Facebook is the new Excel
alexmuir.com
alexmuir.com
When IBM built the original PC, they let Microsoft keep the rights to the operating system software. In hindsight, it was a massive miscalculation as Microsoft's "software-without-the-hardware" business went on to earn more profits than IBM's hardware. IBM's later weak attempt with OS/2 to beat Windows failed.
Microsoft's then CTO Nathan Myhrvold (who Bill Gates considered one of the smartest guys on the planet) was on a phone call with Larry and Sergei and yelled into the phone that "Search is NOT A PRODUCT!!!". (Probably their MSN hubris speaking.) Microsoft's later attempt with Bing has hardly dented Google's search marketshare.
Google didn't notice the importance of social networking before Facebook did. Google's later attempt with Google+ Circles failed to trigger a mass exodus from Facebook.
Facebook.... <story is yet to be written> but the same thing will happen to them. Somebody will come up with something that blindsides them. Or it might not even sneak up on them. Mark Z himself may look at the early-stage product and conclude that it's not anything special.
There are plenty of untapped business ideas that Facebook will misjudge and dismiss, leaving others to win that market.
But to the author's point, it will suck if you create a product that paints a bullseye and it lines up in Facebook's crosshairs. Microsoft couldn't beat Intuit Quicken with MS Money but they did crush Netscape with IE. They lose some, they win some.
I suppose they were right in one way. Google's product is search advertising.
Just because advertising pays for the operation of a service, doesn't make the service not the product.
And yeah, I understand that Google also sells advertising as a separate item from their search engine, but that's not what parent anecdote was referring to.
I had to abandon a project when they stopped supporting that...
Edit: Actually link: still works also
still... it could be partially useful.
I would guess that's not the common perception.
Sure there are secondary economic effects and markets that complicate the picture. But the basic business model of a television network isn't all that different than a regular company that sells their products directly.
Programming is their product, and customers buy it by paying attention (or to netflix, hulu, comcast, etc more directly). Attention is the currency, and ads let them exchange attention for USD.
To be fair, if you're an advertiser, then the product is eyeballs. But if you're a pair of eyeballs, then the product is the content. They're not mutually exclusive. Same with google. If you're a searcher, then the product is results. If you're an advertiser, then the product is relevant searchers.
Granted I don't hand cash over, but the user is still paying if you really want to stick with "products are paid for" argument
Yeah, all of that is true, but it misses the point entirely. The product that is 100% responsible for people going to the movie theater is movies. The product that drives everyone to Google is search. The fact that the revenue isn't directly related to the product doesn't make the product not the product.
That is exactly what makes it a product.
Product - Definition - an article or substance that is manufactured or refined for sale. e.g."dairy products"
In this case, the product refined for sale is the users.
A product is anything that can be offered to a market that might satisfy a want or need. That nobody actually pulls out their checkbook and pays for a Google search doesn't mean it's not a product and that there's not a market for search.
Search, Maps, Mail, Android are given away free as their competitive strategy of generating huge volume of traffic.
Google's business model is to charge their customers the possibility to redirect some of that traffic. And because advertising is speculative they can reach high profit ceilings.
It's an old-school dot-com point of view. Own eye balls, monetize clicks.
Facebook went and ate Google's lunch by following their playbook and improved upon it by focusing their product around SOCIAL ACTIONS.
Facebook produces huge volumes of interactions. Every like, every heart, every comment, every follow. By the time Google got around moving the battleship they've already lost.
You want to be the next big thing?
What is that one thing everyone does all the time? Catch that.
https://en.wikipedia.org/wiki/Loss_leader
Search is sold at $0, to drive customers into the Store where they can see the real product.
Can't you? Adium claims it supports FB: https://adium.im/
Can I?
The Graph API has not longer the ability to retrieve the /home endpoint which contained the newsfeed, since v2.0. The only this a app can retrieve is the user's own posts.
What's the problem here?
So really he wants to be AT&T circa 1965. Nice work if you can get it.
I think he already did and bought Instagram & Whatsapp. Yea real threat is when they miss the opportunity.
The point is, you can have that vision for a while, but eventually the market changes such that the threat (or opportunity) to your business isn't so direct to be obvious like Instagram was to Facebook.
Yup. Classic example of innovator's dilemma. These are the opportunities startups need to constantly find and solve.
Proof that simple ideas seem so simple on the surface yet become these big opportunities. What you do with the idea/initial success is what separates these successful companies.
Bing has 21% market share vs. 64% for Google.
IE defaults can only take you so far.
Assumes the OS would have been as widespread as it was w/o the licensing that MSFT ended up doing (and it would not have been). That is what it made it the defacto standard operating system.
Microsoft tightly integrated IE with Windows, leveraging their OS monopoly in order to beat Netscape. I don't believe MS built a superior product.
Whether you do or don't believe it, it's whether they did, and yes they did. Users overwhelmingly chose to not purchase Netscape products which killed their revenue and shut down the company. The competition was free vs paid, and as often happens, paid will fail. If it was free vs free, maybe Netscape would have had a shot.
I could agree that the browsers were at least comparable, until Netscape disappeared and MS had little incentive to improve IE.
Which led to feature stagnation until the Firefox rose from the ashes...
I 100% believe IE 5 was a far superior product than the competing Netscape 4.x. Previous to IE 5, maybe it's debatable.
I worked in a shop in 2000/2001 that was doing early Ajax type stuff (for a dashboard that controlled some embedded hardware.) It wasn't possible to port it to Firefox even at that point, even at that point IE had some leg up.
Later, MS let IE6 bit rot forever. And it was loathsome.
That WhatsApp acquisition ($19 billion) must have been made exactly because Facebook was thinking that WhatsApp really could have been their Facebook (for Google), their Google (for Microsoft) and their Microsoft (for IBM).
If a messenger could overcome FB, snapchat might actually have a chance, but the key value proposition that FB offers is that it's your online persona. You have pictures up from all the years you been around, you have your friends' profiles to go check out at will, you can start a group, or make an event and know all your friends are already on Facebook to see it.
So why buy? Messengers have the highest retention rate. You can see them expanding upon it by integrating FB profile + allowing you to install "apps" or "plugins" that do X/Y/Z. There is a Chinese company, WeChat, that has made billions on this model. I'm sure FB would like to as well, but with it integrated with FB login etc..
Downvoters: Genuinely curious how I'm wrong if you feel like throwing in your 2 cents.
> You have pictures up from all the years you been around,
In practice, people care very little about this - they want the world to know they were in the Taj Mahal last Sunday or their baby started walking yesterday, but older pictures are generally forgotten, and sometimes even a nuisance for various reasons.
> you have your friends' profiles to go check out at will,
and yet almost never do
> you can start a group,
as you can on WhatsApp
> or make an event and know all your friends are already on Facebook to see it.
This is one use case that is indeed better on Fb, though just posting and gathering replies on WhatsApp seems to suffice in 80% of cases.
(Btw, I'm not among the downvoters.)
I was confused about downvotes because I was at -2 for awhile (maybe I offended snapchat employees ;), but I appreciate you rebutting me. I do believe if there was to be a huge contender to Facebook, it would need a messaging component to grow out of. However, I still do not believe FB made the purchase primarily out of fear of competitive threat. I think FB Integration in a tencent model can make them more money than FB ads (while driving more targeted FB ads).
Everything Facebook learned about mining and selling -- they learned from Googs.
Google Buzz? Wave? Orkut? Don't remember the exact timeline for all of those (maybe some were slightly after Facebook?) but I find it difficult to suggest they were late to the game. It was more like they didn't figure out how to play it well.
Friendster and, later, MySpace were popular before Orkut and Facebook, so social networking was already a thing.
Facebook was just much better than MySpace, Orkut and G+. And it still is.
This was the brilliance of early Facebook. By initially limiting membership to only hip young influencers, and only gradually expanding to less hip/young/influential groups, they successfully created scarcity and huge word of mouth. It made the news every time a new group was allowed to join Facebook. People were coming banging at the gate to be let out of the "MySpace ghetto." People want what they can't have; Bernie Madoff created the most successful Ponzi scheme ever by making people have to come to him and beg to be allowed to invest.
The other brilliant idea of early Facebook, unlike Friendster/MySpace/Orkut, was that it was a disguised dating app (remember pokes?), but one that eliminated the gender ratio issue by being disguised, and the creepy old guys problem by limiting its membership to young people and limiting most interactions to "friends." Later, only after it had built up a critical mass of a large and loyal userbase, it was able to become even bigger by gradually pivoting to becoming a more traditional social network/blogging platform. And Instagram now exists to fill the disguised-dating-app role in their product portfolio. Snapchat is pivoting much the same way, albeit more jarringly.[0]
[0] http://www.bloomberg.com/features/2016-how-snapchat-built-a-...
That may have been an unintended consequence, but the genius move was to bootstrap the online social network with existing offline social networks (and getting the date integration - email addresses - for free!). Somewhat ironically, privacy (such as it follows strict exclusivity) was a central feature of early Facebook. No other social network did anything like it, they were all free-for-alls.
It started with people who had a Harvard email address (including staff). It expanded via Ivy League universities, then all US universities and colleges, then US high schools, before finally opening up to the public.
If you were running a nightclub, I think you'd appreciate the distinction between "let in hip young influencers" and "let in anyone with a student library card". ;-)
Friendster was initially quite popular and not a bad product. But again, it was left to rot and it became slow, like unusably slow, and uncool. And then MySpace took its audience.
nope: https://en.wikipedia.org/wiki/Orkut_B%C3%BCy%C3%BCkk%C3%B6kt...
With something like webmail you can switch providers based on your preferences but nobody else needs to do anything. You can keep emailing the same people like you always have. But with Facebook-style communications networks, you have to use their service to communicate with people on it. And since Facebook was the first to really get everyone to join (not just the teens and twentysomethings who had Friendster and Myspace pages), it has that critical mass of users.
So even if I think the G+ app runs better and looks nicer on my phone or the service does a better job of letting me specify who sees my posts, it won't make a bit of difference if I want to have a group chat or event planning page with 10 friends and Facebook is the only platform we all have in common. I don't own Google stock and I'm surely not going to start pestering friends and family to pull up stakes and move to G+ because I like it better. And that will be the case for a while I think...at least as long as the closed-network Facebook-style services are concerned.
I don't see them being unseated until something new really takes off the way the current form of social networks replaced mass email chains for people sharing links, pictures and weekend plans with friends and family.
It was also great at delivering status updates, well at least until people started saying "John Smith is." lol.
The other powerful thing Facebook did that no other social network did was handle growth. Friendster and Orkut, they were painfully slow to use even in their early days.
Yep, poking was really important.
They leave college, get married, and within a few years they are posting baby pics.....
Something with 1.5 billion users isn't likely to disappear in a hurry.
Since Facebook already owns Instagram, WhatsApp and Oculus Rift, and can afford to buy any startups it wants, even a decline in core Facebook use wouldn't be terminal.
I haven't deleted my account, but I did remove it from my phone because it started aggressively notifying me of bogus status updates after it noticed my absence.
After a few days, I asked myself, "Is my life better without it?" Yes, no irritations from ego, politics or ignorance anymore.
It'd be a bit amusing if what has been the reason for their growth eventually ends up being the reason for their decline.
And maybe he is even using it right now... I am thinking about Slack...
Not saying it's bad... just neutral. And it may have very good consequences for society as a whole. The only danger is believing the process is "good" in of itself.
Evolution operates on genes, an amoral physical process.
Capitalism is the operation of people, a morally-laden process.
But, I also want to add that I believe you can start a very profitable business with careful planning that relies less on luck and more on your hard work!
In my opinion people behind high-profit-margin startups that were bootstrapped with no venture capital and were profitable from day 1 are the real business "geniuses".
Example: my good friends at basecamp.com
Edit: I like to add why I think Basecamp is a good example... first of all they are not my actual friends, I just like their take on how to do business.
In case you don't know one of the co-founders (David Heinemeier Hansson) is the creator of Rails. They are all about creating a profitable long-lasting business from start and I very much admire that.
I actually like reading about companies that set out to solve a genuine business need, make some money and treat staff well.
It's not as 'sexy' as billion dollar valuations for "Uber for Cats" though.
The speculative nature of capital has always been a core theme in economics. Yes, including "freshwater", "neoclassical" or "orthodox" economics.
Those often celebrated in the media as whiz kids or geniuses often do just that.
In addition, even if you are a "legitimate" business/founder, there is still a massive amount of luck, way beyond your control. Imagine for example if Elon Musk had founded X.com slightly later that he did - probably wouldn't have the funds or track record to do Tesla and SpaceX due to the lack of exit opportunities with PayPal. Or if Paul Graham had founded ViaWeb slightly later, perhaps no YC.
https://en.wikipedia.org/wiki/Universal_Darwinism
https://en.wikipedia.org/wiki/Difference_and_Repetition
http://www.amazon.com/gp/product/1780937997?keywords=intensi...
http://www.amazon.com/Innovators-Dilemma-Revolutionary-Chang...
One thing to consider is that Mark is very aware of this based on his purchases of companies like Instagram. At the moment it seems like facebook wants to try and buy anything they perceive to be that new up and comer.
You are most likely currently using an IBM-compatible PC running Microsoft Windows on which you run Google for searches and Facebook to reach friends.
There are some losers in those stories and they are losing to direct competition: IBM is losing on profits because they made their system open and anyone can build IBM compatible PCs, Microsoft is losing because people were for some strange reason ok with Apple creating a closed operating system (iOS) where they take 30% of any transaction that runs on it. Microsoft are trying to change this with Windows 10 and UWP, but hopefully it will fail just like Bing.
This has always been the case in the startup world too: you always look at markets over $10B with caution, because that's big enough to interest AGAF (Apple/Google/Amazon/Facebook) if they're already in an adjacent market. Your only hope is to target a less-profitable sub-sector of that market, develop expertise and hope that AGAF didn't bring their A game to that market (in which case, your company makes an excellent acquisition target at crazy valuations as AGAF bid against each other!)
[1]https://books.google.com/books?id=ktm885vGIXEC&pg=PA68&dq=go...
FB tends to be a 'look at the car I just bought' or 'look at the project I just finished' or 'the event I was just at' ego space. The vertical, model specific forums continue to be the place to go if you are diving into detail via searches of existing threads and people helping each other in response to specific questions and more importantly problem solving.
IMO FB tends to be the place to share the superficial, and to reduce sophisticated ideas to ephemera. A significant challenge on the internet generally and particularly FB is uninformed advice - youtube for example is full of parts life endangering how-to videos.
FB is more of a casual after hours clubby bar atmosphere rather than a serious forum in my experience, and i wouldn't go there for advice.
For specific task-oriented project support, if you're not part of StackOverflow/StackExchange, it's pretty much old-school BBSes. I've also found blogs are quite active for discussion.
"Social" ... is oversold, and actively kills multiple potentially useful categories. It does however point to massive holes in discussion and discovery across other platforms.
Facebook conversations tend to be very ephemeral - requests for help, "yay we got into X festival", etc. If you want in-depth discussion, you need - again - old-school forums or at a pinch Reddit.
1. I joined a couple FB group for American expats in the country I live in. I quit them both when I realized that most posts are people complaining about the people and food options here or pictures of their recent booty of American junk food. I joined with the naive assumption that people actually moved here with the same amount of enthusiasm I had when moving here. I was quite wrong.
2. I joined a gluten-free group along with my wife. We both quit when we realized that 95% of the posts were just people asking "is this gluten free?", with pictures of the ingredient list on the side of boxes.
At this point, FB is a news aggregator for me and only keep the account just to avoid drama with certain people.
I've always looked at many of the subreddits as a potential for different products or a channel to access customers of that interest.
For example:
* r/RedditGetsDrawn -- Marketplace for artists and users
* r/SomebodyMakeThis -- Request for product
* r/DataIsBeautiful -- Collection of people passionate about data visualization
* r/IAMA -- Ask Me Anything -- many other community sites have copied this concept.If your customers don't buy your product because they can get it for free on reddit, it doesn't matter how much they pay reddit for it.
Many a start-ups have come and gone trying to revolutionize house/apt hunting. If they try to incorporate craigslist, craigslist shuts 'em down; if they try to get organic listings, craigslist beats 'em.
Out of curiosity, why craiglist and not ebay? Is ebay "too big" (you're not advertising to people in your city, that you can meet and do the handover in person, but rather to the world -- and will likely have to deal with shipping)?
Facebook isn't a competitor to most B2B products, but it's defintely the Excel of the B2C world.
For the other cases you mentioned: Groups to collaborate, Events to organize - these are all completely underwhelming alternatives to other market products. The biggest tragedy of Facebook is that it has enormous scale but it can't write comprehensive products that satisfy all of that scale uniformly. You get the lowest common denominator, which is why customers go for niche alternatives.
Excel is not Facebook. Yes, Facebook is big. Excel is big in its industry. However, Excel has just enough of a balance between niche and scale. Excel is about computation and reporting. It solves a very specific need that is fortunately applicable in all types of applications. As soon as you try to go outside the bounds of what Excel can do (large data analytics, more customized reporting, interactive applications) you stop trying to rationalize Excel and start using other tools. People do the same with Facebook. More people do it with Facebook because Facebook doesn't effectively solve as many core needs.
There is a vast untapped market of digital semiliterate that only waits to be tapped. See also: medium. Why that and not wordpress.com? Because they speak the right language.
As for poor information, I don't see how that's the result of Facebook. Plenty of restaurants neglect all sorts of information on their websites. Add in that plenty didn't bother with websites before, but now have a Facebook page, I'd say Facebook has drastically increased the amount of information available on restaurants.
People are increasingly aware of security as a problem - it only takes one business you know to have their WP install hacked and start distributing malware before you say "hey, maybe not" - and things like Squarespace offer very attractive themes, no need to keep updating the install, and a lot less technobabble.
(I must admit I'd almost never recommend someone without technical knowledge set up their business website using self-hosted WP these days. Go for a WP-specialised host that'll handle the caching and security, or go for something like Squarespace.)
If your SaaS is targetting B2B then Facebook is a non-issue. It goes almost without saying that Facebook has no teeth to eat your lunch.
It's not a straight analogy. Specialized use cases can coexist with Facebook, otherwise half the Social-Network-for-X or Facebook-but-not-Facebook startups wouldn't exist. Productivity applications in contrast have an uphill battle and tend to stray away from anything even remotely resembling a spreadsheet UI.
So the story to be written is who or what will take over Whatsapp.
I have a four-year-old smartphone that's basically dead, but works for getting emergency calls. I also have multiple laptops, a tablet, etc. and keep encouraging people to use FB chat (since I've given up on converting folks to Slack) to talk to me.
It's quite popular in my neighborhood and works pretty good as a way to share issues, things for sale, lost pets, etc.
Doubt FB can replicate this unless they set up the verification by postcard process.
I was part of a garage sale private group on FB for two towns and it sucked.
On next door they actually live in the area and are more authentic I guess.
Excellent service, IMHO. The interface is a bit ... unpolished -- trying too hard to be polished? I only say that because of the high degree of polish I see elsewhere, but I guess that really isn't of that high of importance.
I guess, in the end, I want all services to work like reddit & HN, minimal and usable, maximum text on screen.
This continue destruction of the open Web must end.
I'm sure I'm a member of a whole bunch, but aside from using them to coordinate society activities back at uni, I haven't really used them in years. I always found the interface to be ugly as hell, and if I want to join a large thriving community on topic X then I just go on /r/topicX.
Interface has definitely improved of late - Facebook clearly are prioritising adding in functionality like being able to give reviews on sellers etc.
* smash.gg is also used heavily for majors as of late though
FB isn't the only way to do this, of course, but it's certainly low friction for most members, since they generally already are guaranteed to have a personal FB account.
Pre-web: Usenet Early web: Bulletin Boards Mid-Late 90s: Yahoo Early 00s: Myspace/Livejournal Now: Facebook
So, yeah, it's not so much Facebook is the new Excel as it's just the current "place where the average person is going to post things/look for things."
This is a snarky comment, but if a company can be replaced by a facebook page then it isn't adding much value.
I think we're both just re-iterating the point of the author--maybe slightly differently
It used to be the case that if economists who wanted to do any quantitative analysis at all had to know Fortran 77 - and punch cards in batch mode. Now people in my field who know some Matlab are already seen as wizards.
However I do use nextdoor that I check once or twice a day for community related news/events/etc.
Away from that demo, I think you can still build a service for a community.
That's only true if your userbase is relatively young. Facebook is far from ubiquitous among middle-aged people who still have smartphones, etc.
And to give some evidence beyond my obviously skewed social context, most restaurants have a simple static website with a menu and map, instead of a Facebook page (or in some cases, in addition to a Facebook page).
However, most of everything else, people will slowly come to the realization that it's not a good idea to use real identities.
Reviewing a restaurant or small business? Probably not a good idea to leave a lifelong trail of clues about oneself.
there was indeed a movement to "remove all social media" a couple of years ago, but it ran out of a lot of steam:
https://www.google.com/trends/explore#q=%22delete%20facebook...
There are a lot of privacy settings you can utilize, and you are probably missing out on a lot of opportunities by not being on Facebook: it's costing you.
I was hugely against facebook for a very, very long time. But the fact is, some people simply do not use email, and you can ask for their facebook and communicate with them and build an acquaintanceship, or not do so. The opportunity cost to not using facebook is too much for me: I "can't afford" not to use it in fostering new acquaintanceships with people I meet in passing. Events are another huge thing that is exclusionary and costs me if I am not on facebook.
I use skype for chat. I like reddit and sometimes HN when there are interesting discussions going on.