How to Create the Next Facebook: Seeing Your Startup Through, From Idea to IPO (6 page)

Your product needs to be habit forming—something that your users come back to every day, a central hub where they gather to spend huge chunks of their time. In other words, your product must be engaging. No doubt, fostering engagement has been a hugely important priority for Facebook. Features like Facebook’s News Feed and Photos were critical for creating user engagement—and for fending off rivals like MySpace. After all, the more time Internet users spend on Facebook, the less time they spend on rival social networking sites.

Facebook is not alone in the importance that it places on engagement. If you look at other top consumer Internet products, they are all habit forming as well. Anyone who has used Skype, YouTube, Zynga, Twitter, or Instagram knows how easy it is to lose an hour or two of your day to these web sites.
However, although it makes sense that users would return day after day (and often hour after hour) to hubs where they can access for free internationally integrated messaging, entertaining and informational videos, constant streams of international news and personal status updates, and visually appealing photos, there are certain categories of products in which user engagement is very difficult to achieve. Think, for example, about a theoretical site that caters to car buyers. Typical consumers purchase a car once every eight or nine years, so what reason would they have to return, time and time again—let alone day after day or hour after hour—to a site with the main purpose of helping users purchase a new car? The answer is: None. Car buyers only access the product site when they need it (which, in our example, is only once in a very long while), making it extremely expensive for this type of site to attract and retain users. Unless you come up with a unique business model—or an incredibly cheap way to attract and retain users—it is a good idea to stay away from product categories for which daily user engagement is difficult to achieve.

If I had asked people what they wanted, they would have said faster horses.

—Henry Ford

All great product developers know that consumers do not know that they want or need a given product until they start using it. However, actually developing a product that consumers don’t know that they need is no easy feat! To make matters worse, consumers tend to be resistant to change, so it’s extremely challenging to convince them to start using your new product in the first place. Regardless, few tasks are more crucial to a company’s success than creating a product that consumers grow to love and rely on in their day-to-day lives.

When Zuckerberg first came up with the idea for News Feed, it made a lot of sense to redesign Facebook in such a way that users could view instantaneously what their friends were up to on logging on to the site. However, when the feature was launched, there was a huge uproar from users, who said that the redesign made Facebook feel too cluttered. Users also voiced concerns about privacy, even though News Feed did not provide any extra information on users than was already available on the site. The only difference was News Feed made information that once required a concerted search easily accessible in one central hub. But users, of course, were frustrated and uploaded a constant stream of messages to the tune of “I feel violated” and “You’ve ruined my life.”

What would a typical CEO do if confronted by this same type of situation? Probably back off and kill the new feature. Yet had Zuckerberg done away with News Feed, Facebook would likely not have turned into the megaphenomenon it is today. Zuckerberg knew that users would eventually come to understand the value of News Feed because it was central to the mission of Facebook: to improve users’ ability to connect and share with one another. Within a few weeks of News Feed’s launch, the furor died down and News Feed became a must-have component of Facebook!

There are, of course, risks to the approach Zuckerberg took with News Feed. A classic example is Digg. Founded in 2004, Digg was one of the pioneers in social media and gained instant traction. Over time, Digg was able to create a loyal user base that was interested in ranking the top stories of the day. This would change, though, in 2010, when the company underwent a major site redesign. As was the case with Facebook, users were outraged and began to flee to rivals like Twitter, but Digg remained committed to its new design and would not back down. In the end, the redesign was catastrophic, because it caused Digg’s user base to dwindle quickly.

So why did Digg waste away in the same type of situation in which Facebook thrived? Digg’s problem was that the site’s redesign really did not do much for its core mission. If anything, the redesign was mostly a reaction to emerging sites like Facebook and Twitter. Digg essentially wanted to copy these sites’ popular features, despite the fact that its users were passionately saying that they wanted Digg to be Digg and not some other type of service. Had the site gone back to its original approach or rolled back many of the needless features it added in the redesign, the disaster could have been averted. Loyal users tolerate mistakes, but not if the core focus of the site changes drastically.

Some products can be too focused on solving problems and, as a result, lack an element of fun. Fun features—even if they do not enhance your product’s usability—can, in and of themselves, lead to added user engagement. In the case of Facebook, Zuckerberg decided to add one particular feature, known as the poke, purely and simply for fun. Says Zuckerberg, “When we created the poke, we thought it would be cool to have a feature without any specific purpose. People interpret the poke in many different ways, and we encourage you to come up with your own meanings.”
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And people have! People use Facebook’s poke function for any number of reasons, whether they are using it to meet new people, to flirt with a friend, or to say hello in a fun and playful way. Regardless of how or why it is used, the poke lends Facebook an added layer of character, frivolity, and approachability, all of which are qualities from which any startup can benefit.

Groupon is another example of a company who has used fun—specifically humor—to set itself apart from its hundreds of competitors. The company sends out daily e-mail messages to encourage users to keep on clicking and buying. Groupon often sends funny offer descriptions, such as the following for a horse ride: “Without horses,” the copywriter notes, “polo shirts would be branded with monkeys and Paul Revere would have been forced to ride on a Segway. Celebrate our hoofed counterparts with today’s Groupon.”
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Given the wit, skill, and diversity of offer descriptions that find their way into users’ inbox each day, it should come as no surprise that Groupon has more than 400 copywriters on staff, which is more than some of the world’s brand organizations.

For technology companies, developing a platform that becomes a global standard is the equivalent of finding the Holy Grail. In the early days of Microsoft’s history, Bill Gates (who actually was the first person to come up with the concept of
platform
) was approached by IBM, who wanted him to help them with their personal computer (PC) project. Gates realized that if he could develop an operating system that could run on almost any IBM-compatible computer, Microsoft stood a good chance of owning the rights to the world’s standard-issue operating system. In response, Gates created MS-DOS, and, as he had predicted, the operating system was wildly successful and became the operating system that was bundled for use on all PCs. In fact, the concept of developing a standard-issue platform was so lucrative for Gates and Microsoft that he applied it to Windows and the Office Suite. As a result, even though other players have competed fiercely against these product lines, Microsoft still has huge market shares in the computing and software spaces—even after several decades. Not many tech companies can claim the same.

Like Gates, Zuckerberg realized the importance of developing something bigger than a single-focused software program or web site, which is why he created Facebook with the end goal of turning it into a platform or even a utility. In essence, Zuckerberg wanted Facebook to be the core for all of its
users’ social activities. To turn this goal into a reality, Zuckerberg took some crucial steps. One was to allow third parties to create apps on Facebook, a decision that set the stage for the current Facebook ecosystem and led to the creation of megacompanies like Zynga. Another important step Zuckerberg took was to develop Facebook Connect, which makes it possible for other web sites to register new users via Facebook’s social login.

If you think your company has a platform opportunity, you need to take some important steps. It is critical that you devote an immense amount of resources to providing support services, which entails more than just giving developers access to code and modules. You need to create a developers’ program that has clear-cut terms, training programs, and frequent updates. You should also hold ongoing conferences and meetings to encourage new developer members to join your platform.

Creating a platform involves a lot of work, so make sure you’re ready to anticipate the potential questions and the possible problems that developers may encounter when using your utility before you launch your platform. If your company is in its early stages, think about waiting to create and launch a platform until your user base has reached critical mass and can grab the attention of potential developers. Consider that Facebook waited 3 years before launching its own program; and even with the wait, the platform still had many glitches in its early days.

When a company introduces a new feature or product to ward off the threat of encroachment from a rival, it is engaging in reactive product design. However, fighting rivals on a feature-by-feature basis can harm the long-term prospects of your company. As discussed earlier in this chapter, adding new features just for the sake of keeping up with the Joneses is likely to create confusion and undue complexity for your users. It can also cause you to veer away from your company’s mission.

Even the best companies, Facebook included, can be found guilty of reactive product design and, generally speaking, it does not work out for them. For example, when the check-in service Foursquare became popular, Facebook launched its Places feature, but the service was a flop and was discontinued in short order. Then, in April 2011, Facebook launched Deals, which looked a lot like Groupon. The service was piloted in five cities but got little traction and it was eventually canceled as well.

This is not to say that it is wrong to experiment with adding new features from time to time. Keep in mind that even though Facebook’s Subscribe
feature—which pushes to your News Feed the public updates of users to which you decide to subscribe—looks a lot like Twitter, the service was a good idea and is consistent with Zuckerberg’s mission. So, be conscientious when you are thinking about adding a new feature and ask yourself: Am I doing this because it’s good for my users or because I don’t want to be left behind? If you can’t genuinely say that the feature will benefit your users, spare yourself the hassle and forget about it.

There’s little doubt that mobile is a megatrend and represents a huge opportunity for tech startups. The key driver in mobile is the supergrowth in smartphones, especially in devices running Apple’s iOS and Google’s Android.
Table 3-1
includes just a few data points regarding the anticipated growth in mobile from 2011 to 2016. As you can see, the figures are staggering.

Smartphones and tablets are becoming an integral part of the daily lives of many consumers who are using these highly habit-forming devices to check
out the news, shop, get directions, listen to music, and play games. Have you noticed how many people walk and drive while looking down at their smartphones?