Some Amazing Inspiration for Startup Businesses

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Facebook to IPO

As part of the IPO process, to comply with SEC regulations, Facebook has publicly listed the risk factors that could “materially and adversely affect” Facebook in the future.

After reading the list, most people’s gut instinct might be to think that with this many challenges to face, there would be little point in continuing. Some of these are so significant, that it might make you wonder if Facebook will be around in 5 years time. Mashable did a great job of identifying the biggest threats from the list – shown in bold. We think they hit the nail on the head, so we have left their bolded entries intact.

We reckon the biggest of these is probably that Facebook currently makes no money from mobile and the general trend of usage is moving that way, so their valuation could be way overdone.

But let’s look at this another way

Think about all the challenges that have Facebook’s team have already passed. Legal claims over ownership, data breaches, internal issues, rapid growth, finding talented people and probably thousands of others challenges.

Similar challenges to these face every new startup business when they first set up. Guess what. Facebook had the same issues as you.

More importantly, they still do!

This is not a list of problems they have solved, but a list of future challenges they may yet face. Setting up a new business is difficult, but hey, even when you are generating billions of dollars of revenues and valued at more than McDonalds and Disney, the issues still happen, you just become better at facing them and resolving them.


Take some inspiration from the list below.

It remains to be seen if all of these risks emerge, but one thing is for sure. A company like Facebook with a track record of resolving them already, will give it their best shot and based on history, they will overcome them. That’s why they will be valued at $100bn when they IPO.

1. We could simply lose users, or fail to add new ones.
2. We could lose advertisers — and new technology may let users block ads.
3. Facebook’s mobile platform doesn’t show ads — so the more that grows, the worse for us.
4. The platform
for Facebook apps might not be successful.
5. The competition from Google, Microsoft and Twitter could heat up — not to mention other social networks around the world.
6. More governments could restrict access to Facebook.
7. Users could turn their noses up at new products.
8. The Facebook culture is all about rapid innovation and getting users engaged — and that could come at the cost of profits.
9. Unspecified future events could tarnish our brand.
10. Bugs might give people access to users’ information that they’re not supposed to see.
11. The media could turn on us.
12. Our quarterly financial results could be difficult to predict.
13. Zynga accounts for 12% of our revenue. If we part ways, that could seriously hurt us.
14. Our revenue grew by 88% last year — and that’s simply not sustainable. Growth is bound to decline.
15. The U.S. laws and regulations we’re governed by could change or be reinterpreted.
16. If our patents and copyrights aren’t granted — or aren’t effective — it could seriously hurt us.
17. We have some patent lawsuits on our hands that could end badly.
18. We’re also involved in class-action lawsuits, and we could lose them too.
19. Mark Zuckerberg has a massive amount of shares, which concentrates power in the hands of one man.
20. There’s a complicated tax liability connected to a particular kind of stock unit we gave out — one that will be taxed at 45%.
21. If we need more rounds of investment, the terms might not be reasonable.
22. Costs might grow faster than revenue.
23. A lot of our servers are handled by third parties, and they might be disrupted.
24. We’ve started building a lot of our own data centers to handle traffic, and we’ve got limited experience doing this kind of thing.
25. Our software is incredibly complex and may have a lot of bugs.
26. We can’t say for sure that we’ll handle our growth effectively — we have more than 3,000 employees now, and that could spin out of control.
27. If we lose our leaders, like Zuckerberg and COO Sheryl Sandberg, that would really harm us.
28. People might sue us over all sorts of stuff posted on Facebook — intellectual property, copyright, defamation, and so on.
29. Viruses, hacking, phishing and malware. Oh my.
30. Payment systems in Facebook apps could mean new government regulations.
31. We’re continually expanding abroad, and we may not understand all the risks in new countries.
32. We’re planning to acquire lots of other companies, which could disrupt everything at Facebook.
33. We might default on our leases or our debt.
34. Our tax liabilities, in general, are bigger than we thought.
35. U.S. tax code reform, if it happens, might hit us where it hurts

Let us know in the comments below if you faced challenges that could inspire startup businesses.

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About the Author:

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