John SturinoComment

Facebook's AOL moment

John SturinoComment
Facebook's AOL moment

Age isn't kind to any of us. Especially companies. While the passage of time changes everything, one of the things that is eternal is that kids think that their parents are uncool.  

There's a reason for that. Their parents are uncool. Their parents are worried about things that might happen, even though those things, by and large, never happened to them. Parents are about avoiding bad experiences. Kids are about experiencing. 

If your parents are uncool, then you're not gonna want to do the things the way they do them. Technology gives us a unique view into this phenomenon because the ability to bring competing (read: better) versions to market is much faster/easier. Even when kids wanted different cars, it takes years to bring them to market. Kids weren't designing for kids. Adults were designing for their idea of kids. 

But all of that has broken down in the last 15 years. We now have a platform in which products can be designed, developed and distributed to a mass audience with relatively low cost.  So, now we have a stream of innovations happening that are widely accessible. When you are discovering something, you go for the best version. Once you develop habits, you stop discovering and start optimizing. 

Source: Community102 and Hunch.com (2011 data). By the way, I know that this is flawed in several respects, not the least of which is that these are not mutually exclusive. 

Source: Community102 and Hunch.com (2011 data). By the way, I know that this is flawed in several respects, not the least of which is that these are not mutually exclusive. 

For a company to get large, it needs to become a habit in the lives of consumers. But that can become a trap. Changes are antithetical to habit, and so you slow or stop innovation to avoid major disruption to your business. Then your brand becomes associated not only with your parents but with an inferior product. This happened to AOL. This happened to Yahoo! This happened to a host of companies that didn't have the core audience to sustain them and have faded from our consciousness. (The fact that AOL is still alive and kicking is a testament to the power of habit.) 

Has Google avoided this trap? Too soon to tell. In reality, they are behaving in the other companies have - do you really think that the search results are the best way to display search results or that the paid search ad format is the best for advertisers? No, but they've priced most competitors out of the market. But if the paradigm for Search changes quickly, will they be able to subvert their own revenue stream?

So, what about Facebook? It's starting to become the new punching bag. The pew report resulted in headlines about how kids are moving to Twitter (I'll be putting a separate post out about what's interesting in the pew report - it's not that quote about Facebook vs Twitter.) Today, I read this post called "Facebook is for old people". Well-written, but premature in his condemnation of Facebook.  

That's really up to Facebook. They built a great place for the kids. Those kids have grown up. Will they build a new one?