February 21, 2013 · 11:13 am

Is Facebook Viable?

There’s been a lot written since Facebook did their IPO a while back questioning their business model.

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Some analysts say that once the company solves monetization of the mobile traffic all will be well. Others speculate that a better, more marketer-friendly platform is needed. Personally, I like to let the companies themselves identify where the problems may lie. Facebook did exactly that in their S-1 filing a year ago as they prepared to go public:

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.

Fair enough.   After all, without users continuing to add content, what’s there?  Which is why a couple of things I’ve read lately have me wondering if Facebook is a viable business in the long-term.  I know – it’s huge, it takes in a lot of money, and it seems sort of ubiquitous.  At one time, many of those things were said about MySpace or the walled-garden version of AOL, so bear with me.

A decent amount (low double digits at one point) of Facebook’s revenue came from Zynga‘s games.  Is anyone you know still “Villing”?  That goes to the engagement point.  More important than that (since revenue sources are fungible), is the fact that younger people don’t seem to be using the service.  In fact, the real young crowd – those reaching the age when they would normally join Facebook – seem to be focused on other services.  Instagram and Tumblr, by many accounts, are more popular with the young teen set than Facebook is, and that’s been the case for a year.

A Pew study came out the other day that should set off te fire alarms at Facebook HQ.  What it found was:

  • 61% of current Facebook users say that at one time or another in the past they have voluntarily taken a break from using Facebook for a period of several weeks or more.
  • 20% of the online adults who do not currently use Facebook say they once used the site but no longer do so.
  • 8% of online adults who do not currently use Facebook are interested in becoming Facebook users in the future.

They asked the 61% of Facebook users who have taken a break from using the site why they did so, and they mentioned a variety of reasons. The largest group (21%) said that their “Facebook vacation” was a result of being too busy with other demands or not having time to spend on the site. Others pointed toward a general lack of interest in the site itself (10% mentioned this in one way or another), an absence of compelling content (10%), excessive gossip or “drama” from their friends (9%), or concerns that they were spending too much time on the site and needed to take a break (8%).  Many of those reasons are NOT things Facebook can fix since they’re a result of what users are doing and not the platform.  That’s troubling.

So I’ll put it out there:  is Facebook a viable business in the long-term?  If it’s just old folks like me catching up with high school pals we haven’t seen in 40 years or our grandkids, is it going to be long before all we see are supplemental Medicaid insurance ads and sponsored posts for hearing aids?  What do you think?  Have you taken a break from Facebook?  Have your kids?  Is Facebook viable in the long-term?

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February 20, 2013 · 12:51 pm

Solitaire

Is there anyone who hasn’t played solitaire? It seems as if it’s available on every PC and Mac addicts can grab it in Game Center. I have it on my phone as well as on a Nook, and I’ve come to the realization that it’s a pretty good business tool. Let me explain why.

English: A GNOME version of Klondike (solitaire).

(Photo credit: Wikipedia)

There’s the obvious – it gets your brain cranking.  I find, however, that there are some other skills that are required to finish many hands.  The first is patience.  It’s rare that you get through the game the first time you leaf through the deck.  In fact, I’ll often use that first pass as a form of research that helps me figure out the strategy for the rest of the game.   Doing that research before settling on a strategy is another often overlooked business skill.

I’ve found that the key to solving the puzzle (and I’m playing the most common version of the game called “Klondike“) is to get the down (covered) cards turned up as quickly as possible.  In business terms this is removing the unknowns so you can get a clear look at the situation.  I’ll usually keep attacking the biggest stack of covered cards just as in business we should focus on the areas where we know the least.

Since a finished pile – the stacks beginning with the Ace  – is an objective, there is a real temptation to add cards from the board to the Ace stack.  I only do that when I know I still have a place to put a lower card that still remains.  In business we sometimes make that mistake – we try to finish a task without thinking about the rest of the dependencies.

Sometimes you hit a wall.  All the cards are red and you’re only turning up additional red cards or you get to where you must turn over a specific card to keep going.  That’s when the creative thinking kicks in – how can I move something that’s already there to free up a slot?  Keeping the same suits (Hearts, Clubs, etc.) in the same lines can be helpful.  This often means delaying the play of a card into an obvious opening with an eye on something other than top-line data – the card’s number.  Yes, that may be a nuance but using all the information I have – number and suit – helps with the long-term solution, sometimes at short-term expense.  Sounds like a smart business practice, doesn’t it?

You probably have a solitaire game on whatever device you’re reading this.  Spend 5 minutes and try looking at the game in a different way.  After all, that’s how we need to approach business too, right?

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February 19, 2013 · 10:37 am

Hitting The Mark

I’m not a big bourbon drinker but I do enjoy it from time to time.  A friend of mine invited me to be a Maker’s Mark Ambassador a while back, which is a sort of frequent flyer program for the brand.  That’s given me a front row seat to something that’s happened over the last week and is a fantastic example of how marketing works these days.

Maker's Mark

Maker’s Mark (Photo credit: Wikipedia)

Maker’s Mark has been doing an awful lot right with the brand, so much so that there is a shortage of product.  Earlier this month (about 10 days ago as I write this), the distillery emailed us that they were going to be reducing the proof of the liquor a bit.  Watering it down would be an apt description. Another bourbon brand did the same thing a decade ago and not much happened when they did so.  This time,  as one might expect, outrage ensued.  However, as we’ve discussed fairly often here on the screed, that outrage is now easily broadcast across the planet.   The negative response built on Twitter and Facebook and after three days there were thousands of posts which were amplified by others.

Maker’s Mark then did something very smart.  They listened.  They acted.  They sent an email to all of the Ambassadors.  Mine showed up yesterday morning and it said, in part:

Since we announced our decision last week to reduce the alcohol content (ABV) of Maker’s Mark in response to supply constraints, we have heard many concerns and questions from our ambassadors and brand fans. We’re humbled by your overwhelming response and passion for Maker’s Mark. While we thought we were doing what’s right, this is your brand – and you told us in large numbers to change our decision.

You spoke. We listened. And we’re sincerely sorry we let you down.

Perfect.  Take responsibility for your actions (don’t hide behind “mistakes were made”), express regret, and explain what you’re doing to fix it.  The positive reaction was immediate and loud – 16,000 “likes” on their Facebook page and a couple of thousand positive comments within a few hours.   This is how it works in the social age.  Listen, respond, be transparent, rinse, repeat.  This is how the Maker’s hit the mark after a big miss.  They’ll have to find another solution to their supply problem – once which doesn’t involve watering down the product (and the brand!).  It’s a good lesson for any brand.  Do you agree?

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