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Thursday, September 06, 2007
Laws of the Edgeconomy: Open Beats Closed
Facebook takes another small step towards openness.
As we've discussed extensively, there are tremendous structural pressures for openness. From a strategic point of view, in the edgeconomy, getting open always and everywhere trumps staying closed.
Though Facebook is decidedly evil, and is fighting tooth and nail against these pressures - they are too great for it resist. They are using a bucket to fight the tide.
All of which adds up to a great strategic error. Why can't Facebook find a working business model? In large part, because it's focuing on staying closed - when, by getting open, enormous and explosive possibilities for radical business model innovation would be unlocked.
Comments:
really interesting thoughts umair. what would you do if you were the chief strategy officer at FB to push towards the openess you describe?
"Why can't Facebook find a working business model?" Oh, but they do have a business model - grow exponentially worldwide and do an outrageously priced IPO based on hype and everyone's expectation that they'll figure out eventually how to monetize all those users. If they had a concrete business model now then they'd have to price their shares based on hard data, and that can't be good for the VCs. Remember - the company is managed by a 23 year old. A very talented 23 year old, but still, wanna bet that Accel are calling the shots there?
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