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Zuckerberg's IPO Letter Is a Data Miner's Delight

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When Facebook published its IPO prospectus this week, investors rushed to read a 45-paragraph letter from company founder Mark Zuckerberg. Everyone wanted to see what made the 27-year-old tycoon tick. Now an expert data-miner offers word-by-word insights about Zuckerberg’s aloofness, his need for achievement and his gift for slipping nuanced ideas inside simple formats.

The decoder is James Pennebaker, psychology department chairman at the University of Texas. For the past 20 years Pennebaker has been using big-data analytical techniques to pick apart revealing oddities in minor parts of people’s speech. His work recently was featured in Harvard Business Review. Last year Pennebaker published a book on his methods, called “The Secret Life of Pronouns.”

In recent weeks, at Forbes’s request, Pennebaker has been scrutinizing founders’ letters from America’s best-known Internet companies at the time of their initial public offerings. The scholar examines 81 quantifiable factors, ranging from average sentence length to the ratio of upbeat-vs.-downbeat emotion. Such analysis would be pointless for most sections of IPO prospectuses, in which a dry, lawyerly tone overwhelms individuality. When founders sit down at the keyboard, however, it’s a different story.

Letters by the founders of Google, Zynga, Groupon and Facebook reveal “very different writing styles that could be linked to personality,” Pennebaker reports. By his analysis, Google founders Larry Page and Sergey Brin spent the most time talking about the future. Groupon founder Andrew Mason dwelt on money issues twice as much as his peers.

Meanwhile, Zynga founder Mark Pincus expressed positive emotions 31 times more often than negative ones. His peers settled for ratios more like 6 to 1. Is that a sign of great optimism? Or trying too hard? Pennebaker doesn’t have the answer. He does raise the question.

As for the Zuckerberg letter, Pennebaker finds repeated clusters of distinctive traits. Words such as “win,” “lose,” and “try” make up 5.09% of Zuckerberg’s letter, more than any of his three peers. Yet money terms make up just 1.19% of the Facebook founder’s text, less than half the rate for any of the other founders.

Zuckerberg’s word use “suggests someone who is driven by very high rates of need for achievement” but low rates for building wealth or social affiliation, Pennebaker concludes. “Most of the Zuckerberg letter is emotionally distant,” the researcher adds. “There are very few personal pronouns (which typically signal an emotional cognition to other humans) and virtually no I-words except for a couple of paragraphs in the middle of the letter.” Emotive words such as “happy” or “sad” are rare, too.

Anyone who has seen the film “The Social Network” or read the book “The Facebook Effect” is familiar with portrayals of Zuckerberg as an aloof person who doesn’t always connect fully with others. Pennebaker’s analysis reinforces that view. Even so, the Texas professor has found lots to like in Zuckerberg’s style, as well.

Zuckerberg’s letter is simple and straightforward, Pennebaker declares. Short sentences are built with relatively short words.  Yet Zuckerberg also makes the heaviest user of exclusionary words such as “except,” “but” and “without.” In Pennebaker’s eye, that reveals nuanced and relatively structured thinking.

One last oddity: Zuckerberg uses present-tense verbs 13 times as often as the future tense. No other founder’s ratios exceed 6 to 1. Pennebaker’s interpretation: “The author is very much in the here-and-now, as opposed to deep analysis of the past or even directions for the future.”