A question I often receive in my classes and talks is “What will replace Facebook?”
It’s a natural question. We look to history to see the progression of upstarts replacing established companies — didn’t Facebook replace MySpace? — and of course assume there is a new idea out there somewhere waiting to unseat Facebook as the leading social network.
But that is not necessarily the case. What will replace Facebook? Here are six factors that will determine that question … and the company’s future.
1. The cool factor
Facebook’s biggest vulnerability is that it would fall out of favor with its core audience. If it ever becomes “uncool,” its marketshare will slip away quickly. This is one reason why Google+ struggled to be mainstream. It was Tom Hanks when it needs to be JayZ.
So what is hot today? Instagram. WhatsApp. Guess who owns these? Facebook. To remain relevant, Facebook will certainly build a war chest to continue to buy platforms that are siphoning off customers and ad dollars. A smart strategy.
I think it is possible to remain relevant generation to generation. Look at Coca-Cola. Without changing the product, it has remained vital across the generations for 120 years! Can Facebook stay cool? That needs to be their number one priority.
2. The switching costs
It is far easier to change houses than to change social networks. Facebook has become a convenient hub for photos, videos, games, family, and friends. It is literally a timeline of our lives. It would be hard to give that up.
To move to another network, you would have to move all of that or start over. Not easy.
Research shows that even Millennials are diversifying their social media use but not leaving Facebook entirely. The switching cost is a huge advantage for Facebook.
3. The investment
Facebook has spent billions of dollars on software development and the extraordinarily complex processes that make it work. It has billions invested in mega-datacenters.
Facebook works really well on a massive scale. Even if you don’t like HOW it is designed, you have to admit it functionally works. Duplicating that technology and infrastructure would be an immense challenge. They have such a head start … and the gap widens day by day, patent by patent.
4. The psychology of choice
In most other places in our life we enjoy having a choice. We like lots of brands in the grocery store or may shop around town to choose between different car companies.
But when it comes to social networks, we seem to only have the bandwidth for one. We don’t need another Twitter. The one we have works fine.
We don’t need another LinkedIn. That niche has been filled.
And we don’t need another massive social network.
5. The leadership
Here are characteristics of Mark Zuckerberg that will solidify Facebook’s long-term success:
- He knows what he doesn’t know. He is an urgent learner and can see his own weaknesses and vulnerabilities as a leader.
- Zuckerberg has surrounded himself with outstanding business leaders, not just friends and sycophants
- He has committed to long-term strategies and investments, even when the decisions are not popular with Wall Street
- He is obsessed with a vision and has a unique financial arrangement to assure he will be the leader of his company long enough to see it through.
Facebook is a well-run company and it is being built to last.
6. The future
Facebook made an investment in 2014 which I predict will prove to be one of the most impactful technology alliances in history. It bought the immersive augmented reality company Oculus (not Oculus Rift which is the company’s headset).
This is a topic for an entirely different post, but let’s just say that Oculus has patents that can potentially transform the way we connect, become informed, and entertain ourselves … just as Facebook did in the last five years.
Facebook is preparing to re-invent itself in amazing new ways.
Perhaps “what will replace Facebook” is the wrong question. A more interesting question is “How is Facebook replacing itself?” Perhaps the Era of Facebook just beginning?
What do you think?