F*ckedbook
After years of data pollution, the perfect storm hits Facebook
A year ago, I wrote the following:
To many, what I’m about to say will sound crazy. Bear with me for just a thousand words or so. I think Twitter is going to have a good year in 2018, while Facebook has a bad one.
…
The two companies could not stand in more contrast to one another when it comes to apparent trajectory and execution. And yet. I just have this feeling that we’re approaching the end of the Age of Facebook. And I continue to believe Twitter is highly underrated, if not undervalued. And I think 2018 may be the year this flips, even if just a bit.
Twitter, as it turns out, didn’t have a great year.¹ I still believe my prediction was directionally accurate — there are a few reasons to think they’ve turned a corner, but still have a lot of work to do with hate speech, trolls, and the like. But in relative terms, I was 100 percent correct. Twitter had a great year in that it was not Facebook; a company which had maybe the worst year for any major tech company that I can recall. Understatement of the year: I underestimated how bad Facebook’s year would be.
This past week’s NYT story is just the latest in a seemingly never-ending barrage of bad press for the company. Make no mistake: this is largely their own doing.² But it’s also undoubtedly exacerbated by the strong tailwind that is the “techlash”.
Such backlash against the sector had been building for years. It was always inevitable given the increasing power of the companies and amount of money flowing through the space. Basically, all of the biggest companies in the world both in terms of market cap and increasingly, profits, are now tech companies.
And each of the largest ones has had their own moments of reckoning in recent months. It was almost as if the techlash was looking for a figurehead and was trying out various candidates for the role. And the candidates did their damnedest to jockey for the spot as if they were cities trying to woo Amazon’s next headquarters.
But in the end, there was only one Facebook.
While you could make individual cases against the Apple’s, Amazon’s, etc of the world — and some people are — Facebook fits a certain mold. That mold has formed around a central thesis of the techlash: that “data is the new oil” and certain types of it are harming our online environment.
Another prime techlash figurehead candidate in this regard, Google, undoubtedly has more data, but the company has largely gotten a pass. Certainly when compared to Facebook. And while you could argue I’m biased in this regard,³ I think this dichotomy is largely correct. Or, at the very least, understandable. Google provides a service (well, several) which many people find vital in their day-to-day lives. That data not only allows many such services to be offered for free, in many cases (but certainly not all), it actually augments the experiences offered in a net positive way.
While Facebook used to also have a positive aura around them, this has clearly turned in recent months. At a high level, I do think there’s something to the notion that while Facebook provides certain services that are nice — or even very nice — to have, such as connecting remotely with friends and family, none of it is a must-have. And, in fact, a lot of it now makes people feel worse about their lives. Either because of the content they’re seeing or because they’re simply using the services too much.
Add on top of that all the recent discoveries around what is actually being done with the data you share and you have a perfect shitstorm.
Further, there are now many services that do Facebook’s general tasks, and many would say do them better. Social networks are legion. And so if you believe that connecting with people online is a vital part of the internet (I wouldn’t argue with that), there are now basically unlimited ways to do that, likely in more modern ways to boot. People are slowly but surely realizing that you don’t need to use Facebook.
And yet Facebook has one last stronghold: scale.⁴ Everyone uses Facebook because everyone else uses Facebook. My mom is on Facebook. Your mom is on Facebook. The network is still so much more massive than the next closest one that it hasn’t really mattered what mistakes they’ve made in the past.
Also, the next closest networks are all owned by Facebook. Funny that.
But because of the situation Facebook now finds themselves in, they undoubtedly will not be able to buy the next would-be challenger to their social dominance. And this is highly problematic for Facebook, if history is any indication. Popular narrative aside, Facebook is actually pretty bad at cloning other social services.⁵
The current narrative has Facebook weathering this storm because they can abandon the big ship and pile everyone into their Norwegian cruiseship-sized lifeboats that are Instagram and WhatsApp. And it could work.⁶ At least for a while. But eventually, those networks will suffer a similar fate at a similar scale. This is the way of things.
Anyway, that’s a long-winded way of saying that I have long believed that it wouldn’t be a mass exodus that would kill Facebook, it would be the younger generations who don’t use it in the first place. That is, it would be a slow fade from below, not a quick death from above. And while I still largely believe that, this year has added that pressure from above, which will just hasten the overall decay. The worm has turned. The knives have come out.
Again, I think the negativity around the company is both understandable and warranted given many of the said revelations this year. But I also know that a lot of what is being uncovered didn’t actually happen this year.⁷ That is to say, if Facebook is evil, they’ve been evil for a long time. But people either didn’t care enough to look or look enough to care. People clearly care enough now. This is front page of The New York Times stuff.
¹ Though I will note that Twitter’s stock is still amazingly up for the year. Which is no easy feat in this current macro environment.
Facebook’s, not so much…
² And Facebook’s responses to the stories have been pretty uniformly bad.
³ Per my bio above, I’m a partner at GV, a venture fund whose LP is Alphabet, making Google a sister company. These thoughts are my own, obviously :)
⁴ As the company itself (not the network) rushes to figure out what’s next.
⁵ The cloning on Snapchat Stories in Instagram worked for very specific reasons. It did not work in Facebook Messenger, for example. And we won’t even talk about the more macro pivot-to-video thing, which Facebook is still flailing about trying to make work.
⁶ Though will it work from a monetization perspective? Even with Instagram, that seems unlikely at the scale at which Facebook itself has monetized.
⁷ Though the company isn’t doing themselves any favors with the things they have done this year — such as launch a camera for your home in the midst of privacy scandal after privacy scandal…
