I watched The Social Network this past weekend. It exceeded my expectations. I saw a few things that made me think about topics I post about here frequently.
1 – Black Swan – Zuckerberg’s Face Mash and Facebook were black swans (Taleb not Portman). Both resulted from a random series of events and ended up popping with users.
2 – The Rational Optimist – In this book, the author Ridley likens ideas to evolution and new ideas come from the mating of different ideas. Facebook was a good example of this. Zuckerberg mated several basic ideas that he got from others and his own observations and experience to create something that many people now find value in. Many of those people wouldn’t have predicted that they would find value in it.
Many who do use Facebook, still are not sure why. They poke fun at it like it’s a kids game they happen to enjoy. This behavior is a great example of a revealed preference not matching their stated preference.
3- Value prop – Zuckerberg had an innate understanding of the value prop he could provide with Facebook. He evolved and experimented the website keeping a couple key questions in mind. First, will this change make it useful to the people using it? Second, will it be as natural as our physical social network? Compare that to other sites like MySpace, which diverged from providing users a value-prop to trying to provide advertisers the value-prop.
Zuckerberg’s key value prop insight seemed to be that he understood how folks interacted, even though the movie depicts him as not being able to do it well himself. This reminded me of the insights Adam Smith had about how humans interacted with each other in Theory of Moral Sentiments. Smith was somewhat of a social outsider, which may have helped him see what others took for granted. Maybe Zuckerberg benefited from a similar perspective.
4 – I enjoyed the backdrop of conflict throughout the movie between talent and conventional privilege. Zuckerberg wasn’t courted for elite clubs at Harvard. His friend and CFO, Eduardo was. Eduardo played the game of delighting the few that held the keys to the club of privilege and prestige. For many this turns out to be a lucrative path. Zuckerber played the game of delighting users. Talent won this round.