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The Facebook Phone Would Have Been an 'iPhone-Like Moment,' Says the Exec Who Led It

Yves Béhar still has one of the prototypes, ex-Facebooker Chamath Palihapitiya says.

Vjeran Pavic for Re/code

Facebook was working on a “beautiful” and “groundbreaking” phone designed by Yves Béhar in 2010, but it didn’t yet have the money to make a big bet.

That’s the story as told by Chamath Palihapitiya, former Facebook growth lead and current investor at Social Capital, on the latest episode of our podcast Re/code Decode, hosted by Kara Swisher. The discussion begins at the 24-minute mark.

“It mostly didn’t work because of my ego, I think,” Palihapitiya admitted. “There was a 12-month period of concentrated super-creativity … I was able to take an entire group of people, really the best of the most creative, early folks at Facebook, and I really convinced them about the need to build not just a software platform, but software and hardware together.”

Marrying software and hardware is — famously — Apple’s playbook. The company launched the iPhone in 2007 and was in the process of changing the mobile industry forever, along with Google’s Android platform. But Palihapitiya believes “the window was still open for us to have done something.”

So, what went wrong?

“I made it difficult for Mark [Zuckerberg] to say yes,” Palihapitiya said. “When push came to shove, I had been negotiating with Intel and AT&T, and we had this amazing plan in place. It still would have cost Facebook $1 billion to do what I wanted to do, which was a hugely disruptive idea and go-to-market.”

“But I thought, combined with how brilliant the software and hardware could have been, it really would have been an Apple iPhone-like moment,” he added. “The problem was Facebook was still private and it barely had a billion of cash on the balance sheet.”

Palihapitiya noted that he recently ran into Béhar, who said he still has a prototype.

“He’s like, ‘Dude. I still have one of the phones.’ I saw it, and even to this day, it was beautiful. It was groundbreaking, conceptually.”

In the end, Facebook didn’t make the phone. And despite struggling early in mobile, it has built a massive mobile audience and profitable mobile-ad business. As Palihapitiya notes, it was the fastest company in history to reach a $300 billion market cap. It has also financed several big mobile and platform bets, buying companies such as Instagram, WhatsApp and Oculus.

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