Can Facebook Innovate?

By Shlomo Maital

Facebook

This cartoon ran in a German newspaper; it was accused of anti-Semitism, because its portrayal of Mark Zuckerberg, Facebook founder, who is Jewish, with a long hooked nose, recalls anti-Semitic literature.

Actually Facebook and Zuckerberg do have a problem. But it is NOT anti-Semitism. It is innovation – how to remain innovative, even though Facebook is not that old. When startups grow to global size, almost invariably they lose the creative spark. And Facebook is no exception. Facebook has been forced to acquire its innovation, rather than initiate it internally. Its innovations like Home and Graphsearch failed; and it paid huge sums for Instagram and WhatsApp.

   In an interview with New York Times writer Farhad Manjoo (April 17, “Can Facebook Innovate?”), Zuckerberg describes Creative Labs, an effort to unbundle the “one big blue app” that migrated Facebook to mobile phones.   Creative Labs will try to create a wide variety of Facebook spinoffs, with specific features users seek, some of them not even branded as Facebook. It should not be that hard. People spend 20 per cent of their mobile time, on average, on Facebook. This is amazing, considering Facebook migrated to phones not that long ago. But – how to sustain this 20 percent? It already seems to be eroding.

   Why is it so hard for companies to innovate, as they grow large? Zuckerberg’s answer:

“Understanding who you serve is always a very important problem, and it only gets harder the more people that you serve,” says Mark Zuckerberg.

Big companies become isolated from their customers. Senior management sits in their 30th floor corner offices, and never speak to a real customer from one year to the next. And when customer preferences change rapidly, daily, hourly, this isolation from customers and clients is almost fatal. Zuckerberg is struggling to keep in touch with Facebook users.

   Will he succeed?   Stay tuned. Meanwhile, let’s learn from Facebook. As your startup grows,  do everything possible to keep decision-makers in touch. Have them make sales calls. Get them out of their offices at least two days a week.   Have them answer the customer service phones for a few hours a week. and have them bring regional executives and sales personnel back home frequently, for informal chats. It is the sales people who really know what is going on with customers.

     Another key issue: Wealthy senior management live lives totally different from those of their customers, and soon grow out of touch with reality. Zuckerberg says: “ .. my life is so different from the person who’s going to be getting Internet in two years. One of the things that we do is ask product managers to go travel to an emerging-market country to see how people who are getting on the Internet use it. They learn the most interesting things. People ask questions like, ‘It says here I’m supposed to put in my password — what’s a password?’ For us, that’s a mind-boggling thing.”

     Startup entrepreneurs must make a point of trying to live more or less ordinary lives, if they are to remain in contact with real people. Pretty hard, when your net worth is several billion dollars.