Facebook has more than 500mn users and private valuations have it worth up to $100 billion. But ask any analyst, writer or tech passerby and they will tell you Facebook has a few problems--namely, user engagement and monetization. This is proven, look at their shut down of Places, their reduction of Deals and their product reaction to Google +'s market entry. Add to that Groupon's latest troubles and consider that Facebook cannibalized previous social networks that over-promised and undelivered (MySpace, Friendster).
Its clear that Facebook needs an answer to that problem.
So far they've reacted by creating copycat products that aren't that differentiated from the competitor's original product--relying on their scale to add value to users that other platforms simply can not.
But, this doesn't work.
This doesn't work because users of social networks that have high user engagement share very specific personal data to a hyper-discreet social graph in real-time. Look at the main players:
Facebook has tried to address the more discreet social graph problem, somewhat in response to Google Circles. But the real-time sharing problem still persists. And it will continue to persist because Facebook's size inevitably has users of different activity levels. Consider the rate of diffusion for a social network to be accepted by the market
- Innovators – venturesome, educated, multiple info sources;
- Early adopters – social leaders, popular, educated;
- Early majority – deliberate, many informal social contacts;
- Late majority – skeptical, traditional, lower socio-economic status;
- Laggards – neighbors and friends are main info sources, fear of debt.
Using location as an example, the first two groups are already on competitor platforms (foursquare, scvngr, etc.) and are not going to check-in on two different platforms. Somewhere between early majority and late majority users are going to want traditional value-adds to engage on a platform. This is why the fantastic work that foursquare's BD team has conducted is so crucial, by pushing through offers, discounts and other value adds for engaging with brands they incentivise a new set of users to engage on the platform. While Facebook has more leverage to provide those value-adds, they suffer from a fundamental lack of engagement from a sustained user base--those innovators and early adopters are already on foursquare and other competitors. It seems that product and innovation drive initial adoption, BD and partnerships enable scale. This would explain why consumers are seemingly choosing a variety of new platforms and products over a single integrated experience time and time again.
If that maxim is true, Facebook's solve for enabling places, deals, etc. on their platform is a product solve. And if it is a product solve, they already have the assets to enable it.
For a long time they've touted themselves as the largest photo-sharing site on the internet. They're right and thus, should really play to their strengths. The user behavior on Facebook is already to share your memories via photos after the event has taken place and by restructuring that experience can habituate users to sharing their location and other meaningful information that would enable commerce like Deals. foursquare recently allowed users to start attaching photos to their check-ins. Notice they didn't suggest that users add a check-in to a photo, because that wouldn't make any sense. Similarly, Facebook should add check-ins and other products to photos instead of making them standalone.
Let's see an example of how this could work. Recently, my girlfriend Ashley made dinner for me and my friends. Because she was sharing a photo and not a location she decided to share it on Facebook. Here's what she shared:
Ashley was trying to share two things with her friends: here's what I'm eating and here's who I'm eating with. Facebook's current experience doesn't fully communicate that. But, by adding categories to their photo upload tool they could more clearly represent what Ashley's trying to share and incentivise her to share things like current location, activity and merchant.
Same image, new structure:
Now, Ashley has an incentive to check-in to Whole Foods, has shared what activity she is doing and who with. That set of data is now structured and more portable. Facebook could enable deals for Ashley (though not real-time) that were relevant and didn't require her to go through a separate experience. They've also cleaned up their user experience significantly. Path is already doing something similar.
Here's a photo I shared seven months ago at a Fashion Week party with my friends:
This type of change would also help clean-up Facebook's data across the platform. Right now, when you share photos you don't give them any type of category. This is problematic because the photo is just a form of media and people may be trying to express themselves differently using the same media. Consider three profile pictures that Ashley has shared:
Three profile pictures, three fundamentally different messages and Facebook is reading the data all the same way. By adding category classifcation to their upload tool, they can get cleaner data sets that enable commerce for users and enrich the user experience. For instance, people who may be intersted in finding Ashley wouldn't be able to recognize her in photos 2 or 3. But by adding classification and a rule (e.g. non-friends only see profile pictures classified as "me"), would-be friends can recognize her.
Facebook shouldn't be competing against the foursquares and instagrams of the world--at more than 500mn users they are in a fundamentally different place. But that doesn't mean they can't capture the same value or even have similar use cases. They can enable commerce like Deals by integrating the sharing behavior in a more organic way, which will result in them capturing the early majority, late majority and laggards who are looking for more traditional value-adds anyway.
Update on Tuesday, September 27, 2011 at 7:19PM by
Alex
Facebook's launched new features, aligned with the product design mentioned above. Check out coverage from f8.
