Hindsight is 20/20. Had we known to follow Yuri Milner's lead back in 2009 when he and his company Digital Sky Technologies (DST) invested $200 million in what was a small business at the time called, Facebook, for a 1.95% stake -- we may all have been a lot wealthier today. That early bet made this previously-unknown Russian investor, a billionaire.
Page from graphic novel, "Facebucks & Dumb F*cks"Even when Facebook's stock plummeted after it's initial IPO broke on May 18, 2012 to 50% of its $32 opening share price, we still should have held tight. Today FB's selling at $44.22 (as of this posting).
Internet Companies that will last 100 YearsIn an interview on stage at the South by Southwest Interactive conference March 9, 2013, in Austin, Texas, Milner said there will be three Internet entities which will still exist a century from now because their services gain momentum the more people use them. In addition to Google and Wikipedia, the third, not surprisingly -- was Facebook.
Others FollowedOther Internet investment holdings held by Milner and DST are companies you may recognize. In addition to the big players such as Twitter and Zynga, Milner's company has stake in ZocDoc, Spotify, Airbnb, Alibaba and 360buy.
The Next FacebookSo what new social media businesses is Mr. Milner investing in today? Well, as the quest continues to find the next Facebook, Milner's most viable small business pick is Coursera, an new education model that offers free online university-level courses.
Differing from distance learning, Coursera's innovative learnings approach is based on MOOCs (massive open online courses) aimed at large-scale interactive participation and open access via the Web. In addition to traditional course materials such as videos, readings, and problem sets, MOOCs provide interactive user forums that help build a community for the students, professors, and teaching assistants
It's a new spin on delivering a college education at a fraction of the cost. By immersing the free market into university education, Coursera is a pioneer in cutting costs by reducing labor costs (i.e. professors, real estate, etc.) while introducing economies of scale by teaching tens of thousands of students at a time, versus a classroom of 35-50.
Time magazine included Coursera’s two co-founders (Andrew Ng and Daphne Koller on its 2013 list of “The Andrew Ng & Daphne Koller100 Most Influential People in the World,” and Inc. magazine named Coursera one of its “25 Most Audacious Companies” this year.
Milner's advice to small social media start-ups: "Go against the grain." His premise is based on achieving high returns by not only thinking outside of the box, but actually thriving around its perimeters.
“It’s almost a theorem if you want to get disproportionate returns to go against flow,” Milner said. ”Otherwise returns will not be as high. If everybody thinks it’s a great idea, returns would be under pressure… It’s a positive indicator if you go against the flow–for not only investors but founders as well.”
In a Forbes interview, Milner also talked about what he saw in Facebook and why he invested. “There are a handful of companies and entrepreneurs really building something to the extent that it can change the world. I saw at the time that this was one of them.”
I interpret Milner's advice to also mean you can't just produce a knock-off of what's gone before, unless your shiny new idea takes it to another level. The times you can benefit from the work of others is when you not only capitalize on your competitors' followers, but you build a model that motivates them to shift their advocacy from the old to the new. And while some might view that as an insurmountable task, think about what Facebook was able to accomplish when they reconfigured the now-broken "MySpace" model.