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.
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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