Download now: Gold and Silver Mining Stocks

Why Mark Zuckerberg is NOT the Next Bill Gates

Written by Jason Stutman
Posted August 7, 2016

Mark Zuckerberg isn't the kind of person to shy away from excellence and innovation. By now, this fact should be abundantly clear.

Business Insider and Yahoo Finance both came out earlier this week referring to the young billionaire as a modern day Bill Gates. In many respects they're right but, in most respects, he's even better.

At the age of 10, a time when most kids are still struggling to memorize their multiplication tables, Zuckerberg first picked up computer programming after discovering his father's PC.

By age 11, Mark had built a program dubbed ZuckNet, connecting his father's home and office computers. Keep in mind this was 1995, when most people still didn't even know what the Internet was.

By the end of High School, a time when most kids are still struggling just to fit in, Zuckerberg had already mastered the languages of Latin, Greek, Hebrew, and — more importantly — C++. In his spare time he built video games on his computer, became captain of his school's fencing team, and even turned down a $1 million offer from Microsoft for one of his many programs. That's more success than most of us will experience in our entire lifetimes, but for Zuckerberg it was just the start...

Like Gates, Zuckerberg attended Harvard only to later drop out and launch his own startup, but his rise to prosperity and fame came at a far more rapid pace. Before dropping out, Mark had already turned down a $10 million offer for Facebook (NASDAQ: FB). Shortly after, he was walking away from a $75 million buyout from MTV.

Most people, of course, would have said he was insane to turn those numbers down at the time — But Zuckerberg wasn't insane, and he certainly wasn't most people.... He was (and still is) an absolute genius.

Today, at the age of just 32, Zuckerberg ranks as the fifth richest man in the world with an estimated net worth of $53.7 billion. By that age, Bill Gates was worth just $2.45 billion when accounting for CPI inflation.

So while calling Zuckerberg the next Bill Gates might seem flattering enough, the truth is it's a massive under-appreciation. Zuckerberg isn't the “new Bill Gates” and Facebook isn't the next Microsoft either. In fact, both of these things are even better.

The Value of Foresight

One thing Bill Gates didn't really have going with Microsoft early on was a long-term vision. The company's narrow focus on the PC made it incredibly difficult to pivot during the mobile phone revolution. Its lack of R&D efforts on what would come next allowed the firm to be vastly overshadowed by Apple as smartphones established their dominance in consumer tech.

While Microsoft did eventually make efforts to catch up to its rival, and is doing a much better job planning for the future today, there's no doubt that the company did too little, too late to establish any meaningful stake in the wildly lucrative smartphone era.

None of this, of course, is to take away from the early accomplishments of Bill Gates or Microsoft, but it goes to show just how much of a visionary Zuckerberg truly is by comparison. What most people saw as a simple website to share photos just a few years ago has transformed into a massive, $357 billion social ecosystem today... And those who had the foresight early, to truly understand just what Facebook was doing, have been justly rewarded.

Back in June of 2013 Facebook was trading for just $24.66 a share, off 35% from its IPO opening of $38.25. The market was panicking and people were acting as if Facebook was doomed.

Personally, I saw things a bit differently back then, laying out the case to readers that Facebook was undervalued. At the time, one of my colleagues proceeded to insist it was better to invest in companies that deal in tangible assets like gold, and while he had some good points, here's how that all turned out:


FBvsGLDvsSPY

Zuckerberg's Vision

Unlike Bill Gates, and unlike Facebook's many naysayers back in 2013, Zuckerberg has always had a long-term vision for the social media firm. He has never just been building a website: He's been building new and innovative ways for people to connect.

You see, Mark Zuckerberg understands that people are deeply social beings. Sure, social interactions aren't something you can touch or hold in the palm of your hand, but they're very real nonetheless, and they're deeply valuable to each and every one of us. So long as we are human, there will be an insatiable demand for social connectivity.

And ultimately that's really what Facebook is... and what it will continue be so long as Mark Zuckerberg remains at the helm. In brief, Facebook is not a social media company: It's a social connectivity company that leverages human interactions for revenue, and Zuckerberg has a 10-year vision for expanding its dominance in this realm.

FB Roadmap

The roadmap above was first revealed by Zuckerberg at Facebook's F8 developer conference back in April. The company's long-term vision includes drones, satellites, internet lasers, telecom infrastructure, virtual reality headsets, and augmented reality hardware.

It was relatively unclear how all these new technologies would be developed at first, but this week Facebook has answered that question by revealing its highly secretive “Area 404” lab , a state-of-the-art testing facility where engineers can turn their ideas into prototypes, and spur further innovation.

Here's a description direct from Facebook:

This new 22,000-square-foot lab is located in our Menlo Park office, and it's outfitted with state-of-the-art machine tools and test equipment. With this new space, we can now handle the majority of our modeling, prototyping, and failure analysis in-house, decreasing each iteration of the development cycle from weeks to days. Even more important, the space has room for all teams, with more than 50 workbenches in the main area. Connectivity Lab, Oculus, Building 8, and our Infrastructure teams can now work collaboratively in the same space, learning from one another as they build.

A wide range of gadgets will be developed at Area 404 to coincide with Facebook's 10-year roadmap. This includes virtual reality hardware such as the Oculus Rift headset and Facebook's “Surround 360” camera rig; components for Facebook's solar-powered Aquila drone; and antennas for its super WiFi endeavor Project. Former head of the Defense Advanced Research Projects Agency (DARPA) Regina Dugan will also be moving in as head of Facebook's top secret “Building 8” skunkworks division.

There's little doubt that what was once, and still is, perceived by many as a social media website could soon grow into one of the most powerful technology firms on the planet.

The Long Road Ahead

That said, Facebook will face stark competition with many of these new technology endeavors, particularly in the AR/VR space.

Not just Facebook, but Microsoft, Apple, and Google are all betting big on augmented and virtual reality — from multibillion-dollar acquisitions to top-secret laboratories to the poaching of each other's top talent. For investors, it would be relatively safe to bet across all four, but picking a single winner amongst these tech giants will prove difficult.

The alternative is to bet on the component providers of the emerging technology of augmented and virtual reality — the Intels, Nvidias, and Qualcomms of tomorrow's consumer electronics craze. For those looking to get in early, there's only one stock that fits the bill.

Until next time,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and The Cutting Edge. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.

Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.

Outside the office Jason is a lover of science fiction and the outdoors, and an amateur squash player at best. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.

Comments

Buffett's Envy: 50% Annual Returns, Guaranteed