History of Facebook - FourWeekMBA

Starting as a social experiment, at Harvard University, back in 2004, Facebook quickly expanded to reach over 1 million monthly active users by the end of the same year. By early 2005, Facebook was already present in 800 college networks. By 2012, as Facebook got ready for its IPO, the company reached over a billion monthly active users.

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The early days

In 2021, Facebook became the largest social media site in the world after amassing almost 3 billion users.

Around half of these were using the platform daily.

The story of how Facebook came to become the behemoth it is today has been told many times over, with much of it immortalized in the 2010 movie The Social Network.

Believe it or not, the company is now more than 18 years old and has recently started a new chapter in its life under the name Meta.

Let’s tell the story of the history of Facebook with a particular focus on its earliest years.

Facemash

While CEO Mark Zuckerberg was a second-year student at Harvard, he created a website called Facemash.

After hacking into Harvard’s security network, he populated Facemash with the identification photo of every student on campus.

The site, which asked students to rate others based on how attractive they were, was launched on October 28, 2003, and almost immediately shut down three days later by the university.

Zuckerberg came close to expulsion for his efforts, but the charges laid against him were eventually dropped.

TheFacebook

In early February of 2004, Zuckerberg launched TheFacebook, a site named after directories that were handed out to new Harvard students to facilitate introductions.

TheFacebook was funded by fellow student Eduardo Saverin, with Saverin and Zuckerberg pitching in $1,000.

Zuckerberg once again attracted the ire of Harvard University, with some classmates claiming he stole their idea to build a similar social network known as HarvardConnection.com.

In 2008, Zuckerberg would ultimately settle the matter for 1.2 million shares worth $300 million.

In any case, membership to TheFacebook was initially restricted to any student at Harvard College. Within a month, more than 50% of all undergraduates had signed up.

In March 2004, membership eligibility extended to students at Columbia, Yale, Stanford, all Ivy League Colleges, and, eventually, most universities in the United States and Canada.

Facebook

Sean Parker became the company president in June 2004 as the headquarters moved to Palo Alto, California. Parker was one of the co-founders of Napster and was instrumental in securing Facebook’s first round of investment funding from PayPal co-founder Peter Thiel.

In 2005, TheFacebook shortened its name to Facebook after purchasing the Facebook.com domain name for $200,000.

More funding was secured in May, and the company expanded once more to become available for high school students and Apple and Microsoft employees, among other companies.

Finally, in September 2006, the platform was opened to anyone and everyone above the age of 13 with a valid email address.

Around this time, Zuckerberg turned down a $1 billion offer from Yahoo to purchase Facebook, feeling that the company had undervalued his social network.

He also introduced the News Feed, which is a mainstay of the social network today.

In February 2009, the iconic Like button was introduced.

The platform experienced meteoric growth in the following years, surpassing 300 million members in September 2009 and 500 million in July 2010.

From this point onward, the company would never be headed.

The Four Stages of Facebook’s History

Move fast and break things (2004-2014)

In this time period, Facebook has acted as a continuous blitzscaler, trying to gain market shares as quickly as possible, killing competition, with an aggressive iterative strategy, coupled with aggressive acquisitions and a fight to optimize every single user engagement metric.

In this period, Facebook managed to go from a small startup, in a Harvard dormitory, to a scale-up, able to compete against Google!

Move fast with stable infrastructure (2014-2022)

By 2014-15 Facebook had passed a billion users worldwide, becoming a de facto monopoly in the social media space. Given the incredible influence of the company, the motto changed from “move fast and break things” to “move fast with a stable infrastructure.”

This was a key change, as it signaled to the world, that while Facebook’s priority was still to move fast, it could not afford to do that by risking breaking its own infrastructure.

For a scaled company, providing services to billions of users, the underlying infrastructure stability became critical.

From Facebook to Meta (2022-2023)

Zuckerberg has had the conviction that VR would have become the next platform since 2014, when Facebook acquired VR maker, Oculus (which still today represents the main product in the Reality Labs segment).

And yet Zuckerberg’s vision of the Metaverse seemed like Bill Gates’ vision for the Information Highway.

It was correct directionally but completely missed the way it would have evolved in the short term.

The same goes for the Metaverse. Zuckerberg might be right about VR becoming an important business platform, in the future, but not in the way he envisioned it in the short term!

Yet, with mounting losses of Reality Labs, and slowed down revenue for its VR headsets, Meta had to re-change its strategy.

In fact, the company’s cost structure completely collapsed under the weight of a Metaverse that never materialized.

The spiked expenses into the Metaverse also crashed Facebook’s profitability.

Again, that doesn’t mean the Metaverse is not happening, but not in the way Zuckerberg envisioned, and not on Meta!

Today, the Metaverse is happening on other platforms like Roblox.

Roblox it’s so sticky that it has seen its daily active users move from 49.5 million by 2021 to almost 59 million in 2022, collectively spending engaging on the platform 12.8 billion hours!

Meta, from hierarchical, slow, and bureaucratic to flatter, leaner, and more efficient! (2023-forward)

How is the new Meta looking like today? The company is getting reorganized around a few core principles. And a massively reduced headcount, which is going back to pre-pandemic levels.

The key pillars are:

Flatter is better
Leaner is better
Keep technology the main thing
Invest in tools to get more efficient
In-person time to build relationships and get more done

Key takeaways:

While eventual CEO Mark Zuckerberg was a second-year student at Harvard, he created a website called Facemash featuring the identification photos of every student on campus. Since Zuckerberg had hacked his way into Harvard’s systems, Facemash was shut down after three days.
An iteration of Facemash called TheFacebook was launched in early 2004, named after the Harvard directories handed out to students to help them become acquainted. Several of his classmates sued Zuckerberg, who claimed he stole the idea for TheFacebook from a similar platform they were creating at the time.
TheFacebook became Facebook in 2005 as the platform was progressively opened up to all university students in North America, various companies, and then anyone over the age of thirteen with an email address. Three years after it was open to the general public, Facebook had already amassed 500 million users.

Read Next: Facebook Business Model.