Facebook’s IPO is all over the news and who am I to ignore a topic of obvious interest? Suffice it to say that IMHO valuing Facebook above McDonald’s, Citigroup and Amazon is totally ridiculous—but what do I know?

However, I’m not alone.

A survey done by WhisperNumber.com polled 1,100 registered traders and investors, found that 71% do not consider Facebook a long-term investment and will not be buying share after Facebook’s initial public offering.

And comparing Facebook to Google isn’t a no brainer; it’s a no brains-er.

But when Facebook amended its S-1 on Monday…the company reported a season decline in revenues hitting $1.058 billion compared to $1.131 billion in the quarter before — the questions started cropping up about whether it was too much to ask that Facebook soar in the markets like Google had. Just prior to Google’s IPO, on the other hand was gearing up quarter after quarter pre-IPO and experienced sequential revenue growth of 27.2% from Q4 to Q1 before its IPO.

Bottom line is that for garden-variety investors (that us) making a profit from Facebook isn’t likely (unless, IMHO again, the market crashes and you still have spare change to invest. And even if you there would probably be better places to use it.)

But if history offers any lesson, average investors face steep odds if they hope to make big money in a much-hyped stock like Facebook.

The IPO should create at least 1000 new millionaires, but it’s unlikely that wealth will be ostentatiously displayed; the exception being when funding another startup—or buying a bicycle.

The hand-painted Italian bicycles that flash across Silicon Valley on Saturday mornings have become the new Ferrari — and only the cognoscenti could imagine that they cost more than $20,000.

My favorite bit of IPO wisdom addressed to all those newbie Facebook millionaires comes from Seattle-based entrepreneur and investor Jonathan Sposato, who earned his first taste of wealth at Microsoft 20 years ago, then founded Picnik, which was bought be Google, and is currently GeekWire’s chairman.

For some, stock wealth launched entrepreneurship and philanthropy. For others, materialism and conspicuous consumption. It was a lottery ticket, plain and simple. And statistically, 90% of all lottery ticket winners go broke after 3 years. And while people seldom talk about money in our culture, avoiding the topic makes history repeat itself, and stigmatizes issues around money.

Thus, I offer some very candid advice for my younger colleagues at Facebook, who are about to have a life-changing event.

Finally, here is some useful advice in the form of what to consider when offered equity in lieu of cash.

The shares-versus-dollars decision presents a common dilemma for startup staffers and consultants. Early-stage companies often don’t have the ready money to just write a cheque, so they have to lure talent with the promise of stock. (…) If you are in the fortunate position of weighing a juicy stock offer, what issues should colour your decision?

Flickr image credit: pedroelcarvalho

Maybe because it is finally spring where I live, but my mind is skipping around topics like a butterfly (although I haven’t seen any yet).

Everywhere you go the tech world, especially startups, are scrambling to hire and moaning over the perceived lack of candidates. But finding talented engineers is a snap in comparison to finding women willing to commit to a convent. Being that it’s 2012, both groups have turned to social media to solve the problem.

Rather than leave the future of the convents to prayer and chance, Sister Elaine Lachance has turned to the Internet. She’s using social media and blogging to attract women who feel the calling to serve God and their community. “But I knew I had to go there, that I had to do it,” said Lachance, who turned 70 on Sunday. “You have to go where the young people are. And that’s where they are.”

Bend, Oregon is the backdrop of an encouraging story on jobs thanks to Gary Fish, who founded Deschutes Brewery in 1988.

With 80,000 people surrounded by not much of anything — with no Interstate, no university, and the closest major city 160 miles away across steep and snowy mountains — beer has had room to make a difference. (…) “You have to thank Gary Fish for kind of creating that culture,” said Larry Sidor, a former brew master at Deschutes who left last year to open a brewery of his own this summer, CRUX Fermentation Project. “It’s been kind of a training ground, a spawning ground for the craft movement.”

I have to admit I don’t understand the willingness of people to hire strangers to do both everyday and more exotic “life stuff” for them, but doing so is more tsunami than trend.

We’ve put a self-perpetuating cycle in motion. The more anxious, isolated and time-deprived we are, the more likely we are to turn to paid personal services. To finance these extra services, we work longer hours. This leaves less time to spend with family, friends and neighbors; we become less likely to call on them for help, and they on us.

Finally, I was reminded that short-term thinking always comes back to bite when I read in January that teens were “showing their love” by sharing everything, including passwords; actions guaranteed to create mayhem as teen feelings shift.

Young couples have long signaled their devotion to each other by various means — the gift of a letterman jacket, or an exchange of class rings or ID bracelets. (…) It has become fashionable for young people to express their affection for each other by sharing their passwords to e-mail, Facebook and other accounts.

Fast forward to adulthood and that tell-the-world social sharing is still creating mayhem, although not because of changing affections.

After a few relationship-testing episodes, some spouses have started insisting that their partners ask for approval before posting comments and photographs that include them. Couples also are talking through rules as early as the first date (a kind of social media prenup) about what is O.K. to share. Even tweeting about something as seemingly innocent as a house repair can become a lesson in boundary-setting.

Enjoy today and have a memorable Mother’s Day tomorrow.

Flickr image credit: pedroelcarvalho

In case you haven’t read the profile of Joshua Kushner, founder of Thrive Capital, which closed a Series B investment in Instagram 72 hours before the Facebook acquisition, I’m going to share some of the smartest advice I’ve heard.

It’s just 7 words describing 3 actions, but those actions will save your company when it’s hottest or when events in the startup ecosystem serve up major distraction, like Instagram.

Like all Facebook-related news, the deal stirred up a media frenzy. Kushner was already back in his Nolita offices in Manhattan and left notes for each of his four teammates: “Heads Down”; “Stay Focused”; “Ignore the Noise.”

Sounds simple, but when stuff starts happening, whether internal or external, developers, marketers, sales people and everyone else can quickly develop severe cases of ADD.

Those seven words make a great mantra; one worth putting on the walls.

Just remember, Kushner’s advice won’t work unless it’s followed from the top down.

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(no ducks today:)

Every time someone gets in trouble or is fired for mouthing off about a boss or employer on social media people go up in flames citing their right to Freedom of Speech, but guess what?

The First Amendment doesn’t cover the workplace.

According to Wharton legal studies and business ethics professor Janice Bellace it just ain’t so.

She says in the U.S., anyone trying to challenge such a practice in court would have almost no legal ground to stand on. “People think they have more rights than they actually have; they seem to think they have rights that are just not there.” For example, she notes that employment law for decades has said that non-unionized workers could always be fired for taking actions that publicly disparage their employers.

Does the First Amendment protect candidates when they are asked for access to their social media? Probably not.

“It has always been the case that employers could ask others about you for a reference and, if you refuse to give them names, they can refuse to hire you.”

For years I’ve enviously read about privacy rights in Europe and watched the European Union enforce them, no matter the political/economic clout of the companies.

And for years friends and business associates laughed at my concerns and cited the First Amendment as our best protection.

While it is marvelous protection for political and religious freedom, it would be wise to remember that it has no protective power in the wonderful world of work.

Sure, that may change, but you have to function in the current reality no matter how hard you are willing to work to change it.

Flickr image credit: William F. Yurasko

All the world is Facebook—or so Facebook would have you believe—especially with its upcoming IPO.

I don’t have a Facebook account (we maintain on for Option Sanity™, although it’s not particularly active at present). The more I hear the surer I am that I don’t want one.

Mark Zukerberg would have you believe that Facebook’s only interest is making your life better, but a comment from RickyGunns reveals a more and more frequent and unflattering view of his colossus.

…he plans to make it a mandatory agenda to broadcast everyone’s life in real time invading all privacy for his own legacy and profit trying to be another Bill Gates with the exception that he will do it at anyones expense.

Long defamed for frequent, unannounced changes to its (so-called) privacy policy, problems are now arising that are likely to play out in Congress and at Supreme Court level as the demand by private employers, government and colleges for access to candidates’ Facebook pages (either by asking for logins or to be friended) escalates.

In their efforts to vet applicants, some companies and government agencies are going beyond merely glancing at a person’s social networking profiles and instead asking to log in as the user to have a look around.

In 2007 I wrote about an executive’s dilemma when he found out that the wife of a senior manager cited abuse when she sued for divorce. Although his work performance was fine, the executive was uncomfortable having him on staff. Liz Ryan, a well know HR guru, said, “Ron should be evaluating Terry’s performance on the job, and nothing else.” Most of the other commenters agreed with this. That’s only five years ago, but the personal/professional boundaries have changed drastically.

Wharton management professor Nancy Rothbard says, “The core of the problem is the blending of personal and professional lives. We are still in the infancy of trying to understand how to deal with all this.”

Interestingly enough it is younger people who are changing their behavior to meet the challenge.

But today’s spring breakers — at least some of them — say they have been tamed, in part, not by parents or colleges or the fed-up cities they invade, but by the hand-held gizmos they hold dearest and the fear of being betrayed by an unsavory, unsanctioned photo or video popping up on Facebook or YouTube.

Or opting out completely.

But the company is running into a roadblock in this country. Some people, even on the younger end of the age spectrum, just refuse to participate, including people who have given it a try.

And there are a number of startups rushing to meet the needs of those who want to socialize only with those they really know.

Dave Morin, who worked at Facebook for four years before leaving to help found Path in 2010, explains the rationale for his company this way: “Facebook has made socializing on the Internet normal. But now there is an opportunity to return to intimate socializing.”

Flickr image credit: pedroelcarvalho

This post is for all the entrepreneurs and small biz owners who constantly tell me that the best (only) way to reach a large audience and move product is via Facebook.

It hasn’t been for many companies, such as Gamestop, J.C. Penney, Nordstrom, 1-800-FLOWERS, Delta Air Lines, Diane Von Furstenberg Studio and Seven for all Mankind.

Even Gap, which, together with its Banana Republic and Old Navy divisions, has 5.6 million Facebook fans, stopped selling on Facebook.

These are companies with abundant talent and dollars to invest in selling online, but they are opting not to do it on Facebook.

For young companies and small biz there is a major lesson here.

“It was basically just another place to shop for all the stuff already available on the retailer websites. I give so-called F-commerce an ‘F.’” –Wade Gerten, chief executive officer of social media developer 8thBridge

If there is one lesson that should have come down from the dot com era it is that visitors don’t necessarily translate to buyers.

This isn’t surprising if you look at people’s actions in the real world.

People of all ages spend time at the mall whether to eat, hang out with friends or for indoor recreation in bad weather, but that doesn’t mean they shop and even if they shop it doesn’t mean they buy.

This isn’t to say that you can’t build a store on Facebook and make it a success, but you need to think about whether that is the best use of your resources.

Before committing a large portion, let alone all, of your resources to build on the Facebook platform you should consider two inescapable facts.

1. People do hang out with friends on Facebook, but it is to socialize, rather than shop; and
2. you have no control on policies, such as privacy and information sharing, that garnering more and more attention from even casual users.

I’m not suggesting that you ignore Facebook and other social media sites, rather that you recognize them as great places to build your brand as opposed to selling your products.

Flickr image credit: The-Nancy-Minor-Team

Did you start your company to become a millionaire in a few years?

If so, you’re in for a rude awakening.

If candidates’ reason for joining is to become rich when the company exits should raise more than red flags; it should ring every alarm you have and send you running for the nearest exit.

That’s true no matter how badly you need his skills or how much the team likes him.

Candidates who join because they believe they’ll be millionaires in a few years are walking time bombs and hiring them could be your worst nightmare.

Why?

Because, as the man once said, “It ain’t gonna happen.”

This isn’t about the well know statistic that half of all startups fail (they don’t), but it is based on some interesting stats I came across in a blog called the “MarketInfoGuide” sponsored by China Research and Intelligence, a market research and consulting firm in Shanghai.

Slide sold for 200 million dollars to Google, but the employees made almost nothing, because so little was left for the common stock shareholders after the preferred shareholders were paid back.

I bounced it off Matt Weeks to see how solid the information and numbers were.

“Math is wrong regarding the participating preferred, but the main point is still pretty accurate… don’t join a startup to make a million in 3 yrs.”

Also, some phrasing slants the text in a decidedly negative way, but that doesn’t change the stats.

So why should you start a company?

To solve a problem, make a difference in people’s lives, maybe even help solve one or another of society’s ills and create a happy place to work.

Why should you join a startup?

To work on the bleeding edge of technology, contribute to something amazing, be challenged, grow exponentially, be happy.

Whichever side of the table you are on remember that Rome wasn’t built in a day, Google was founded in 1998 and IPOed six years later; and Facebook was founded eight years ago in 2004.

Even when it happens it doesn’t happen fast.

Flickr image credit: Alan Cleaver

Unless you’ve been living on another planet or alternative reality you’ve heard that Facebook is going public.

Facebook loves to position itself as users’ friend, with only their best interests at heart.

In his founder’s letter Mark Zuckerberg said “We don’t build services to make money; we make money to build better services.”

Huh?

There is far more truth in the editorial comment, “This also seems disingenuous considering that Facebook’s biggest triumph is to help advertisers by mining user data to target ads and to train them to treat corporate brands like friends.”

The exception is the 845 million people who log in on Facebook’s mobile app, “We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”

But I’m sure they’ll find a way.
How much personal data does Facebook collect?

Consider the disk sent to Max Schrems, a 24-year-old law school student, a Facebook user since 2008, who is spearheading a protest against “Facebook’s illegal practices of collecting and marketing users’ personal data, often without consent.”

The disk contained 1,222 pages of information.

That’s a very rich vein of ore for any marketer to mine.
Privacy is a far bigger deal in Europe.

Europeans demand more privacy than Americans and the EU is far more willing to enforce that desire than the financially beholden US Congress.

That makes international monetization more difficult.

The drive for monetization underlies everything Facebook does—but that’s not what’s bad.

What’s bad is their pretense that it isn’t true.

Facebook as a social force isn’t going away, but you would be wise to remember that Facebook is not your friend.

Flickr image credit: marcopako 

In spite of Monday’s post I’m still ambivalent about social media and I’m not just thinking about Facebook, Twitter and their ilk, but also blogs and other commentary.

Part of my ambivalence is from the anonymity available. Mark Suster defends it and I understand the necessity in places where dissent is dangerous.

But what works and is necessary in dissent is destructive when embraced by local gossips.

One thing social media guarantees is that at one time or another politically correct attitudes will fall prey to actual attitudes and reality can be pretty ugly.

Bloggers have long argued that they deserve the same protections as journalists, but in most cases I disagree. While there are a few exceptions, most bloggers have neither the interest, ability nor resources to do in-depth research of a subject; what we produce is commentary and opinion pieces, so I am glad when a truly destructive blogger is sued and loses.

Of course, a primary reason for my dislike of social media is that it brings out so much human unthinking, me-focused stupidity. Seriously. If you thought distracted driving—email, texting, talking etc.—was bad try distracted doctoring!

And while Facebook and Google initiate efforts to become forces of good, not all twenty-somethings-and-up feel the need. (I have company:)

Crowdsourcing is a new wrinkle in the social world and one that I find positively uplifting. Join me next Saturday for a look at it.

Flickr image credit: pedroelcarvalho

As most of my readers know, I’m not into social media; I am on LinkedIn and my company’s new product Option Sanity is on Facebook and Twitter, but other than the blog posts, I can’t say that any of them are particularly active.

I also freely admit that I don’t really understand how to use them for business (I have no interest in building my ‘personal brand’).

The negative side, especially the bullying, personal attacks, hate and amazing level of active stupidity, that I read about dismays and disgusts me. Beyond the negative much of what I heard was just totally inane; granted, I’m not a celebrity watcher and wouldn’t care what God had for breakfast, assuming h/she bothered posting the information.

Then came the so-called Arab Spring and suddenly social media showed a decidedly positive side.

Right around Thanksgiving I read about Amit Gupta’s friends who started reaching out after he was diagnosed with leukemia.

And so his friends set up a website, amitguptaneedsyou.com, to encourage donor drives, during which the tissue type of potential donors is collected with a cheek swab. The site links to the National Marrow Donor Program website. It provides instructions on hosting a bone marrow dive and provides PDF fliers to promote the events. Yes, there is a Facebook page. Twitter blew up with news of the drives and Gupta’s health. And, of course, there’s a Twitter hashtag (#IswabbedforAmit).

When word of Gupta’s need for a match started circulating, unique visits to the marrow donor program website increased from about 16,000 on a typical day to 40,000. “That’s 21/2 times,” says Dr. Jeffrey Chell, the donor program’s CEO. “That’s impressive.”

I found many other stories of social media’s impact, and lives saved, as a result.

It’s good to know that social media, especially the 5000 pound gorillas Twitter and Facebook, can facilitate more real good than just keeping families in touch.

I guess the good offsets the bad.

Of course, the real problem is the humans that use it; they are just the same as they’ve always been—social media just makes them more so.

Flickr image credit: PUBLISYST Comunicaciones