Facebook’s strategic plan is working brilliantly. That’s really bad for humanity.
Do we really want a Microsoft of digital communication?
If you’re Facebook, things are going pretty great these days. The latest financials and a surging share price show that the company’s strategic plan is working spectacularly. As for the rest of humanity, well, we should all be freaking out.
That’s because Facebook’s strategic plan goes far beyond image macros and political arguments. No, Facebook holds a far more synoptic view of its place in the world: its true aspiration is to become the default platform for humanity’s digital communication. That’s kind of a big deal.
How is that even possible? Well, Facebook founder and CEO Mark Zuckerberg and his crew understand one very important fact: Some markets only want one winner. Typically this occurs in cases where the segment functions best with a single, common platform. The minimized complexity and friction is the very real benefit to the market, but let’s be clear: the winning competitor reaps unassailable wealth and power.
So in this type of market, “winning” isn’t merely an objective; victory is the sole market success factor. Call it hegemony as a business strategy.
The last time something like this happened was in the PC era, where Microsoft had a similar opportunity, and executed with devastating efficiency. Bill Gates and co. recognized early on that, in markets like these, establishing and then sustaining leadership destines you to eventually own the whole market.
The key for Microsoft, and now Facebook, was in identifying the correct market. Both companies realize that the platform play resides at the highest logical level in a market category. Thus Microsoft targeted the totality of the PC software market, allowing competitors to invent and grow market sub-segments, like spreadsheets, or memory management, or browsers. Creativity was unleashed and fortunes were made when innovators had breakout hits in lots of new and exciting areas — but at the end of it all, those innovations were just market proofpoints, destined to be absorbed by the Microsoft software platform.
Facebook is operating in just such an environment right now. In the past few years the world has seen an explosion of creative internet apps and solutions, a teeming petri dish that has brought us to a state — one personified by Facebook — that is breathtakingly empowering, yet (to many people) fundamentally troublesome.
Facebook is operating from the same playbook Microsoft used, nimbly integrating capabilities from leading competitors in market sub-segments. That’s how Facebook offered photos, hashtags, instant messaging, live streaming, payments, etc., etc. It’s why Instagram is adding Snapchat-like “Stories.” And Facebook recognizes that digital communication encompasses all types of relationships, which is why the company is so focused on connecting consumers and businesses.
Eventually, if all of these features are available in the leading platform, why would you need anything else? The market must naturally collapse into its simplest possible state. (Well, except that Facebook is so hated that this will always drive demand for competing platforms. Unfortunately, this also guarantees that the digital communication market will never achieve its truly optimal state.)
But, again, the plan is working really well so far. Facebook is perceived to have attained an increasingly insurmountable lead in the two most important assets needed for digital communication: content and connections. One sure indicator is that Facebook is succeeding wildly while competitors in specialized sub-segments, even ones with high usage and engagement (see: Twitter) are struggling. The market is increasingly expecting Facebook to eventually just absorb it all.
So what? Is that such a bad deal?
You may be questioning what’s the real issue with any of this. Even if there is a natural hegemony in the digital communication space, should you really be terrified if Facebook is able to seize it? You could argue that Facebook is simply best at giving people what they want, and in a free global economy the company deserves whatever success it can achieve.
And using the Microsoft precedent, you might argue that the company’s contributions have been instrumental in creating a critical global platform. Many well-paying jobs are being created, and people are doing things that were never before possible, and in some cases are literally impacting history. And Bill Gates and Mark Zuckerberg have pledged their riches to help humanity.
All of that is true. But I would argue for a different perspective.
I think the trillion-plus dollars that Microsoft has extracted from the world’s economy to date constitutes pretty inefficient allocation of global capital. Today, I think most of Microsoft’s customers, including virtually every corporate IT department, would agree. The problem is that hegemons can charge, and do, whatever they want. That’s why 30+ years into this market, companies are being forced to budget scarce IT dollars to update and maintain pricey yet “geriatric” software that delivers little new business benefit.
The bottom line is that the world did need a standard software platform to achieve the benefits of the PC revolution. But it was never necessary that it be a Microsoft-controlled standard. Microsoft’s hegemony strategy aimed from the start for that outcome, and it succeeded spectacularly. Microsoft was an openly pugnacious competitor, too; the entirety of the company’s actions, legal and illegal, were designed to assure its strategic plan would succeed.
Similarly, I believe that the world will suffer much harm if Facebook succeeds in its quest to dominate the market for electronic communication.
I’ll skip the standard arguments about Facebook’s privacy abuses, connections to government spy programs, and unprecedented zeal in monetizing intimate details of users’ lives. The outrage expressed by users is simply having no effect on Facebook’s strategic plan. The frog’s boiling hard but still hasn’t jumped out of the pot.
No, the big risk is in a single, for-profit entity deciding what humanity sees, at least in the the digital realm. (Also the driver behind Facebook’s ham-handed digital colonialism.) History proves that controlling the information people get is key to controlling the populace. And the sheer scale of what Facebook’s trying to achieve is what makes it different — and so scary.
Sure, for a long time we’ve had publications and broadcasters curating what we see, but there are still real people connected to that content, and there’s choice. We’re contemplating the prospect of the whole world relying on a single company’s algorithms. That’s already made those algorithms — as opaque and subjective and buggy as they may be — one of the most valuable assets in the history of civilization, and one that’s becoming more valuable every day.
But here’s how it’s really screwed up. As a for-profit entity, Facebook exists to make decisions that favor itself, and that’s logically disconnected from how those same decisions impact the interests of its users. For example, it’s a critical activity for Facebook to determine the exact maximum ad load people will tolerate — and aggressively work to defeat ad blockers. Giving users too much control in the UI would corrupt the value of the algorithms in determining what you see. Therefore Facebook will always exercise tight limits over what users can actually do with the platform.
But… Luckily for humanity, if you recognize the problem, you’ve made the first step in figuring out a solution.
Is this destiny assured?
So, if you buy the narrative I’ve laid out — or even if you don’t, I suppose — you now possess the logical context to ask two very important questions:
- Are we destined to suffer Facebook’s hegemony in the digital communication market?
- If not, what would a better digital communication platform look like?
If you’re a Facebook fan, the answer to the first question is, “Yes — and I’m fine with that.” In reality, the answer is definitely “No.” In fact, for Facebook there’s nothing assured at all.
One basic, forgotten fact means that Facebook perpetually exists one step away from obsolescence — no matter how much success the company achieves. Let’s have Facebook itself describe the issue, from its 2012 IPO Prospectus:
If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed.
That’s right. Facebook is still just an app. So if people stop clicking on it, it ceases to have a purpose. You’ll recall how important this point was when Facebook was being originally valued. And this highlights the biggest difference between Facebook and Microsoft, which has its software installed on hundreds of millions of PCs, and is integrated into IT budgets worldwide.
Facebook’s ultimate weakness is that it’s inherently ephemeral. You know, like MySpace.
So then you get to ask the second question: What would a better digital communication platform look like? And you realize that Facebook has provided the actual recipe. Not to put too fine a point on it, but you just need a platform that delivers all the benefits of Facebook—both the current and future versions — without all the bullshit.
And that is very possible. In fact, I’ve previously outlined one approach, here on Medium, in this post and white paper. But ultimately it doesn’t matter whether it’s a model like the one I describe, or a variant, or something completely different. Because the big insight— the point of his post, actually —is something everyone, including me, has overlooked the whole time it was happening.
At the end of the day, there’s really only one “social network” — it’s called the internet. Everything else is just UI and programs running atop the internet’s protocols and standards and conventions. Every existing social solution has really just been assembled from available internet parts, using widely adopted methodologies, and mostly based on open standards. They compete for the same devops and engineering skills.
But if it’s all based on open, available tools, how did everything get so screwed up? The root cause is that all market competitors —Facebook being the exemplar, as described above — are using a model that works fine for them, but is terrible for the actual people who use it. It’s an intentional design error, and humanity will never prevail unless the design error is addressed.
And what is the design error? It’s the presumption that the service owns all the data produced by its users. Turns out, that’s a really bad design, and is directly responsible for privacy abuse, surveillance, and a host of lesser pains we suffer.
The honeypot problem
Somehow it’s evolved to the point where companies like Facebook have effectively overcome the internet’s inherent openness, and reintroduced the “walled gardens” we suffered in the early days, with AOL and MSN and CompuServe. But those old platforms had technical drivers— it simply wasn’t easy otherwise to get online — while Facebook and its competitors have perfected a different, modern approach: the honeypot model.
A security honeypot is designed to attract spam and malware so that it may be detected and analyzed. A social honeypot is a new evolution, designed to be sweet enough to entice you, while sticky enough to keep you from leaving. All social networks do it exactly the same way: they offer tools for you to do something with your content that you otherwise couldn’t do, but the process requires you to enter — and store — that content on a centralized database deployed by the service.
Recognizing that simple model, you realize that it’s just an industry of honeypots, each competing for the biggest share of you. That’s a problem in many ways, but the big one is that it splits up your content and connections, effectively locking them away and preventing any other uses. That creates major friction (e.g., kludging together your Twitter and Facebook feeds), and in fact will be the key driver to the consolidation of the honeypot industry around a single platform… just as Facebook’s strategic plan anticipates.
Click your heels, Dorothy
So how could you fix the honeypot problem, and the intentional design flaw, to create an optimized digital communication platform? Well, like Dorothy in Oz, we’ve had this power all along; we just didn’t know the correct incantation to activate it.
The question to ask yourself is, “Where’s the actual value in any social network?” Remember, all any of them is doing is letting you do something with your own stuff. This means that, except for the well-understood and commoditized computer componentry, you’re providing 100% of the value. You are the sole raw material input for these vast industrial enterprises.
So, logically, the solution is to stop giving your valuable content away. And that’s what an alternative platform could fairly easily be designed to do.
Here’s what a better digital communication platform would look like:
- The default presumption is that you get to keep your data and content, rather than handing it over to strangers. A better platform would provision everyone with a separate, private, individually encrypted cloud repository, which would become the single destination for all your digital communication and data.
- With the repository in place, you can to provision a layer on top — a single, universal, complete instance of all the services and APIs you need to execute any digital communication. You’ll get everything the various honeypots do today: sharing, identity, notification, security and authentication, with support for all content types from text and images to voice and video. At the same time, your actual data is encrypted end-to-end, hidden even from service providers.
- The availability of these common services creates a far superior application development model. By separating the data and logic, lightweight apps can do anything that now requires a full service stack. This will drive an unlimited universe of interchangeable apps, with different UIs and features and algorithms, competing only on end user benefits (the ones Facebook doesn’t care about). Since they all access the same data source, you’ll be able to bounce between them with perfect continuity, but since they only have secure read/write access to your repository, they’ll never be able to monetize your data.
- The platform will include robust tools to manage your identity and content and interactions. You’ll consolidate your identity to a single authoritative version — one declared and managed by you and accepted by everyone. Different apps enable you to “facet” your identity for different purposes, such as business, social, or dating profiles. You’ll have a single, unified contact list, and tools to manage interactions across digital communication modalities. And a certificate-based identity can authenticate you seamlessly in any digital interaction, from email or IM, to web logins. The bottom line is it re-maps your digital identity to be like the one you own in your real life —at the center of your world, and in command of you.
- Lastly, a better platform cannot be controlled by for-profit corporations — or anyone else for that matter. That’s what got us into this mess. Rather, any new platform must be based on completely free and open standards, using the model of the web platform itself. Just as Microsoft IIS and Apache are very different HTTP server technologies that converge at the standards layer, this approach unleashes the massive creativity and innovation of a truly open platform. What you end up with is something akin to a public utility — not Facebook’s hegemonic vision.
Sorry for all the words, but the narrative really requires them. To net it out, we can accept the future Facebook’s executing toward, or we can do something completely different — and better. I don’t think there’s really any intermediate outcome. Since everyone’s following the honeypot model today, no one can have a truly differentiated product (see: Google+). Absent real and transformative change, you would not be smart to bet against Facebook — not with the tremendous lead the company has built to date.
I wrote this post simply to highlight this problem facing humanity, a slow-motion train wreck if there ever was one. But I also want to create awareness of the opportunity for a better outcome. We’re all in this together.
Do you agree? Disagree? Have you spotted an error in logic, market understanding, or architecture? Let me know in the comments, or privately at firstname.lastname@example.org (well, as private as the Gmail honeypot can be — irony alert!).
Oh — and to take us full circle, what about Microsoft’s $26.2 billion acquisition of LinkedIn — a honeypot if ever there was one? Nobody really mentioned what a big departure this is for Microsoft. They’re in the honeypot business big time now… and that massive investment is just as at-risk as the rest of the honeypot industry, once a better platform comes along.