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This week: Mark Zuckerberg’s existential product crisis
Photo by Chip Somodevilla/Getty Images
Steve Jobs famously said Apple makes products that consumers don’t know they want. Facebook CEO Mark Zuckerberg has a slightly different challenge: He’s creating products that people are explicitly telling Facebook they absolutely do not want.
- Instagram for Kids, a version of the photo-sharing app for children under 13, is causing an outcry before it’s even been released. On Monday, 40 state attorneys general in the US wrote Zuckerberg asking him to abandon plans for the app, saying pre-teens are “not equipped to navigate the challenges of having a social media account.”
- Facebook’s cryptocurrency Diem (née Libra) ran into a similar wall of opposition when it was announced in 2019. This week the Facebook-backed project said it would shift its focus to creating a US dollar stablecoin, withdrawing more ambitious plans to get a license from Swiss financial regulators.
- And changes to WhatsApp’s terms of service, designed to help Facebook turn the messaging app into an ecommerce platform, have been stymied by backlash for months – hordes of users defected to rival messaging platforms like Signal and Telegram when the news was initially announced, and now everyone from Germany’s privacy regulator to the US Congressional Hispanic Caucus is trying to stop it.
For an organization founded on the “move fast” credo, all this product pushback is more than a little inconvenient. But this would be a problem for any company. It’s tough to grow a business when news of your next product drop doesn’t cause excitement but rather, alarm and opposition.
Sure, a lot of the pushback is coming from politicians and advocacy groups. But that’s the thing about being a network of platforms with 3.45 billion users: everyone is a user; and a lot of important users don’t want any more of what Facebook has to offer.
What Facebook is dealing with is much more existential than the typical constraints companies face when they get too big and powerful. Regulators can stop companies from acquiring other companies, and big businesses will often pull back on M&A when they’re under regulatory scrutiny. But a tech company can’t stop launching new products. In the fast-moving tech market, that’s a death sentence.
And so Facebook can only press forward, making concessions but not giving up. The scaled-back Diem digital currency is expected to launch in the US any day now, Instagram boss Adam Mosseri vows not to back down on IG for kids even if he gets “slapped around” for it, and WhatsApp is warning users that if they don’t agree to its new privacy terms they’ll lose functionality.
Take this product or be punished is an odd pitch, especially for a product you’re giving away for free. But if Facebook has taught us anything in its 17 years it’s that in the internet’s free consumer economy the most valuable asset a business can have is trust. Facebook treated that asset like it had no value and squandered it for years. Now it’s become Facebook’s biggest liability.
All the news that’s fit for profit
all-in podcast/youtube
The hottest new thing tech VCs have discovered is: themselves.
A growing number of venture capital firms, including Andreessen Horowitz and Greylock, are becoming mini-media outlets in their own right and “going direct.” That means using things like podcasts, blogs, Twitter, and Clubhouse to speak to an audience directly, controlling the narrative and presenting information on your own terms, rather than relying on the press.
The result has been a lot of shop talk – some of it quite interesting – and self-promotion. As Becky Peterson reports, going direct is also a powerful way for tech elites to push political messages. In California, VCs who are bankrolling efforts to recall the governor and liberal district attorneys are also using their celebrity status with the tech industry to spread the message on their podcasts and other direct media channels.
“In the case of the “All-In” crew and some other prominent VC activists, an impulse toward iconoclastic contrarianism and self-assured sermonizing honed on social media has meshed with tech riches to create a potent new political force. Against the backdrops of liberal San Francisco and Los Angeles, the VCs have cast themselves as brave voices taking a stand against corruption and crime enabled by governments run by ‘far-left radicals.'”
Read the full story here:
Silicon Valley VCs are at war with the ‘far left radicals’ running California
San Francisco Chronicle via Getty Images; Justin Sullivan/Getty; iStock; Steve Jennings/Getty; Kimberly White/Getty; Michael Kovac/Getty; Skye Gould/Insider
Vernacular watch
“Unregretted Attrition”: The management principle at Amazon that business units should shed a certain portion of employees each year. As Eugene Kim and Ashley Stewart report, Amazon managers can go to extreme, and absurd, lengths to meet their URA targets, including hiring schlubs who aren’t up to snuff just to have bodies on hand to sacrifice.
“We might hire people that we know we’re going to fire, just to protect the rest of the team,” one manager told Insider.
Recommended readings:
Hot German grocery delivery startup Gorillas has lost its 2nd cofounder in 3 months
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– Alexei
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