The Hacker Way (Facebook’s IPO Letter)

The situation

In early 2012 Facebook was eight years old and preparing the largest technology public offering of its time. Its registration statement reported hundreds of millions of monthly users. Zuckerberg retained control of the company through his shareholding and voting arrangements, so public investors would be buying into a company whose direction he would decide.

Following a tradition set by Google’s founders in 2004, Zuckerberg wrote a letter for the front of the filing to explain how Facebook would be run.

What the letter argues

The letter begins with mission. Facebook, it says, was built to make the world more open and connected, and that purpose comes first. The line most quoted at the time states the relationship with money directly: “We don’t build services to make money; we make money to build better services.”

The second half describes culture. “We have cultivated a unique culture and management approach that we call the Hacker Way,” Zuckerberg wrote. Hacking, in his description, meant building quickly and testing the boundaries of what can be done: shipping, learning and improving continuously rather than trying to get everything right at once. The letter explains the slogans painted on Facebook’s walls, among them “Done is better than perfect” and “Move fast and break things,” and adds values about being bold, being open, focusing on impact and building social value.

The message to investors was clear: Facebook would keep investing in the mission and in rapid iteration, and investors who wanted a company managed for short-term profit should understand that before buying.

The decision it carried

The letter committed Facebook publicly to two things: putting the mission ahead of profit, and maintaining a culture of speed after becoming a public company. Combined with Zuckerberg’s control, it told investors they would have little ability to change either.

What happened

Facebook went public on 18 May 2012. The offering was troubled: trading problems on the first day and concerns about the company’s mobile business sent the shares well below the offering price within months. Facebook then rebuilt itself around mobile advertising, and the shares recovered strongly.

The Hacker Way continued to shape the company. In 2014 Zuckerberg changed the internal motto from “Move fast and break things” to “Move fast with stable infrastructure,” acknowledging that breaking things had become costly for developers and users who depended on Facebook. In the following years the consequences of moving fast at the scale of billions of users became a public issue: the Cambridge Analytica revelations in 2018, a $5 billion FTC penalty in 2019, and investigations around the world into privacy, misinformation and the safety of young users. In 2021 the company renamed itself Meta.

How to read it as a product manager

The letter is a useful study in how a culture designed for one stage of a company behaves at another.

At small scale, “move fast and break things” is a sensible rule. Mistakes affect few people and can be fixed quickly, and learning by shipping beats learning by planning.

At very large scale, the same rule changes meaning. A small change can affect hundreds of millions of people, and some consequences, such as data shared with third parties or harm to vulnerable users, cannot be reversed. Facebook’s own change of motto in 2014 recognised part of this.

The letter also shows the power and risk of slogans. “Move fast and break things” was memorable, which is why it spread through the technology industry, and also why critics used it to summarise everything they thought had gone wrong.

And it shows how to set expectations with investors. By saying clearly that the mission came first and that profit was a means, Zuckerberg made his later decisions, including large, long-term investments, harder to contest.

The decision, examined closely

What triggered it

The IPO required a registration statement, and founders who control their companies have used the letter at its front to set the terms of their relationship with public shareholders.

The constraints

Facebook needed to raise capital and give employees and early investors liquidity. It also had to reassure investors about a business that was still adapting to mobile devices, while making clear that Zuckerberg would not run it according to their preferences.

What the author was optimising for

The letter optimises for preserving the culture and the founder’s freedom after the IPO. It signals to employees that public ownership would not slow them down, and to investors that they should not expect it to.

Second-order effects

The letter’s slogans became shorthand for a whole era of technology culture, admired and later criticised. Its emphasis on speed and scale described how Facebook would grow, and also how problems could grow faster than the company’s ability to see them.

The counterfactual

A Facebook run with more caution might have grown more slowly, and might have avoided some of the harms later attributed to it. It might also have lost ground to faster competitors. The letter’s honest description of the culture makes it a useful record of the choice the company made.

What is contested

Supporters see the letter as a candid and accurate description of how one of the most successful companies of its time was built. Critics see “move fast and break things” as an example of how technology companies discounted the effects of their products on society. Both views draw on the same text, which is part of what makes it worth studying.

Sources and limitations

Quotations are taken from contemporary reporting of the letter; some sources present the slogans as wall slogans that the letter describes rather than as Zuckerberg’s own sentences, and they are treated that way here. Details of the IPO and later events come from widely reported company history. The assessment of the culture’s consequences is the author’s interpretation and does not attribute motives beyond what the company has stated.