THE Social Network is a 2010 American biographical drama film adapted from Ben Mezrich’s 2009 book The Accidental Billionaires.
The film portrays the founding of social networking website Facebook and the resulting lawsuits. Since its release, The Social Network has been cited as inspiring involvement in start-ups and social media.
It has also helped fuel an emerging perception that “techies have become the new rock stars”. In terms of the plot, Mark Zuckerberg is dumped by his girlfriend Erica Albright.
Returning to his dorm, he writes an insulting post about Albright on his LiveJournal blog. This then leads to the creation of the Facebook, a social networking website which grows in popularity and extends from Havard to Yale, Columbia and then Stanford University.
The story takes a turn when Zuckerberg meets Napster co-founder Sean Parker, who presents a “billion-dollar” vision for the company. He also suggests renaming the site Facebook.
In real life, Sean Parker is an American entrepreneur, most notable for co-founding the file-sharing computer service Napster and serving as the first president of Facebook.
He also co-founded Plaxo, Causes, Airtime.com, and Brigade, an online platform for civic engagement. As president, Parker brought on Peter Thiel as Facebook’s first investor.
In the initial round of funding, he negotiated for Zuckerberg to retain three of Facebook’s five board seats, which gave Zuckerberg control of the company. It allowed Facebook the freedom to remain a private company.
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Additionally, Parker is said to have championed Facebook’s clean user interface and developed its photo-sharing function. Zuckerberg notes that “Sean was pivotal in helping Facebook transform from a college project into a real company”.
That said, there are critical themes and key lessons from the film that can be applied in the world of business, trading and investing.
The last-mover advantage
The film portrays an important business concept about the last mover advantage.
According to Peter Thiel, “First mover isn’t what’s important — it’s the last mover. Like Microsoft was the last operating system and so was Google the last search engine”.
It is basically the advantage that a company has when it is the last to introduce a new product, service, or technology, because it can learn from developments that have taken place, or from what others have done.
The thinking is that the last entrant to the market benefits from mistakes made by earlier entrants.
In the technology space, first mover dominant leaders included the likes of Napster, Mxit, Myspace and Skype.
It should be noted that MySpace would have become the largest social network but instead was beaten by the late starter Facebook. While first movers may have enough resources and scale to win, their demise comes in when they fail to follow customer trends.
Stimulate entrepreneurship
The film also portrays Harvard University as an institution focused on entrepreneurship. Students are encouraged to embark on “projects” and create jobs as opposed to just finding a job.
Piggy also notes that whether it is a ranking of MBA programmes, entrepreneurship MBAs, or MBAs with the most notable alumni, Harvard Business School (HBS) — the birthplace of the MBA itself — is often found around the top of the list.
Stimulating an entrepreneurial culture and encouraging innovation in institutions is indeed a key recipe for success in business and the economy at large.
Targeted customer
Businesses should aim to address the needs of the targeted customer. One of the major reasons that triggered Facebook to go viral was that it addressed the needs of targeted users.
Most college students were intrigued by the idea of knowing “the relationship status” of friends within their network.
Visuals in the form of pictures and videos also added life to the connections made on the platform.
Monetisation strategy
The Social Network also gives ideas of how creators and digital marketers can earn money by placing ads from other companies on their site or marketplace.
This model is very popular among online marketplaces because it allows one to make regular profits. Types of marketing integrations include mentions of the advertiser’s products in the site’s blog or news feed, banners on the main page and product listings.
The main advantage of advertising is that it allows the creator to make the platform free for users, which increases their loyalty.
In addition, it helps increase the value of the marketplace by collecting analytical information or data for marketing campaigns.
Strong work ethic
Mark Zuckerberg and his team had a strong work ethic that involved programming “thousands and thousands of codes” in the development of the Facebook platform.
Generally, a strong work ethic is crucial for career success as it demonstrates reliability, commitment, and professionalism, leading to increased opportunities for promotion, recognition, and building a positive reputation in any industry.
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- Matsika is a corporate finance specialist with Switz View Wealth Management. — +263 78 358 4745/ batanaim@switzview.com
