The only difference between offense and defense is timing.
The tipping point for Facebook was back in Spring 2007. The site had only been open to the non-college/highschool world at large for less than a year, and was just finally overcoming the broader “isn’t that just a site for college kids?” stigma.
That’s also about the time Facebook opened up its platform. And even though the importance of that move was arguably overstated in the short term (no one throws zombies at sheep anymore), it’s hard to overstate it as a long-term advantage. Facebook logins have become the de facto username and password of much of the Internet.
Post-2007 everyone went so ape-shit trying to be a platform that it’s hard to remember how controversial the move was back then. It was a radically different move than MySpace, who allowed a lot of freedom for individuals to customize their pages, but had a less than warm relationship with third party developers.
And even as Facebook took off and began to approach MySpace’s popularity, MySpace would always cling to the line that they weren’t worried. They seemed to view anything that might appear to be copying Facebook as an admission of weakness. Instead, they insisted they were about messy self-expression. They were about musicians and celebrities, they said. They were something different, and even as Facebook was getting sexier, they were still bigger. Facebook wasn’t really a competitor, MySpace kept telling everyone. Moves to open the site up to developers and launch a news feed came so late it just looked desperate.
MySpace knew what made them popular was the contrast to Friendster — which was too rigid and too slow. But they were blind to the idea that Facebook was succeeding in part because there were things that sucked so badly about MySpace. That included everything from the perception of rampant pedophilia on MySpace, a minefield Facebook navigated far better, to the difference in design. I don’t think anyone misses the full sensory assault of pages that blared music and flickering winky faces at you the second you opened them. (My ears! My eyes!)
Put another way, What went wrong at MySpace is the same thing that goes wrong, eventually, at most companies. They lose touch with the reality that the reason they became huge was by exploiting a weakness of the incumbent. They confused their success with the idea that they themselves had no such weakness.
This is in part the genius of Facebook: It has never become too complacent. Mark Zuckerberg is a classic wartime CEO, even though it may appear he’s long since won this war. He is clearly intensely paranoid, perhaps the most paranoid CEO we’ve seen since the legendary Andy Grove. He might as well have a $60 gillion valuation. He operates the company as if it could crumble at any moment. And that’s why, to date, no social network has come close to toppling it.
Today, it has been reported that Facebook is testing a layout for the Open Graph app stories that have similarities to Pinterest. Inside Facebook broke the news and has screen shots and descriptions. Details on the plan for rolling something like this out are unclear, as is any sense of how prominent it may be.
To many this seems like Facebook is scared of Pinterest’s surge. But there’s a big difference between MySpace’s lamely belated, who-cares-anymore copying of the news feed, and Facebook experimenting with what people like about Pinterest now. In a word, it’s timing. If you copy a surging competitor once it’s already beating you — a la MySpace –then it’s pathetic. If you do it when it’s just starting to surge, I argue it’s a sign of strength. You are playing offense as much as defense. It’s not “Hey remember us? You used to love us!” It’s more “You have five minutes to get off my lawn.” (Insert shotgun cocking sound here.)
Indeed, Facebook has a history of borderline overreaction to any social competitor getting the slightest bit of heat. Facebook changed its status updates to compete more readily with Twitter. It started Places to squash Foursquare. It even tweaked the news feed in one iteration to be more competitive with the echochamber buzzy FriendFeed — before just buying the company.
Hamish McKenzie recently reported one that went unnoticed by most: Facebook’s “Find Friends Nearby” feature is directly ripped off of Tencent’s mobile app. I’m fully expecting some sort of rip off from Path’s gorgeous mobile UI soon. And perhaps we’ll know that Facebook is taking Google+ seriously when we see the introduction of, say, “Ovals.”
Of course, the most obvious example: Zuckerberg aggressively going after Instagram while even Twitter’s Jack Dorsey, who you could imagine needed Instagram far more than Zuckerberg did, took a more lazy negotiating approach. Zuckerberg wisely knew of all of the surging social networks, Instagram was going after both Facebook’s biggest strength and weakness at once: Photos on mobile.
Here’s the amazing bit: None of these companies that have caused Facebook to deviate from its product road map has ever come close to challenging Facebook. It’s hard to know whether that’s because Facebook was so reactive to potential threats that it kept itself from getting stale, or whether none of these competitors would have ever challenged Facebook anyway. Ultimately, it doesn’t matter. It’s a playbook that Zuckerberg is clearly not deviating from, even post-IPO.
That’s very rare for a company so dominant. Most CEOs poised on what was then thought of as a $100 billion acquisition would have been more consumed with that victory lap than buying a nascent competitor with no revenue prospects. Indeed, Zuckerberg was criticized by Wall Street for distracting himself with Instagram at that moment.
You could see a less-paranoid CEO taking away the wrong lesson from each of these instances, responding to sensationalized stories about the next great social network with a Zen sense of pattern recognition. Oh, Pinterest won’t take over the space. They said the same thing about Twitter, and it went through three CEOs and has barely changed the product. They said the same thing about FriendFeed and it never got out of the echo chamber. They said the same thing about Foursquare and checkins are now passé. We’ll be fine…
As Google is learning now, no one stays on top in the Internet forever. And Zuckerberg has known that from the beginning. It was a lesson that investor Peter Thiel hammered into his brain from their earliest meeting. Thiel told him, in the earliest days of the company, that every dominant Internet company of its era only stays on top for four or five years after IPO, and that Facebook had to work hard to avoid that curse. After they signed that first term sheet, Thiel congratulated Zuckerberg on Facebook’s torrid growth and gave him five words of advice: “Just don’t fuck it up.”
Astoundingly billions of dollars and a billion users later, that’s still how Zuckerberg is running the company.