Dan Rose Profile picture
Nov 21, 2020 13 tweets 3 min read Read on X
A few days after I joined as head of biz dev at Facebook in 2006, MySpace announced a partnership w/Google worth $1B. I sent an internal email suggesting we pursue a similar deal and Zuck gave me a hunting license. Here's how I signed the biggest deal of my career with Microsoft:
Microsoft had been left at the alter with MySpace. They bid more than Google for the right to run banner ads, but MySpace was owned by NewsCorp and Rupert liked Google better. Ballmer was reportedly very upset about losing, so my first call was to some folks I knew at Microsoft.
MySpace had 10x more users than Facebook at the time, but we were #2 and growing. I told Microsoft we could be their “rebound date,” but they had to move fast because Google was also pursuing us (which was true). I didn’t mention we were wary of Google’s competitive ambitions.
Microsoft did move fast. They were starting to believe ads could be an existential threat to their software business, and they understood that scale mattered in building an ads platform. There weren't many deals left that could give them scale in web-standard banner ads.
We had been selling banner ads in our left column, yielding low CPMs + low quality ads. Our COO Owen Van Natta told me to get 30 cent CPM guarantee for that space, substantially more than what Google gave MySpace. Owen was the best negotiator I ever met, great at pushing limits.
Days earlier Microsoft had lost the MySpace deal to Google. This time they hit our bid on the spot, and Ballmer told his team to get the deal done before another one slipped away. A week later we had a signed contract worth hundreds of millions of dollars.
A few weeks later I was briefing Zuck on the deal. I proudly explained how much money we were making already from Microsoft on our guaranteed CPM. Zuck stopped me and asked "how's it working for Microsoft so far?" I knew in that moment I would work with this guy for a long time.
Microsoft contributed most of Facebook’s revenue over the next couple of years. They were able to break even on our guaranteed CPM, which they viewed as a win since their primary goal was getting scale. At the same time, Google lost a ton of money on a MySpace deal that unraveled
Why did we outsource our early ads biz? We knew banner ads weren't strategic for us. This deal gave us learnings and guaranteed revenue which we invested in R&D to develop social feed ads. We were transparent with Microsoft about our strategy and they were happy with the trade.
A year after we signed that initial deal, we expanded the scope internationally and Microsoft led our Series C at $15B valuation (which eventually worked out great for them). We were close partners for many years, in part because we found mutual alignment in our fear of Google.
Partnerships are hard. When I was doing BD at Amazon, we signed multiple deals that ended in lawsuits. At Facebook we thrashed developers over the years as we pivoted our platform strategy, which gave everyone a lot of heartburn. But good partnerships can be transformative.
Good partnerships maximize value for both sides with minimal waste. If you are bargaining over an orange, one resolution is to slice it in half. But if you dig deeper into motivations of each side, you might find one party cares about the meat while the other cares about the rind
Despite risk of failure, good partnerships are worth pursuing. Always look for optimal solutions, keep digging until you find them. Push your limits on leverage, but leave value on the table. And after you sign a deal, always ask yourself "how's it working for the other side?"

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More from @DanRose999

Jan 8
My personal habits, insights and inspiration to stay sharp in business and life:
Read biographies before bed

I go to bed every night reading biographies. Studying great leaders from history reveals clear themes and patterns. And by falling asleep to heroic stories, the lessons seep into your subconscious. amazon.com/Churchill-Walk…
Be vulnerable

Deep and lasting relationships are built during moments of vulnerability, leading to a foundation of trust. Nothing is more rewarding (and uncomfortable) than human connection formed through authentic interaction.
Read 12 tweets
May 24, 2023
Watching the movie Air reminded me of a few times in my life when I trusted my gut and put all my chips on the table. You can’t be successful in business without taking risk, and there’s no guarantee it will work out. But when it does… Here’s a story about my big bets:
After my first year of business school at U Michigan I got a summer internship at Amazon. 3 weeks into the job they offered me a full-time position. I had a wife and 18 month-old baby. Amazon was a 5 year-old start-up, though already a public company.
When I told my friends and family I was dropping out, everyone thought I was making a huge mistake. But I knew I would learn more about business at Amazon than in school. Allison & I never looked back, literally. We hired movers to pack our stuff and never set foot in Ann Arbor.
Read 10 tweets
Dec 9, 2022
The best companies always have a strong senior leadership team, filled with people who complement each other and play well together, like a winning sports team. Here’s how I built my career by learning how to play my position at the highest level:
As a kid, soccer was my primary sport. I played center half-back and rarely scored a goal, but I was the leader in assists. I was co-captain of my high school varsity team, along with my best friend who played striker and scored most of our goals.
On the other hand, I made the mistake of thinking I should play quarterback on the football team. I rode the bench as 3rd-string QB until I switched to wide receiver where I had more success. (Eventually I left the team and found a new way to assist, as a male cheerleader!)
Read 12 tweets
Nov 20, 2022
I love to read autobiographies of people who started iconic companies. I was fortunate to work for Zuck and Bezos as their origin stories were still being written, and it's fun to pattern match against other founders. Here’s a list of some of my favorite business biographies:
1/ The Autobiography of a Founder: It’s one thing to be a great founder, it's another thing entirely to write a compelling book about your life and your company's origin story. Each of these iconic CEO’s wrote amazing autobiographies:
Sam Walton wrote an autobiography shortly before he died, and it's so good I’ve read it twice. When Walmart sued Amazon in the 90s for poaching executives, Bezos quoted from Sam’s book in his defense :-)
amazon.com/gp/product/055…
Read 21 tweets
Oct 2, 2022
The best tech companies drive strategy through product. This is why founders and CEOs tend to be product leaders, and product / design / engineering is more important than ops / marketing / finance. Here’s what this looked like for me as a business leader at Amzn and Facebook:
Jeff and Mark were very different, but both of them spent most of their time in product meetings, and they both scrutinized product ideas down to the pixel. They didn’t waste cycles debating strategy in the abstract, they drove it via the roadmap. They never hired consultants.
Everyone in the company understood the strategy because it showed up in the product’s evolution. There was no need for long slide decks explaining where the company was going. Company all-hands meetings simply focused on the product roadmap. Our product leaders were the stars.
Read 8 tweets
Sep 8, 2022
When I first started out in my career, I thought I had to “fake it until you make it.” Later I learned to ask questions and embrace situations where I didn’t have all the answers. Here's how I went from being an insecure manager to a more honest leader:
Amazon was my first real job, and I found myself surrounded by brilliant people with strong opinions. Everyone seemed to know exactly what they were talking about, and Jeff Bezos was the smartest person in the room. It felt to me like a culture where the strongest survived.
In that environment, I thought I needed to project confidence. For example, after a promotion to merchandising manager, I was asked about my forecast for gross margin vs contribution margin. I barely understood these concepts at the time, yet I pretended to have clear answers.
Read 18 tweets

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