The man who helped Facebook reach 700 million users tells you how to achieve user growth

Chamath Palihapitiya was born in Sri Lanka and immigrated to Canada with his family when he was six years old. After earning a degree in electrical engineering from the University of Waterloo in 1999, he worked as a derivatives trader at investment bank BMO Nesbitt Burns for a year. In 2000, he moved to California with his girlfriend.

Palihapitiya joined America Online (AOL) as a software engineer when the Internet was beginning to boom, and was promoted to head of AOL's instant messaging department in 2004. In 2005, he left AOL and joined Mayfield Fund, but just a few months later, he joined Facebook, where his main job was to help the company increase its users.

Before he joined, Facebook had encountered a growth bottleneck, but when he left, Facebook already had 700 million users. But in fact, when Facebook only had 45 million users, he was sure that Facebook would one day beat MySpace, which had 150 million users.

In 2011, Palihapitiya resigned from Facebook, received investments from Tesla's Peter Thiel and LinkedIn's Reid Hoffman, founded a fund called "Social+Capital", and transformed himself into a venture capitalist.

After leaving Facebook, he bought a portion of the shares of the Golden State Warriors and became a partial owner. The Golden State Warriors defeated the Cavaliers in this year's NBA Finals to win the championship, which was also the first championship in the careers of all the Warriors players.

Many companies are unclear about the reasons for their success and failure at each step. When the company is booming, everyone is walking on the cloud, but when the company suddenly encounters a bottleneck or plummets, everyone is at a loss. Chamath Palihapitiya is clearly not one of them. He always knew exactly what he was doing and why he was doing it.

This article is a public speech by Chamath Palihapitiya, in which he said that he only did three things to increase Facebook’s user base. So what were these three things?

On user growth, “We just measure, test, and experiment”

Let’s talk about user growth. Everyone comes to ask about this, as if it is something that can be talked about at length. Of course, this is something that everyone wants to know, and it's as mysterious as a secret, as if we are the NSA ( National Security Agency ) and we are doing something that no one knows about, or we have made some behind-the-scenes deals with the government. Nonsense! We just did three things that seemed stupid. At the same time, we think we are not that self-aware and proud, so we just stubbornly continue to do these very simple and monotonous things over and over again. And once we find the direction, we will do it to the end, or simply not do it. Never doubt yourself during this process.

I tell people, "You know what? We just crunched a lot of numbers, calculated, tested, and experimented." Of course, that leaves out a lot of detail and it may seem trivial, but at a macro level, that's really all we do. I am shocked and incredulous when I see so many people wrap their products in layer upon layer of complicated frills in an attempt to convince customers how wonderful and smart their products are. They think they’re doing the coolest things, like “I’m so fucking different” or “I’m riding the Muni subway in San Francisco” or “Look, my all-natural organic oolong green tea” or “Look at my ripped skinny jeans.”

It's like polishing yourself. Testing reveals many bugs, but repeated modifications are often in vain. Even more bugs may be found after further testing, and you have to ruthlessly delete those useless ones. The process is not that complicated. As I browse through APP after APP, immersing myself in the ocean of APPs, I often can't help but ask, "Have you really spent even a few seconds experiencing your product?" An incredible fact is: most products lack sufficient internal testing.

So most people overcomplicate user growth, as if growth can only be achieved by doing unconventional things. But this is not the true meaning of growth. Growth actually comes from a pure and elegant understanding of product value and consumer behavior. When you wrap yourself in layers of bullshit (which is also the biggest and only problem in Silicon Valley today), you will be penalized by the market or consumers.

The problem is that we are now in the era of huge long tail, with many pioneering success stories in front of us, and everyone is facing difficult choices: the first choice is to do what you think is right and ignore the feedback from the outside world; the second choice is to do what you see, what you can get investment for, and what others tell you is very interesting. This arbitrary dichotomy can ruin a product and also destroy people's creativity.

No matter how well you do what you have, if you don’t have a clear core value in your product, you will fail. So the most important thing now is to draw a clear line between yourself and those people around you who talk nonsense and make exaggerated statements.

How do we increase our user base? One time, we had no idea about a certain architecture. I have a subordinate, of course I won’t say who he is now, and I have wanted to fire this piece of wood countless times. He came to me and said, "Chanmath, what about eBay's architecture?" eBay? That was in the year 2000. I asked, "eBay, eBay bullshit, what can we learn from eBay?" He replied, "We can use the same architecture we used at eBay." It turned out that we just tweaked that architecture a little bit and it worked, and then I realized, “Oh my god, when it comes to dealing with complex and difficult things, taking a simple approach can be very effective.”

Of course I have to admit that eBay is a great company and does very well. But because eBay is a different product, we made some minor adjustments. But we still adhere to the simple principle: measuring, testing, and trying things. The biggest risk we faced at the time was that people who already trusted and used our products might stop using them. At the metric level, losing old customers sounds bad, but don’t forget that we are in an era of extremely long tail.

Rumor has it that you can learn from a lot of companies, except HP. I know Meg Whitman, and she's actually a really great CEO. So why do people say that? Since HP does not have any product innovation now, does that mean their performance growth came out of nowhere? No, when you look back, you'll find that a decision five or six years ago to reduce costs and optimize revenue structure has kept their performance growing. So you will understand that this is the long tail effect, a decision requires such a long reaction period to reflect its value.

Similarly, if we send spam to our users and deceive them, these users will gradually stay away from us. Of course, this shift away from the market won’t be immediate, but will be spread out over the next three or four years, especially if your competitors offer superior products. The most important thing we established in our architecture is to say no to virality. We don’t do it, we don’t discuss it, and we don’t even touch it. I don't want to see any viral campaigns, I don't even want to hear about them.

Don’t do those empty words, solve the three “hows” first

I want to focus on the three most difficult problems, which are also the problems that every user-friendly product needs to solve:

• How to attract people? (How to get people on the front door?)
• How can we make them feel “Wow!” about our product as quickly as possible? (How to get them to an “Aha Moment” as quickly as possible)?
• How to convey the core value of the product with high frequency? (How do you deliver core product value as often as possible?)

Only when all these are explored clearly can you suggest to me how you plan to attract more users. This order must never be reversed. In my opinion, this was the smartest decision we made.

Looking back, no matter how clear or intuitive these rules are, and no matter whether your industry has experienced rapid growth and then fallen to the bottom, failure cases that ignore these principles are not uncommon. It is precisely because you have not made any optimizations for the industry you are engaged in that you only get the shortest and most immediate return on investment. This approach is definitely not a long-term solution for you to build valuable products.

So when you go through this, you understand two most important things:

The first is to "eliminate the ego". Ego makes you fantasize about pursuing the mainstream lifestyle promoted on Twitter, rather than being a true entrepreneur who is committed to developing valuable products and trying to deliver their core product values. Eliminating the ego means you have to accept that you won't get rewards in the short term.

The second point is to abandon the routine. Those who follow their instincts are no different from fools. Intuition is useless because most people cannot make correct predictions about the future. We are all very clear about this.

We should stop doing certain things and filter out the meaningless talk.

Most people work for companies that lack the culture that allows both of these things to coexist. If you are not calm enough or put too much personal opinion into the products you build, it will be difficult to avoid making mistakes, and it will be difficult to improve in the field you are working in because you are not objective enough and do not understand what is happening around you.

We need people who don't believe in nonsense, and even more so, people who can distinguish between luck and strength. Unfortunately, many people have absolutely no idea what they are talking about.

• Don't talk about something without relevant context because it's useless. You're like a spammer, which is sympathetic but ruins the interaction experience for both of you. Stop it now!
• Avoid low-level abstract ideas that might give you a short-term return on your investment but are meaningless.
• Don't focus on things that won't bring you long-term returns.
• Don't pretend in front of me that you really understand what you are talking about. I would rather you say that you don't know, and I am even willing to work with you to find a solution to the problem.

What I don't want to see is a culture that's focused on the short term, where you start working without considering the context, and you get a quick rise followed by a big fall. Then everyone around you starts talking about, "Look at what I did, I think I did a good job." In fact, you didn't do a good job, you just changed one of many variables.

It seems like I'm pouring cold water on you. People rarely talk about the core value of a product, and most products really have no product value, I do believe this. But I also believe that many products can have value. So when you put the two important conclusions above together, you come back to a basic question: do you really know what kind of product you are designing? Why design this product? Do you really know how to design products that customers feel they don’t need but actually serve them well?

“Showing the value of your product to different people is the most important thing”

When we launched our product in Asia, we put together a team. We once said, "We want to go global, we want to promote our products, and we want to go to every corner of the world."

We only hire local people in local markets. We once hired a worker in Japan who said, “We should add something special to the product description because Japanese culture is different.” I asked him, “What would you do?” He said, “Maybe it would be better to show blood type in the description.”

You might be thinking, what's the point of this, and yes, it may not matter to us, but it doesn't to him. So we made some adjustments because we weren't connected enough to the local market. Our product is not resonating well enough with people here. You may think that Facebook does have clear product value, but in Japan at that time, it did not have product value.

It takes courage to reinvent and redefine your product in an established market. We did that and it hit us, "Oh my god, we really don't understand." In every single market, people react differently, behave differently, and speak a different language.

So the key is that what you think works may not work for everyone, and you have to find some kind of cognitive framework to help you make some new adjustments to certain things. In this way, the value of your product can be recognized and accepted by different people in different situations, and this is the top priority.

Focus on one thing, focus, focus

We knew we were going to beat MySpace when Facebook had 45 million registered users, and even then they had 115 million users, and we had no doubt about it. Because we know we are doing the right thing, we know what we are doing. After a lot of testing, a lot of iterations, guess what we found? To get every user to add 7 friends in 10 days (7 Friends In Ten Days), that's it. Want to know the secret of our success? That's it. It’s not as complicated as everyone thinks.

Now we have a full team with hundreds of employees, and we have successfully built Facebook into a product with one billion users, and all of this is based on this simple law. I can't tell you those complicated truths. All the principles we follow are based on this rule that is simple enough to not be simpler. It is this concise and elegant description that helps us grasp the core product value, define the meaning of the product, communicate, search on the Internet, find the areas with dense crowds, and then repeat the process on this basis.

Every Q&A session and every plenary meeting we have revolves around this sentence. We will also discuss Facebook's monetization and the current status of the second and third level construction of the platform. But the only core focus is still that sentence. Because we have transformed the core product value into such a clear and actionable statement, every member of the company knows exactly what they are supposed to do.

Next, I want to talk about why it is problematic to devote a lot of energy to everything from developing a development strategy to the specific issues. The person on each team who is committed to the company's development needs to be visionary and capable and be responsible for formulating the core product strategy. Because when you take your discussion to a higher level, you're considering the core structure of how the entire company operates , such as how equity is distributed, how costs are generated, how to focus on key issues, and who to hire or fire.

But when you understand the core product value, you can capture the key points and continuously build cycles to demonstrate the product value, which is the most important and most natural thing. Now, I use this concept to help some companies, whether they are CEOs who change their way of thinking or founders who agree with this concept, they can consider every problem they encounter in a continuous and systematic way and achieve success. This is true for every company.

Of course, I have also met some people who have a lot of problems. Like, "Hey, I really, really like..." The kind of people I meet are kind of brainless, they're reckless, they're reckless, they're a little violent. This reminds me once again that it is so important for people to have a long-term vision. This advantage can always help you better balance the establishment of corporate culture and the cultivation of employee work ability. Cherish the achievements you have made. So now when you see again those companies that have achieved blowout growth, or even those that have already gone public, going through incredible difficulties, painful transformation, spiral decline, what you should realize is that this situation is not a growth problem, even though it is indeed a growth problem from a data perspective. But this is actually a question about product value and company culture.

No matter how optimistic you are about the short-term prospects, it will be in vain if you don't want to understand the core issues. You still have to go back to the most original point and think about why people come here and what is the "Aha Moment" that users want? Why can't we satisfy them sooner? Don’t tell me it will take days to give it to them, that’s not reliable; calculating in hours is not okay either; calculating in minutes is the bottom line, but it is far from enough. You have to think clearly about how to accurately grasp people's needs in a timely manner within a few seconds or even milliseconds? That's how you win.

If you can't figure out what's optimizing everything you do all the time, I think you're at a terrible company and what they're doing is nothing but garbage and destroying the value of the internet.

To recruit people

As it's coming to an end, I want to say that I have poured out everything I most want to share with you. Maybe you expect a bunch of dry goods like formulas, but you really have to deeply understand what I say. Don't just be a clueless follower. What you need to do is think carefully, focus on core values, prioritize things and find partners who think like you. These are the values ​​we value when we first hire employees.

Once again, although it sounds a bit crazy, I still want to remind all CEOs to write down the following words in their notebooks: about how to recruit people. We have quite a bit of experience in recruiting people. I share this with every company I invest in, and it works for most of them. These seem obvious to me, absolutely obvious. But people always stumble over these issues.

A person with high emotional intelligence, self-awareness and a strong sense of purpose will not succumb to short-term pressure. His persistence in success will make him willing to try everything. An enterprising and competitive person will respect others but not be afraid to challenge authority. Come to a high-quality, near-perfect bar. If you can handle it, the overall situation will be settled. Some things can be improved by 0.1%, but now you have to improve them by 0.2% or even 1%. This kind of working state is changeable and dynamic. Our employees will stay here as long as they are not trying to destroy their careers, they work in a comfortable environment or find problems. It takes courage to change.

When that Japanese guy comes up to me and says, "Hey, I think we need to add blood type to our profile," when the Korean team comes up with a bunch of new ideas, or the Indian team figures out a clever way to implement Facebook on mobile. You must temporarily put aside your personal prejudices and spare no effort to find these people who break the rules; secondly, the reason for doing this is not to let yourself live in the illusion that "I am the best."

There are too many problems and products that focus on solving too few needs. The fact is, there are 7 billion people in the world. Many people have entered the mobile phone era without ever using a computer. They live in completely different contexts, and different regions of the world have very different socioeconomic models, so you have to be sensitive enough to discover their needs.

It's easy to focus on short-term results. It is not enough to think long-term and then make short-term plans step by step, because what you want to build is something meaningful and far-reaching, which is rich in cultural connotations and has its own value system. These are the value of the product.

LinkedIn is a great example. Reid Hoffman (co-founder of LinkedIn) is one of my very good friends. It's an incredible company that's been around for 10 or 11 years, and all they do is code. When Friendster (the pioneer of global social networking sites) emerged, they didn't panic; when MySpace emerged, they didn't panic; when Facebook emerged, they still remained calm. They just wanted to make a great product, and they just kept working without taking any shortcuts. We must respect such companies because they have surpassed others little by little and as a result are still standing today.

There's nothing wrong with working with great people, but I've found that many people are reluctant to hire people who are better than themselves. The most successful thing I have done is to recruit 4 employees to my team who are better than me. The initial user growth team consisted of six people, including me. They are James Wang, who is the engineering director of Facebook Platform; Naomi Gleit, a Facebook veteran and the best product manager ; Alex Schultz, a guy who improves his abilities at an amazing speed; Javier Olivan, who helps me expand into international markets; and Blake Ross, who is not only a product manager but also the original developer of the Firefox browser . All of these guys were clearly much better than me when they were hired. All I did was build a framework and create the rules, and they were the ones who actually made it happen. I was lucky enough not to miss the surge in Facebook users while I was away.

The last thing, build real value based on perception. I like oolong tea as much as that person, but it doesn't make any difference. I also like tight jeans, which happens more often on girls, so what? Right now, we live in a world where we’re easily distracted by trivialities, torn between what’s urgent and what’s important. To find the true value of things through appearances, you need the courage to try.

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