I recently cranked through reading The Accidental Billionaires, the unauthorized story of the early days of Facebook which details how Mark Zuckerberg started it in his dorm room, and how he ran over some “wanna be” Web entrepreneurs along the way. The book was written based on interviews, second hand accounts, email records and just piecing stories together. All in all, it was a pretty interesting book and it did a good job of connecting all the dots to weave the story of FB’s evolution.
So now, I’m completely fascinated with the history and evolution of Facebook and its growth trajectory. Its so interesting to research how it got to where it is today, and to learn more about the big players in its story – Sean Parker, Eduardo Saverin, the Winklevoss twins, and others. Obviously, the big challenge that FB has now is how can transition itself to a viable and profitable business and how it can sustain its relevance after the initial “newness” of the service wears down. What will be everyone’s “boredom” factor before people start to post fewer updates, and look for new platforms and options to connect with people.
From a business perspective, FB has been challenged to figure out its true business model so far. Recently, their COO Sheryl Sandberg sat down with John Battelle at the Web 2.0 summit and declared that Facebook was cash-flow positive and they will address an IPO sometime later on. But cash flow positive does not necessarily mean profitable…yet. I do think there is a ton of upside if FB is able to leverage the data that it has from all of its users and really turn that into marketing opportunities. The challenge will be to do that in a way that does not impinge on the vision of the site and the clean user experience that has made it so popular. I think they have the opportunity to turn themselves into a marketing and promotional machine similar to Google and other organizations that are effective in capturing user data and information. I have a feeling that FB may turn into a Harvard Business Review case study, either for its business success or failure, and wouldn’t that be the ultimate irony.