This Guy Lost $170 Million Dollars — 3 Lessons I Learned From It

You learn when you lose. And you can learn a lot from other people's losses. Here's a look at three hard-won lessons I learned from entrepreneur, Noah Kagan's...

Photo: Jason Taylor, founder and Director of Operations at Phenomenal Staffing; Source: Courtesy Photo
Photo: Jason Taylor, founder and Director of Operations at Phenomenal Staffing; Source: Courtesy Photo


Noah Kagan was a Berkeley graduate with a love for entrepreneurship and startup companies. He worked at Intel for a brief time until “he was hired as Facebook’s 30th employee. He joined the company when it was one year old,” according to BI reports.

Nine months later Kagan was let go. In his book, ‘How I Lost 170 Million Dollars: My Time as #30 at Facebook‘ Kagan shares an inside look at a setback that cost him a lot (more than most could stomach) — but not everything.

“
June 16th, 2006 at 11am was the moment I was fired from Facebook. I remember that day vividly. It marked the end of one of the hardest working, most intense and amazing times in my life,” Kagan recalled.

“For months afterwards, I thought that everyone at Facebook must miss me. That Monday when everyone returned to work and found out I wasn’t there anymore I thought would be a tough day for the Facebook employees… I got no well-wishes or hey, we are going to miss you notes from anyone at the company. That was part of our natural selection culture. The best survive. That’s how the company got to accomplish ‘world domination’ which was what Mark always wanted. I hoped more than anything they’d regret firing me and the website would come crashing down to a burning flame.”

His story illustrates his rise to stardom and his spiraling fall back to earth.

 While reading his book, I was intrigued by the exceptional detail to each place, emotion, and situation.

Sure! It would be fun to read book entitled, ‘How I Made 170 Million Being Employee 30 At Facebook’, however, that wouldn’t be useful.

You learn when you lose.

And you can learn a lot from other people’s losses.

Here’s a look at three hard-won lessons I learned from Noah’s book:

 

1. Associate yourself with those who elevate you.

In order to elevate yourself you need to work with people who are on a higher level than yourself. Many of the original Facebook employees went on to do great things, including Steve Chen a co-founder of YouTube who quite to start the video-sharing website later acquired by Google in 2006 for $1.65 billion.

 

2. Never get complacent.

From catered dinners to daily parties at the Facebook House Noah’s extravagant lifestyle was due to his employment at the company. He never factored in any contingency steps or financial advisement during his short tenure. A mistake we all make in our lifetimes when we are granted a dream opportunity (especially a ‘dream job’). Anything can happen when someone else controls your paycheck.

 

3. Don’t allow anyone to extinguish your flame.

Noah admittedly had a hard time adjusting after he lost his prominent role at Facebook. After all, he associated his livelihood with the company.

Business Insider reports: “He was arrogant and tried to use his role at Facebook to make a name for himself. Kagan says he used to host startup gatherings at Facebook’s headquarters because he enjoyed showing off where he worked, and he frequently wrote blog posts on his personal site, OKDork.com, about Facebook’s business.”

“Matt Cohler (early LinkedIn, FB and now Partner at Benchmark) called me a ‘liability’ as they let me go that day in the coffee shop on University Avenue (Observer).”

 

Kagan’s intrinsic entrepreneurial boldness led him to create his personal blog, Okdork, and hold entrepreneur conferences; it also could have very well been a major reason he lost his position.

Most companies have a clause when it comes to promoting your personal brand in relation to their own. Navigating the risks associated with building a brand and working a full-time job can be challenging.

 

Today, he owns AppSumo, a daily deals website for digitally distributed goods and online services. However, Kagan’s unceremonious departure from Facebook cost him a fortune, specifically in the amount of Facebook stock offered to early employees.

 

  1. A $60,000 base and .1% of the company (20,000 shares)
  2. A $65,000 base and .05% of the company

 

As of March 20, 2014 that would have been worth around $170 million.

 

Don’t forget to grab a copy of my book ‘Lead Yourself to Financial Success‘ available on Amazon.

 

This article has been edited and condensed.

Jason Taylor is the founder and Director of Operations at Phenomenal Staffing. Jason is also a former enlisted member of the United States Air Force and former professional athlete. Have a question about IT contractors or how staffing companies can make your business better? Visit phenomenalstaffing.com and sign up for a free consulting session. Connect with @PhenomStaffing on Twitter.

 

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