Zuck: "How Facebook Dies"
#14 Entropy
One of the Big Truths in Technology Start-ups is that as companies get older and bigger, they lose their edge. The same week of Facebook's IPO, HP announced it was laying off 30,000 humans. What was the last innovation you heard of coming out of HP, or IBM? Apple is probably the exception here, but exceptions are ... exceptional.
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15:
Competition
MySpace offed Friendster. Facebook offed MySpace. Do you actually believe the public is so much more loyal to Facebook than any of its predecessors?
14:
Entropy
One of the Big Truths in Technology Start-ups is that as companies get older and bigger, they lose their edge. The same week of Facebook's IPO, HP announced it was laying off 30,000 humans. What was the last innovation you heard of coming out of HP, or IBM? Apple is probably the exception here, but exceptions are ... exceptional.
13:
Advertising
And the same week of Facebook's IPO, GM announced it's pulling $10M of advertising. While we can't exactly describe GM as a bellweather of business genius, it isn't driven by serendipity. Some brands might be a good fit for Facebook, but Facebook isn't a one-size-fits-all proposition. There are limits and where there are limits, there are limits to growth and opportunities to hit the wall.
12:
Mobile
One of the things Zuckerberg has noted is the increase in people who use Facebook on their smartphones. Guess what: These people aren't seeing any advertising at all. No ads? No dollars.
11:
Boredom
Can you think of a television series that lasts more than three seasons? Four? The public is fickle and, like a kitty kat, will become fascinated by the next shiny object.
10:
Tech Failure
What if Facebook went down for 12 hours one day? What if that happened six times a year? What if it happened twice a week? Would you lose confidence in it? Hey, if your dishwasher stopped working, would you replace it?
9:
Government Regulation
Zuck thinks there's a distinct possibility that a government -- or several governments -- might regulate it. ---And that would be very, very bad.
8:
Lack of Privacy
This might be the big one. The Really Big One. You've been pouring a lifetime of personal details into Facebook. Some of it you want to share with everyone. Some of the secrets you only want to share with certain people. And some of the secrets you want to stay that way. A wise analyst recently said, "If a product is free, then you are the product." In other words, your information and your secrets are what will make Facebook rich. What's your share?
7:
Torpidity
Too much money can make people lazy and there's no reason to believe Facebook is any different. Facebook's last innovation? Timeline. Big whoop. Acquiring Instagram? That didn't take a lot of ingenuity, did it?
6:
Jumping the Shark
When Fonzie jumped the shark, he lost his cool. According to the laws of thermodynamics, Facebook will, inevitably, lose it's cool. How soon will Facebook have to resort to the position, "Not your Father's Facebook"?
5:
Mission Before Money
Here's what Zuck wrote to potential shareholders: "Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected."
4:
Arrogance
Here's another tidbit from Zuck's letter: “Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones — the raw tools necessary to start sharing what they’re thinking, feeling, and doing with whomever they want. Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries.”
3:
Having the Cake and Eating It Too
Check out this line from Zuck's letter that let's us know he wants to have his cake and eat it too: “We frequently make product decisions that may reduce our short-term revenue or profitability if we believe that the decisions are consistent with our mission and benefit the aggregate user experience and will thereby improve our financial performance over the long term.”
2:
No Depth of Bench
Unlike Apple, Facebook doesn't have any depth of bench, there's no one in line to run the company if Zuck were to, say ... go back to school or spend a couple of weeks watching Dark Shadows re-runs.
1:
Divide and Conquer
There's a very strong possibility that, instead of bringing people together, Facebook might break them apart. Warring tribes could form, snarking could reach unprecedented heights and trolling could reach unprecedented depths.
