Facebook and Innovation

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.