Dan Rose Profile picture
3 Oct, 13 tweets, 3 min read
In 2008 Facebook’s user growth hit a wall at 80M and we were having serious debates about whether any social network could ever reach 100M users. 2 years later we had doubled our user base and not long after that we reached 1B users. Here’s how we did it:
I joined FB in summer ‘06 when we had 7M users and were adding 5k/day. Over the next 18 months, Zuck shipped News Feed, Open Registration, Platform and community-led translation. By end of ‘07 we had 70M users and it seemed like we couldn’t be stopped.
Towards end of ‘07 I helped raise our Series C at $15B valuation. We had <400 employees and only $250M revenue, but we had explosive user growth and powerful network effects. Our entire valuation was based on how fast people were signing up for FB all over the world.
Then in early ‘08, user growth suddenly stalled and we couldn’t figure out why. When you’re building a company, growth is like water - you need it to stay alive. Suddenly we were facing a major existential crisis and we had no idea how to dig out of it.
We thought everyone on the planet would want to connect w family and friends, but now some inside the company speculated there was a natural limit to how big a social network could grow - MySpace/Skype/others hit ceilings at 100M. Some team members pushed Zuck to sell the company
In the middle of this crisis, Zuck went on a 6-week “walk-about” in Asia. He hadn’t taken a break since starting FB 4 years earlier and working 100 hrs/wk, exhausted and needed to clear his head. Sheryl had recently joined and he trusted her to keep things together in his absence
When Zuck returned we held a tense management team offsite to debate our path forward. Some people announced their resignations at the end of the meeting. The core strategy debate boiled down to whether we should focus on growth marketing or core product development.
Rather than choosing between growth vs product, Zuck decided to do both and deprioritize everything else including revenue. I was responsible for monetization and I fully agreed with this decision, we needed a much larger user base to unlock our full full potential as a business.
It took time to reorganize the company around these priorities and our new leadership team. And right in the middle of executing this strategy, we ran into the ‘08 financial crisis and advertising revenue dried up. We barely grew users or revenue in 2008.
At the end of the year, Zuck announced his New Years resolution to wear a tie to work every day for 12 months, symbolizing ‘09 would be a serious year for the company. I thought he would last a month, but he never missed a single day all year. And the company executed like hell.
Growth marketing focused on tons of small improvements and viral loops that compounded over time to bring more people on the service, which also made the product better for existing users who were now able to connect with more friends and family (=definition of network effect).
The core product team focused on new features + load time, informed by a combination of intuition and data. We shipped fast and frequently, and the product steadily improved. Real-time Feed, Messenger, Timeline, Games Platform, etc.
By mid-2009, user growth was back on track and revenue growth was also re-accelerating. We ended that year with more than 150M users and $750M revenue. We had a stable leadership team that stayed largely in tact for 10 years (many are still there). And we didn’t look back.

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More from @drose_999

17 Oct
In 2004 I had an offer to join the new Kindle team at Amzn and I jumped at the oppty. I was on our retail team at the time -> Kindle was new/sexy. But a week before I was scheduled to start my new job, I was told to stay put and I learned an important lesson. Here’s the story:
2 years earlier I had been given P&L responsibility for Amzn’s cell phone store. We sold phones + plans (like Car Warehouse and Best Buy). This was Amzn’s highest margin biz, but it was tiny and not growing and I was told it could get shut down. I had 6 mos to turn it around.
The industry model at that time was give phones for free w/ service plan attach. I reinvested the service plan margin to make phones less than free, and rev growth exploded. GM % plummeted, but profit $ went way up. My little biz was our fastest growing segment at Amzn!
Read 10 tweets
19 Sep
May 18, 2012 - there was a crisp blue sky at FB’s campus as we rang the opening bell. Emotions ran high as we took a brief moment to celebrate our hard work. The stock traded up for the first few hours. Then it traded down for the next 12 months...
Facebook’s IPO coincided with a paradigm shift in technology. The majority of our usage and revenue transitioned from desktop to mobile practically overnight. Facebook’s journey to a mobile-first company started with a strategic error and ended with a pivot. Here’s the story:
Mobile initially presented us with a number of challenges, and our instinct was to innovate our way around them. The heart of our strategy was HTML5, which turned out to be a flawed approach. We spent 2 years sprinting down the wrong path before reversing course. Why?
Read 16 tweets
12 Sep
Amazon launched in July 1995, and every Xmas was a near death experience for the first 7 years. I joined in ‘99 and got to experience this first hand. Starting in late Nov, all corporate employees were shipped to fulfillment centers to pack boxes for 6 weeks. Here’s what I saw:
Despite efforts to plan ahead, the company literally couldn’t keep up with holiday demand. 40% of all annual orders would come through in 6 weeks from Thxgiving through New Years. Ops teams would start planning in Jan, but by Sept they were always massively behind.
As “earth’s most customer centric company,” failing to deliver presents for Xmas would have been like Santa missing his deadline. But when demand exceeds even your most aggressive forecasts, it’s a physical world problem that requires physical world solutions - ie human bodies.
Read 11 tweets
4 Sep
I dropped out of b-school to join Amazon July ‘99. By Dec Amzn’s stock had doubled, Jeff was Time Man of the Year. Then March ‘00 internet bubble popped -> my stock options were underwater and Amzn faced bankruptcy. Yet dropping out was the best decision I ever made. Here’s why:
I needed a pattern interrupt. My life had been conformist up to that point - straight A’s, awards, Harvard, b-school. But business is messy, life is messy. I knew deep down I needed to mess stuff up, get outside the box. I’ve tried to maintain that mentality ever since then.
Shortly after I started my internship at Amzn, I asked CFO Joy Covey if she thought I should drop out of b-school to stay on full time. She said I would learn more on the job than in school (she had dropped out of high school). She was right, you can’t learn biz in a classroom.
Read 8 tweets
21 Aug
In 2002 I was working in Amazon’s retail division. We were organized by department - books, CDs, electronics, etc - and a separate dept for products sold by 3rd parties. Then Bezos decided 3rd party should appear next to 1st party on the same product page. Here’s what happened:
Amzn launched 3rd party biz right after I joined summer 1999. Started w auctions, competing directly w eBay. Added fixed price when eBay acquired Half. Despite a ton of cross-promo, nobody visited the 3rd party store. eBay had buyer/seller network effects. Amzn couldn’t compete.
By 2002 most people thought we should shut down 3rd party biz. It wasn’t working, consumed a lot of resources, good people were on it, big distraction. At the same time, core retail biz had decelerated to single digit growth after we raised prices to stop bleeding cash.
Read 12 tweets
8 Aug
A few months after I joined Facebook in 2006, we shipped the 2 most important products in FB’s history: News Feed + Open Registration. A lot of smart people thought these moves would destroy FB. Instead, they transformed the company and cemented Zuck’s leadership. The backstory:
News Feed shipped first. In 2006 there were no feeds (other than RSS), NF was a novel product idea. Websites were measured on page views back then, and NF was designed to reduce PVs by eliminating the need to click around profiles. Less PVs = less ad impressions, seemed crazy.
Mark described FB as a utility, and NF was central to his vision. It showed info you could already see on people’s profiles, but organized efficiently on the home page. And stories would be ranked based on what people found most interesting. This was a massive change.
Read 10 tweets

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