Is Facebook Revolutionary?

Is Facebook a revolutionary company?

No one doubts that Facebook has risen rapidly to become the most popular social network on the planet, succeeding where Friendster and MySpace did not. But did Facebook introduce revolutionary innovations that changed the face of social networking, rewriting the book on interaction online? Or were Facebook's innovations merely disruptive to the incumbents, pushing past and edging them out?

Before Facebook

"Goddess loving vegetarian techno-utopian" used to be a typical personal description on the now defunct social network Friendster. Peopled with Burning Man fans and Silicon Valley engineers, the site encouraged people to invite friends, discover others with like interests, and contact each other.

What Friendster lacked was reliable enough technology infrastructure and a strong enough incentive to come back. When MySpace gained traction, the hipsters -- I mean, Friendsters -- abandoned the site and created new profile homes.

MySpace enabled people to create highly customized home pages to express their personalities. The site grew so quickly that trolls and pedophiles saw an appealing target. As MySpace weathered the growing pains, without ever really solving its sleaze problems, the site finally gained a niche among artists and musicians. Bands posted recordings and video trailers. Their fans could stay in touch and find out about upcoming shows.

And then Facebook emerged from the Ivory Tower and the crowds rapidly defected again. In 2009 Facebook finally surpassed MySpace's traffic, but the site had already created more incentive to stick around as early as 2007.

What did Facebook do right? Was it revolutionary or just a little better in a few minor ways?

Revolutionary vs. Disruptive Innovation 

A quick note on definitions. A revolutionary innovation changes the rules of an industry, introducing whole new product attributes that people had never valued before. Example: the Amazon Kindle.

By contrast, a (merely) disruptive innovation segments an existing market by creating a new feature tradeoff that appeals to different users. Example: 3.25" disk drives.

I introduced the definitions of revolutionary and disruptive innovation in an earlier post that attracted enough attention to become one of my most popular. As Facebook approaches one of the largest technology IPOs ever  (though not among the ten biggest IPOs in history) I thought it would be interesting to assess the company and see how it measures up as an innovation in online interaction.


Facebook Innovations

By now everyone knows the history of Facebook, chronicled in The Social Network as well as earlier books, blogs and news articles. In my own selective reading, I'll point out just three innovations that I believe set Facebook apart in important ways from Friendster and MySpace, two sites that are no longer even donut-worthy.

From the start, Facebook required people to register with university email addresses using their real names. In offline life, we see people's faces and know their names. Social networks depend on trust. The simple requirement that people reveal their true identities promoted a level of trust that MySpace never managed to build up. People are less likely to behave dishonorably when they can be and will be identified.

Secondly, Facebook created a reason to return. Mark Zuckerberg famously told venture capitalists that he wanted to build a site that people checked first thing after waking up in the morning, and last thing before going to sleep. Facebook succeeded and more. I know people who, upon waking up in the middle of the night, cannot go back to sleep unless they first check their Facebook stream.

Socializing means communicating. It's more than putting on a face -- a personalized home page, a profile image, a list of interests. We define ourselves through our actions more than through any description we may write of ourselves. Facebook made the interaction seamless, continual. Even before a new user posts a single status update, Facebook fills up the person's page with all of the conversations of her friends and family. Instant community. That's a social network.

Thirdly, Facebook created a platform that software developers could build upon to write apps and integrate with other sites. A Tech Crunch article from 2007 sums it up nicely, calling Facebook the anti-MySpace. Facebook built an ecosystem, inducing other tech companies and entrepreneurs to invest in Facebook's continued success and relevance.

As a result, Facebook created positive network effects in two dimensions:

1. User base. As a person's friends and acquaintances joined and posted more status updates and photos, the value of the site increased to that person. 
2. Business partners. As more companies integrated with Facebook, wrote apps within it, and promoted themselves on Facebook, more commercial partners wanted Facebook to succeed. Their own businesses depended on Facebook winning.

Obviously Facebook introduced a host of other innovations, small and large. But I'll stop with just those three, which are at once entirely obvious, and certainly not unique to Facebook, in the sense of being patentable innovations or relying on trade secrets. They're innovations in action.

Disruptive or Revolutionary?

So what's the verdict? Was Facebook merely improving on what had come before or rewriting the rules?

I gave away my opinion in my original article, because I cited Facebook as one of my prime examples of a revolutionary innovation. The key attributes of a social networking website that Facebook transformed forever were: an end to anonymity, a shift of focus from self-expression to interaction, and an open ecosystem to encourage other businesses to make Facebook even better.

As a result, Facebook did not merely create an incrementally better Friendster, with a responsive site that didn't freeze or crash. Facebook did not merely create a differentiated offering from MySpace, appealing to an alternative and growing market segment of college students.

Instead, Facebook changed people's vision of what a social networking website could be. Facebook created an entire industry of venture backed startups that could build on top of it. Facebook created a virtual reality to enhance the physical reality where distance and time and memory prevent us from staying in touch as closely as we would like. Facebook created trust, which made its privacy missteps all the more newsworthy, because trust was and is fundamental to Facebook's success.

In short, Facebook has revolutionized social interaction with crucial innovations that have had a profound impact that is only beginning to unfold. And if you like this conclusion, you can share it with your Facebook friends using the Like button below.

Disclosure: I (sadly) do not have any financial stake in Facebook, though I do have Facebook friends who do.


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