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

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."

47 of 236 comments (clear)

  1. Facebook has products? by Gothmolly · · Score: 4, Interesting

    What exactly does Facebook _do_ ?

    --
    I want to delete my account but Slashdot doesn't allow it.
    1. Re:Facebook has products? by tapspace · · Score: 5, Funny

      What exactly does Facebook _do_ ?

      They deal with the goddamn customers so the engineers don't have to!

    2. Re:Facebook has products? by 93+Escort+Wagon · · Score: 4, Insightful

      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.

      --
      #DeleteChrome
    3. Re:Facebook has products? by GoodNewsJimDotCom · · Score: 5, Insightful

      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.

    4. Re:Facebook has products? by Anonymous Coward · · Score: 3, Insightful

      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.

    5. Re:Facebook has products? by Tough+Love · · Score: 4, Insightful

      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.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    6. Re:Facebook has products? by epyT-R · · Score: 5, Interesting

      typical marketer perspective. things that cater to the masses are the most watered down boring cliche products possible. No one bothers with the niche anymore and that's too bad. That's where the interesting things hide.

    7. Re:Facebook has products? by MrLizardo · · Score: 3, Insightful

      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.

      --
      ^I'm with stupid.^
    8. Re:Facebook has products? by buddyglass · · Score: 3, Interesting

      Sure. And yet they're paying me (in free services I use to interact with my friends and acquaintances) in order to monetize me. If that payment ceases to motivate me to put myself in a position to be monetized then they lose.

    9. Re:Facebook has products? by rnswebx · · Score: 4, Informative

      That is not all. Facebook also makes a tidy sum from their Facebook "credits" by taking a 30% cut from app transactions on their platform.

    10. Re:Facebook has products? by MobileTatsu-NJG · · Score: 4, Insightful

      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.

      --

      "I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)

    11. Re:Facebook has products? by tnk1 · · Score: 5, Insightful

      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.

    12. Re:Facebook has products? by Anonymous Coward · · Score: 3, Funny

      They have people skills! They are good at dealing with people!

    13. Re:Facebook has products? by dcollins · · Score: 3, Insightful

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

      --
      We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
    14. Re:Facebook has products? by KramberryKoncerto · · Score: 3, Insightful

      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.

    15. Re:Facebook has products? by Chrisq · · Score: 3, Funny

      What exactly does Facebook _do_ ?

      This is a bit hard to believe but I have heard that its a bit like Slashdot but they talk about things other than tech. Not only that but female posters are not the exception. Strange, but true?

    16. Re:Facebook has products? by History's+Coming+To · · Score: 5, Interesting

      Slashdot does not require me to link my account to others as part of the deal. Slashdot has no interest in my physical location. Slashdot does not track me on a multitude of other websites (OK, maybe a few that have /. buttons). Slashdot allows me to remain pseudonymous and still access the full range of non-subscriber features. Slashdot allows ACs. Slashdot has content that is generally of interest to me. Nobody on Slashdot knows who I really am.

      This is why I have a Slashdot account and why I have never signed up to Facebook.

      --
      Please consider this account deleted, I just can't be bothered with the spam anymore.
    17. Re:Facebook has products? by am+2k · · Score: 3, Informative

      No one bothers with the niche anymore and that's too bad.

      Kickstarter takes care of a lot of niche projects and projects that turn out to be not-that-niche-after-all now.

    18. Re:Facebook has products? by Teancum · · Score: 4, Informative

      The purpose of a corporation can be for things other than to "maximize profits and increase shareholder equity" (a typical phrase in many corporate charters). A really good example of a corporate charter that has other purposes is Ben & Jerry's Ice Cream, which explicitly put social progress and other corporate goals besides making a profit into its corporate charter.

      If you are an investor and have not read a prospectus about the company and especially if you don't have a clue what the goals and corporate charter have to say about that company, you are being foolish in even investing into such a company.

      I know of one particular company (I won't bother naming it because this was said informally) whose express purpose is to provide full employment for the citizens of South Dakota. Another company (Fortune 500 and traded on the NYSE) has in its corporate charter to act as a beneficiary to the development and welfare of a smallish Mid-western town in America. There are also a few corporations that have been established "to spread the gospel of Jesus Christ" or to promote science and other various purposes that have nothing to do with making a profit. Elon Musk, in the case of SpaceX, openly admits that the purpose of his company is to "make mankind a multi-planetary species". The "Newman's Own" company also has a strong charitable mission where none of the profits are even given to shareholders.

      In some cases (like SpaceX) earning a profit is certainly very useful and helpful to the ultimate goal so it doesn't even hold that the company must be a "non-profit" company to have purposes other than maximizing profit. If a company fails to meet the overall purpose of the company, it could be argued that the fiduciary responsibility of the board of directors and the corporate officers has not been met, even if perhaps they are maximizing profits.

    19. Re:Facebook has products? by Type44Q · · Score: 3, Funny

      Sell my eyes and ears? How?

      They grow them on your arms and harvest them while you sleep. :)

    20. Re:Facebook has products? by Bengie · · Score: 3, Interesting

      Then don't browse sites with the "like" button. In order for the like button to work on a website, you must first authenticate. To make this transparent, it's done via a cookie and the site must also authenticate.

      From that info, FB gets to see which account you are and which site you've loaded. FB created this feature, end users love it, and web devel are using it. FB does not force this on anyone.

    21. Re:Facebook has products? by Spuffin · · Score: 5, Informative

      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.

      Here is another of his sites which has more of his experience: http://noahkagan.com/

      I'll echo some of the same sentiments others are posting here in that I don't know what he really did at FB but given the information on the site above, here are some highlights:

      Internship at MS in 2003 for ~3 months during the summer before his Senior year; the experience definitely looks like he took a few liberties describing his responsibility.
      Bachelor's in business administration and economics from UC Berkeley in 2004
      Moved on to Intel from 2004-2005; again his experience looks a bit exaggerated. I don't doubt there is truth to it but in my opinion, the way it reads gives the reader the impression his responsibilities were much more than they actually were.
      Moved on to Facebook in October 2005 until he was fired in June 2006. For those keeping tabs, that is less than 1 year of experience at FB. Furthermore, the experience he lists has a lot of what I would consider technical in nature yet he does not have a Comp Sci or related degree. Given the liberties I feel he has taken with his other experience, I don't think this one would be any different. If he helped market facebook during its infancy then he should be marketing that (hah) a lot more than "his" experience with these technical items.

      At the end of the day, he joined Facebook with about 1 year of actual work experience under his belt and he got fired from Facebook after having worked there less than 1 year. Did he lose out on $100M other than what he feels he would have eventually worked up to had he been there until the IPO? Not a chance.

  2. Should have listed to jwz by busyqth · · Score: 4, Interesting

    Do you hate your job? Are you only still there because you're waiting to vest? I feel your pain, brother. The only thing that kept me from leaving Netscape in 1997 and walking away from a dumptruck full of cash in frustration was this script. I ran this every morning for at least a year: it prints out the following motivational message:

    Today's NSCP price is $__._; your total unsold shares are worth $____. You are __._% vested, for a total of ____ vested unsold shares ($____). But if you quit today, you will walk away from $____.
    Hang in there, little trooper! Only _ years __ months __ days to go!


    It's amazing how this script can put it all back into perspective and keep you from going postal and strangling someone. Fill in your numbers, and let it remind you not to do something you'll regret later.

    http://www.jwz.org/hacks/

    1. Re:Should have listed to jwz by jmerlin · · Score: 3, Insightful

      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.

  3. What? by slimjim8094 · · Score: 5, Informative

    I actually mostly read TFA. This guy sounds like an asshole, but at least he does a decent job admitting it. For those of you too impatient to slog through it, he basically says "I was a product manager but I wasn't very good at product managing" and "I used the brand more than I added to it" (w.r.t holding parties at the office, self-aggrandizing on his blog about working at FB). Not to mention going behind people's backs, like all of Marketing, on a new feature.

    Short version: I was a liability, and they fired me for it. At least I learned something.

    --
    I have developed a truly marvelous proof of this comment, which this signature is too narrow to contain.
    1. Re:What? by rgbrenner · · Score: 5, Informative

      That, plus.. according to wikipedia he worked there for 8 months over 6 years ago.

      At that point, Facebook was already running for nearly two years.

      Get over it already... you didn't lose $100m... you were a momentary employee of facebook, where had you stayed for 10x longer, and your share wasn't diluted, and etc etc etc.. you might have made $100m.

    2. Re:What? by AchilleTalon · · Score: 3, Interesting

      Anyway, the lessons he learned don't worth 100M. Almost everyone learn them for free. Nothing special in this story at my humble opinion. Everyone with about 5 years at the workplace got these lessons. I estimate that 5 years is the average time to be fired these days.

      --
      Achille Talon
      Hop!
    3. Re:What? by Type44Q · · Score: 3, Insightful

      Almost everyone learn them for free.

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

    4. Re:What? by Arrepiadd · · Score: 4, Interesting

      It's pretty funny that he says one of his mistakes was using Facebook to promote himself and that he learned not to do that. That he should help build something and the publicity comes as a consequence of that. And here we are, 6 years after he left Facebook, reading about him and Facebook.

      Clearly he learned all he's preaching

  4. A lesson by mallyn · · Score: 5, Informative
    I did read the article.

    The person may be an ******, but that does not mean the article is worthless. It is a lesson to take with you.

    --
    Most Respectfully Yours Mark Allyn Bellingham, Washington
  5. why do we care? by phantomfive · · Score: 4, Insightful
    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.

    --
    "First they came for the slanderers and i said nothing."
    1. Re:why do we care? by timeOday · · Score: 5, Informative

      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. I work in research and it's even worse: whenever somebody leaves, nobody even bothers to carry on the work they'd been doing. What does that mean?

    2. Re:why do we care? by petsounds · · Score: 5, Insightful

      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.

    3. Re:why do we care? by phantomfive · · Score: 3, Interesting

      No, I was at the occupy rally last year. Protesting is fun! It was a party!

      --
      "First they came for the slanderers and i said nothing."
  6. 'How' may be a bit of an exaggeration. by Samantha+Wright · · Score: 4, Insightful

    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?)

    --
    Bio questions? Ask me to start a Q&A journal. Computer analogies available for most topics!
  7. how did he get hired at facebook by Dan667 · · Score: 3, Interesting

    to me, that would be the more interesting article now that we know where he ended up.

  8. He didnt... by WGFCrafty · · Score: 5, Insightful

    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.

  9. like the guy says, everyone should be fired once by circletimessquare · · Score: 3, Insightful

    it teaches humility

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  10. Moral: marketdroids get sacrificed first by aNonnyMouseCowered · · Score: 3, Insightful

    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.

  11. Not a healthy topic. by fm6 · · Score: 4, Interesting

    It's a familiar story. I worked with a guy who interviewed at a certain small software company back in 1982, and refused their offer because he thought their CEO was an insufferable dork. And of course that dork's name was Bill Gates.

    Another bunch I worked with on a skunkworks startup had been with a certain other Big Name back when (this one I have to keep to myself) and just barely missed out at cashing in when they got bought out. The whole point of the startup they had brought me in on was to try and recreate that magic moment they had missed the first time. And of course the startup's product was hopeless, since all it's motivations were the wrong ones.

    Which kind of demonstrates the stupidity of the whole approach. I don't mean the obsession with might-have-beens (though that's pretty unhealthy). I mean the obsession with getting rich by being part of The Next Big Thing. Unless you're a fucking genius (and trust me, you're probably not), you're not going to invent something really brilliant, and that's the only sure way of cashing in. Otherwise, you're just rolling the dice. OK, you roll the dice every time you start a business. But to have any hope of succeeding, you have to be focused on the the basics of making your company work, not crapshoot aspects, which are simply beyond your control.

    I'm not saying that nobody ever lucks out and gets big bucks. But it's just not something you can plan. If you want to gamble, buy a lottery ticket: the odds in your favor are just as good, and it'll screw up your career a lot less.

  12. wow by buddyglass · · Score: 5, Insightful
    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.

  13. "Everyone is replaceable" by FoolishOwl · · Score: 3, Insightful

    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.

  14. Check the letter section by SmallFurryCreature · · Score: 4, Insightful

    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?

    --

    MMO Quests are like orgasms:

    You may solo them, I prefer them in a group.

  15. Someone said it's the lesson that's important... by Anonymous Coward · · Score: 4, Interesting

    ...and not whether the guy is an asshole, but (a) he is an asshole and (b) what the hell WAS the lesson? This dipshit can't put together a coherent thought. To wit:

    Lesson 1 is not only wrong, it's uninformative. A company gets famous by making a fabulous product? No s**t. Or was it that a person gets famous by making a fabulous product? But he's a manager, not a creator. Did he mean he figured HE could get famous by... managing... a fabulous... product? F**k it, I'm done with that one.

    Lesson 2 insists in two consecutive sentences that he shouldn't have gone around the marketing guys, but what he did (i.e., go around the marketing guys) wasn't wrong. So, it's not wrong. But he shouldn't have done it. F**k it, I'm done with this one, too.

    Lesson 3 is that you need to see if your weaknesses are hindering your ability to do the job. That's... a lesson he needed to learn? Did he also learn that he needed to put on pants when he left the house in the morning? Who IS this idiot?

    The guy actually admits that he thought the company missed him after firing him, like Facebook (even in its early days) was some high school s.o., pining away for him. You're kidding, right? Who the hell has that kind of sense of self importance, especially a guy who, by his own admission, wasn't one of the driving forces at the company? I love that he actually follows this up with the insight that "everyone is replaceable." In fact, most people (but not all) are replaceable. Most of the people who are replaceable are business types who specialize in bureaucratic process control... like this dope. The creative types... less replaceable, depending on their skill and originality.

    Seriously, he talks about how he just wants to focus on the job instead of, you know, self-promotion, but here is bloviating on the internet about his "insights," all of which would be old news to anyone with emotional and intellectual maturity of a sixteen year old.

  16. Heartbreaking by SpaghettiPattern · · Score: 3

    Ooh, that's truly heartbreaking. I feel so sorry for this lad missing out on a completely disproportional lump of money.

    Back to important things. I wonder what's on the menu in the cafeteria.

    --

    I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
  17. Re:and how does he figure he "lost" $100 million by Teancum · · Score: 4, Interesting

    He is showing regret that he should have learned these lessons before he screwed himself out of this kind of money. I didn't see anything in that blog post that suggested he was "cheated out of the money" and indeed suggested that he really wasn't fit to be getting that kind of money... at least with the skill sets that he had at the time he was fired. In fact, he even goes so far as to express that if the him of here and now was in charge of the him of then and when, that he would have fired himself in nearly the same way (perhaps more diplomatically, but it would have still happened).

    I've been in some of the same position more than a couple of times, where I made the wrong decision in my career where had I been able to take the skills I have today and have been in the position I was at elsewhen, I would have been a multi-millionaire myself. No real regrets, and I've learned those lessons over time. My hope is that other opportunities will arise that I can take advantage of and hopefully not screw up if it comes up again.

  18. Hmm, from reading the article, by VAElynx · · Score: 3, Interesting

    I suspect that /. might be selling him slightly short - after all, he says he was promoted a while before that.
    What I suspect happened is that he was a fine worker where he was, and someone up thought of promoting him. What resulted was him peacocking as he admits, and not being of particular use at his new place, even creating fuckups. Well, they couldn't quite demote him again because he'd read it as being a stop to his career and would leave anyways, not doing much in the meantime - the logical, if nasty option was to show him the door as unexpectedly as possible.
    The actual lesson is: getting promoted doesn't mean you have everyone in your pocket yet.