One of the most memorable moments in the history of Facebook happened in July 2006.
Mark Zuckerberg, Facebook's CEO, received an offer from Yahoo to sell his 2 year-old company. At that time, Facebook was unprofitable and it was just a college social network site with around 9 million users.
Here was Yahoo, offering a billion dollars for a young company with a 22 year-old CEO. Zuckerberg did not even have to think about the offer. He turned it down immediately.
When Facebook's 3-person board met to discuss the offer, Zuckerberg informed them that he would not sell. The board members thought he was making a mistake and tried to show him that he could do more with the money.
To convince the board, Zuckerberg argued that Yahoo did not realize the definitive idea about the future. He stated that the potential buyer could not see Facebook's full potential and therefore, was undervaluing the business.
The business partners were not enthusiastic about turning down the billion dollars. When word got to the public that Zuckerberg had rejected a billion-dollar offer, some people did not have kind words for him as they questioned how an entrepreneur with an unprofitable company could pass up such an opportunity.
Within a year, the entire management quit.
However, Zuckerberg had a clear vision for Facebook. Like every entrepreneur, he could see value where others could not. He understood that his company was worth much more than a billion dollars. It was more than a unicorn startup. Zuckerberg completely believed in the future and success of Facebook. He had a vision of the future.
Right now, Facebook is valued at 633 billion dollars. Now we understand why Zuckerberg could not sell the company for 1 billion dollars.