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Not a positive trend for FB considering the What'sApp founder quit in April: https://techcrunch.com/2018/04/30/jan-koum-quits-facebook/ Giving a single person full control of a company is great when they're on the right track. These have to be warning shots to employees and investors though.
Just as content is king, so product will always be king. The ads will follow whoever has the best product, and hence user attention.
On the technical side, FB's methodology with acquisitions seemed the most rational. Rather than sucking the new company in they embedded PE's in there for the purpose of giving the tech teams a fast track to using FB resources.
But the first advantage he mentions -- the size of the network -- is a direct result of the product. The point of a good product is to get people to use it which is what grows the network.
In the short-term, Zuckerberg maybe the CEO, but if he keeps prioritizing ads over product (which he has done with FB prod/privacy), then the long-term maybe dicey. Just as content is king, so product will always be king. The ads will follow whoever has the best product, and hence user attention.
Ads are the product that Facebook sells
This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature). You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff: * distribution * monetization * back end systems for admin users * sales channels etc, etc Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and…
You initially lead with a use case, but end up following how people actually use your product, or competitive products, and iterate on them in order to retain and attract users.
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The broader point here though is that, at least with consumer software, you will not be able to compete with Google AND Facebook AND Snap AND Amazon in any category.
Maybe your product can beat Google+ at social networking, you won't beat Facebook and they'll either buy you or siphon your users. You might be able to build a better enterprise messaging system than LinkedIn but Microsoft will bleed you dry with a better enterprise sales team.
Even new categories that are subsets of broad categories eg. Social/Ephemeral Messages have no chance of surviving, as they are features to existing products that have BN of users.
So the best chance you have as a software startup to compete is to sell to the Cartel (Facebook, Google, Apple, Amazon, Microsoft), and hope that you're given enough lattitude to see the product that you're ruddering play out as long as possible.
Seems like they didn't know when to leave. Once they sold it was no longer their baby and should have started working on an exit strategy. It becomes a contest of egos. On the technical side, FB's methodology with acquisitions seemed the most rational. Rather than sucking the new company in they embedded PE's in there for the purpose of giving the tech teams a fast track to using FB resources.
Very hard to second guess such a well written article. Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Salesforce seems good at keeping acquirees but enterprise is different. The acquired companies come with their own revenue and field sales.
> Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one. Then again maybe he's just the exception that proves the rule.
Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.