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The ENTIRE History of Facebook in 16 Minutes — Transcript

by CEOzoned · 2,432 words · 398 segments · language en · Watch on YouTube

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0:00In 2004, a 19-year-old college student
0:03built a website in his dorm room. 20
0:05years later, that website and the apps
0:08it bought along the way is used by more
0:10than 3 billion people every month.
0:12That's about 40% of everyone alive.
0:15Along the way, it ate its rivals. It
0:18survived lawsuits, a stock market
0:20disaster, and a privacy scandal that
0:23rattled governments. It was fined $5
0:25billion
0:27and then it kept growing anyway. This is
0:29the story of Facebook and it starts with
0:31a website that was designed to be mean.
0:34Mark Zuckerberg was born in 1984 in
0:37White Plains, New York. His father was a
0:40dentist, his mother a psychiatrist. He
0:43started writing code as a kid and his
0:45father hired a private tutor because
0:47Mark was learning faster than he could
0:49be taught.
0:50At Phillips Exeter Academy, he built a
0:52music player called Synapse that learned
0:55what songs you liked. Big companies,
0:57Microsoft among them, were reportedly
0:59interested in buying it or hiring him.
1:02He said no and went to Harvard in 2002.
1:05At Harvard, he was known for two things.
1:08He was good at code and he was a little
1:10bit reckless with it. In October 2003,
1:14after a bad breakup and a few drinks, he
1:16sat in his dorm room, Kirkland House,
1:19and built a site called Facemash. The
1:21idea was brutally simple. It pulled
1:24photos of students from the dormitory
1:25websites, showed you two of them side by
1:28side, and asked you to pick who was
1:30hotter. He hacked into the university
1:32systems to get those photos. The site
1:35spread across campus and got around 450
1:38visitors in a few hours and more than
1:4020,000 photo views. Harvard's network
1:43nearly crashed. Within days, the
1:46university shut it down. Zuckerberg was
1:48hauled in front of the disciplinary
1:50board facing charges of breaching
1:52security and violating privacy. He
1:55apologized and in the end he got away
1:57with it, but he had learned two things.
2:00People are fascinated by other people's
2:02faces, and a simple website can spread
2:05across a campus faster than anyone
2:07expects.
2:08Right after Facemash, three Harvard
2:11students approached him. The twins
2:13Cameron and Tyler Winklevoss, and their
2:15partner Divya Narendra. They were
2:17building a social network for Harvard
2:19students called Harvard Connection, and
2:21they needed a programmer. Zuckerberg
2:23said yes. Then he stalled. He kept
2:26telling them he was busy, that the code
2:28was taking longer than expected.
2:31Meanwhile, he was working on his own
2:33project. On February 4th, 2004, he
2:36launched a website called
2:38thefacebook.com.
2:40The idea was an online directory of
2:42Harvard students with profiles, photos,
2:46and details about who you were. But
2:48there was one rule. You needed a Harvard
2:50email address to join. That made it feel
2:52exclusive, and it made it feel safe.
2:55Within 24 hours, over a thousand
2:57students had signed up. Within a month,
3:00more than half of Harvard's
3:01undergraduates had profiles. The
3:03Winklevoss twins were furious. They
3:06believed he had stolen their idea. We'll
3:08come back to that lawsuit. Zuckerberg
3:10didn't build the company alone. His
3:12roommate Dustin Moskovitz helped with
3:14the code. Eduardo Saverin, a friend with
3:17a talent for business, put in the first
3:19money and took over the finances. Chris
3:22Hughes and Andrew McCollum joined as
3:24well. Then they did something clever.
3:26Instead of launching everywhere at once,
3:29they spread the site one campus at a
3:31time. First other Ivy League schools
3:33like Columbia, Yale, and Stanford. Then
3:36more universities across the country.
3:39Every new campus felt like a club you
3:41were lucky to get into. By the end of
3:432004, Facebook had 1 million users.
3:48That summer, Zuckerberg and a few
3:50friends moved to Palo Alto, California
3:53into a rented house that became the
3:54first Facebook headquarters. It had
3:57almost no furniture. Staff slept there,
4:00coded there, and there was a zip line in
4:02the backyard. Zuckerberg dropped out of
4:05Harvard to run the company full-time.
4:07That summer he met Sean Parker, the
4:09co-founder of Napster, the music sharing
4:12service that had shaken up the music
4:13industry. Parker had seen how a startup
4:16could explode and how it could be
4:18destroyed by lawyers.
4:20He became Facebook's first president and
4:22introduced Zuckerberg to the people who
4:24had the money. One of them was Peter
4:26Thiel, the PayPal co-founder. In 2004,
4:30he invested $500,000
4:32for about 10% of the company. It is
4:35still one of the most famous investments
4:37in the history of Silicon Valley. Soon
4:40after, Facebook dropped the "the" from
4:43its name and bought the domain
4:45facebook.com for $200,000.
4:48In 2005, Accel Partners invested more
4:52than $12 million
4:53and the company was suddenly worth
4:55around 100 million. But the growth came
4:57with a price.
4:59Eduardo Saverin had been Zuckerberg's
5:01closest partner, but as new investors
5:03came in, Saverin's share of the company
5:05was diluted, shrinking from roughly a
5:07third to a tiny fraction.
5:10He felt he had been pushed out. He sued
5:13and the case was settled quietly in
5:142009.
5:16His name was restored as a co-founder
5:18and he walked away a billionaire. The
5:20Winklevoss twins also sued, claiming the
5:23idea was theirs. In 2008, Facebook
5:27settled for roughly $65 million
5:30in cash and shares. The twins later said
5:33the shares were worth far more than they
5:35were told and tried to reopen the case.
5:38They lost.
5:40In 2005, Facebook opened to high school
5:43students.
5:44Then, in September 2006, it opened to
5:47anyone over 13 with an email address.
5:50That same month, it launched a feature
5:52that changed the internet, the news
5:54feed. Before the news feed, you had to
5:57visit each person's profile to see what
5:59they were up to. Now your friends
6:01updates all appeared on one page, front
6:03and center. Users hated it. Hundreds of
6:07thousands joined groups protesting it.
6:09People felt like they were being
6:10watched. Zuckerberg apologized, added
6:13privacy controls, and left the news feed
6:16exactly where it was. Then people
6:18realized they couldn't stop using it.
6:21Time spent on the site went up. That was
6:23the first big lesson of Facebook's
6:25history. Users complain loudly, then
6:28they stay. At the time, Facebook's rival
6:31was MySpace, which was much bigger and
6:34owned by Rupert Murdoch's News
6:36Corporation. MySpace was messy, full of
6:39glittering backgrounds and auto-playing
6:41music. Facebook was clean, consistent,
6:44and real names only.
6:46People trusted it. By 2009, Facebook had
6:50overtaken MySpace. Yahoo tried to buy
6:52Facebook for about a billion dollars in
6:542006. Zuckerberg turned it down. Many
6:58people thought he was crazy. In 2007,
7:01Microsoft bought a small stake at a
7:03valuation of 15 billion dollars. For a
7:06company that barely made money, it
7:08sounded absurd.
7:10Also in 2007, Facebook launched its
7:12platform, letting outside developers
7:15build apps and games on top of it. Games
7:18like FarmVille would soon take over
7:20millions of feeds. And in 2008, a key
7:23person joined, Sheryl Sandberg, a top
7:26executive at Google. She built what
7:28Facebook had been missing, a business
7:30model. Her answer was simple and
7:33powerful. Facebook knew who you were,
7:36what you liked, where you lived, and
7:38what you cared about. Advertisers would
7:40pay a fortune to reach exactly the right
7:42people. And in 2009, Facebook added the
7:46like button.
7:47By 2010, Facebook had 500 million users.
7:52That year, a Hollywood movie called The
7:54Social Network told a dramatized version
7:57of the story, and Time magazine named
7:59Zuckerberg its person of the year. He
8:02was 26. Zuckerberg often said the
8:05company's culture was a hacker's
8:07culture. Engineers had a famous motto,
8:10painted on the walls of the office,
8:12"Move fast and break things."
8:14That speed worked, but it also meant
8:16privacy was treated as something to fix
8:18later. That choice would come back to
8:21haunt the company.
8:22If you're enjoying this story so far,
8:24subscribe to CEO Zone, because the next
8:27part is where everything almost falls
8:29apart.
8:31In May 2012, Facebook went public. It
8:34was one of the biggest tech IPOs ever,
8:37raising about $16 billion
8:39at a value of more than $100 billion,
8:42and it was a mess. Technical glitches on
8:45the NASDAQ delayed trading. The price
8:47barely moved on day one, and then it
8:49started to fall. Within months, the
8:52stock lost about half its value. The
8:54reason was simple. Everyone was moving
8:57to smartphones, and Facebook had been
8:59built for desktop computers. It had
9:01almost no mobile advertising business.
9:04Investors worried that Facebook would be
9:06left behind, like so many tech giants
9:08before it. Zuckerberg responded by
9:10rebuilding the company around mobile.
9:13Engineers stopped working on the website
9:15and focused entirely on the phone app.
9:18Within a year, mobile advertising became
9:20the biggest part of Facebook's revenue,
9:22and the stock came roaring back. And
9:25while all this was happening, he was
9:26working on something else, and buying
9:29anything that could threaten him.
9:31In April 2012, just before the IPO,
9:34Facebook bought Instagram for $1
9:36billion.
9:38It was a photo-sharing app with 13
9:39employees and no revenue. People laughed
9:42at the price. Today, Instagram is worth
9:45many times that, and some say it's the
9:48best acquisition in tech history. In
9:502014, Facebook bought WhatsApp, the
9:53messaging app, for around $19 billion,
9:57the largest deal in its history. It also
9:59bought the virtual reality company
10:01Oculus for 2 billion, betting that
10:04headsets were the future. Zuckerberg
10:06tried to buy Snapchat, too, offering
10:08about $3 billion. Snapchat's
10:11Snapchat's founder said no. So, Facebook
10:13did something else. It copied Snapchat's
10:16best feature, Stories, and put it into
10:19Instagram, then Facebook, then WhatsApp.
10:22It worked, and it hurt Snapchat badly.
10:25By 2015, a billion people were using
10:28Facebook in a single day.
10:30The company owned the four most popular
10:32social platforms on the planet outside
10:35of China: Facebook, Instagram, WhatsApp,
10:38and Messenger. Some critics said this
10:41wasn't competition, it was a strategy of
10:43buying or crushing everything that might
10:45one day threaten the empire. That
10:47argument would eventually reach the
10:49courts.
10:51In 2016, Facebook's reputation started
10:54to change. During the US presidential
10:56election, it emerged that fake news
10:58stories were spreading across the
11:00platform, and that Russian groups had
11:02run campaigns to influence American
11:04voters.
11:06Zuckerberg first called it a pretty
11:08crazy idea that fake news on Facebook
11:11had influenced the election. Later, he
11:13admitted he had been wrong. Then, in
11:16March 2018, came the scandal that
11:19changed everything, Cambridge Analytica.
11:22A political consulting firm had
11:24collected personal data from up to 87
11:26million Facebook users through a
11:28personality quiz app without their real
11:30consent, and used it to build voter
11:33profiles for political campaigns. The
11:35stock dropped. A hashtag called delete
11:38Facebook took off and Zuckerberg was
11:41called to testify before the United
11:43States Congress answering questions for
11:45hours from senators who often seemed not
11:48to understand how Facebook worked. The
11:50consequences were serious.
11:52In 2019, the US Federal Trade Commission
11:56fined Facebook $5 billion
11:59the largest privacy fine ever against a
12:01tech company. Facebook's stock barely
12:04flinched. The fine was less than one
12:06quarter's profit and many critics said
12:09that proved nothing would change. There
12:11were darker problems, too. The United
12:14Nations said Facebook had played a role
12:16in spreading hatred against the Rohingya
12:18minority in Myanmar and internal
12:20research would later show that the
12:21company knew Instagram could harm the
12:23mental health of teenagers.
12:25In 2021, a former employee named Frances
12:29Haugen walked out of Facebook with tens
12:31of thousands of internal documents. She
12:34leaked them to journalists and to
12:35Congress. The documents suggested the
12:38company knew about many of its harms and
12:40often chose growth over safety. The
12:43story was everywhere. Zuckerberg called
12:45the accusations unfair. Then on October
12:4828th, 2021, he announced something
12:51unexpected. Facebook, the company, was
12:54changing its name to Meta. The new
12:56vision was the metaverse, a virtual
12:59world where people would work, play, and
13:01meet using headsets. Critics said the
13:04rebrand was a way to escape the
13:06scandals. Investors were skeptical.
13:09The company was spending over $10
13:11billion a year on virtual and augmented
13:13reality with few customers to show for
13:16it.
13:172022 was brutal for Meta. Apple changed
13:20its privacy rules on iPhones making it
13:22harder to track users and Meta lost
13:25billions in advertising. TikTok was
13:27stealing young users, and the metaverse
13:30was burning money. The stock lost about
13:33three quarters of its value from its
13:34peak. Hundreds of billions of dollars
13:37vanished. Many people thought the empire
13:39was finished. In November 2022, Meta
13:43laid off 11,000 employees, about 13% of
13:47the company, the first mass layoff in
13:49its history.
13:50Zuckerberg declared 2023 the year of
13:53efficiency. He cut layers of management,
13:56shut down projects, and shifted focus to
13:59artificial intelligence. It worked
14:01remarkably well. Meta's AI-powered ad
14:04systems got better at targeting. Reels,
14:07its answer to TikTok, took off. In July
14:112023, Meta launched Threads, a rival to
14:14Twitter, and it passed 100 million users
14:17in 5 days. The company released its
14:20Llama AI models openly, and positioned
14:23itself as a leader in the AI race. By
14:26early 2024, Meta's market value passed
14:29$1 trillion. Its yearly revenue climbed
14:31above
14:32$160 billion,
14:35almost all from advertising. Regulators
14:37had also tried to break the company up,
14:40arguing that buying Instagram and
14:41WhatsApp had been illegal. The US
14:44government went to court, but the judge
14:46ruled in Meta's favor.
14:48Today, Meta is one of the most powerful
14:50companies in history. Its apps reach
14:53roughly 3 and 1/2 billion people every
14:55single day. It's investing tens of
14:58billions in AI, smart glasses, and a
15:01push toward what Zuckerberg calls
15:03superintelligence.
15:04In 2025, it paid more than $14 billion
15:08for a stake in Scale AI, and hired its
15:11young founder to lead a new AI lab. The
15:14founder who once shocked Harvard with a
15:16hot-or-not website now controls how a
15:19huge part of humanity talks, shares,
15:22argues, and shops. Whether you think
15:24that's a miracle or a warning, the story
15:27teaches the same lessons. Be early. Move
15:31faster than your competitors. Buy or
15:33copy what threatens you. Keep control of
15:36your company. And when you are in
15:38trouble, rebuild around whatever is
15:40next. But power at that scale comes with
15:43a question that every founder must face
15:45sooner or later. When a product connects
15:48the entire world, who is responsible for
15:51what happens on it? Facebook began as a
15:53way to look at faces on a college
15:55campus.
15:56It became something no one fully
15:58understands, including, some say, the
16:01person who built it. That was the entire
16:03history of Facebook. If you want to see
16:06which company comes next and what the
16:08founders got right and wrong, stay tuned
16:10to CEO Zoned. See you in the next one.

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