave of absence from his alma mater. “I was not somebody who understood technology deeply, but I wanted to learn,” Graham recalled.
The kid struck him as extremely awkward and shy. Zuckerberg didn’t seem to blink as he haltingly explained to Graham, almost forty years his senior, how Thefacebook worked. Students at Harvard created their own pages with basic information: their name, class, dormitory, college clubs, hometown, majors. One student could look up another and ask them to be a “friend.” Once connected, the two could comment on each other’s pages and post messages. “Who is going to Widener Library on Thursday night? Want to study for the Chem exam?” The site had a few ads from local Cambridge businesses, just enough to cover the bills for more tech equipment.9
“Well, there goes the Crimson,” Graham said, referring to Harvard’s student newspaper. “Every pizza parlor in Cambridge is going to stop advertising in the Crimson because of you.” With so many eyeballs gravitating to the social network and the relatively inexpensive cost of its ads, any travel, sports equipment, or computer company trying to reach college students would be foolish if they didn’t advertise on the site, he added.
Zuckerberg laughed. Yes, he said. But it wasn’t revenue he was really after, he explained—Graham would later note that Zuckerberg didn’t seem to know the difference between profit and revenue—it was people. He wanted more users. He told Graham he had to race to expand to every college in the nation before someone else did.
The platform was focused on pursuing scale and engagement. And unlike the Post, Zuckerberg had a long runway to build that audience without the pressure of making money. Graham was struck by the company’s potential reach. He saw it not as a threat to the traditional newspaper business, but as a technology that could be a good partner as the Post navigated its future online; he had witnessed the trouble that the music and entertainment businesses had run into during the shift to digital. Twenty minutes into the conversation, he told Zuckerberg that Thefacebook was one of the best ideas he had heard in years. Within days of the meeting, he offered $6 million for a 10 percent stake in the company.
Parker liked the idea of an investment from a media firm. He felt he had been burned by venture capital investors while running Napster, and he didn’t trust them. In contrast with Zuckerberg, Parker came across as a slick salesman; his preference for a media firm’s involvement seemed somewhat ironic, given his history as the cofounder of the peer-to-peer music sharing service that was the subject of multiple piracy lawsuits by record labels. Nevertheless, the three quickly hammered out the broad contours of a deal. There was no term sheet, just an oral agreement.
For the next several weeks, the lawyers at the Washington Post and Thefacebook went back and forth on an official contract. At one point, Thefacebook asked for more money and for Graham to sit on the board. In March, Zuckerberg called Graham. He had a “moral dilemma,” he confessed. He had received an offer from the venture capital firm Accel Partners that more than doubled what Graham had put on the table.
Accel offered deep coffers without any of the fussiness, or Old Guard values, of traditional financing. There was no interest in pushing young founders like Zuckerberg on issues like profitability or accountability. Start-ups were encouraged to operate on losses of millions of dollars a month, as long as they were attracting customers and innovating. The strategy was simple: be first to market, grow like crazy, and figure out the money later.