At 28 years of age, Mark Zuckerberg doesn’t quite fit the profile of the typical CEO.
His pedigree isn’t the norm for an average Fortune 500 company president, either, having never graduated from college despite putting three (storied) years in at Harvard. Indeed, the only real employment he has experienced as an adult is at the helm of his own company — a little outfit called Facebook (NASDAQ:FB), worth a mere $65 billion.
Oh yeah … Zuckerberg also is worth about $7 billion as a result of taking the company from nothing to the prototypical and prolific social networking site.
A disparity? You bet. And one that hasn’t shielded Zuckerberg from some harsh lessons — lessons that became particularly harsh after Facebook entered the unforgiving world of being publicly traded just a year ago.
To give credit where it’s due, however, the “before and after” snapshot of Zuckerberg’s feel for corporate leadership shows a fairly drastic change. He’s still not as polished as a one would expect the CEO of a Citigroup (NYSE:C) or a General Electric (NYSE:GE) to be, but he’s certainly come a long way from the 27-year-old kid who would show up late to meetings with investors, proudly wearing a hooded sweatshirt.
That Was Then
It’s easy to take cheap shots — and take things out of context — when the target isn’t around to defend or explain himself. Then again, when someone assumes the role as the chief of any major company, he or she also volunteers to be put under a spotlight, and must bear in mind that someone in the media is always watching … and writing. That’s what makes this ditty from Zuckerberg a tad unsettling:
“One of things that I do focus on at Facebook is making sure the culture is very friendly and that people hang out. So instead of having 20% of people’s time working on projects I make people hang out with each other.”
Great. But, unless there’s a clear fiscal benefit to “hanging out” (and there isn’t), the folks who’ve funded your company might feel a little differently about how you’re using your time and your employees’ time. The time to hang out is/was in the dorm rooms, or out on the patio on nights and weekends.
Granted, the above was something Zuck said way back in 2005, when we was a mere 20 years old and Facebook was truly in its infancy. Still, his 20-year-old demeanor as well as his 20-year-old apparel preferences hadn’t exactly progressed by the time his company finally went public seven years later.
Remember Facebook’s first earnings report as a publicly traded company? It was July 26, 2012. Revenue came in as expected, up 32% from the year-ago quarter’s top line. Non-GAAP income was up a little more than 3%. The number of monthly active users was approaching 1 billion, having grown every quarter for the past few years.
It was, by any layman’s standards as well as Zuckerberg’s, all the success any investor could hope for.
But the market is a fickle and finicky beast, and for a few days Mark Zuckerberg seemed, to put it mildly, a little shell-shocked that shareholders (and even non-shareholders) weren’t satisfied. He penned a letter to all Facebook users later that day:
“It seems like just yesterday that Facebook had its historic I.P.O. and, thanks to you, my net worth soared to a staggering $20 billion. What an awesome day that was for both of us. Today was a different kind of day. Facebook shares are plunging because the geniuses on Wall Street expect us to, and I quote, ‘make money.’ That’s why your Facebook friend Mark needs your help …”
Admittedly, it was true — Wall Street oddly enough wanted to know about the whole “money” thing. Worse, once the market sensed fear and saw he was unable to fight fire with fire, the crowd lit their torches and grabbed some pitchforks.
In retrospect, it might have been the young man’s first real experience with the harsh reality of being a publicly traded company, as the CEO or just an observer. For investors, quarterly results are never about that quarter’s results. The market thinks six months to two years down the road. Zuckerberg seems to have naively thought that quarter’s numbers would be enough to satiate traders.
It wasn’t a mistake he made twice, making sure to create — and convey — a revenue-centric plan of attack before the next quarter’s earnings announcement.
This Is Now
While most 28-year-olds would have crumbled under the media and market barbs following Q2 2012’s results, Zuckerberg quickly learned that being a CEO inherently requires expectation management as much as it does project management.
By mid-September, Facebook had unveiled a real-time ad-bidding platform. The company also made sure mobile was part of the new advertising program (and made it clear FB was backing away from HTML5). More than anything, though, the young CEO began to take a proactive role in unveiling those plans, dictating how the market should interpret the news rather than relying on the market’s fickle mood to come to the right conclusions.
It also was around this time (and not by accident) that Mark Zuckerberg started to act, talk and present himself with the polish that investors would expect from the leader of a major corporation, even if he never intended for the company to be a business. Around the same time that he took on a proactive role with the company’s PR effort, he stated:
“When people are writing nice stuff about us, it’s important to get in front of the company and say, ‘Don’t believe all this.’ When they write negative stuff, it’s important to get in front of the company and say, ‘Don’t believe all this.’”
Spoken like a veteran CEO that knows nothing is black-and-white, and that nothing is constant. Spoken quite poetically, too.
But a sellout to corporate America? Nope, not in the least. He still dresses casually, and with a nod to Steve Jobs, he now has no problem remaining confident in the quality of the product — even if the market doesn’t. But it doesn’t come across as smug or aloof.
That in and of itself is comforting to shareholders who need little more than “a reason to like the guy.”
Perhaps Business Insider’s Jay Yarow said it best:
“Unlike any other CEO in history, Mark Zuckerberg has truly grown up before our eyes. From a bratty kid running Facebook out of a Harvard dorm, to a guy getting flop sweats on stage in a tough interview, to a much more polished and confident man leading his company to a $104 billion IPO, we’ve watched him every step of the way.”
Yeah, it has been a long year for Zuckerberg in his role at the helm of a publicly traded company … a challenge made even more daunting by the fact that Facebook largely defines the concept of social media, and that he’s had more than his fair share of scrutiny. But Zuckerberg still is here, with one very important year under his belt.
No, he’s no Steve Jobs … at least not yet. But he has quickly become the right — and best — guy for his job.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.