In thinking about what might bring Facebook down, clearly the answer is lack of innovation.
Interestingly, one of Facebook's great advantages is that it offers opportunity for companies to directly hear the 'voice of the customer'. Yet, listening only to the voice of the customer won't lead to innovation.
As Columbia professor Jacob Goldenberg argues in his book Creativity in Product Innovation, customers are only able to make suggestions based on their own experience with products. The customer would never have been able to come up with the iPhone, for example, because market research wouldn't be able to ideate something so far afield from existing products.
So market research and data collection -- for all of the value it offers -- cannot truly drive innovation. But Facebook must truly innovate to remain at the top of its game. Google has made this a core tenet of its operations and has benefited; MySpace did just the opposite and stagnated. To remain relevant, Facebook needs to recognize the limitations of market research, even as it builds a business model based on the value of customer data.
2 comments:
I think it's funny that Facebook probably perceives it's innovation as all its new page formatting that it rolls out ever few months... But what I really think will bring Facebook down is its perception from the public as being a site that isn't very privacy-friendly. While they have all these ways to customize your privacy, they're actually very confusing and very "if this, then that". (Am I the only one who feels this way?). Additionally, has it happened to anyone that when a new format was unveiled, all of the old privacy settings were erased? Am I the only one who is that skeptical of Facebook? Moreover, I think that part of Facebook's issue is that it is now open to everyone. It's not that exclusive college-only forum, and as the generation of college students who were the first ones in on the game advance in life, will they continue to be Facebook users? What will this generation demand? Seems like Facebook has replaced MySpace which replaced...wait for it...Xanga. I was never on the latter two, which probably explains my skepticism with Facebook..
I think Facebook has to continue to keep their platform open and not mistreat their partners, especially the developers creating applications for Facebook. For example, a while back Steve Jobs doesn't want people anyone to develop applications on top of his operating system while Bill Gates opened his operating system for everyone to develop on. Apple almost went bankrupt. Fast forward to day, Steve Jobs allows developers to develop applications to his new operating system, IOS. Now, Apple is dominating the mobile market.
If we look at Facebook the same way, I believe the scenario above applies to them. Facebook has to make it as easy for developers to develop application on their platform. Applications developers love the idea that once a product is created, they have the ability to broadcast it to 700 million users. This area of innovation will distinguish Facebook from their competitors. People will continue to logon to Facebook if they have something new and different to look forward to.
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