The real reason Facebook should worry. (Hint: It's not privacy, Wall Street, or terms of service)
Yesterday one of the more salacious stories in our world was a photo showing the Zuckerberg family's shocked expression at Facebook's new Poke app.
It became public due to misunderstanding with Facebook's privacy settings. As if that wasn't enough to wake the Facebook haters and get them screaming, Randi Zuckerberg sent a preachy Tweet saying the honest mistake on the part of an acquaintance breached the rules of "human decency." And the coup de grace was doing it all on a slow news day. How this didn't reshuffle David Holmes list of social media gaffes this morning I will never know.
If only that Tweet hadn't happened, this could have been chalked up to a funny coincidence and fodder for the extreme anti-Facebook people out there, but nothing more.
But it was the preaching that riled people. When you are the market leader, when you have amassed a market cap even at the discounted size of Facebook's, when you are trusted with one of the largest repositories of personal data in the world, when you are now a family worth billions, you just don't get a lot of latitude. And unfair as it may seem, you shouldn't.
But under the surface of that somewhat silly story, there's a more meaningful one brewing that Facebook would be wise to be aware of.
I'm not talking about the same old privacy saw. Honestly, people, just don't post something on a social network if you don't want other people to see it. You have total control over this. That Facebook's settings are confusing and stuff can get out has been beyond documented. (This includes you, too, Zuckerberg family.)
I'm not talking about the continued-pile on about the value lost by Facebook arguably pricing its shares too high and venture capitalists supposedly passing a known bill of goods onto main street. As for the former, there remains no real evidence of exactly how bad the issue was priced, thanks to the Nasdaq's platform not actually working at the time of issue. Unfortunately, it can not be redone. Remember-- the shares were initially surging. As for the latter, no VC or insider was grinning watching their premium investment of the last decade collapse. They have to actually sell the shares to lock in gains. If they sell at half the price they anticipated, that hurts them. No one came out of this well, but it certainly wasn't all Facebook's fault.
Those groups have mostly always been a vocal minority or people who just didn't understand the company. Like Randi Zuckerberg's embarrassing gaffe on Facebook's privacy features, it's something that makes some headlines on a slow news day and then mostly goes away.
But there's a very real undercurrent that's making the rounds in Silicon Valley that could hurt Facebook: A view that it can no longer innovate. Worse: That it's no longer really even trying.
The catalyst of late was the release of Poke-- a rip off of surging Snapchat. When it launched a handful of Valley insiders were expressing embarrassment that the first real new feature the company was launching in a while was a defensive rip off of a hot new company. Now, about a week later, blogs are piling on with news that Poke isn't even doing well, with some arguing that Facebook may not even be that powerful of a distribution mechanism anymore.
A few points. First, the latter bit is definitely taking things too far. Facebook is still one of the best distribution platforms on the Web. It's just that distribution isn't everything.
Second: This isn't particularly new. Remember when Facebook ripped off Foursquare with Places? I'm unclear on how that's too different than the story arc of Poke. Its recent pay-to-email features are a rip off of LinkedIn's InMail. And before that Facebook had worked more Twitter and even FriendFeed like features into its Wall and Newsfeed streams.
One of Mark Zuckerberg's strengths has always been watching the competition closely and letting it influence his thinking, throwing new features into the product and seeing if users want them. Contrast that to most Internet kingpins who refuse to admit anything is a threat until it's toppled them.
This pattern isn't all bad from the point of view of Facebook's users, employees, and shareholders. It could even be seen as a sign of humility-- even fear that the gargantuan network could be toppled by something so new and tiny as a very young startup. See also the whopping $1 billion purchase of Instagram. Snapchat, in particular, is hardly a household name. It hasn't even moved into real office space or raised a Series A yet.
That said, Facebook needs to pay attention to the narrative nonetheless. Whether totally fair or not, it's damaging.
Facebook used to be so innovative that it actually frightened people. The Newsfeed was unlike anything else a social network had done and it worked so well, people were horrified at the public information it surfaced. It laid the foundation for the power of Facebook's Platform-- another big innovation-- by allowing third party apps to market to others via their users. Ease of tagging in Facebook photos lead directly to the social media company's growth before any of this. While it may have started life as yet another social network, the company always did things in new and different ways and pioneered a look and feel and features that hundreds of other companies would ape.
Facebook has used wins like these to define itself in a crowded labor market by adopting the mantle of the hacker. It has acquired companies and in demand talent by trumpeting a low ratio of engineer to user-- meaning your code actually matters at Facebook unlike other bloated Web companies. All of its positioning has been around disruption and hacking. And employees have mostly bought it.
Can Facebook continue to recruit and acquire teams with a straight-face if the narrative becomes that now-public Facebook only rips off companies?
There was already a concern that that would eventually go away when the company filed to go public. That change in status has no doubt compounded the anti-innovation narrative surrounding Poke.
And it doesn't help that Google-- still Facebook's biggest rival when it comes to recruiting-- seems to have suddenly regained its own engineering mojo with ambitious gambles like Google Fiber and new intensity around its mobile apps.
Unlike an uproar over terms of service, this one could hurt if Facebook doesn't pay attention.