Gone So Soon

Recently I gave an interview about one of my favorite career projects, Carmen Sandiego. It was being researched by an archivist! I hadn’t been asked in years about the mysterious thief in the red trench coat and fedora. As big as she was in my life and on the national stage, save for a new motion picture in development, few people remember dear Carmen as much more than nostalgia. For that matter, who remembers the massive multimedia magic of CD-ROM computer games with all of 700mb of storage?

There she is. There she isn’t. Nothing lasts forever. Very little lasts long at all. That is the stuff of our culture. That is the stuff of our careers. Hold on too tightly to anything and you find yourself grasping ancient pixel dust.

Creative destruction is increasingly real and accelerating faster than ever. A new company comes, an old company goes. Brands emerge and evaporate before our eyes. In the start-up world, the notion of permanence is almost impossible to envision. Look forward with alacrity or don’t bother looking up from abandonment.

Contemporary taste is fickle. Technology trends are more fickle. Customer loyalty is most fickle.

Earlier this year I watched the National Geographic Channel limited series Valley of the Boom. I couldn’t tell if it was a dark walk down memory lane or an idealist’s time capsule of lost promise. Netscape—the big bang of the internet age—went from conception to extinction in all of about four years. The Globe—the biggest IPO of its time—was practically eviscerated at birth. Pixelon—a scam extraordinaire foiled by its own iBash—today doesn’t even make a decent trivia question on a game show.

Those were just three emblematic stories, real-world cautionary tales of boom and bust. You might remember the history of other exploded rockets, from Pets.com to Webvan. Maybe you don’t want to remember. Of the big consumer-facing internet companies that emerged from dotcom v1.0, it seems Amazon, Priceline, and eBay are the only lauded brands continuing to operate at large scale.

Google emerged in the second wave of the internet, capitalizing on all the failed portals’ inability to understand the essential nature of search, most notably the excruciating death spiral of Yahoo. Can you think of another important round-one bubble survivor? Which will be the next to vaporize? Jeff Bezos has already said Amazon won’t last forever. He knows inescapably it will be replaced by something fast moving and better.

Today there are reportedly 300 or so companies affectionately refered to as “unicorns.” These are start-ups largely in the technology sector with a valuation of more than one billion dollars regardless of revenue or earnings to justify the bragging rights. You are undoubtedly familiar with many of their quirky names: Uber, Lyft, WeWork, Airbnb, DoorDash, Slack, Pinterest, Instacart… these are widely regarded as some of the good ones.

How many of these brands will today’s schoolchildren recognize when they become adult consumers? You know they won’t all still be around. History assures us of that—unless of course this time is different (and when someone tells you this time is different, keep your hands on your wallet).

Early last year I wrote an article titled Is Facebook the Next AOL? At the time I wasn’t sure. Later in the year I wrote about it again. By then Mark Zuckerberg had testified before Congress and I had become sure. Facebook is going to fall hard. The level of cynicism over there is no different from the hubris of America Online. Today cash is pouring in and it has no serious competitors, so hey, it must be invincible, a forever brand!

Facebook only has one major problem corroding its innards: customers don’t trust the people running it. No product or service can last long that way. It’s hard to be a forever brand when your promise is held in contempt. You can pay lip service to addressing the failings in your business model, but if the core concept is fundamentally conflicted, you can’t beat the reaper.

Even General Electric has fallen from grace. GE, the one original Dow Jones industrial average company dating back a century, is no longer in the Dow 30 index. How can that be? Yes, it is still an enormous enterprise, too big to fail, one might say. Does that mean the brand matters a fraction as much as it did a decade or two ago?

Nothing lasts. Creative destruction is consistent that way.

Google will last a long time because it has built a mighty moat, but it won’t last forever.

Apple? Depends on how it deploys its seismic war chest of cash.

Netflix? Hard to imagine, but it seems like a transitional platform. It could be bumped off.

Microsoft is evolving again, truly embracing the cloud, so maybe it will be the new GE. It has lots of runway to continue reinventing itself, but like GE, no runway is infinite.

What’s the point? Think about your own Carmen Sandiego, that gig you love that will be gone someday, and plan your career accordingly. Are you ready to lose the inevitable and discover what comes next? The ship you are on may appear to be built out of steel, but steel eventually rusts. Are you looking beyond the bow?

Creative destruction wins every single time, but don’t despair. Where old jobs become obsolete with antiquated value propositions, new jobs emerge requiring fresh ways of looking at the world. I doubt that will change. While so many companies have come and gone in the last quarter century, the planet has lifted two billion people out of abject poverty. There are new pockets of middle-class workers emerging all over the world in an increasingly shared global economy. That seems like a decent enough tradeoff for a few trampled unicorns.

Maybe someone will even capture Carmen Sandiego. You never know what can happen when you let go of everything you don’t need anymore.

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Is Facebook the Next AOL?

 

I used to like AOL. Back in the day we called it by its full name, America Online. Prior to the broad penetration of the Internet, it was how we connected with each other. It was the company we paid on a subscription basis for both access to digital connectivity and content. For the ownership of AOL, it was a very, very good business, so explosive that it frightened the old guard in media and was merged into an even bigger entity, AOL Time Warner. If you were born after that wildly failed merger, it is difficult to convey just how powerful and influential AOL had become. Truth be told, I still have an active AOL account and get teased about that by friends. I wound it so tightly into my life it is still hard to completely unwind despite its deterioration.

I also like Facebook. As an individual enamored with words, I find it an irresistible way to communicate with a circle of acquaintances on everything from politics and social causes to MLB, The Beatles, wine, and business opportunities. As an author of fiction, I find it an essential tool to communicate with readers, let them know a new book is coming, tie that book into news of the day, and connect all of that with the monthly postings on my blog. Another confession: I was one of the earliest adopters of Facebook over the age of 40, invited for business reasons to create an account back when it required a .edu email to become a member. Companies I’ve led have been active buyers of advertising on Facebook at every stage of its evolution. Yet even with all that passion, I have been an ardent critic of Facebook. It reminds me of AOL. I hope it won’t suffer the same fate.

Is it alarmist to think that Facebook could collapse at the level of AOL simply because of its latest data breaches? Yes, I think that would be overstating the calamity of its current situation, and if Facebook does implode, it will likely be a slow and painful process much like AOL with a long-tail legacy business lingering into the digital future. I am not predicting that will happen. I am suggesting that it could if Facebook does not radically rethink its business in real time and take immediate action to course correct.

I am not specifically reacting to the gross abuse of Facebook’s members by Cambridge Analytica, but if ever there was a wake-up call to Mark Zuckerberg this bell is tolling awfully loudly. The sound of that alarm is the crying out of customers reminding the leadership of Facebook that they are not users as the descriptor goes, but human beings who have chosen to enter into a relationship with a brand. As I have mentioned here many times before, a brand is not a logo, a brand is a promise. When that promise is violated, all bets are off for the future of the brand. I believe AOL broke its promises way too many times and then sadly faded away. Facebook is now breaking many of its promises, real or presumed, and if the leadership there doesn’t do something material about it soon, they are rolling the dice against fate.

Here are the three most obvious areas of overlap I see between Facebook and AOL, and how addressing them now aggressively might change the course of history for the social network that changed our lives in the last generation much as the online access ramp that carpet-bombed the nation changed it in the previous generation.

DUMP THE MVP

I am at odds with many of my colleagues on the topic of “minimum viable product,” but I have always vastly disliked the MVP acronym and concept. I know how much Silicon Valley treasures the notion of The Lean Startup, and I suppose if a fast path to cash generation is primarily a company’s goal, a crappy first-generation product bounced off a wave of early adopters who will offer critique could make business sense. Because I favor brand development over fast monetization, I have never bought into the whole idea of “moving fast and breaking things.”

How did Facebook get into this fix with inexplicable amounts of customer data being exploited? Top management didn’t take the time to fully think through the implications of their product decisions. Likewise, AOL was legendary for releasing updates that crashed our computers and often made it impossible to even log onto the system. MVP is a shortcut that disrespects customers. Build excellent products tested thoroughly before deployment, and customer trust will compound rather than be wagered.

LEAVE SOME MONEY ON THE TABLE

AOL came to love hammering our screens with advertisements. We got them at sign-on, with our email, with instant messaging, with our stock listings, with our sports scores. The ad insertions were ceaseless and endless. When it was the onramp to connectivity we were already paying a monthly fee for the privilege of being an advertising target, but this additional banquet of media cash was a renewable feast of dots and spots. With so many eyeballs and so little competition they also assaulted advertisers with ever-increasing campaign rates.

Today on Facebook it isn’t quite that aggressive, but it’s getting there. What’s worse, the advertising depends on crawling through our personal profiles to target ads with astonishing performance response. The media business is certainly a game of haves and have-nots, but company leaders have to keep their eyes on the prize. Does the company think its demise is inevitable and thus seek to exploit its visitors with endless badgering? Or can it modulate the experience to show us a reasonable number of ads that are relevant but not beyond our comfort levels of intrusion?

SUSTAIN AN AUTHENTIC MISSION

Here we return to the luster or disposability of a brand, to the ability to make a promise and deliver on it consistently in the face of day-to-day business realities and financial opportunism. AOL’s stated mission was “to build a global medium as central to people’s lives as the telephone or television… and even more valuable.” AOL actually didn’t do that—the internet itself obviated its driving purpose—but rather than build on the goodwill of its access brand and attempt to enhance the customer experience through creativity, the company sought to keep customers in a “walled garden” and intervene in easy access to the open internet. Customers soon enough revolted and left in droves.

Facebook’s initial mission was “to make the world more open and connected.” That mission more recently has been revised “to give people the power to build community and bring the world closer together.” Those are both lofty ideals. The question is whether Zuckerberg had the maturity to comprehend the implications of what path his company’s technology cut through the landscape as a result. Of course it seems like a great idea to be closer to our friends and meet new people along the way, but if that compromises our privacy and personal security, is it worth it? Who gets to decide that? I can’t navigate Facebook’s privacy tree and I work in the medium. If its brand offers us a lasting promise of sharing and collaboration, does it also offer any guarantees of protection? If not, then we arrive at the cynical conclusion: “If we aren’t paying for the product, we are the product.” If a company wants to build a brand for the long-term, that’s simply not a sustainable value proposition.

I would guess if AOL founder Steve Case had it to do over again things would have been different at his once pioneering enterprise. It was a younger audience that first championed AOL, but his demographics didn’t stay young as the massive brand quickly lost its cool factor. Facebook is already seeing a similar demographic shift as its relevance with younger customers is waning, ceding that excitement to newer brands. I wonder if Zuckerberg will someday have the same regrets as Case or if he will find a way to shift gears with thundering resonance and reinvent his company to achieve a greater destiny.

The answer isn’t in testifying before Congress, any more than it is about inescapable government regulation. The answer is in balancing business success against the real human needs of customers, about making a promise and keeping it, about building a brand that stands for something more than the dollars it attracts. Innovation is both challenging and valuable. Trust is much harder and worth so much more.