Bad news for Facebook: It lost its functional second in command today. Matt Cohler, 31, who oversees the Facebook "product" and is generally perceived to be the core of the original management team, is joining Benchmark Capital, a powerful Bay Area venture capital firm.
Cohler told me this morning that he'll be continuing to consult for Facebook. "Facebook doesn't have an advisory board per se. But I'll still be working with [Facebook founder and CEO] Mark Zuckerberg in an ongoing capacity," he said. "I should point out that this is absolutely not an operations role, it'll be more of an advisory role."
He said his move wasn't a surprise to Zuckerberg. "I love early-stage start-ups. Mark and I have talked about this as my long-term trajectory for years. I knew there would come a time when this was a path I would take."
Nonetheless, he added, "This was a really tough decision for me. I love Facebook and have always had a great time there. And I'm still having a great time there. I'm thrilled about the company's future. But for me, it was just the right thing to do personally."
Insiders say that Cohler's move was precipitated by Facebook's recent hire of Sheryl Sandberg as chief operating officer. Sandberg, who in March defected from rival Google, where she built up the search giant's sales operation, is said to have great operational chops. That, observers say, created some overlap with Cohler, who was among the first five employees hired at Facebook and founder Mark Zuckerberg's first "outside" executive when he joined the start-up in 2005.
Cohler denied that Sandberg's hire had anything to do with his move: "Sheryl is a close friend of mine. Mark and I recruited her to the company together. There is zero operational overlap between what she does and I do at Facebook. We are very complementary."
Zuckerberg had started "the facebook" while an undergrad at Harvard as a social network for Ivy League students, then moved to Palo Alto, Calif., in 2004 to turn it into a business. It subsequently threw open its doors to everyone and made the guts of its underlying code accessible to developers, creating a massive platform for applications. (And making some of those developers a lot of dough: SocialMedia, an advertising network that represents the apps makers, has paid out over $8 million to 1,000 developers in less than a year.) The network now has 80 million active members, surpassing rival MySpace in numbers of users.
But losing Cohler has got to be a real blow to the service. He's got tons of smarts and maturity and came to Facebook via LinkedIn, a social network for business users he helped Reid Hoffman, the legendary Silicon Valley entrepreneur, found. "He's the soul of Facebook," one Valley insider, who knows Cohler and works closely with Facebook, told me. "He is driving the service, the user experience. That's his thing."
Facebook did not immediately comment this morning.
"We're just super-excited. I love this guy," Bill Gurley, a Benchmark partner, told me. "We always feel a very strong need to find the best young talent to fit the criteria of what we think it takes to be a great venture capitalist."
Cohler's stake in Facebook, a privately held company valued at $15 billion (thanks to Microsoft's minority investment last year), is likely vested by now. And he's not exactly leaving for a job in the Peace Corps. One of Benchmark's hallmarks is that all of its partners share in the wealth equally a deviation from the typical star system at venture capital firms, where partners tend to be rewarded based on the deals they put together. The firm which, with Cohler, now has nine partners manages nearly $2.8 billion. Cohler said that another aspect of the novel partner arrangement, though, was what drew him to Benchmark. Since the partners share equally, each is vested in the success of the start-ups they fund. "All the partners collaborate as a team, as opposed to indirectly working against each other," he said.
Cohler, a Yale graduate who studied Chinese history and worked in Beijing for a telecom company after graduation, comes from an entrepreneurial family. His maternal grandfather invented the ballpoint pen tip. "But he didn't make a penny off it he sold the patent and died without a penny as an immigrant in East Harlem."