Facebook’s downfall; a new perspective
I’ve talked about it earlier but a recent article on Forbes offered me a surprising insight on Facebook’s future. In an article titled What’s Wrong With Facebook’s Business Model And Innovation Strategy? author Panos Mourdoukoutas connects Aristotle’s teachings to Facebook’s current predicament. I suspect he had this idea before, but Facebook’s $ 19 billion dollar acquisition of messaging app WhatsApp confirmed his thinking. His view? Facebook’s audience is leaving because the social network is not focused on the right group of people.
According to Aristotle, “friendship is a rare spiritual intimacy that can only be shared among a handful of people.” We can usually count our true/real friends on one hand. All others are classified as utility relationships or pseudo-friendships, relationships that will fade away as soon as the utility runs out. Facebook is a way to connect with these social connections and now, a couple of years along, quite a few of these relationships are fading. But we’re still connected on Facebook as ‘friends’.
According to Mourdoukoutas, this is the reason Facebook is stagnating and why users are leaving. His conclusion is backed by a recent Stanford study but his reasoning is different.
Facebook bought WhatsApp for just this reason; on WhatsApp we communicate (semi-)privately with a select group of friends and contacts. More general contact with our outer circle – or utility friendships – is possible through platforms like Google+, LinkedIn and Twitter. These are all less-personal, more public platforms as opposed to Facebook which is generally seen as a 100% personal platform.
He does conclude that the move is a good one for the company in the short term, but he concludes that the tactic of paying a hefty premium for any startup that challenges its position will not hold. He makes an example out of Cisco who did just that at the peak of the bubble and kept diluting shares of current stockholders. Breakthrough innovation should be nurtured inside a company and cannot be bought.
I thought this solid reasoning to predict why Facebook will fade away in a few years. The fact remains that it will join friendster, myspace, dutch hyves and many other used-to-be-hip platform in the ghetto of the internet at some point. 2017 is as good a prediction as any.
What do you think? Do you expect Facebook to be as prominent in 3 years as it is now?
On Europe’s mobile environment
Interesting article on readwrite.com titeld “When did Europe become such a mobile backwater?” about how Europe has lost its head start compared to the US in terms of mobile connectivity and availability. From a Dutch perspective; much is wrong with the current market circumstances. The slow adoption of new techniques like 4G and the significant changes in the earnings model of mobile providers (earning on data vs earning on calls) have by now forced the hand of the EU council which will start forcing companies to adapt.
I could probably write for days on this subject, but the article is great in its simplicity. Read the full article here.
Thoughts on community building in business
Many people see the opportunities in creating and facilitating a community from a business perspective. They figure that the value of their products or services only goes up if there are many people actively endorsing it. And they’re right. So they set their goal; we should start a community, build a Tribe and watch new customers and profits roll in. They determine to invest in their community like a business. They run the numbers on what kind of effort/investment makes sense and get started. After a while they realize that it’s not taking off and wonder: “But we did as we were told. We shared, facilitated and supported. Why isn’t this working?”. Even though they did everything by the book they still failed to create a community. For the simple reason that they just weren’t committed on the most essential level, they wouldn’t actually participate in the community if it wasn’t their job! Why would true experts, thought leaders or passionate users join your community if you lack their commitment?
What made me think about this was a post on LinkedIn titled: The Business Secret Behind Minecraft’s Dominance. In this article the author explains why Minecraft (an extremely succesful videogame focused on building and exploration), keeps growing and asks himself how this can be replicated to ‘less interesting businesses’. This thinking is exactly why businesses keep failing at this thing called ‘social’ or ‘building a tribe/following’. To the creators of Minecraft their game was something they cared about deeply from the beginning, when nobody else did. They created it because it felt right to them, and they wanted to enable other people to create and share. The business success was the very welcome side-effect. With the success they found even more ways to facilitate their community, and it just keeps getting better.
Many companies just don’t have a staff that’s committed to their product or service on a personal level. It’s just a job! But the companies that do build successful communities have one thing in common: they have a staff that cares and would keep doing the same thing even if the community was only 100 people instead of a million.
Pressfield’s War of Art, what really stayed with me
Steven Pressfield’s The War of Art is basically the follow-up to his Domino Project book Do the Work, which I read when it was released. In this new book Pressfield focuses on the inner battle for creativity, a war with a force he calls Resistance. While large parts of the book are very similar to Do the Work, his core ideas have really developed in the time between both books. His main message: Anything really worth doing will immediately be met by Resistance, where Resistance is all the doubts and fears that make you want to quit. The first two parts of the book discuss this battle and ways to counter it, valuable reading for anyone looking to do anything creative. The third part was too vague and faith/religion oriented for me, it made me finish the book on a low. But now it’s been a week and I must say I’m surprised, the impact of this book is much bigger than expected.
So let me start off by saying you should read this book. Period.
Pressfield is an accomplished author, but in this book he shares his mental road to becoming a professional writer. Professional not in the sense of money , but in the mental sense of the word. He uses his journey and experience to make you understand how Resistance and therefore creativity works. This is obviously something most self-help book authors try to do, but the author excels in making it stick. Now, I’m completely aware of Resistance, and I know that most of my doubts and fears are just that, Resistance against change. Because the author has given me a different perspective on creativity and the tools to make a difference, I can now use Resistance to determine what’s really worth doing! The book turned a very negative feeling/emotion into a tool, where the rule basically is; the more Resistance I feel, the more reason there is to do it.
This all seems very ‘duh! /obvious’ but the 2 hours it take to read this book are more than worth it. So read it and let me know if you agree with me.
The book on Amazon
Thought exercise: Consequences of Peak Ads
Over on inoveryourhead, Julien Smith talks about a research paper titled Peak Ads(click to read). The paper draws attention to the fact that on-line advertising effectiveness has always been declining and discusses the ‘unavoidable’ point in time when advertising revenues will fail to keep core internet services like Facebook afloat. It points to several causes, of which user sophistication is the major one, basically saying that because users are getting more adept at avoiding ads their value will continue to drop. This situation is, according to the paper, similar to the peak oil scenario that you’re probably familiar with.
The paper goes on to explain that this might cause a tension between the company’s drive to keep profitable, which will lead to or only be possible by selling of their users’ personal data, and the obvious privacy concerns of their users.
While we can’t be sure this is actually going to happen, again also similar to the peak oil issue, but it is interesting think about the what if scenario.
What do you think would happen when we reach Peak Ads? Read more for my thoughts on the subject.
Change your thinking from Marketing to Market Interaction
We often forget that the traditional company is a very recent invention. It wasn’t until the sixties that we started to use strategy, and went on to divide companies up in departments designed around core business functions This (then) radical idea was implemented when basically all larger companies were manufacturers. So these divisions were arranged around the two basic concepts; producing and selling product. Sales would sell what production made and all other departments supported this. One on one sales was basically the only tool available at the time, but when new tools became available it lead to phrases like: “the ever-present rivalry between sales and marketing”. I think there’s a better way of thinking about the ‘selling side’ of business: Market Interaction.
Sales is commonly defined as “selling a product or service to a (potential) client” while marketing is defined as “communicating the potential value of products or services to (potential) clients”. I don’t know about you but to me it seems that both are essential to getting your customer to buy. Marketing is the ‘how‘, to the ‘what‘ of sales. The fact that these departments often have different goals, purposes or strategies is a clear sign of wasted resources and efforts.
Obviously the best organizational structure differs for each company, but we can say that the most efficient way of sales in a B2B environment is an integrated approach. An approach where all efforts are aligned towards the same goal and based on the same strategy. That means that from the traditional marketing area’s – i.e. creating brand awareness in the market – to the customer satisfaction goals of after-sales is thought of as one process. And you notice correctly that the actual sale lies somewhere in between. This process, which is essential to the survival of any company, is what’s called Marketing Interaction.
I’m specialized in developing the central story for your Market Interaction strategy. We call it a positioning. It tells clients about your core values or believes, what this means for your behaviour, why this makes you different from all the other in the market and why she should buy with you. This story should be at the core of any and all Market Interaction, because only when you’re clear and consistent about what distinguishes you from the competition can it be translated in true competitive advantage.
I’m very interested in hearing others’ views on this subject and look forward to hearing from you!
* This post is translated, and rewritten, from a blog I wrote in Dutch on merkelijkheid.nl
3 ways for more results from you social media succes
For many it’s some sort of holy grail, being successful in Social Media. You’ve collected hundreds of followers and every post you do gets re-tweeted, shared or liked. Every day you search the web and other sources for interesting content to share with your followers and you write new content on at least a weekly basis. This gets you more followers at a steady pace, but you still wonder: when does this sowing let me harvest? In this article I’ll discuss 3 ways to get more results from your social media success.