December 4th, 2007

Facebook’s Crisis Demonstrates That People Matter More Than Technology


As with Facebook Beacon’s implosion, the PR tailspin of Facebook itself is more interesting for what we can learn from it than why it is happening. What’s most interesting about Facebook’s downturn, as Josh Quittner observes, is that there’s nothing wrong with the technology:

The really weird part of this story is that there’s absolutely nothing wrong with Facebook. It works as well as it ever has, and many of the people who use it (my kids for instance) are unaware of the worsening situation about its privacy-invading Beacon social ads scheme that tracks people’s web-surfing habits even when they’re not on the site. That’s bound to change.

Traditionally what happens is a technology company matures and becomes vulnerable to an upstart innovator leap-frogging them in the marketplace. But that type of innovation used to require years. Now, Facebook is presumed vulnerable — and the most likely company to overtake it hasn’t even been identified yet.

The great irony of Facebook is that, despite its excellent design, nobody assumes that the technology — even the once hyped Facebook Platform, and all its third-party apps — confer any real competitive advantage.

Facebook is too easily to replicate. It only has one real asset — people. What Facebook critics see is not the risk that another social networking company can do a better job with the technology — it’s that one could do a better job with the people.

It seems self-evident to say that online social networking is all about the people, but Facebook’s woes really hammer home how little the technology matters when push comes to shove.

We all the know the “user is in control,” yadda, yadda, but the fact is that getting it right with the people is the new competitive battleground for online technology and media companies. Just look at the difference between Microsoft and Google. One dominated by monopolizing the technology. The other dominates by obsessing over the quality of the user experience.

The next great internet company will not be one that makes a breakthrough with technology — it will be one that makes a breakthrough with people.

Comments (9 Responses so far)

  1. This post also yadda, yadda except for :
    The next great internet company will not be one that makes a breakthrough with technology — it will be one that makes a breakthrough with people.

    Brilliant summary and something to feel good about.

  2. Nice Scott –

    Soylent Green for Facebook is ….. people!

  3. Do you really believe that those companies are there to help people?

  4. YES! Good technology is 50% math and 50% people!

  5. Unfortunately, Quittner is now catching the wrath of the Facebook Zombies, who are taking his critique as a personal affront to their unique culture.

    It’s rather pathetic.

  6. The problem is simple. Facebook had no business model. When VC goes away, you need to find one. Their target audience has never been people with buying power (unless they have mom or dad’s credit card) so even if an ad model worked, I’m guessing the top advertisers (except maybe Job Boards) wouldn’t be there regardless of the targeting capabilities.

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