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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.
How Facebook got it right
This is my investment/personal finance column for this week:
THE EXTENT to which Facebook is changing the world’s social and business landscape is well-explained in David Kirkpatrick’s new “The Facebook Effect.”
Unlike the version of Facebook’s history that is presented in “The Social Network,” Kirkpatrick’s book strives to present the real facts rather than a story that will entertain audiences. Kirkpatrick, a longtime technology writer for Fortune magazine, had ample access to Facebook founder Mark Zuckerberg and most of the key players in the social networking company’s present and past. The same isn’t true of the people behind “The Social Network” (which I haven’t seen but is supposedly a very entertaining movie).
Kirkpatrick traces Facebook’s evolution from its creation in a Harvard University dorm room to its status six years later as an international behemoth worth tens of billions of dollars with more than 500 million users.
In addition to giving people an easy way to stay in contact with their friends and family, Facebook’s success is transforming media, marketing, politics, enter-tainment, activism, event planning, shopping and much more. It has created its own ecosystem within the Internet, and the nascent company has ambitious plans for the future.
Therefore, anyone within the aforementioned fields would be well-advised to read Kirkpatrick’s book.
Unlike many other Web phenomena that quickly come and go, Facebook seems poised to thrive over the long term. As Kirkpatrick mentions, the more people who go on Facebook, the more valuable it becomes both to marketers and to individuals. Most people don’t want to keep numerous social profiles on the Web, so as Facebook use becomes more widespread, its staying power is enhanced.
As with most great enterprises, Facebook’s success is in part due to lucky timing. It wasn’t the first social network, but it was launched at a time when broadband Internet access had become widespread enough to support the service. The fact that it was started at Harvard gave it a cachet that made other colleges and, later, non-students want to get on.
Despite that good fortune, Kirkpatrick’s book makes it clear that Zuckerberg and company made a lot of smart moves that got Facebook to where it is today. Those lessons should be studied by budding entrepreneurs and businesses. Among them:
- Think about the long term. Zuckerberg is said to be extremely focused on the long haul. That has allowed him to think about the big picture rather than try to lock in short-term gains that aren’t lasting.
- Focus first on building a great product, then worry about revenue. Zuckerberg has always made Facebook’s user experience its top priority. Only after people came en masse did the company worry about building a business model.
- Constantly watch your competitors. Facebook has stayed closely up-to-date with what’s going on in the industry and has designed many features that imitate its competition, which especially of late is Twitter.
- Don’t be satisfied with the product you’ve got. Constantly improve it, even if that means some short-term protests from users. But also listen to your customers and admit your mistakes if necessary.
- Keep control of the company vision. Zuckerberg has had countless offers over the years from companies seeking to buy Facebook. Impressively, he has turned them all down in order to keep control over the product. Now his personal stake in Facebook is worth billions, and it’s only growing in value.
- Keep the product simple and easy to use, but build world-class technology beneath the surface. Google and Apple also have profited from these lessons.
- Embrace the wisdom of the crowd. Many of Facebook’s greatest successes–including its language translation service and third-party applications–have been the result of innovations by other technology companies and users whom Facebook has empowered.
It’s a fascinating story, one that continues to unfold and reshape the world in many ways.