Facebook is really frustrating sometimes when you want to get the news out to friends, your fans, or your club. Since everything goes through an algorithm, you’ve no idea whether anyone’s going to see your post, or when. Recently, a friend in the SCA asked if we could wean ourselves off Facebook.
The answer is - not really, no. But why that’s true is really interesting. Technology and features are really important at a certain point, but completely unimportant in the overall. And it also tells us what we can do.
There’s a type of business out there which serves end users directly, and where the incremental cost of serving an additional user is basically zero.
We’ve never really had businesses like this until relatively recently. Coca Cola needs to produce twice the fizzy liquid to serve twice the number of customers. But for FB, Google, Uber, AirBnB and the like, it’s basically the opposite; they’ve already sunk most of their costs. And even bigger than that, their product becomes more valuable the more people are on it.
Take cab hailing apps. How did Uber get so dominant in so many places? If they have more drivers, they attract more users, because that makes them the easiest app to find a driver. And then when they have more users, they attract more drivers, because that’s where it’s easiest to find a passenger.
Same for AirBnB (guests and landlords.) Same for Facebook (users, advertisers.) Same for Google (users, advertisers, webmasters. Webmasters literally change their websites to suit Google’s whims.)
So there are enormous winner-take-all effects for these businesses. Once they have established dominance, tearing people away from them is basically impossible, because you’re starting at an enormous disadvantage. The value you can provide through better features, or better privacy, can’t possibly outweigh the value they can provide - to users and suppliers - from being the biggest.
This is so powerful that even aggregators struggle to take on other aggregators head on. Google tried to take on Facebook with Google Plus, and it failed. Not because of the features; Google definitely has the smarts and the resources to compete on that front. Larry Page even made everyone’s bonus depend on it. But the existing winnner-takes-all effects were just too powerful.
It is possible to compete, if you do it asymmetrically (which is what disruption theory is about, but that’s another kettle of fish.) No one’s going to build a more successful Facebook, but it’s possible to drag peoples’ attention away with something very different. This is why Facebook paid $19 BILLION for WhatsApp and yet hasn’t cluttered it up with Facebook junk. Zuck doesn’t need WhatsApp to shore up Facebook dot com. He doesn’t care which one wins. He just needs to own the winner.
Which tells us what we can do. Facebook is where everyone is, so if we want to reach everyone right now, it is the only game in town. It won, and it took all. All we can do is try to deal with its foibles. But if you’ve got an interest, you can keep an eye on other, newer things - the Snapchats, and the Slacks, and so on. They might turn out to be a big deal, they might not, and it’s not crucial for us to be there on day one. We’re just sticks flowing through this river and the river’s gonna take us wherever it’s going. But that’s how to find the things that we will want to be on, some day, when Facebook dot com is no longer a big deal.
If you’d like to read more about the business background here, Ben Thompson talks extensively about Aggregation Theory and how it affects us every day.