How Facebook is preventing Behavior Switches to New Products
Link to article: http://www.businessinsider.com/former-myspace-ceo-and-la-tech-guru-explains-facebooks-brilliant-strategy-to-avoid-disruption-2015-5
Technologies are often able to supplant other technologies by offering services similar to the ones currently in existence, but with unique features, that have never been seen before, or never implemented as smoothly. Once these new technologies get enough initial adopters to cause a significant cascade of changing from the older technologies to new, the older technologies tend to die out, or see usage at a very small fraction of what they initially had.
According to Science Inc. CEO Mike Jones, “Facebook has accepted that new social media platforms are going to disrupt their business model and drive traffic away from the site.” Facebook is combating this by snapping up and integrating competitors that appear on the scene and have a large cascade of adoption. They purchased Instagram and WhatsApp in 2012 and 2014, respectively.
This can be related to the concept of tipping points, where, once a company surpasses a certain number of users in the population, their odds of dying out as a product decrease tremendously, and, in fact, usage will usually increase to some z” fraction of the population, where it will rest at. Facebook has bought companies that are close to surpassing their tipping points, or have just recently surpassed them but not started to cascade through the population, and has benefitted from the growth those companies have experienced.
It can even be claimed that, through integration with such a large company as Facebook, the tipping points for these products are decreased significantly. An example can be the messenger app Facebook has released. They know that the, “utility of messaging people,” is highly valuable, whereas the “entertainment content that you consume through Facebook.com” may not be enjoyable at the moment. On it’s own, the messenger app may have had quite a high tipping point, as well as relatively few initial adopters to cause any significant cascades through the population. Through it’s association with Facebook, it was widely adopted upon it’s introduction. This move also prevented other message-based applications from taking up this role in the population.
If it is able to continue this practice of buying smaller companies, products, and technologies before they surpass their tipping point and begin to approach their z” fraction of usage in the population, the longevity of Facebook will continue. It will also be extremely hard for new products to succeed in the population, as Facebook has adopted many products that satisfy niche needs of it’s users, so the new products will have incredibly high z’ values, with very little change between z’ and z”.