Why the 800 lb Facebook gorilla will not destroy your tech startup.

By now you have probably all heard that Facebook is coming out with a photo sharing app that industry experts are saying will cause the death of Instagram, PicPlz, Color, and just about every other awesome photo app that you can think of. “How can these companies possibly compete?” they say.  “Why would you not just use the Facebook photo sharing app? It will integrate seamlessly with Facebook!”  This is of course ignoring the fact that those aforementioned companies already integrate seamlessly with Facebook AND have the additional benefit having their own specialized communities full of passionate users.  If you need a good example of this, look no further than Instagram’s community where users and even brands share and vote on their favorite artsy photos.  So why all the death calls? It’s almost as if they are expecting everyone else to just give up once Facebook rolls into town.

There can be only one!

I don’t understand why critics seem obsessed with thinking of Facebook as an end-all to every other form of social media.  These same critics announced that there was no way for Twitter to compete with Facebook statuses. Prior to that, they announced the end of Facebook once Google announced that it was getting into the social game.  Notice a pattern here?  Everyone is obsessed with the 800 lb gorilla, but there is plenty of room in the zoo.

Social media isn’t Highlander… though that would be awesome.

I think a perfect example of this is foursquare.  Once Facebook Places was announced most analysts predicted the end of foursquare.  Why would anyone go to foursquare when they can share their location with all their Facebook friends within Facebook itself?  Well clearly there are plenty of reasons to use foursquare being that the company grew by 3400% last year and today has around 10 million users.  But why are companies like Facebook and Google not stamping out smaller tech companies left and right?  Everyone has a Facebook account, isn’t that enough of a reason to use their products?

They can’t be everywhere!

In the end, larger companies can only stretch their lines so thin.  In order for Facebook to dominate mainstream social media, it has to devote a large amount of it’s resources to innovating its main product.  While Facebook may have teams dedicated to their photo sharing and location based services, small companies will always be able to move and innovate quicker.  While, much of that is due to the fact that small companies do not have to go through the bureaucracy that plagues their larger counterparts, small companies have the added advantage of being experts in their field.  Instagram understands social photography just as foursquare understands what makes location based services fun and rewarding.  Smaller companies are closer to the ground and know what makes their customers tick.  They can react faster to consumer demand and when you are at the cutting edge of social technology these are significant advantages to possess.

Though its not all sunshine and lollipops.

This is not to say smaller tech start-ups will not have a tough time staying ahead.  Larger platforms have enormous user bases to draw from, which can make it easier for them to scale.  However, it is well known that competition breeds innovation.  Facebook can continue releasing side products to make its own social network even more impressive.  Eventually it may even cover the entire social media spectrum, but that does not dictate the end to tech start-ups.  That would be like saying that the only place to shop is Walmart since technically everything you need is under that one roof.  People love innovation and like being part of something special.  Facebook can (and should) continue its attempt to blanket the social landscape.  However, people have to keep in mind how vast that landscape truly is. Innovative companies will always find ways to continue forging ahead despite the 800 lb gorilla glaring at them in the corner.

So what do you think? Will there always be room for smaller companies to innovate or will Facebook stifle the competition before they can even start?

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3 Responses to “Why the 800 lb Facebook gorilla will not destroy your tech startup.”

  1. Blair
    July 8, 2011 at 12:32 pm #

    Interesting insight here. I agree that there is still room for start-ups. I mean, these bigger companies (i.e FB, Google) actually buy innovative start-ups to move ahead. Facebook can’t be everywhere. They need these startups who are at the pulse of the demand to develop new ideas. Ultimately the trend has been that if the big dogs see you as a potential way for them to grab more market share …get ready to buy that new vacation home in Aspen. They’ll want to buy you.

  2. Chris Ferdinandi
    July 10, 2011 at 8:03 pm #

    Hi Patrick,

    A few random thoughts…

    1. The funny thing about this for me is that I find it pretty easy to just post photos to Facebook already using the FB app (or Tweetdeck). I’m not sure I get the need for a separate app.

    2. I 100% agree about NOT being everything to everyone. Facebook seems determined to keep going down that path, and the more they do, the less I like using their service.

    Cheers!
    Chris

    • Pat Kent
      July 11, 2011 at 10:35 am #

      Great comment! I think FB wants to have a separate app so that it sits right on a persons icon tray. If you only have a few seconds to take a picture before the moment is gone, you may not want to add another step by first having to open your FB app and then going to the photo section. It also could just be because people do not associate their FB app with photo taking and instead use it just to check status, etc. Having a separate app will allow them to compete directly with the likes of Instagram.

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