Article reprint source: Smart Pie

Source: Forbes

As a representative figure in the social media industry, Mark Zuckerberg is about to enter his 40s, and he is also experiencing his own "Bill Gates moment": he has become more stable (a little bit), more mature (somewhat), and is transforming his company beyond recognition with amazing confidence. This is a big gamble on the future of human life, and it is also a legacy he leaves to future generations.

By Kerry A. Dolan

In a glass-walled conference room nicknamed "The Aquarium," Mark Zuckerberg conducted a cost/benefit analysis of the subject that has made him headlines this year: mixed martial arts. Today, he focused on blows to the head and body. "Getting hit in the face doesn't hurt that much," he said calmly, "but it causes brain damage."

Zuckerberg's cage fight with Elon Musk obviously won't happen ("I didn't think he meant it."), but it allows Zuckerberg to return to the trend in the stupidest way, and it also achieves a business purpose: Zuckerberg has made many mistakes and been entangled in scandals that have "undermined democracy" throughout his career, which has negatively affected his career achievements. Therefore, this dispute with Musk is a rare opportunity - it allows Zuckerberg to play the hero in front of such a surly villain as Musk, and prove that Facebook's former "toddler CEO" has now grown into a strategist who plans to master the Meta.

"It's not your competitors that determine your fate, but your actions," he said.

Zuckerberg's Bill Gates moment

Such reflections come at an opportune time. When Zuckerberg turns 40 next May, he will have a fortune of about $106 billion, a philanthropy designed to maximize impact, and a commitment to transforming one of the world’s most important companies, over which he has near-total control. In many ways, he is having his own Bill Gates moment.

For example, both of them dropped out of Harvard University and founded a historically significant technology company; both of them were called "nerds", but were geniuses in their own professional fields; both of them had fans and enemies on their way to the top, while facing antitrust issues.

But as he approached 40, Gates suddenly flipped the script, transforming his image from an incorrigible monopolist to a global philanthropist, a win-win for both his company and his legacy.

So what would Zuckerberg do? The narrative of his friend and colleague, Spotify founder Daniel Ek, brings us back to the present.

Ek said that first there was "Mark the Social Network," referring to the 2010 movie "The Social Network," which portrayed Zuckerberg as an arrogant, duplicitous genius; and then there was "Cambridge Analytica" or "Evil Mark," a reference to Facebook's data collection scandal.

"It's what made Mark who he is today. His public persona is much more authentic," Ek said, stressing that the "three marks" he calls them reflect public perceptions, not his own. "Mark has learned a lot over the past few years, and there's a new fire in him," Ek said. "He realizes that he has this huge platform and he needs to take responsibility... But there's still some of the old self who took a gamble even when everyone told him 'it's never going to work.'" The most noteworthy of these bets is his potential $100 billion investment in the "metaverse," a virtual world that is rich in imagination but has yet to be proven to be feasible. Even if it can generate revenue, it will be seven years at the earliest.

Mission Impossible | Zuckerberg and his wife, pediatrician Priscilla Chan, have taken on an unattainable goal: to cure, control or prevent all diseases by the end of this century. "The things we're talking about may not even be possible in our children's lifetimes," Chan said. Image source: META

Zuckerberg said that both he and Meta follow a "martial arts worldview" that involves respect, purpose, self-discipline and many other management textbook cliches. But ultimately, the more mature Zuckerberg, now the "third Mark," will follow one MMA principle: self-awareness. "When you compete, you're not fighting someone else, you're fighting yourself," he said. "You're just trying to become a better version of yourself."

In his quest for reinvention, Zuckerberg has complete leeway. From a work perspective, no one can tell him what to do. Facebook's dual-class share structure gives him absolute control over the company. He currently owns 99% of the company's Class B shares (which come with super-voting rights) and 61% of the total voting power, making him both incapable of being fired and largely immune from responsibility for the company.

“Can you get all the other shareholders to vote against Mark?” said his friend, Facebook co-founder Dustin Moskovitz. “No, you can’t.”

That’s the basic modus operandi for Mark the Social Network—and he did it on the advice of Sean Parker, the co-founder of Napster and former president of Facebook. Even Zuckerberg’s early business cards read “I’m CEO, BITCH.” In the early days of Facebook, Zuckerberg’s desire to control his own destiny became stronger. He recalls the time in 2006, when Facebook was just two years old, when Yahoo offered to buy it for $1 billion. “I didn’t want to sell the company, and I guess the investors were thinking, ‘Maybe we should get a new set of managers?’ And I was like, ‘Yeah, well, you can’t do that,’ ” he chuckles.

Apparently, Zuckerberg sees this ownership structure as a feature of the company, not a flaw. "There are a lot of companies in the world that have a lot of capital... but don't have the leadership or board structure that allows them to make big bets on the future," he said. "But we are a company controlled by our founders."

This equity structure has undoubtedly helped Facebook make several acquisitions that were once seen as bold but are now viewed with respect (WhatsApp), curiosity (Oculus), or reverence (Instagram, one of the best corporate acquisitions of the century).

Yet, as Facebook went public in 2012 with a market value of nearly $82 billion, those successes also led to the “Evil Mark” period, which can be summed up in one word: hubris. Around 2015, Zuckerberg went on a listening tour with fishermen, farmers, and firefighters in the Midwest. Meanwhile, in Menlo Park, California, his company, which connected the world better than any other, was being used to attack democracy on a massive scale.

This is no small matter. In 2014, Facebook’s algorithms amplified calls for ethnic violence in Myanmar, helping to incite targeting of the Rohingya minority. In 2016, Cambridge Analytica, an advisor to Donald Trump’s campaign, improperly used data collected from Facebook with the intent to build voter profiles ahead of the presidential election. That same year, Russia essentially turned Facebook into an anti-democratic tool for discord. In 2021, whistleblower Frances Haugen revealed that Facebook’s leadership knew about the harm its products could cause but still prioritized profits and growth.

"Mark Zuckerberg's legacy will be the role his company played in undermining democracy," said venture capitalist Roger McNamee, one of Facebook's early investors (and a former Forbes investor) and now an outspoken critic. "Without Facebook, the world would be a completely different place... and a much better place than it is today. It's a tragedy for a man who had so many opportunities to do good."

Zuckerberg's wealth myth and vision

In 2008, at the age of 24, Facebook founder Zuckerberg became the youngest self-made billionaire on the Forbes 400 list of the richest Americans. Seven years later, he became the youngest to make the top ten.

Zuckerberg initially dismissed concerns about Facebook being used to interfere with the 2016 US election as a "crazy idea," even though it was happening right under his nose. But now, he said, "certain governments around the world will continue to try to conduct activities like this," adding, "I think our team has become more sophisticated in how we deal with this."

That’s about all the response we’re likely to get from him. Voting control has largely insulated him from consequences beyond an apology. “We made a big mistake by not having a broad enough sense of our responsibility,” he said at a 2018 congressional hearing to apologize for the Cambridge Analytica scandal. “It’s my fault, and I’m sorry. I founded Facebook, I run it, and I’m responsible for what happened here.”

But being responsible and being accountable are different. Especially when the big asset firms that back him, including Vanguard, BlackRock and Fidelity, see that despite these missteps, he has delivered an undisputedly brilliant track record for shareholders. While Meta’s stock has lagged the S&P 500 by nearly 16 percentage points over the past three years, it has outperformed the index by 31 percentage points over the past five and 367 percentage points over the past 10 years.

In theory, benevolent dictatorship can create greatness. “There aren’t many places in the world that are worth betting on for the long term like we are,” Zuckerberg said. But without self-awareness, such benevolence can look more like what Ek calls “evil Mark” — especially when the CEO’s reign could exceed half a century.

“I think I’m in charge of Meta for a long time,” Zuckerberg said.

While it’s hard to pinpoint maturity for anyone, it’s helpful to consider what September 2021 will look like when looking at Zuckerberg and the “third Mark.”

At the time, Facebook’s stock price had just hit an all-time high, the company’s market value was approaching $1.1 trillion, and Zuckerberg himself was worth $136 billion. His push into the Metaverse was also proceeding rapidly. However, the following month, he announced that he would rename Facebook to Meta Platforms, betting his brand that the Metaverse would be the future of the tech world—as defined by the founder-led gamble.

The reckoning ensued. Over the next 14 months, Meta's 2022 net profit fell 41% as annual revenue fell for the first time, causing Meta's stock price to plummet 75% and Zuckerberg's net worth to plummet to $33 billion. In addition, Apple made a privacy update to its mobile operating system iOS in 2021, making it more difficult for tech companies to track users across applications. Another culprit is competition from TikTok.

The latest version of Meta's Quest headset, which offers "mixed reality" capabilities (a fusion of virtual reality and the real world), is expected to be released this fall for $500. The above image shows a prototype of the device. Image credit: META

Last year, Zuckerberg did something uncharacteristic. No hard-nosed pushback, no belated, half-hearted apologies. Instead, his posture shifted slightly. Over the previous four years, Zuckerberg’s headcount had ballooned from 33,600 to 87,000. But in November, Zuckerberg announced more than 11,000 layoffs, or 13% of the company’s headcount, and another 10,000 in March. “We made some very difficult decisions last year,” he said grimly. “These were clearly not your intent.”

He continued: “We built this operating framework for the company to accomplish two goals. One is to allow us to operate more efficiently and build better products faster; the other is to ensure that we have enough financial space to cushion any bumps we encounter along the way so that we can continue to invest in our long-term vision, which is largely the significant investments we are making in these two areas of AI and the Metaverse.”

That vision has remained the same, even though some believe the Metaverse has failed and Zuckerberg has publicly said it will take 10 years for the Metaverse to be profitable. Meta has racked up about $40 billion in operating losses on the idea of ​​another virtual world, led by its Reality Labs, but Zuckerberg remains fully invested.

According to an internal document cited by the Wall Street Journal in February, Horizon Worlds, a free virtual reality app developed for the Quest VR headset that was supposed to usher in the era of immersive experiences and VR teleconferencing, failed to achieve its goal of 500,000 monthly active users by 2022, with less than 200,000 monthly active users. Even Zuckerberg admitted that Horizon Worlds did not achieve the retention rate it should have. He said: "It's one thing to say it was an 'impressive experience' and another to say 'I want to have a meeting like this every week'."

Meta CFO Susan Li added: “If I were calling the shots, I might have made a different investment in Reality Labs, for example.”

Lee noted that her comments would not surprise Zuckerberg because he encourages such debates. As Zuckerberg took the criticism and corrected his mistakes, the market responded. Meta's stock price has more than tripled from its low point at the end of 2022, thanks to about $38 billion worth of stock buybacks since the beginning of last year.

Analysts generally expect Meta's revenue to grow 14% this year to nearly $133 billion, and net income to surge 50% to $34 billion, bringing it closer to its peak two years ago. The resulting stock price rally has put Zuckerberg back among the world's top 10 richest people.

“What are you spending all this money on?” “We’re trying to put a supercomputer in an ordinary pair of glasses.”

For him, the Metaverse is part of the company's long-term vision, which includes not only virtual and augmented reality, but also artificial intelligence. In an interview with Forbes in February, Bill Gates described the latest advances in artificial intelligence as "as important as personal computers or the Internet," and Zuckerberg also sees the mainstreaming of artificial intelligence as a transformative event. Like many other tech giants, Meta has built a large language model to train the artificial intelligence that will define its future. The model is called Llama 2, an open source model that will be integrated into Meta's various products.

“AI is going to be in everything,” he said, outlining a new world that now sounds familiar, starting with smart assistants and ending with holograms of coworkers in business meetings. Zuckerberg also believes AI will power a range of new products, including chatbot “personas.”

Artificial intelligence is another expensive, forward-looking bet, he acknowledges. But he is Meta’s only significant shareholder, and he has plenty of patience. “It’s going to take some time to fully develop augmented reality glasses,” he says. “Most of the Reality Labs budget is going into that. So if anyone asks, ‘Where are you spending all your money?’ I’d say, ‘We’re trying to put a supercomputer in a pair of glasses.’ ”

If Meta can power through the development process and get there first, it could define a new market. Otherwise, it could be a big, fast flop like so many of the company’s previous products: Facebook’s phone, the now-abandoned Portals video chat device and the messy Libra cryptocurrency.

“Failure is a very common thing in our space, and we keep failing and working on things that we think people will like,” said Andrew “Boz” Bosworth, Meta’s chief technology officer. “And if they don’t like it, we ask, ‘Why don’t you like it?’ And we keep asking. And then we keep iterating until we find product-market fit. We’re pretty good at that.”

The third “Mark” of practicing charity

If the first two "Marks" are how the public sees him, then the third "Mark" must have understood the true meaning of Gates' transformation of his public image, which is to focus on and commit to the development of great public causes in his 40s. In fact, Zuckerberg was one of the first signatories of the "Giving Pledge" at the age of 26. The "Giving Pledge" is a campaign initiated by Gates and Warren Buffett that requires billionaires to commit at least half of their wealth to charity.

"Bill firmly believed that if you want to learn philanthropy as a discipline and you want to learn it well as you get older, you need to practice it," Zuckerberg said.

In 2015, just before their daughter was born, Zuckerberg and his wife, Priscilla Chan, wrote a letter to their daughter pledging to donate 99% of their Facebook shares to their philanthropic efforts, a pledge that became known as the Chan Zuckerberg Initiative, or CZI. Today, those shares are worth about $103 billion (plus the $4.2 billion they’ve already given away). If they keep going (and there’s no sign they might), CZI will become one of the world’s largest philanthropic efforts, second only to those of Gates and his ex-wife, Melinda French Gates, and potentially even larger, depending on Meta’s future performance.

CZI is “an incredible opportunity,” Chan says. Unlike other traditional charities, it is set up as a limited liability company that, in addition to donating money, makes venture investments in for-profit companies that align with its goals. It also funds advocacy work. The LLC setup means Zuckerberg and Chan don’t get an immediate tax break or have to disclose their activities. But when they transfer assets from the LLC to CZI’s charitable foundation, the couple can take a tax break, and must disclose the information. CZI’s audacious goal is to help science cure, manage and prevent all disease by the end of the century. The goal is lofty, but the reality of providing treatments is complex. Chan is undeterred. “It’s very fulfilling to work on problems that people thought were impossible to solve,” she says.

To this end, CZI plans to build the world's largest artificial intelligence computing cluster for nonprofit life science research, trying to more fully simulate various human cells to understand how they behave in health and disease. CZI's Advanced Bioimaging Institute in Redwood City, California, is already developing new ways to observe cells at high resolution to promote earlier detection of diseases.

This expanded thinking has also changed the way Zuckerberg does things. Even as his CZI supports entities researching diseases, the third Mark is pursuing health in his own life to increase productivity. He works out almost every day and gets eight hours of sleep every night. He also participates in martial arts through Jiu-Jitsu and MMA, but in a more respectful and thoughtful way. He clearly understands that if he can achieve even a small part of what CZI has sworn to do, the sins he has committed over the past decade may be washed away.

“Even if only a third of the bets work out, I think it will create tremendous value for the world,” he said.

This article is translated from

https://www.forbes.com/sites/kerryadolan/2023/09/26/mark-gets-meta-zuckerberg-talks-ai-and-that-musk-mma-fight-thats-never-going-to-happen/?sh=1bf80c503037