With your market cap down about $100 Billion, I thought I’d give you some advice.
When you were testifying on Capitol Hill, you made a comment that you might want to think about, “ultimately Facebook is a technology platform that allows people to share content…”
You were a technology platform, that is what you built. But, it is no longer helping you define your business.
There is an example from the past that gives another view of a very similar situation. Peter Drucker told the story of AT&T and how they defined their business:
“One of the earliest and most successful answers to the question was the one that Theodore N. Vail worked out for American Telephone and Telegraph almost fifty years ago: “Our business is service.”. This sounds obvious once is has been said. But first there had to be the realization that a telephone system, being a natural monopoly, was susceptible to nationalization, that indeed a privately-owned telephone service in a developed and industrialized country was exceptional and needed community support for its survival. Secondly there had to be the realization that community support could not be obtained by propaganda campaigns or by attacking critics as “un-American” or “socialistic”. It could only be obtained by creating customer-satisfaction. This realization meant radical innovations in business policy. It meant constant indoctrination in dedication to service for all employees; and public relations which stressed service. It meant emphasis on research and technological leadership and financial policy which assumed that the company had to give service wherever there was demand, and it was management’s job to find the needed capital and to earn a return on it.”(Peter Drucker, The Practice of Management 1954 pages 49-50)
The similarities with Facebook is striking:
- Their technology had been around for about 20 years
- They had the leader advantage
- Their technology had significant social and personal implications
- Their technology connected individuals around the world
- They were susceptible to regulation.
Using AT&T as an example gives you a picture of how they gained “the community support for their survival.”
- They focused on customer satisfaction: You will need to define this.
- Focused on radical innovations in business policy: It looks like you will be doing this soon.
- Indoctrination in customer service for employees and public relations: Your people will need to focus on the customer and the community.
You were lucky enough to ride the wave of new technology and the novelty of connecting people together. That is getting old, and is no longer compelling. How you survive the future will be dependent on how you adapt in this next season. Continuing to think of your company as a technology platform may serve the investment community, or maybe even the technology community. It doesn’t serve you, the future of Facebook, or the community.
If you’re in Seattle, give me a call, I’ll buy you a cup of coffee. (I know things are tight right now)