“A lot of the time that I’ve spent on this over the last few weeks as we’ve been building this out and getting ready to ship has been on privacy, security, integrity reviews, and how do we make sure that a lot of the use cases that that have been problematic around Zoom are not going to be things that are replicated here.”
Mark Zukerberg, 24th of April 2020
Last Friday, Facebook had a new post by Mark Zukerberg. Without clicking play on the video, I immediately got a sense of where this was going…video conferencing. I sped-listened until I got to the section, where Mr Zukerberg dropped the bombshell: 50 people at a time, no time limit and it is always free. Hello world, meet your new video conferencing contender, the Messenger Rooms!
Zoom was the first casualty of this act. The company’s value had risen about 50% with the global quarantine/lockdown as companies and individuals explored innovative ways to stay connected. Mr Zukerberg’s announcement knocked 6% of its value on Friday amidst news that Facebook’s new product is aimed at cornering Zoom’s video conferencing space.
Let’s put things in context.The strength of Facebook is in three words: “last mover advantage”. At a time when the world was struggling to understand how identities can be represented online, Facebook’s simple interface and limited offering of Wall, Photo Album and Newsfeed most reflected how users were comfortable expressing themselves socially online. Beside Facebook, other startups moved in early to secure sections of that online identity space, from Twitter (that focused on capturing rapid news broadcasting) to Linkedin (that was more interested in its users career/professional image).
The company expanded organically and later via acquisition. Some of it’s most newsworthy acquisitions were Instagram, Oculus VR and WhatsApp. The accumulation of growth via organic and acquisition channels positioned the company as a major player, and directly (or indirectly) led to the demise of social networks like MySpace and Hi5. I believe Facebook’s growth intensified competition in the Instant Messaging Services space, which created losers most notably the BlackBerry Messenger.
The company expanded at neck-breaking speed and in 2012, it went public with the largest IPO of a technology stock in history. Going public might have affected the company’s “move fast, and break things” ethos. Facebook at that time was renowned as a movement with a dream to connect the world. But I would argue that in the company’s quest to meet shareholders expectation, a shift for that ideological standpoint began to occur. There were instances of the company copying features from Twitter, Periscope (think Live video), and a even a somewhat publicized lunge at Snapchat, which eventually ended with Facebook copying its unique features (disappearing media and facial filters). Facebook is currently considering a move into the crypto-currency space in with its Libra crypto. This effort has however faced stiff criticism, and even calls by the United States House Committee on Financial Services Committee for Facebook to halt the product’s development citing absence of a “clear regulatory framework”.
In the book Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas, the writer opined:
“Similarly, to question the doing-well-by-doing-good globalists is not to doubt their intentions or results. Rather, it is to say that even when all those things are factored in, something is not quite right in believing they are the ones best positioned to effect meaningful change. To question their supremacy is very simply to doubt the proposition that what is best for the world just so happens to be what the rich and powerful think it is. It is to say you don’t want to confine your imagination of how the world might be to what can be done with their support. It is to say that a world marked more and more by private greed and the private provision of public goods is a world that doesn’t trust the people, in their collective capacity, to imagine another kind of society into being”.
I was excited by the prospects of Messenger Rooms and Facebook’s plan to roll out similar video conferencing services on WhatsApp. My preferred method of communication and even social media (think WhatsApp Status) is on the platform. As a consumer, this option is the most effective. I would rather have all my communications in one app, not the multiple apps littering my phone doing specific tasks.
But bringing it to a societal level (and without an understanding of behind the scenes conversations that might have ensued), I question how good this could be for creative freedom. I have stumbled on contending argument about how Messenger Rooms might be a different offering from Zoom, so much so it is unlikely corporate customers would switch. Corporate customers might not switch from Zoom to Facebook for corporate meeting, but they could for WhatsApp Business, which could be re-positioned as a perfect competitor to Zoom. These next frontier for these competitors might be exploring growth within the small business’s and in the developing economies’s space. In a post covid19 world where pandemics would likely occur regularly, these spaces are yet to attain deep integration with any provider of services that offers additional video conferencing capabilities. Bigger and more established companies will stick to Microsoft Lync, Cisco Webex, and Adobe Connect as they already possess established and deeper integration with these services.
One obvious advantage Facebook has is its network. With a base of around 2.5 billion users, a single feature launched on its platform has a wider potential for success than a startup trying to scale. In the cases of Zoom, Periscope and Snapchat, it could appear that after the startups had completed the heavy lifting of proof of concept testing, interface design and market identification, Facebook’s showed up to reap from the windfall by completely leveraging on its network and and influencing the market’s evolutional trajectory. It’s actions displaced new entrants who in a perfect or regulated competition, should have been protected by mover’s advantage, copyright laws or even unattractive adoption rate. Such antiques might change the patterns of future innovations. Startups would therefore steer either towards developing products that would be features in a large corporations offerings or something completely out of their current view. But in an increasingly connected world where everything intersects, every startup becomes a potential threat. In the event the product of the startup shows up in the radar of the large corporation (before the startup acquires a sustainable customer base), only the law of the jungle would apply: either sell or pivot.
So is this a case of move fast and copy things? Maybe or maybe not. Just a thought: maybe Facebook has a white label agreement with Zoom and intends to launch Zoom’s entire offering as a feature of its video calling product line. Zoom would continue along its current trajectory like deepening its VOIP PABX capability.There is the possibility that Zoom might have accepted its limitation in tackling the growing incidences of zoombombing on their platform. With that in mind, maybe this is a case of knowledge exchange: Facebook provides security technology, Zoom’s in return white-labels it video conferencing offering. Or maybe there are regulations in place to give inventors a head start. Maybe Facebook had been considering this industry for a while but had to delay move as result. Thus potential entrants into said market space must stagger their move in such a way that the reward of prospecting or first move is secured.
Understanding this is important. Because a simple look at the playfield could suggest otherwise. The video below visualizes the leading social media networks from 2003 to 2019. It is interesting to note that the top two players are owned by Facebook.
I feel it is worth examining the shrinking size of major industry players and asking ourselves if it is as a result of the market selecting based on competence, if this is creative destruction at work…..Or we are witnessing a new type of fiefdom.