Why Facebook was successful, market sizes, and life-changing questions

Welcome back to the Z Fellows newsletter! Every Monday we share 3 ideas - to help you build companies, ship products, and create your life's work.

1: Peter Thiel on Why Facebook Was Successful

“The most important single event in the history of Facebook was in July of 2006, we were about 2 years into the company’s history and we received a $1 billion acquisition offer from Yahoo!, the company had about $40 million in revenue but no profit, it was a college site, the management team was a bit nervous about the 22-year-old CEO and there were 3 of us on the board and 2 of us thought maybe we should take the offer.

Mark started the board meeting by saying, “Well it’s just gonna take 10 minutes, we just have a quick formal board meeting to turn this down.” And we both said we should talk about it more and we had a 6-hour long discussion about the pros and cons of doing it. It was like Mark, “You are 22 years old, you would make a quarter of a billion dollars, there are many things you could do with this money.” Zuckerberg said he didn’t know what to do with a quarter of a billion dollars. “I mean, I guess I would start another social networking site, but since I already like the one I have, why would I sell it?”

The key point that Mark made that convinced us to not sell it was that there were a whole series of specific products that the company was going to be launching in the next 6 months. They were clearly not valued by the would-be acquirer and we thought we were probably safe waiting and they wouldn’t go away that soon. The only big thing was Mark believed in what he was working on.” — Peter Thiel

Big takeaway: You will be tested on your belief at every stage of the journey.

Source: The Single Most Important Decision In The History of Facebook

2: Why Market Sizes Don’t Matter (At The Start)

“There is one consistent sign that the entrepreneur is going to be rejected by the Shark Tank panelists. It’s when the founder starts to talk about how massive the market is for their product. Mark Cuban is usually the first to pounce on this aggressively, and this is often his reason for not funding the startup.

If you are brand new and haven’t sold a single product, then regardless of your targeted market, your market share is 0.00000000% (take that out to an infinite number of decimal places). As soon as you start to sell, the number of decimal places gets fewer, but most of the time, as a startup, you still have well under 1% of your market. You can have an incredibly successful startup and have a meager market share.

Market share doesn’t matter. What matters is getting those first customer purchases and making that customer happy with your service and product. Then, get the next purchase (and the next, and the next….). It is only customer purchases and customer satisfaction that matter.

Nothing else matters. Just go sell something.” — Sean O Shaughnessy

Source: The Market Size is Immaterial

3: Life-Changing Questions

James Clear (author of Atomic Habits) has published over 200 issues of his 3-2-1 newsletter.

I’ve been collecting my favorite questions from each of his newsletter editions.

Here are 7 of my favorites:

1. What is the most neglected important area in my life right now?

2. Can my current habits carry me to my desired future?

3. The people who have already walked through the fire can help you do the same. Who are you surrounding yourself with?​

4. What career would you realistically pursue if you wanted the most money What career would you realistically pursue if you wanted the biggest impact? What career would you realistically pursue if you wanted to have the most fun? What career offers the best mix?

5. What can you remove from your life that would improve it?

6. Am I climbing the right mountain?

7. What am I holding on to that I need to let go of this year?

Source: James Clear’s 3-2-1 Archive

Best of The Week

See you next Monday,

- Jay + The Z Fellows Team

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