Innovation and Strategy: What's Wrong with Facebook?

Yesterday I wrote about a talking head on a business news program that was explaining why it made sense to dump Apple stock. (The link to that post is below.)

In that same program, he also talked about why it makes sense to run like the wind away from Facebook.

That got me wondering:
While the talking head's logic about Apple's future innovations made no sense to me, why is it that when that same logic is applied to Facebook there's a core of sense that makes me think he might be right?
Here's my thinking:
Where Apple innovates outward, Facebook innovates inward.
Let me explain.

Facebook's strategy, in some ways, mirrors Apple's (and Google's and Amazon's). Once you get your users into your ecosystem, whatever you do, don't let them go!

It's the "Cheerful Ruthlessness" strategy I've described before. (The link to that post is below, too.) Under the guise of "You're our customers and we love you" you're actually being held prisoner as they take down everyone in their way.

But, where Apple and the others innovate outward into markets, Facebook is building its business based on what it can provide to other Big Boys from within:
  • Its users. 
  • Its data. 
  • Its targeting.
Facebook is operationalizing the marketing concept of "mass customization" to a whole new level.

But will it translate?

When Amazon "mass customizes," it looks like personalized recommendations from Amazon to you.

What's key about that - and also how Google's algorithms have evolved - is that it looks like it's the company, itself, that's doing the personalization. Not someone to whom they sell their data.

And that's why I'm uncomfortable with Facebook's strategy on a long-term basis. Even its new services - like "Gifts" and "Graph Search" - that give its users access to information about other users, are inward directed. It's all about the data.

The question is: What about the humans?

Targeted ads are great - but if they look, in any way, like the only reason that those advertisers know to target you is because Facebook sold them data that led them to you, you feel more used than user.

It feels like an invasion of that privacy that's so hard to keep on the platform.

Don't get me wrong. I think Facebook is an amazing company. It really did change the world - both personally and on a corporate level - fast and furious. It enculturated social media as part of how we live and work...and that's not going to go away.

The question is whether, 1+ billion users and still but more slowly growing, it will stay the leader in its space.

Facebook needs to do more to understand the human aspect of social media. Not the technology nor the data nor the algorithms. Those are for them.

What will keep Facebook viable - as the industry leader and innovator for the long-term - is looking at and incorporating the satisfaction people find in all the other ways that humans socialize with and without social media.

It's not about what Facebook can do. It's about what they're not doing...for their human population. Not their advertisers.

This is a hard one in the strategy world. It's when you've got the operations to execute on just about anything - which they do - and are hard-pressed to figure out what to execute on.

But, just as Starbucks (another Cheerfully Ruthless company), began to cannibalize itself and had to do a u-turn on its growth, products and services to save itself, so does Facebook need to stop looking at its data as the only answer. By looking in that one direction, only, it, too, cannibalizes itself - only in this case, it's the data that drive the users away.

So the question for you is:
How are you, by what you're doing now, making it easy for your customers to want to find someone else to provide your product or service?
If your focus is wholly internal, you're missing opportunities all around you. Go back to the five questions I laid out for you in my Apple post. That will get you going in the right direction...and keep you there.
_____
Innovation and Strategy: What's Wrong with Apple? Nothing. (llk)
The Secrets of Success: Cheerful Ruthlessness (llk)