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How Noah Kagan Got Fired From Facebook and Lost $100 Million 236

Posted by timothy
from the but-who's-counting dept.
First time accepted submitter abhi2012 writes "Noah Kagan, a former Facebook product manager, has written a brutally honest article about how and why he got fired from Facebook in 2006 and what he learned from it. The experience must be particularly painful, given that it eventually cost Kagan a $100 million fortune."
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How Noah Kagan Got Fired From Facebook and Lost $100 Million

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  • by 93 Escort Wagon (326346) on Sunday September 30, 2012 @11:04PM (#41510243)

    Do you have a Facebook account? If so, YOU are their product. They sell your eyes and ears to people who give them money for the privilege.

  • why do we care? (Score:5, Insightful)

    by phantomfive (622387) on Sunday September 30, 2012 @11:06PM (#41510265) Journal
    I don't know why we care about this guy, but he took firing pretty hard. Who doesn't? As he said, Facebook had an important part in his life, from the article:

    At that time, here’s the order of what was important in my life:
    1- Facebook
    2- Myself
    3- Food / Shelter

    OK, it sucks the get fired, but he lied in that list above, in reality he actually put himself above everything, and really abused his relationship with Facebook. As he later admits:

    I wanted attention, I put myself before Facebook. I hosted events at the office, published things on this blog to get attention and used the brand more than I added to it.

    Add to that he wasn't paying attention at all in meetings (well, I don't blame him for that but sometimes meetings are important), he didn't work well with others, and eventually he just annoyed the wrong people too much.

  • by GoodNewsJimDotCom (2244874) on Sunday September 30, 2012 @11:09PM (#41510279)
    Facebook took the old adage from the late 90s: Attract eyes and ears then you'll make money somehow.

    Nowadays there are ad networks that you can cash easy with this, but back in Google's time, it was like the underpants gnomes equation.

    The irony is Classmates.com was first on the scene for meeting your fellow highschoolers, but they charged you for the privilege!

    This teaches us one thing: Don't put any barriers in your website for adoption, even if the barrier is a paywall to profit you in the short run.

    I think this is why freemium games are coming into their own. You have more people playing, money from ads and some money from premium good sales, and if your game is good, more people will come play it than a traditional 60$ game.
  • by Samantha Wright (1324923) on Sunday September 30, 2012 @11:11PM (#41510287) Homepage Journal
    There isn't really a how here—just (rather gamy) reflections on possible "why"s. The piece is not really very good at generating sympathy, either; the author comes across as erratic, impatient, and insecure—more than a little like a stereotypical teenage girl in disguise. Perhaps the true lesson is that marketing is a strange, shallow world. (And more importantly, why doesn't the blog article mention any attempts at intervention before he was let go? Do they just randomly axe underperformers at FB, or was that another critical part of the coherent thinking process left out of the story?)
  • by Anonymous Coward on Sunday September 30, 2012 @11:15PM (#41510327)

    If so, YOU are their product.

    I love that people keep saying this like it's correct. No. They are not in the business of slavery. Grow up.

    They sell advertising space. That's it and that's all. Same as a newspaper, same as a TV show, same as a magazine, same as Slashdot. There's no reason to try to make it sound more evil than it is. They just do it better because they know you're (probably) between 30-40 and like automobiles.

  • He didnt... (Score:5, Insightful)

    by WGFCrafty (1062506) on Sunday September 30, 2012 @11:19PM (#41510347)
    He didn't lose the money when he got fired, I would say he lost it by not having a golden parachute.

    And he wasn't very insightful, I mean, he named 3 specific events and a SINGLE reason he thinks contributed to why he was fired.

    His reason is stupid. He's was a show-er (rigid non adapting thinker) and not a grow-er (some one who adapts and 'grows the brand') or a veteran (some one who grows a bunch).

    Completely arbitrary and meaningless stuff. He sounds like he was working in an environment where hyperbole sold, just apparently not for too long.
  • by aNonnyMouseCowered (2693969) on Sunday September 30, 2012 @11:22PM (#41510373)

    The guy's basically a marketing manager. You might be the smartest person in company, but if a glorified salesman is all you are, you can easily be cloned. The exception is if you developed enough good connections OUTSIDE the company that you can take a shitload of the client base if they fire you. I don't think this is the case with Facebook users, fake or otherwise.

    Of course, marketing types get paid more than the typical engineer if the product is successful. But if you want a more stable job, it's better to be the craftsman working at the product, than the pretty face selling it at the counter.

  • by jmerlin (1010641) on Sunday September 30, 2012 @11:23PM (#41510379)
    In the event of a pre-IPO company, it should also include the difference in a competitive salary vs current salary (and reasonable bonuses or raises) for the duration it will take before vesting occurs and insert "You're paying $____ for the possibility that you will cash out big." Just to put that in perspective.
  • by Tough Love (215404) on Sunday September 30, 2012 @11:30PM (#41510417)

    What exactly does Noah Kagan do? Writing blogs is certainly not his superpower. After reading it I felt I knew less than when I started.

  • Re:why do we care? (Score:2, Insightful)

    by Anonymous Coward on Sunday September 30, 2012 @11:33PM (#41510449)

    So quit.

  • wow (Score:5, Insightful)

    by buddyglass (925859) on Sunday September 30, 2012 @11:43PM (#41510477)
    I don't know the guy from Adam, but Kagan comes across as a bit of a douche. His lessons learned:

    1- Selfish. I wanted attention, I put myself before Facebook. I hosted events at the office, published things on this blog to get attention and used the brand more than I added to it. Lesson learned: The BEST way to get famous is make amazing stuff. That’s it. Not blogging, networking, etc.

    How about this lesson: be a little less superficial and worry about something besides getting famous.

    2- Marketing. The marketing team’s plan was not to do anything and the night before we opened Facebook to the professional market (anyone with a @microsoft.com, @dell.com, etc) I emailed TechCrunch to let Michael Arrington know to publish it in the morning. He ended up publishing it that night (I was at Coachella and will never again attend) before the actual product was released in the morning. I immediately notified the e-team and assumed full responsibility. Lesson learned: I don’t think what I did was that wrong since the marketing team did not do anything to promote our new features. My lesson learned was more I should have involved them instead of just going around them.

    Two lessons not learned: discretion and the ability to abide by someone else's decision when you disagree.

  • by MrLizardo (264289) on Sunday September 30, 2012 @11:44PM (#41510479) Journal

    I think you must be an optimist: They're no *less* evil than television networks, newspapers or Slashdot. (TV shows are sold to TV networks, i.e., the TV show is the product.) When organizations like this are private they (potentially) *can* retain the goals of their founders, but once they're public (and they're founders sell off their stock), they're *required* to try and make the biggest profit possible. They do this by selling certain demographics of eyeballs to certain advertisers. The user's attention is the product.

  • Re:why do we care? (Score:5, Insightful)

    by petsounds (593538) on Monday October 01, 2012 @12:24AM (#41510637)

    The single best take-home message in the post is nothing new, but have you truly internalized it? You are replaceable, and firing you would hurt you much more than the company.

    Generally, no. People are not replaceable. When you try to replace one person with another person who on paper seems to be equivalent, you will end up changing the company. At low-levels, the effect will generally be localized, although even at this level the Butterfly Effect can come into play. As you move up the pay scale, switching personnel can have more and more noticeable effects on the company. What role they are in tends to have different effects -- switching out people in a role of creating value for the company can change the company's value in an extreme way. Replacing middle managers tends more to have a multiplier effect on the value creators. And then there is the social dynamic one brings, which can cause huge problems within the company organism.

    I think an equivalency to your statement would be: you have no job security. And from an employer perspective: you have no security in retaining the people who give your company value. When either of these parties take those statements for granted, one or both parties will hurt from the loss.

  • Dont Care (Score:2, Insightful)

    by Osgeld (1900440) on Monday October 01, 2012 @12:27AM (#41510641)

    about some asshats reflection and regret brought on because he lost money

  • by MobileTatsu-NJG (946591) on Monday October 01, 2012 @12:29AM (#41510643)

    They sell advertising space. That's it and that's all. Same as a newspaper, same as a TV show, same as a magazine...

    I don't write the content for the newspaper, TV, or magazines. That little distinction there is important enough that everybody else gets it.

  • by FoolishOwl (1698506) on Monday October 01, 2012 @01:00AM (#41510725) Journal

    One of his lessons learned is that "everyone is replaceable", which is the sort of things action movie villains say when they're pointing a gun at the hero's head.

  • by bzipitidoo (647217) <bzipitidoo@yahoo.com> on Monday October 01, 2012 @01:35AM (#41510785) Journal

    why doesn't the blog article mention any attempts at intervention before he was let go?

    That's what I was wondering. From the sound of it, things went from hunky dory to gone in 60 seconds. Weren't there any warnings? Don't people communicate at FB? (Extremely ironic, that.) That end run around marketing, a instance in which communication was very badly handled, sounds like the likely reason, and could justify an immediate firing, but we can only guess. Zoning out at meetings is bad too, but not necessarily fatal. If the meetings were just big wastes of time, as too many tend to be, then he should have done something about that. Don't go to those meetings, or cancel them, or refocus them. It doesn't sound like those meetings were wastes of time, rather it sounds like they were about vital functions, but he found the subjects (massive spreadsheets and more meetings) "boring". Typical non-engineer attitude.

    He also goes a little overboard on eating crow and humble pie, which has me wondering about the sincerity of it. He may be doing some posturing, in order to better sell people on something such as his reformed character.

    Finally, he recommends that everyone go through the experience of being fired. Like hell! Good for people with hugely swollen heads, perhaps, when it is their fault. But many people are not massively overconfident braggarts, and many firings are very unfair, executed to cover up someone else's mistake, or to make room for the boss's nephew, or out of personal dislike and jealousy, or sheer and totally impersonal bureaucratic bungling, or dozens of other reasons that would get the employer sued for wrongful termination in a heartbeat if disclosed. All a firing does in those cases is show workers that employers won't treat them fairly. Stories of such firings are legion, but employers don't have to care because there are more desperate workers than jobs. We're expected to suck it up, and for the most part we accept this treatment.

  • by tnk1 (899206) on Monday October 01, 2012 @01:39AM (#41510793)

    There's money in niche products, but things like broad social networks are not built on niches. When you have a social network, you either get as many people on it as possible, or you alternately find a smaller group who is willing to pay and capable of paying. This is not an easy task. And if they pay, you'd better have some first class service and content, preferably service because content these days is pretty easy to copy unless you are marketing something with a short shelf life.

    Something like Facebook was started for college students and spread to everybody. They did what they needed to do, which is market for mass appeal. I can't argue with what they did, although I do wonder how far they can take it. The craptastic IPO was just another signal that FB needs to do something or it may not fare so well in the near future.

  • by Anonymous Coward on Monday October 01, 2012 @01:40AM (#41510795)

    "they're *required* to try and make the biggest profit possible"

    Prove it. I keep hearing that this is "the law", until I read something much more intelligent and educated sounding that said that's not true. I don't know.

    All I know is that the one time I was "given" stock options, it ended up as a tax burden for me and a tax right off for the company.

  • by dcollins (135727) on Monday October 01, 2012 @03:17AM (#41511071) Homepage

    Nothing in that language asserts that "client's best interest == biggest profit possible".

  • Re:What? (Score:2, Insightful)

    by umghhh (965931) on Monday October 01, 2012 @03:37AM (#41511125)
    So the actual lesson from this may be that marketing people are a waste of bandwidth and the articles about them are that too. TFA confirms this quite nicely.
  • by KramberryKoncerto (2552046) on Monday October 01, 2012 @03:41AM (#41511135)
    Well, niches are exactly why Facebook and Google want as much data from you as possible. In hindsight their business models should actually encourage all sorts of niches, because a big problem getting in a niche market is not knowing how to find the right customers. They are more likely to seek help from these data-mining advertisers, and they also pay more per click. Niches, both in terms of demand and supply, is probably essential to their business. The problem you state is in the unimaginative that only try to mimic the success of well-known big players.
  • by SmallFurryCreature (593017) on Monday October 01, 2012 @04:22AM (#41511245) Journal

    What do you think the letter section is?

    Oh and what are you doing when you create a post on slashdot which generates revenue from advertising?

  • by Stormthirst (66538) on Monday October 01, 2012 @06:21AM (#41511527)

    Ad-blocking FTW

  • Re:That.. (Score:2, Insightful)

    by mrjb (547783) on Monday October 01, 2012 @07:33AM (#41511723)
    "It would suck?" It's pretty hard to lose 100 million unless you have it. So, he had more than most people make in a lifetime, and even got to enjoy it for a while before he lost it. He was lucky enough (this kind of money doesn't just come from hard work and talent, people) to have a taste of something that other people can't even begin to dream of, and now he lost it? Boo fscking hoo.
  • Re:What? (Score:4, Insightful)

    by Type44Q (1233630) on Monday October 01, 2012 @08:19AM (#41511977)

    Almost everyone learn them for free.

    I beg to differ; IMHO, I'd say most never learn them at any price.

  • by Kazoo the Clown (644526) on Monday October 01, 2012 @09:23AM (#41512403)
    That page will go over great on his next job interview. Even if you could overlook the fact he was incompetent as a product manager, would you want to hire someone so willing to air his dirty laundry in public?

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