Facebook CEO's Hidden Talent

Mark Zuckerberg's Hidden Talent: Firing People

By Nicholas Carlson | Business Insider

You might not believe it, due to his unblinking stares and awkward personal demeanor, but Facebook CEO Mark Zuckerberg is actually a very good manager of working people.

You know how can tell?

In seven years, he's grown a dorm room project into a $100 billion company with 

3,000 employees.…!

One of Zuckerberg's best tricks, according to Henry Blodget's cover story in New York magazine, is that he is really good at firing people.

“Basically, there are two ways to build an organization,” a former Facebook employee explains. “You can be really, really good at hiring, or you can be really, really good at firing.” Zuckerberg has been really good at firing. “We made some hires that weren’t the right ones. And we were pretty good at correcting that quickly. Mark deserves the credit for identifying and following through with that.” In other cases, key personnel who were good fits simply got outgrown by the company. It can be even harder to jettison those kinds of employees, whose contributions have earned them the loyalty of business partners and colleagues. But here too Zuckerberg did not flinch.

Sean Parker, for example, joined Facebook in the summer of 2004 as the company’s first president. He kept Facebook on track when Zuckerberg’s attention wandered to Wirehog and helped raise the company’s first rounds of outside capital. Most crucially, he did something that will allow Zuckerberg to maintain almost complete control over Facebook for as long as he wants to control it.

Parker, who’d been ousted from both Napster and a later startup, a digital Rolodex service called Plaxo, became obsessed with making sure Zuckerberg didn’t suffer the same fate. In conjunction with raising $500,000 from Thiel, Parker helped restructure Facebook’s voting stock. Zuckerberg today holds 57 percent of those shares, which means that no one, including Facebook’s board members, can legally force him to do anything. This level of control in the hands of one shareholder is extraordinary, and it’s already raising hackles on Wall Street. But it was crucial to getting Zuckerberg comfortable with taking Facebook public, because it means he won’t be compelled to take shortcuts to appease impatient shareholders.

For all Parker brought to Facebook, though, his party-boy ways were deemed too great a liability for him to have a future at the company. Within a year of Parker’s joining the company, he was forced out.

Parker’s departure made room for Owen van Natta, a former Amazon executive hired as head of business development and then promoted to chief operating officer. The 36-year-old Van Natta was Facebook’s first real adult supervision. There were 26 employees when he joined, only two of whom were over 30 years old. During his tenure the staff grew to hundreds, and he had helped hire a lot of them.

Van Natta also got Facebook’s business engine running, assembling its first sales and finance teams and negotiating an investment from Microsoft in 2007 that valued the company at $15 billion. Revenue increased from less than $1 million to more than $150 million. At heart, though, Van Natta was a start-up guy. He thrived on the loosely organized chaos of a young company growing at hyperspeed. His greatest strength was deal-making, not management. In early 2008, in the wake of the disastrous launch of an advertising product called Beacon, Facebook’s senior team determined that the company needed a different kind of executive running the business. So Zuckerberg let Van Natta go.