David Kirkpatrick: The Facebook Effect: The Inside Story of the Company That Is Connecting the World

In July 2010, James Harkin wrote a review of the David Kirkpatrick book for The Guardian. Last month Sheryl Sandberg, Facebook's chief operating officer, stood in front of an industry conference in Las Vegas and announced that email was on the way out. Figures showed that only 11% of teenagers use email on a daily basis, she said; most preferred to send messages via social networks such as Facebook. Even though she herself couldn't imagine life without it, she predicted that email "is probably going away". Sandberg's figures weren't quite right; they referred to data on how many American teenagers were using email to communicate with their friends on a daily basis, not how they were using it in general. Given Facebook's enormous success in colonising our online activity, however, there's every reason to take her hubristic ambition seriously. A good way to understand that ambition is to read David Kirkpatrick's new book.

“Zuckerberg sees the world as moving very rapidly toward transparency and very rapid sharing of data between individuals in all sorts of ways, on and off Facebook. And from the day he first created his system, he had this ethos of sharing that he strongly believed in.”

- David Kirkpatrick, author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World

“But to everyone else the episode was a clear sign: Zuckerberg had a knack for making software people couldn’t stop using. That came as little surprise to his roommates. They knew he had even been talking to Microsoft and other companies about selling a program he’d written with a friend as his senior project at Exeter, called Synapse. The software watched what kind of music someone liked so it could suggest other songs. His friends called the program “The Brain” and were especially excited when they heard Zuckerberg might get as much as a million dollars for it.”

- David Kirkpatrick, author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World

In July 2010, Don Tapscott wrote “Changing the world, one friend at a time” for The Globe and Mail. It was well known among industry insiders a couple of years ago that David Kirkpatrick's book about Facebook was overdue. Some felt he'd lose the window – that Facebook's 15 minutes of fame, like those of Myspace, were coming to an end. Kirkpatrick ignored them, spending another 18 months researching. Good call; the book appears just as Facebook has become the most popular destination on the Internet. Our obsession is justified, as Kirkpatrick points out in the most meticulous and exhaustive exposition to date. Facebook has gone “from a dorm-room novelty to a company with an unbelievable 500 million users.” Canadians love it most: A whopping 40 per cent of us are users. It defies the conventional wisdom that social networks are here today and gone tomorrow. It has become “a technological powerhouse with unprecedented influence across modern life, both public and private.” Facebook has the capability to do everything from linking us with friends to saving lives in the Haitian disaster. It may “be the fastest-growing company of any type in history.”

“Facebook was still burning tons of cash. It couldn’t keep endlessly pulling in investment money to cover losses, no matter how much contempt Zuckerberg had for ads. Luckily, Google, Microsoft, and Yahoo all wanted to talk about a deal to place display ads on Facebook. Zuckerberg authorized his deputies to begin negotiations. To him it seemed like easy money. He wasn’t going to give them much onscreen real estate anyway.”

- David Kirkpatrick, author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World

“A couple of Google executives came over to see if there might be a way to work with or even buy Thefacebook. Even at this early date, Google was well aware that something noteworthy was gong on in Palo Alto. Zuckerberg and Parker were leery, though, because the risk of becoming subsumed by Silicon Valley’s Internet giant was real. If they wanted ot do their own thing, they had to stay independent, they believed. Anyway, what they were trying to do was very different from what Google did. Their site was about people; Google was about data.”

- David Kirkpatrick, author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World

In June 2010, NPR’s Morning Edition did a feature on the David Kirkpatrick book, “Author Explores The Evolution Of Facebook.” The site, which essentially began as an online student directory, went live on Feb. 4, 2004. Thefacebook, as it was then called, became popular almost instantly. Within four days, more than 650 students had registered. After one month, the number had reached 10,000. And now, more than six years later, close to 500 million people worldwide actively use the site. Author David Kirkpatrick spent a considerable amount of time with Zuckerberg while writing his new book The Facebook Effect. Zuckerberg, Kirkpatrick tells NPR's Deborah Amos, is adamant in his belief that the world is becoming more open.

“As costs mounted, Zuckerberg mused to the Crimson, which had taken to idolizing him, that “it might be nice in the future to get some ads going.” By the end of March, with the active-user number surpassing 30,000, Thefacebook was paying $450 per month for five servers from Manage.com. Zuckerberg and Saverin each agreed to invest another $10,000 into the company. Meanwhile, Saverin had begun selling a little advertising and had secured a few small contracts with companies that sold moving services, T-shirts, and other products to college students. These ads began to appear in April.”

- David Kirkpatrick, author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World

David Kirkpatrick on the Future of Facebook

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Recent Mark Zuckerberg Quotes:

"Before we do anything there, I'm personally spending a lot of time studying it and figuring out what I think the right thing to do is," he said, adding that he spends an hour a day studying Chinese.

Dec 22, 2010 Herald Sun (100 occurrences)

...founder and CEO Mark Zuckerberg, who calls the social network's interactions-centered concept as the "social graph", said during an interview with the "60 Minutes" CBS show: "I think what we've found is that when you can use products with...

Dec 29, 2010 TopNews United States (50 occurrences)

On his Facebook page, Mr. Zuckerberg said it was "a real honor and recognition of how our little team is building something that hundreds of millions of people want to use to make the world more open and connected."

Dec 26, 2010 Washington Times (24 occurrences)

"Privacy and making sure people have control over their information is, I think, one of the most fundamental things on the Internet," Zuckerberg said in a 60 Minutesinterview on Dec. 5.

Jan 12, 2011 WBIR-TV (8 occurrences)

At a talk this fall to aspiring entrepreneurs in Palo Alto, Calif., Zuckerberg said he was hoping to figure out the "right partnerships that we would need to do in China to succeed on our terms."

Dec 22, 2010 Herald Sun (10 occurrences)

"People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people," he told TechCrunch this month."That social norm is just something that has evolved over time."

Jan 17, 2011 New York Daily News (377 occurrences)

"The Farm Bureau agreed to sell us fb.com and we in return have agreed not to sell farm subsidies," Zuckerberg said in an account on techcrunch.com.

Jan 11, 2011 Reuters Blogs (blog) (15 occurrences)

"Most applications are going to become social, and most industries are going to be rethought in a way where social design and doing things with your friends is at the core of how these things work," he said.

Jan 2, 2011 Warc (27 occurrences)

"I don't care about the money," said Zuckerberg. "I just want my old life back."

Jan 9, 2011 ProPakistani.pk (blog) (10 occurrences)

Liaquat Ahamed: Lords of Finance: The Bankers Who Broke the World

Lords of Finance by Liaquat Ahamed is a 2009 nonfiction book about events leading up to and culminating in the Great Depression as told through the personal histories of the heads of the Central Banks of the world's four major economies at the time: Benjamin Strong Jr. of the New York Federal Reserve, Montagu Norman of the Bank of England, Émile Moreau of the Banque de France, and Hjalmar Schacht of the Reichsbank. Liaquat Ahamed's book was generally well received by critics, and won the 2010 Pulitzer Prize for History. Because Lords of Finance was published during the midst of the financial crisis of 2007–2010, the book subject matter was seen as very relevant to current financial events. One of the main themes of the book is the role played by the central bankers' insistence to adhere to the gold standard "even in the face of total catastrophe." As Joe Nocera, a book reviewer at the New York Times, stated, "the central bankers were prisoners of the economic orthodoxy of their time: the powerful belief that sound monetary policy had to revolve around the gold standard...Again and again, this straitjacket caused the central bankers — especially Norman, gold’s most fervent advocate — to make moves, like raising interest rates, that would allow their countries to hold on to their dwindling gold supplies, even though the larger economy desperately needed help in the form of lower interest rates." Another theme that runs through the Liaquat Ahamed book is how difficult it was to forecast the financial future and how the events would influence world events. "The opinions of Liaquat Ahamed are made very clear (the Paris Peace Conference’s plan for Germany to pay war reparations is presented as a great blunder), but his overriding idea is that blame cannot be easily assigned: not even the most sophisticated economists of the era could accurately predict disaster, let alone guard against it. The effects of a public herd mentality at the time of the 1929 stock market crash are depicted, all too recognizably, as unstoppable."

“We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.”

- John Maynard Keynes

"Flying Blind" by Joe Nocera for The New York Times: You read the Liaquat Ahamed book's sections on reparations — and there are lots of them because the issue dogged the world for more than a decade — with a growing sense of horror, knowing how it all turns out. But you also read Lords of Finance with a growing sense of recognition. As you learn how the world spiraled into depression, about the interconnectedness of the banking system, where a failure in one country led to problems in other countries, about the way economic orthodoxy caused brilliant central bankers to make mistake after mistake, and on and on — you can’t help thinking about the economic crisis we’re living through now. The central bankers of the 1920s and ’30s were flying blind; Liaquat Ahamed's Lords of Finance makes that quite clear. They could only hope the moves they made would help the economy instead of hurting it. Sometimes they were right, but often they were wrong. We like to think that today we have a better grasp of the machinery that moves an economy — but do we? Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson were much quicker than the earlier lords of finance to throw money at the banking system to prevent it from collapsing, a lesson they learned from the inaction of the Federal Reserve in the 1930s. But Paulson also allowed Lehman Brothers to default, an event that set off a contagion of failure around the world. Here at this critical moment, with a new administration having just taken office, and with so much riding on its policy responses to the current crisis, “Lords of Finance” poses an unsettling question. Do we really understand the workings of that delicate machine any better than our forebears did? Or do we only think we do?



"Pride Before the Fall" by Richard Lambert for the Guardian: The world's four most important central bankers, the principal characters of Liaquat Ahamed book, "Lords of Finance," recognised the political blunders of the peace process and did what they could to deal with the consequences. But more than anyone else, they were also responsible for the second fundamental error of economic policy - the decision to return to the gold standard, at the wrong time and the wrong rate. The Bank of England's Montagu Norman was the first among equals. In the words of his French counterpart, he appeared "to have stepped out of a Van Dyck painting, elongated figure, pointed beard, a big hat ... Very mysterious, extremely complicated, one never knows the depths of his thoughts". Norman saw a return to the gold standard at the prewar rate as a matter of national pride, a moral commitment to those who had placed their assets and their trust in sterling. He could not accept the idea that the City of London should play second fiddle to anyone in the global capital markets. Short-term economic pain would be worth the financial long-term gain. Making up the quartet of central bankers were Hjalmar Schacht of Germany - a man with an extraordinary capacity for making enemies, whose prominent support for the Nazi party was to take him all the way to the Nuremberg trials - and the wily Emile Moreau of France. Unlike Schacht, he was not close to Norman and the distrust was mutual. A Bank of England note-taker at their first meeting observed that he was "stupid, obstinate, devoid of imagination and generally of understanding, but a magnificent fighter for narrow and greedy ends". Then there was John Maynard Keynes - incisive, hostile to those who attacked "the problems of the postwar world with unmodified prewar views and ideas", and almost always ignored. One of the great set pieces of the Lords of Finance is a dinner at 11 Downing Street in March 1925. Chancellor Winston Churchill is trying to make up his mind about the gold standard: Norman, whom Churchill could not stand, is not invited, so senior treasury officials argue his corner. Keynes makes the case against gold, but tragically is not on best form. As the night wears on and the alcohol flows, Churchill is swayed by the idea that failure to act would be seen as a public admission of Britain's diminished role in the world. The final word of the night goes to Reginald McKenna, a banker and former Liberal chancellor. "There is no escape. You will have to go back; but it will be hell." The price of that dinner was economic catastrophe - first in Britain and then more generally. The world's gold reserves were inadequate to take the strain. Because sterling had gone in at the wrong rate, the Bank of England was under constant pressure and Britain's manufacturers were priced out of their export markets. Liaquat Ahamed argues that the four central bankers were able to keep the show on the road only by holding US interest rates down and keeping Germany afloat on borrowed money. The Fed was torn between two conflicting objectives: to keep propping up Europe by cutting interest rates, or to control speculation on Wall Street by raising them. It was a system that was bound to come to a crashing end.

"More than anything else, more even than the belief in free trade, or the ideaology of low taxation and small government, the gold standard was the economic totem of the age. Gold was the lifeblood of the financial system. It was the anchor for most currencies, it provided the foundation for banks, and in a time of war or panic, it served as a store of safety. For the growing middle classes of the world, who provided so much of the savings, the gold standard was more than simply an ingenious system for regulating the issue of currency. It served to reinforce all of those Victorian virtues of economy and prudence in public policy. It had, in the words of H.G. Wells, "a magnificent stupid honesty" about it."

- Liaquat Ahamed, Lords of Finance

"Who Caused the Great Depression?" by Frank Ahrens for the Washington Post: Until last year, few believed anything would stop U.S. homes from going up in value 10 percent every year. That is, until the sub-prime mortgage crisis exploded. Likewise, in the prosperous and interdependent Europe of 100 years ago, war was considered unthinkable because it would destroy all. By 1917, an entire generation of young male university graduates was dead. And, frankly, the brainpower needed for forward-thinking was lacking. European bankers of the time carried a cavalier ignorance of economics, and that goes double for America's first Federal Reserve directors. The science of monetary policy was still in its infancy, and no one could have expected four dreary bankers to turn suddenly into brilliant, ahead-of-their-time economists. That role should have fallen to John Maynard Keynes, one of the few heroes of the Liaquat Ahamed book, Lords of Finance. Keynes called the gold standard a "barbarous relic" and clearly explained its limits; in 1925, he accused the British banking elite of "attacking the problems of the post-war world with unmodified pre-war views and ideas." But despite being a well-known Cambridge don, Keynes was an outsider, not a member of the world's most exclusive club, and those in power largely ignored his warnings. Looking at the events of the 1920s and 1930s, one wonders: Could a modern confluence of catastrophes cause another global depression? No major power is likely to return to the gold standard, so that risk is off the table. But is there a comparable systemic problem today, something we refuse to see? Liaquat Ahamed thinks we're plain lucky that recent financial crises -- in Mexico in 1994, Asia and Russia in 1997-98, the United States beginning in 2007 -- "have conveniently struck one by one, with decent intervals in between." After reading his bracing book, one can only hope that our economy is in the hands of decision makers who are more numerous, less powerful or much wiser than in the past.

Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry

During a luncheon for press and analysts, Benioff was asked about this seemingly competitive swipe at Oracle. “Larry is my mentor,” he said. “They are a vendor to us. We have a great relationship with them.” In his 2009 book, “Behind the Cloud,” Benioff has a brief section called “The Larry Ellison Playbook,” where he talks about lessons he learned from Ellison, such as “always have a vision” and “think of it as you want it, not as it is!” Benioff, though, is no clone of Ellison. During the lunch he also talked about the company’s proposed campus in San Francisco, on the land next to a new UCSF Benioff Children’s Hospital, for which he and his wife donated $100 million. He said the big campus will be important in growing the company and its workforce. “It’s very important for us to have employees for life,” he said. Benioff also went around talking to and giving kudos to many top Salesforce executives during the lunch, in contrast to what he calls Ellison’s “management-by-ridicule” tactics.

That was out of the Wall Street Journal's Market Watch. You can find that article, in full, here. E-Consultancy also mentioned the book:

Marc Benioff probably doesn't mind a few clouds. Salesforce.com's CEO believes that cloud computing is a big part of the future, and has called the book he wrote about Salesforce.com's rise Behind the Cloud. But Benioff isn't just talking about and promoting the cloud. He's putting his money where his mouth is, and Salesforce.com is increasingly looking to play a larger role in the cloud computing market. Yesterday, the company made one of its biggest announcements yet: Database.com. Billed as "the enterprise cloud database," Database.com aims to make your existing database a thing of the past. Instead of installing MySQL on your server, or spending thousands upon thousands of dollars licensing MS SQL Server or Oracle, Benioff believes "Databases need to be in the cloud" and wants businesses to store, manage and interact with their data using Database.com, which will be publicly available in 2011.

Find the rest of that article, here.

Jake Nickell and Threadless

The Santa Cruz Sentinel recently covered the recent book by Jake Nickell:

"Threadless" is the how-to book for crowdsourcing T-shirt designs. In it, Jake Nickell tells the story of his own amazingly successful company, Threadless, which he and co-founder Jacob DeHart started in 2000 with $1,000 in seed money. Without omitting the missteps and growing pains, Nickell describes how Threadless.com has grown in 10 years to become what Inc. magazine hailed in 2008 as "the most innovative small company in America." What makes Threadless a truly innovative company is the level of involvement of its online community. Designers upload their T-shirt designs to the Threadless website, where members of the community comment, critique and score them on a scale of 0 to 5. "Typically, a score of 3.0 and above [is] a great score," Nickell explains in the book. "But it's not just high scores that get printed. Sometimes we look for controversial designs that get a ton of zeros and a ton of fives."

See that Sentinel piece here. Jake Nickell was a guest on American Public Media's Marketplace recently:

NICKELL: An artist submits a design. It gets scored by our community of about 1.5 million people and the top scoring designs we actually print and sell. We pay the artist $2,000 and a $500 gift certificate and then royalties on reprint fees. And we come out with six to nine new designs every single week. Last year we paid over $1.5 million out to artists. RYSSDAL: So the business term, the nomenclature for this, is crowd-sourcing, right? You go out and you get these people to submit and then you crowd-source the evaluation. Did that come organically from your start in that online art community?

See that webpage here. Download that podcast here.

The Tuesday, November 9, 2010 Charlie Rose Conversation with Felix G. Rohatyn

CHARLIE ROSE: Felix Rohatyn is here. He is known as the man who saved New York City when it almost went bankrupt in 1975. For years he was an investment banker. He became the consummate deal maker. He was on the front lines of a new culture that saw the biggest leveraged buyouts of the ‘80s and ‘90s. In 1997, he left the world of finance to become the United States ambassador to France. He writes about all of this in a new memoir. It is called "Dealings, a Political and Financial Life." I am very pleased to have him back at this table. In full disclosure, he is a great friend of mine, and one of the great things we have done in the history of this program is that we went to France when he was ambassador and did a one-hour profile of him there. And, in fact, the way he starts his book is a story he told me on film, which you can see on our website. And secondly, I hope he will remember that this is a book that I said you have to write, and now he has written it. Welcome. FELIX ROHATYN: Thank you. Thank you, always a pleasure. CHARLIE ROSE: You open this book with the scene of you leaving France.

The full Charlie Rose interview as well as the transcript of the discussion can be found here. The New York Times covered the book, and introduced the title and author, as well as his personal story, this way: Felix Rohatyn’s memoir, modestly titled “Dealings: A Political and Financial Life,” is the sort of vaulting success story that makes one yearn for the big-hearted America of the mid-20th century, a less mean and more innocent time when not every career seemed calculated and not every banker was a subject of scorn, and when the country welcomed enterprising immigrants. Find that NYT piece here. The Daily Reckoning, a financial column and blog of sorts, mentioned the author and book as well:

Felix Rohatyn just published his autobiography, Dealings: A Political and Financial Life. He remembers a meeting in 1975 with the then deputy mayor of New York, James Cavanaugh. The city’s finances had so deteriorated that it was not able to issue long-term bonds. (This is a timely reminder of what to expect in 2011: There will be states and cities unable to issue bonds or rollover debt. If the federal government, including the ever-expanding Federal Reserve, does not or cannot fill the gap, scrip will be issued to pay municipal bills and salaries.) Cavanaugh claimed that New York City was running a balanced budget. Rohatyn disagreed. Cavanaugh “breezily” patronized Rohatyn: “I see you don’t know much about municipal finance.” The investment banker who had negotiated the largest merger in American corporate history (ITT and Hartford Insurance Company) shot back: “Mr. Cavanaugh, I may not know much about municipal finance. But I know about bulls**t. And what you’re giving me is pure bulls**t.”

See that DR piece here. See also: Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now, The Embassy of the Future, The Future of the Transatlantic Defense Community: Final Report of the Csis Commission on Transatlantic Security and Industrial Cooperation in the Twenty-First Century (Csis Panel Report), Biography - Rohatyn, Felix G(eorge) (1928-): An article from: Contemporary Authors.