Libra’s Failure To Launch: Why Zuckerberg Should Either Fire His Strategy Team Or Resign Himself
By Ajibola Lawal on ALTCOIN MAGAZINE
When Libra dropped, I thought ah dammit. The Zuck strikes again.
There was a lot of commentaries either way about whether or not the Cryptocurrency would have succeeded. I didn’t say a whole lot, because I felt like in the grand scheme of things, they didn’t matter. I was not sure why I felt this way, but because there was so much on my plate, I didn’t think too hard about the entire matter until the pushback from the US Government — the Lawmakers and eventually the State Department — happened.
What struck me about this part of the news at the time was that it did not come as news to me. It was almost as if I expected this reaction, without thinking about it. This bothered me in a way that I could not pinpoint until it all finally coalesced in my head — in the shower no less (Has anyone done any research as to why this happens so often?).
So Why the Dramatic Title?
Very simply put: The Facebook Strategy Team should have known (not anticipated o, KNOWN that this is what the outcome would have been). It is the business of Strategy Teams to look at all variables to a particular strategy approach and then based on how they weigh all the factors — from threats to opportunities — plot divergent paths to the ultimate goal and choose the most cost-effective and efficient paths.
If that is the case, then in what world they did simulate the success or failure of the Libra product that they didn’t know that the resistance they would face would be boner-killing?
And why on earth would they not have pre-emptively made contingencies?
This gaffe is even more startling because going by the existence of a built platform, and all the partnerships that were struck to build the consortium, this was not some deal that was struck over the weekend. Months (possibly even years) had gone into putting together Libra and nobody felt that may be a risk assessment was due, you know before the launch?
I am sure you’re asking, what should have been so obvious to the Facebook Strategy Team. It’s two very rather obvious things:
1. Facebook Is In The Doghouse And You Do Not Release New Albums From The Doghouse.
Just ask Robin Thicke. When you are in the Doghouse of the Public Eye, you do not come out with something new. You go to the corner and wait until someone else is the scapegoat in the Public Eye before you ever even raise your head again. If you can manage it, make sure that the Public Eye really sees you wallowing in the dirt (Refer: Tiger Woods).
In the case of Facebook, just missing a few analyst targets for a few quarters and having stock dip for a bit would do the trick. Hell if we want to get dramatic, Mark could even seed the company temporarily to Madam Sandberg for a while and join a monastery in Tibet.
But why am I talking about a Doghouse? What did Facebook and Mark do, that is so awful? Well in 2016 a major upheaval occurred, and as is the case when there are any upheavals in the public consciousness, there is always the need for a Mimetic Scapegoat (a la Réne Girard) to assuage the thirst for blood, and the need for someone to blame. Facebook was an easy target (easier than Russia because Russia is not an app on your phone). It also just so happened that Facebook had its hands dirty (Remember the Cambridge Analytica Data scandal?)
2. On the other hand, as if it was not bad enough. If it had merely been that Facebook was releasing a Zuckerberg album featuring Bill Gates, Branson, and Kanye; it is likely that as a way of meting out punishment as the Mimetic Scapegoat, people would have shunned the album and only Facebook Staff would grudgingly buy. But then, that was too small for Facebook. Go big or go home. They now had to touch THE ONE RADIOACTIVE CAKE IN THE ENTIRE GLOBE — CRYPTO.
Again I Ask What In The World, Was The Strategy Team At Facebook Thinking? What In The Entire World?
Let me break it down.
You see Bitcoin/Crypto? It scares Governments. It frightens them. Most of all? They don’t understand it. They don’t understand how it works, what pushes and makes it tick, and it drives them crazy. But this is not what scares them about Crypto.
How they have managed to let it go on for so long (I know when they will make their move though), without taking active steps to quash it, is a marvel to me. If Central Bankers have Nightmares, they would feature Samuel L. Jackson, Ayamatanga and Bitcoins (Don’t ask me how I know this).
So why does Bitcoin scare Governments so much? It’s simple. Bitcoin/Crypto does two things that Governments hate. The first is that it offers a way for money to move across borders, without knowing who is moving what (for the most part). THAT’S BAD. If people can move money that easy, that money cannot be seen by the Government. The Government cannot tax what it cannot see. The Government does not like that, at all.
The second is that Bitcoin robs (first world) Central Bankers of control. It’s really that simple. Control. So you have this other currency, that is not the dollar; so it’s not controlled by the Fed. It is not Gold backed (or backed by anything physical) and then there’s nobody that you can arrest and end the shenanigans? Oh God. <cue nightmare>
Now that we’re done with why Bitcoin and Cryptocurrency make Governments nervous. Let’s move to another reason why IT WAS SUCH A BAD IDEA TO HAVE RELEASED LIBRA IN THE WAY THAT IT WAS.
It’s the US Dollar
I won’t go into a long Economics Lesson now. But I will say a few quick things that you will understand and are basically true:
- The US Dollar is the middleman.
- And it is the US’ biggest export.
As an example, let’s assume you’re Sefiu from Lagos and you want to sell Palm Kernel Oil to a factory in Stockholm. The factory has 10000SEK to pay, but you want your 377,102.80NGN. A problem quickly arises because you can’t spend SEK in Nigeria. You can argue that oh well, you can just change the money in your country. That would be true if the Central Bank in Sefiu’s country has other things to buy in Sweden. Otherwise, it would be stuck with money it can’t spend, just so that Sefiu can spend my money and pay my taxes of course.
Not cool. But what if there was a Middleman Currency that both Sefiu’s Central Bank and the Central Bank of the Factory can talk to, such that this transaction is made possible and they both have currencies that they can actually go on and spend?
Say hi to the US Dollar.
I will skip the history lesson about the Dollar, Gold-backing and how it became the Petrodollar and so forth. The US Dollar is a promise (some people have varying thoughts about the strength of this promise) and as long as that promise is being made over and over every day, the US is happy. And the more that promise is made, the more control over Financial Markets globally, the US has. (This is a whispered reason (you didn’t hear it from me) why any Dictator that proposes having a new Middleman Currency outside the Dollar usually mysteriously gets toppled).
In Short, Facebook Announcing Libra — A Cryptocurrency — Was A Very Red Flag For The US Government, For All The Reasons Stated Above.
A quick illustration:
Facebook says: We have this new really cool Cryptocurrency, Libra. We’re working closely with like 30 other guys to try and make this thing work. We hope you guys like it.
What The US Government hears: WE ARE FACEBOOK. REMEMBER US? THE ONES THAT WERE THE VEHICLE FOR 2016 HAPPENING? YEAH WELL, WE’RE HERE AGAIN, AND WE WANT TO BE THE NEW MIDDLEMANCURRENCY. EFF THE YOU-ESS DOLLARRRRR.
Whose idea was this anyway? I really want to know. Like seriously. I want to know, so we can just have a chat.
*insert shoe-throwing GIF*
So I have said a whole lot about how Libra was poorly executed, and at the worst time ever.
But What Would I Have Done Differently?
I would boil a frog.
Throw a frog into the water, and it jumps out. However, put a frog in water and slowly boil it and it won’t jump out. Something so sensitive as Crypto, by a company that is radioactive at the moment, can only be executed in phases. What would I tell Mark if I were standing in front of him right now?
- Nobody would know of Libra until 2025. Continue to build in silence as they probably already have been doing. Wait for the dust over the bad sentiment, to settle. Falter on analyst expectations quarter by quarter for the next 3 years. Stop trying to please the markets. The prices will reflect this — don’t worry too hard about it. You will bounce back (it’s called the hero’s journey). Plant a few trees. Set up mental health funds to take care of people. Become the public’s darling again.
- In that time, I would slowly enter the payments space, very quietly. Buy up mPesa. Invest in MTN’s Yello Ventures, Buy up PayTM to secure India, maybe even buy Stripe (at whatever cost. Promise the Collisons autonomy). This will gradually bring us to the next step.
- Introduce Facebook and Whatsapp Pay (separately). It is important to go with this name and separate platforms for several reasons: The Familiar — The brands are existing and as such users will not separate the new functionality from the app they use already. It would be, boiling a frog.
- Continue boiling your frog. Make sure that Facebook/Whatsapp Pay is built on Blockchain Technology. But you would be silent about this.
- By the time Facebook/Whatsapp Pay is 2 years old; the transition from separate entities — Facebook Pay and Whatsapp Pay and integrate them into a singular platform — Libra. And then by Libra’s first anniversary, you introduce coins that users can trade their existing Currencies for. Say whatever you want, say it makes it convenient for people to be able to move FB$ than having to deal with currency fluctuations. People won’t care. They would have already been boiled.
In 5 years, you have your own powerful Cryptocurrency, without the fanfare or announcement. And definitely NONE of all the negative energy. In that, you’ve spent a great deal of time stress-testing and improving your product without all of the extra eyes and regulatory control. And definitely none of the pushback.
An argument can be made that well, in 5 years the Governments can still push back! Yes, it is natural to expect that they would. But you see, the thing is, the tables would have turned and you’re in a better position to be able to negotiate your existence. When you’re too big to fail, no matter how ugly you are, the dirty secret is that the Government will continue to let you live, even pay to put you through life support.
Another argument can be made that Facebook could negotiate and cooperate with the US Government and be what WeChat is, to China (🙊). The answer would be: If we even leave aside the issue of people trusting Facebook after that (Not like people left Facebook in droves after the data breach scandal), you then have to think, what is the incentive for the US Government to do that, when it could just simply create it’s own Crypto and say Eff Facebook?
Another argument can also be made that Facebook was punting for first-mover advantage and thus, HAD TO go for broke. That would be the right thing to consider, but it would also be ridiculously stupid to actually do anything more than consider. Why? Spread across Facebook, Facebook Messenger Instagram and Whatsapp, you have the platforms that rival WeChat in sheer numbers. With such a moat, you have nothing to fear.
Mahn, I am tired, and I am upset.
Honestly, I don’t like what I hate and I hate ill-thought-out strategic moves. HATE. So Mark, fire them. Fire them all. If you’re on the Facebook Strategy team and you’re reading this, even you know that you should be fired. Make sure your boss doesn’t read this sha.