Facebook wants to grow up with the whales

whale

Facebook is distrusted by many. It is a company with more power than the Chinese government and we do not know what it really wants.

But I do not distrust Facebook. Facebook motivation is actually very simple to me. Facebook does the same thing every company must do to grow up. It is not different than Las Vegas casinos. It wants to attract the whales, the big spenders, with a high quality customized service.

Facebook has barely scratched the surface of its potential and is far from a marketing tool it could be. The main component of its success will be satisfying the biggest global brands. Facebook does not care to sell 50,000 USD advertising to a small business, it cares to increase Samsung Facebook Ads spend from few hundred million to a few billion. To make extra billions with Samsung, Facebook only needs to make a feature that Samsung needs. To make extra billions with medium businesses, Facebook needs to work million times more. And there are many Samsungs out there.

Do not be fooled by the Facebook pretense that it is there for the small businesses. Facebook hides what we feel intuitively – that it wants to make the biggest global brands happy, whoever they are and whatever their goals are. Facebook is a service for the few, not many, and to understand it we must understand those few.

Facebook never actually did anything out of the ordinary. It is questionable if companies can actually grow by satisfying the needs of the many small customers. Making small customers happy is both an efficiency and a cultural challenge. Even though Google, Amazon, and Facebook forced businesses to switch from one-on-one sales to form filling, they are still not that efficient nor culturally dominant.

The only real problem that showed up in the last decade is that digitalization and globalization allow companies to grow much more than ever before. Today a single company can reach most of the world easily. Digitalization and globalization therefore only amplify all the benefits and problems which always existed.

I am using Facebook to make a more general point: to understand how a company grows do not look at their content, but understand their motivations. All you need to do is make a simple spreadsheet which shows you: do they make money with many small clients who call daily or with the biggest clients who pay more and need less support?

Without a doubt one of the main growth factors is focusing on the whales who are responsible for the majority of financial and political gains. The wales require specific products and Value Content. Products need to be highly customized and Value Content needs to be exclusive and specific. Companies that want to grow up without the whales will never pass puberty.

Written by: Nikola Tosic
Publishing date: 3 Aug 2018