As Facebook leaps off the precipice into the stock market, there's been a lot of talk about its business model, or its amazing stock price, or why GM dropped its ads.

On the eve of the largest technology IPO in American history, the company at the center of all the hoopla is celebrating in a geeky-chic style emblematic of its eight-year history.

Friday morning at 6:30 a.m. Pacific, Facebook CEO Mark Zuckerberg will ring the opening bell in a remote ceremony held at the social network’s Menlo Park campus. Up until that moment, thousands of Facebookers will be participating in an all-night employee hackathon designing and coding away on what could be come the next Facebook Timeline. And from the looks of photos already trickling out on Facebook, this is one party not to be missed.

Facebook kicked off its hackathon, Hackathon 31 to be exact, at 7 p.m. Pacific Thursday evening. A crowd of several thousand employees gathered in an outdoor make-shift arena in the middle of the campus’ corridor (the same place where the bell-ringing will take place) to watch Zuckerberg and senior staffers rally the troops for one final night pre-IPO hacking. Zuckerberg, as pictured below, was greeted with a standing ovation from the crowd.

Thursday afternoon, Facebook priced its shares at $38 apiece for a $104 billion valuation. The company will debut on the NASDAQ tomorrow under the “FB” ticker symbol and raise $16 billion (up to $18.4 billion with its over-allotment option) through its offering.

Tonight, however, Facebook celebrates its “Hacker Way” culture and, in the process, sends a message to Wall Street and the world that its focus will always be on building and shipping products.

Editor’s Note: Nir Eyal is the founder of two acquired startups and an advisor to several Bay Area companies and incubators. Nir blogs about the intersection of psychology, technology, and business at NirAndFar.com. Follow him on Twitter @nireyal.

Tomorrow Facebook will sell shares in one of the biggest tech IPOs in history. New investors will gobble up the stock to get a piece of the global phenomenon famously started in Mark Zuckerberg’s dorm room in 2004. But while owning the stock will have quantifiable value when it trades on the open market, few buyers will be able to say truthfully that they understood the value of the company just a few years ago.

Ask yourself candidly, what did you think of Facebook the first time you landed on its homepage? Where you blown away? Could you see how it would fill a gaping need in the lives of nearly a billion people? If you’re honest with yourself, and you’re not Peter Thiel, your answer is probably, “No, not really.”

Don’t feel bad. Like many of the astoundingly successful web companies of the last decade, it was hard to appreciate the value of Facebook at first glance. But one person who “got Facebook” early on was Noah Kagan, who in October of 2005 joined the company as one of its first product managers. In 2006, Noah was the source for an analysis of Facebook written by Nisan Gabbay. The essay identified one of the most important reasons for the company’s ascent to Internet glory and offers a prescient description of opportunities still to come:

“The Facebook success story is most interesting to me because of how daily offline social behavior drove usage of the site. There are plenty of activities in our daily life that could benefit from a complementary online product … Facebook demonstrates you have a great Internet service if offline behaviors can drive nearly daily usage online.”

The analysis was spot on. Facebook succeeded because it built new online habits around frequent offline behaviors. Originally, Facebook was designed to replace the physical face books undergraduates received their first week of school. The printed collection of classmates’ names and photographs was an indispensable artifact of college life and was referenced for everything from study group formation to late-night hookups.

TheFacebook.com, as it was originally known, offered users a digital way to feel connected to others throughout the day and from anywhere they could access the web. The power of this universal human need for social acceptance and connection helps explain how the company grew well beyond college campuses and now touches one in eight people on the planet.

The Need To Feel

Ask a devoted Facebook user why they log-in to the site several times per day and they’ll describe features they love and provide examples of how they use the service. They’ll tell you it’s a great way to share photos or keep up with their friends.

But below the surface is the need for emotional gratification. Though we can all shift our emotional states ourselves, it’s not easy. Instead of going through the hard work of consciously changing the way we feel, we use ready-made solutions to do it for us.

Using products or services for emotional gratification is nothing new; some of the most valued things on earth are those that have the ability to transport us quickly from pain to pleasure. For example, we laud the ability of painters or musicians to “move us” with their art. We shower athletes with millions for their ability to transform the gloomy start of the workweek into the excitement of Monday Night Football. Facebook, and the companies like it, are the new tools we use to quickly elevate our moods. This “emotion arbitrage” is the differential in work between having to create our desired physiological state ourselves versus utilizing a product or service to help do it for us.

Facebook won’t be the last company to help us feel good fast. The next web phenom to fulfill our emotional needs will likely contain the following traits:

Cued By Frequent Feelings

The most successful consumer web companies cater to our most basic and powerful emotions. People may feel emotions differently, but we all feel the same spectrum in varying degrees. The most valuable services create internal triggers in the user, activating desire to use the site whenever experiencing a particular sensation. These cues prompt users to come back to the site unaided by external messages. The site becomes the default solution to satiate their emotional needs.

The key is how often we feel the emotional cue. In fact, the market potential for a new company is a function of the frequency of how often the emotion it addresses is felt. As Gabbay correctly noted in his 2006 article, early Facebook users felt the need to connect to the site on a daily basis. Likewise, companies that successfully address frequently experienced emotions stand to reap huge rewards.

Pain Relief

When we feel negative emotions we seek out experiences to bring us back to more positive mental states. Products that can alleviate powerful negative feelings – like fear, sadness, rejection, anxiousness, inferiority, and uncertainty – even temporarily, can be a major draw for consumers.

Odds are that if you’ve felt restless during your day, you’ve visited Facebook, Twitter, YouTube, Pinterest or one of the other top 25 websites to lift you out of your funk. However, positive feelings fade over time, and when we find ourselves in a negative emotional state again, the cycle continues. The chemistry of the brain ensures this is so.

With Facebook, it’s often loneliness that cues a visit to the site. Twitter is cued when the user fears being out of the loop about what’s happening. Pinterest users feel the urge to capture and collect visual scraps of the web, worried they’ll lose the image lest they pin it.

Specific Solutions To Fuzzy Needs

You may be thinking that to claim websites are used to satiate unpleasant emotions is a stretch. Clearly, no one logs into Facebook after saying, “I’m seeking to be taken out of a state of loneliness. Let’s check my timeline!” Yet, it’s undeniable that the mind compels us to do everything we do as it endlessly searches for rewards and avoids pain.

So how does a consumer technology company communicate what their product is for, without actually stating what the product is for? Obviously, no one would have signed-up for Twitter with the tagline, “Twitter alleviates your anxiety of social rejection.” Instead, the company made the value of the service concrete with the tagline, “Find out what’s happening, right now, with the people and organizations you care about.”

Yet, in Twitter’s early days even this messaging was still too opaque. So Twitter had to be even more specific about the value of the service. As Josh Elman, an early product manager who led the Growth Team at Twitter, explained to me, “We had to more actively tell the story and came up with use cases around knowing what was happening. One great example is when Conan O’Brien tweeted he was going on tour and sold it out quickly. We told the story as, ‘if you are a fan of Conan O’Brian and were on Twitter the morning of Thursday, March 11, you may have seen the tweet announcing his tour and quickly bought tickets. If you weren’t checking Twitter then, you missed out.’” Same message delivered, but with a specific example to drive the point home.

Things To Come

With the imminent Facebook IPO, Instagram’s recent billion dollar sale, and unprecedented new sources of capital funding seed-stage investments, a new tide of entrepreneurs will answer the enticing call of opportunity and pursue their Silicon Valley dreams. Though almost all will fail, a tiny few will create products, which will touch the lives of not just millions, but billions of people. Those entrepreneurs will have a firm understanding of human behavior and their products will be grounded in fundamental emotional needs.

Next month’s Electronic Entertainment Expo, taking place in Los Angeles from June 5-7, is starting to look a little sparse.

While the annual trade show is usually an opportunity for the games industry’s biggest companies to announce titles, unveil new hardware, and demonstrate their questionable choices in event hosts, this year’s event is looking more notable for what we won’t be seeing. Several high-profile projects and developers will not be present at the conference. That isn’t to say that we can’t still expect some surprises, but the list of stuff we won’t be hearing about continues to grow. Things like:

Respawn Entertainment’s unannounced game

Fans have been eagerly awaiting the first offering from Jason West and Vince Zampella’s Respawn Entertainment, which was founded after their unceremonious departure from Call of Duty developer Infinity Ward in 2010. Those fans will have to wait a little longer, though, because while representatives of Respawn will be attending the show, they will not be revealing anything about their secret project. I guess we’ll have to go back to squinting at that blurry screenshot they released last year (below).

The Nintendo Wii U’s pricing and launch date

Nintendo has announced that it will be revealing the final specifications and launch titles for its upcoming high-definition console at E3, but we’ll still have to wait to hear how much the new hardware will cost and when exactly it’s coming out this fall. This doesn’t really come as a surprise considering the company didn’t finalize launch information on the Wii until two months before it came out.

Anything about Sony or Microsoft’s next consoles

Both Sony and Microsoft have confirmed that they won’t be showing off their top-secret followups to the PlayStation 3 and Xbox 360 (respectively). Sony will likely be focusing more on upcoming software for its struggling PlayStation Vita, and Microsoft will likely spend a lot of time talking about console-exclusive titles like Halo 4 and … well, we can’t rule out any surprise announcements, but Halo 4 is probably the main one.

Any Valve game containing the number 3

Developer Valve Software is going to E3, but that’s as close as it’s getting to that number. The company has stated that it will not be announcing anything new, opting to focus on previously revealed titles like Defense of the Ancients 2 and Counterstrike: Global Offensive.

BioShock Infinite

Developer Irrational Games’ latest was one of the most anticipated releases of this year until it was delayed until 2013. Unfortunately, we won’t be hearing anything at E3 about the now most-anticipated release of 2013, because Irrational and publisher Take-Two Interactive would like to put as much time as possible into, you know, making it. “Preparing for these events takes time away from development, time we’re going to use instead to get the best version of Infinite into your hands in February,” Irrational head Ken Levine said while announcing the delay last week.

Grand Theft Auto V

Grand Theft Auto V developer Rockstar Games won’t be at the Expo at all, which means we’re not going to see anything about its next big release. I have reason to believe that this game will have cars in it, but I suppose the speculation as to precisely what kinds of cars it’ll contain will have to continue. Rockstar’s absence is especially odd in light of the fact that rumors have it that GTAV will release this winter.

Next month’s Electronic Entertainment Expo, taking place in Los Angeles from June 5-7, is starting to look a little sparse.

While the annual trade show is usually an opportunity for the games industry’s biggest companies to announce titles, unveil new hardware, and demonstrate their questionable choices in event hosts, this year’s event is looking more notable for what we won’t be seeing. Several high-profile projects and developers will not be present at the conference. That isn’t to say that we can’t still expect some surprises, but the list of stuff we won’t be hearing about continues to grow. Things like:

Respawn Entertainment’s unannounced game

Fans have been eagerly awaiting the first offering from Jason West and Vince Zampella’s Respawn Entertainment, which was founded after their unceremonious departure from Call of Duty developer Infinity Ward in 2010. Those fans will have to wait a little longer, though, because while representatives of Respawn will be attending the show, they will not be revealing anything about their secret project. I guess we’ll have to go back to squinting at that blurry screenshot they released last year (below).

The Nintendo Wii U’s pricing and launch date

Nintendo has announced that it will be revealing the final specifications and launch titles for its upcoming high-definition console at E3, but we’ll still have to wait to hear how much the new hardware will cost and when exactly it’s coming out this fall. This doesn’t really come as a surprise considering the company didn’t finalize launch information on the Wii until two months before it came out.

Anything about Sony or Microsoft’s next consoles

Both Sony and Microsoft have confirmed that they won’t be showing off their top-secret followups to the PlayStation 3 and Xbox 360 (respectively). Sony will likely be focusing more on upcoming software for its struggling PlayStation Vita, and Microsoft will likely spend a lot of time talking about console-exclusive titles like Halo 4 and … well, we can’t rule out any surprise announcements, but Halo 4 is probably the main one.

Any Valve game containing the number 3

Developer Valve Software is going to E3, but that’s as close as it’s getting to that number. The company has stated that it will not be announcing anything new, opting to focus on previously revealed titles like Defense of the Ancients 2 and Counterstrike: Global Offensive.

BioShock Infinite

Developer Irrational Games’ latest was one of the most anticipated releases of this year until it was delayed until 2013. Unfortunately, we won’t be hearing anything at E3 about the now most-anticipated release of 2013, because Irrational and publisher Take-Two Interactive would like to put as much time as possible into, you know, making it. “Preparing for these events takes time away from development, time we’re going to use instead to get the best version of Infinite into your hands in February,” Irrational head Ken Levine said while announcing the delay last week.

Grand Theft Auto V

Grand Theft Auto V developer Rockstar Games won’t be at the Expo at all, which means we’re not going to see anything about its next big release. I have reason to believe that this game will have cars in it, but I suppose the speculation as to precisely what kinds of cars it’ll contain will have to continue. Rockstar’s absence is especially odd in light of the fact that rumors have it that GTAV will release this winter.

Fun Machine, a new mobile entertainment software company based in Austin, Texas, was founded in early 2011. So why did it wait until today to let the world know it was officially open for business?

“We decided that launching our first game was more important than telling the world that we existed,” CEO Patrick Curry (pictured) told GamesBeat via email. “Anyone can say they’re switching gears and leaving consoles behind to make mobile games. It’s something else altogether to actually go do it. So we launched Awesome Eats and were totally blown away with the response!”

A free app for iOS devices, Awesome Eats has gained over 800,000 players and has been featured by Apple in over 100 countries. The company made the game for the Whole Kids Foundation, a non-profit organization that seeks to improve children’s nutrition and wellness at home and in schools. “The Whole Kids Foundation and Whole Foods Market are both headquartered here in Austin and happen to be good friends of ours,” Curry explained. “We were starting up and looking for a pilot project, and they approached us about the idea of a game that encouraged healthy eating.  That was a perfect fit for us as Disney vets (and parents). We really like the idea of reinforcing positive messages back into the world with our games.”

Besides Curry, who was formerly vice president and creative director at Wideload Games, three other video game industry veterans are behind the startup: Michael Hadwin and Neill Glancy, former directors at Disney Interactive’s Junction Point Studios; and Stephen Palmer, former lead producer for Gearbox Software’s Borderlands.

“We believe that games can do social good, so we are always looking to put positive messages into our gameplay,” said Hadwin (pictured). “But that’s not to say that we’re going to shy away from other genres that we love. You don’t work on Stranglehold and Borderlands without a serious action-gamer streak!”

Curry said the team’s experience at Disney working on games like Epic Mickey, Avengers Alliance, and Guilty Party taught them how to create content for a broad audience, but they were still surprised at how much larger and broader the mobile gaming space was. “We had a lot to learn about making mobile games, and actually to unlearn about making console games,” he said. “For the last 10 years, we’ve been dealing with teams of hundreds of people, budgets in the tens of millions, and high-res graphics on computer monitors and HD televisions. In many ways, mobile gaming is a return to form, where the right five or six people can make something phenomenal, so long as they aren’t afraid to embrace this new audience and marketplace.”

Curry said smart phones, smart TVs, and tablets are changing the video game industry in fundamental ways, creating an ecosystem that lets you play across small, medium, and large screens. “The next generation of gaming isn’t going to come on a disc or be bought in a store,” he said. “It’s going to be downloaded and streamed to every screen in your household — and in your pocket — in the blink of an eye.”

Hadwin added that the team is building some “really cool technology” for this ecosystem that it can’t talk about just yet. “As we get closer to announcing our next game, people will completely understand where we’re going, our mission, and what we are looking to accomplish.”

GamesBeat 2012 is VentureBeat’s fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry’s latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your early-bird tickets here.

If there’s something on Facebook that won’t stop pinging you with Notifications, tell it to shut up instantly with Facebook’s new granular, in-line notification controls. Hover over an alert in the Facebook.com homepage’s globe icon drop-down and click the ‘x’ for the option to turn off notifications from that app, group, event, or post you commented on. The whole drop-down has a slick new look, too

Previously you had to dig your way to the dedicated Notifications Settings pageto make these changes, and there was no way to turn off a specific source of alerts — you had to silence all your events or all your posts. Facebook has confirmed with me that most of the rollout of most of these changes to notifications updates will be rolled out to everyone by tonight, accept for app alert controls which are still in testing.

As we accumulate more friends and apps, Facebook’s notifications can turn from delightful pointers to annoying distractions that interrupt our lives. These new controls mean if you want a more zen Facebook experience, you can make it so.

Now that some of us have been on Facebook for eight years, Facebook needs to be mindful of exhausting its most active users. These are the people uploading the photos, starting the groups, and throwing the events that engage everyone else that uses the social network more casually. It’s already moving in the right direction by offering notification summaries instead of individual emails

If power users become even a bit annoyed with how often Facebook alerts them to minor occurrences, and they don’t feel like they have tight control, they could drift away and stop generating as much content. That could have a ripple effect on overall time-on-site and engagement that could hurt Facebook’s ad business.

The new controls should be especially helpful for quieting noisy groups. One minute someone adds you to a group without your consent, and the next minute you’re getting dozens of notifications about weird music genres or lame club nights. Facebook recently made it much easier to find notification controls on group pages, but now you don’t even have to visit to shut off these alerts.

With the IPO tomorrow, it’s good to see Facebook launching new features today. It seems it’s really serious about the message plastered all over its headquarters. “Stay Focused & Keep Shipping”, even if you’re about to be a paper millionaire. And now it’s got a new poster for all the haters who are gonna hate on its new-found riches…

Silicon Valley venture capital stalwart Kleiner Perkins Caulfield & Byers is announcing this evening that it has closed on a $525 million round for its fifteenth venture fund, dubbed ‘KPCB 15.’

The fund will be headed up by 10 managing members: Mike Abbott, Chi-Hua Chien, Amol Deshpande, John Doerr, Bing Gordon, Wen Hsieh, Randy Komisar, Matt Murphy, Beth Seidenberg, and Ted Schlein. Longtime Kleiner Perkins investment partners Brook Byers, Ray Lane and Bill Joy are all notably off the list, which appears to confirm earlier reports that they will be declining their participation in future funds as part of a gradual general change in the partnership structure at the firm.

Kleiner Perkins says it will focus the fund toward making investments in early-stage digital consumer and enterprise, green technology, and life sciences companies. According to Kleiner Perkins, which for years has been known for placing more emphasis on green tech, it will place an extra focus on all things web going forward: “While KPCB has invested in the digital enterprise space for decades, a further emphasis will be made in KPCB 15,” the firm wrote in a press release.

$525 million is certainly big, but it’s not outsized given Kleiner Perkins’ history and the larger environment. The offering price for KPCB’s 14th fund was $650 million, and its 13th fund’s offering was sized at $950 million, according to regulatory documents. It’s also important to note that this is by no means KPCB’s only fund. Earlier this spring the firm raised $1 billion for its digital growth fund, focused on later stage companies, for example, and the firm has a number of other funds focused on specific initiatives and markets.

Meanwhile, other venture capital firms have raised some truly massive rounds in recent months. Last week NEA filed documents indicating that it is raising up to $2.5 billion for a new venture fund that could be one of the largest ever in VC history. And earlier this year, Andreessen Horowitz and Tiger Global each raised $1.5 billion rounds for new VC funds.

Steve Jobs evidently thought about disrupting everything. From computers, to phones, to televisions … to cars. Apple board member and J. Crew chief executive Mickey Drexler revealed the unfulfilled dream.

“Steve’s dream before he died was to design an iCar, and it would have been probably 50 percent of the market. He never did design it,” said Drexler at Fast Company‘s Innovation Uncensored conference.

Jobs seems to have dreamed of having his hands in every industry. An iCar undoubtedly would have been something to see. I imagine docks for your iPhone, Pod, and Pad, and a hot chocolate/cookie dispenser like the one from Tim Allen’s sleigh in The Santa Clause. It would also be a transformer. But, as Drexler notes, Jobs never designed the car. He may, however, have started designing a television, which is rumored to come out in 2013.

Drexler, whose company is known for great design in the fashion world, also said he wouldn’t want to be Tim Cook, Apple’s current CEO, and Steve Jobs’ successor.

“Never take over a company that’s doing great,” he said. “I love Tim Cook, but I wouldn’t want his job.”

Check out the video from Fast Company below:

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via Fast Company; Apple Car image via blakespot/Flickr

Kleiner Perkins Caulfield & Byers, one of Silicon Valley’s most storied venture capital firms, has closed its fifteenth investment fund.

The company announced today that it has raised $525 million for KPCB 15, which will invest in “early-stage digital consumer and enterprise, green tech, and life sciences companies.” Kleiner Perkins notes that it has been investing in enterprise technologies for decades, but it’s emphasizing this sector even more with the latest fund.

The fund’s 10 managing partners will be Mike Abbott, Chi-Hua Chien, Amol Deshpande, John Doerr, Bing Gordon, Wen Hsieh, Randy Komisar, Matt Murphy, Beth Seidenberg, and Ted Schlein.

KPCB’s press release touted its recent successful investments, including Zynga, RPX, Flipboard, One Kings Lane, Path, and Nest. The fund is not KP’s only pool of cash, however, as it also has the $1 billion Digital Growth Fund (for later-stage investments), the $1 billion Green Growth Fund, the $250 million sFund (focused on social networking), and the $200 million iFund (focused on the iOS ecosystem and other mobile app platforms).

Kleiner Perkins was founded in 1972 and has invested in some of the tech industry’s biggest success stories, including Google, Amazon.com, Intuit, AOL, Genentech, and Netscape.

Photo credit: Ken Wilcox/Flickr