FAILURE STUDIES: EPISODE 7

FAILURE STUDIES: EPISODE 7

The entire story started in eUniverse, an American Internet marketing company headquartered in Los Angeles, California. Some of the employees of the company, who were active users of the then-popular Friendster, decided to replicate the core features of it and come up with something of their own. And thus in 2003, Myspace came to reality. The social media platform exploded in popularity after launching and literally helped to define a generation.

 

As one of the most visited websites on the internet, Rupert Murdoch’s NewsCorp later bought Myspace for $580m in 2005. MySpace has heavily influenced today’s social networking habits, some of its features were incredibly innovative. Here are a few things that were really popular among Myspace users:

Profile Customization

You could have some real fun with your Myspace profile. As well as simply changing the template, you could get stuck in and mess around with the HTML. Many people learned basic HTML skills adapting their profiles and changing font size, image layout, and much more became the norm. Not only that, you could add songs to your profile. You could really sit down and pick a track that channeled your inner emotional self for anybody landing on your page.

It made blogging easy

Every Myspace account had its own blog. Here you could share your deep thoughts and feelings, fill out a random survey that told your friends about how cool you were, or even stick a YouTube video in there. Your friends could then comment on it. MySpace also featured the iconic ‘bulletin board’ too where users could share inane stories and updates, paving way for the creation of the Facebook Timeline.

It brought the selfie to the masses

One of Myspace’s most ridiculous fads was the selfies that were taken from bizarre angles or in front of a mirror. Whilst today we mock some of the hilarious poses that people used to do, these images were the inspiration for the modern-day selfie.

It was all about the music

Looking past some of the cringe-worthy behavior that was rife all over Myspace, it had an incredibly powerful music accessibility feature. In the early to mid-2000s, Myspace was THE place to find new music and immerse into a buzzing community. It allowed you to hear songs from your favorite bands, receive their updates, and connect with them – all within social media. Myspace provided a platform for artists to upload and promote their music themselves and launched the career of many of today’s most popular brands including Arctic Monkeys, Fall Out Boy and Bring Me The Horizon.

MySpace was targeted at the same audience, had the robust capability, and ways to market long before Facebook.  It generated enormous interest, received a lot of early press, created huge valuation when investors jumped in and were undoubtedly not only an early internet success – but a seminal website for the movement we now call social media.  On top of that, MySpace was purchased by News Corporation, a powerhouse media company, and was given professional managers to help guide its future as well as all the resources it ever wanted to support its growth.  By almost all ways we look at modern start-ups, MySpace was the early winner and should have gone on to great glory.

 

So, despite all these, in April 2008, MySpace was overtaken by Facebook in terms of the number of unique worldwide visitors, and in May 2009, in the number of unique U.S. visitors. Why did Facebook become the largest and most dominant player in the social networking market? Why exactly did Myspace fall into the endless pit of oblivion?

The blessings of perfect timing and market readiness

In business, timing is everything. There is no early-mover advantage, just as there is no late-mover advantage. In Facebook’s case, the market was ready with rising broadband availability and Internet participation by an increasingly diverse audience (meaning entire families could participate in a social network). Early social networks already conditioned consumers to the idea (and possible benefits) of social networking. They also provided Facebook with a long list of technical and business mistakes to avoid. So, Facebook gained the upper hand by learning from MySpace’s past mistakes and by not making them.

Having controlled growth

One of the major reasons behind Facebook’s meteoric growth is that it was able to attain a controlled, steady growth. Avoiding the strong temptation, especially when a social network is concerned, to grow very rapidly, Facebook started as a Harvard-only network, then expanded gradually, in stages, to other universities, high-schools, and corporate users, requiring a verified email address. This—and its clean and non-customizable design—allowed it to establish a reputation as a “safe space,” in contrast to MySpace. MySpace grew like wildfire and before long, lost tracks of the territories in which they were entering.

Robust infrastructure

Facebook’s initial success and reputation helped attract smart and experienced engineers that invented new tools and technologies allowing Facebook to build its proprietary technology platform, optimized to handle the demanding requirements of serving (eventually) hundreds of millions of users simultaneously. So, while MySpace basked on the glory of being the “largest social media platform”, Facebook decided to keep its head low and diligently work on its infrastructure and strengthening its technological capabilities.

Letting the market set the direction

MySpace and Facebook were polar opposites in terms of their leadership teams. One was being led by a Harvard dropout, while the other was steered by veteran managers. News Corp tried to guide MySpace – to add planning, and to use “professional management” to determine the business’s future. They focused on the ROI, took calculative steps and focused on introducing things that have been ‘tried and tested’. On the other hand, Mark Zuckerberg and his team took a completely different approach with Facebook. They were willing to allow Facebook to go wherever the market wanted it. Farmville and other social games – why not?  Different ways to find potential friends – go for it.  The founders of Facebook kept pushing the technology to do anything users wanted. If you have an idea for networking on something, Facebook pushed its tech folks to make it happen.  And they kept listening.  And looking within the comments for what would be the next application – the next promotion – the next revision that would lead to more uses, more users and more growth. This customer-centric strategy is what has given Facebook the upper hand.

Sean Parker, the founder of Napster, is deemed to be a veteran in this field. In an interview with Jimmy Fallon at the NExTWORK Conference in New York, he has correctly pointed out the reason why Facebook has won the race. “The failure to execute product development,” Parker replies. “They weren’t successful in treating and evolving the product enough, it was basically this junk heap of bad design that persisted for many years. There was a period of time where if they had just copied Facebook rapidly, they would have been Facebook. They were giant, the network effects, the scale effects were enormous.” Parker goes on to credit the ingenious move of targeting college kids for Facebook’s eventually market dominance, “Facebook entered the market through college and the reason we went in through college was that college kids were generally not Myspace users. College kids were generally not Friendster users”

Things have not been smooth for Facebook as well. From fake news to data privacy, Facebook has had its fair share of legal battles and allegations over the last few years. Maybe, in some unknown part of the world, another enthusiastic youngster is now working on the next social media platform; aspiring to topple Facebook one day. Will something like this ever occur; the same way how Facebook has taken over MySpace? We can only wait and watch.

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