Design can be even more critical than that and more valuable than feature parity. Facebook had way less features than Myspace - you could do all kinds of stuff on Myspace like listen to music, customize your page, have photo slideshows - but Facebook's design was a welcome relief from the haphazard Geocities-like mess that Myspace devolved into.

And similarly, Facebook's current crowded interface leaves room open for even better designed networks like Path, Instagram, etc.