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| Some Social Networking Apps with Video Conferencing features. |
If
you don’t have a competitive advantage, DON’T COMPETE. That was
one important lesson I got from my years of learning from books and seminars as
a budding entrepreneur. Over the years we’ve seen capitalism at its best and
we’ve quite regrettably also seen it at its predatory worst. BIG tech companies
have ruthlessly guarded their poll positions in their different segments,
wading off competition and suppressing calls for more transparency in the use of
data by consumers, responsibility in the way they conduct their business from
regulators, and more accountability from public officials.
On Friday 24th April,
Mark Zuckerberg announced a new feature for its Messenger platform called ‘Messenger Rooms’, a video conferencing
capability said to accommodate up to 50 persons per room. A development some
industry observers believe is aimed at taking on Zoom, whose cloud based video
conferencing platform has become very popular in the wake of the lockdown
orders across the globe, as people sought innovative ways to stay connected
virtually through video hangouts and meetings.
Facebook itself has seen a surge
in the usage of its applications. Going LIVE on Instagram has become a global
trend. This feature has been widely used by musicians, motivational speakers,
lifestyle coaches and even preachers to engage their audience and this has
proven very successful. We’ve seen Asa hosting live acoustic sessions from her
living room to thrill fans (myself inclusive) after the social distance
restrictions forced her, like many others, to cancel her scheduled concerts in
different cities. We’ve also seen how successful the VERZUS matchup shows
started by Swizz Beatz and Timbaland has been, attracting up to 450+ thousand
viewers from around the world. That is indeed phenomenal as no Stadium anywhere
in the world has the capacity to accommodate that number of people at a time.
We have also been using WhatsApp
a whole lot these days, sending tons of messages, engaging in groups, making
lots of voice calls and catching up with video calls. So why is Facebook keen
on introducing this feature and moving Zoom’s cheese? Mark Zuckerberg has
always been obsessed with the idea of dominance. From the onset, he’s always
pushed to dominate the social media space. Yes, he and his colleagues built a
great platform from their college dorm which knocked out the then highly successful
Myspace off the social media space after a few years. At some points in the
past 12 years, we’ve all contemplated staying away from Facebook or deleting
our Facebook accounts altogether, but there is this thing about helping us stay
in the loop with family, friends and colleagues that almost always draws us
back.
Over the years, Facebook has come
under fire for privacy issues and how it uses our data to its own benefit,
sometimes to our individual or collective detriment. Most recently, after the US
presidential election of 2016, there was talk of foreign interference in the
electioneering process, some of which was tied to how third party agencies like
Cambridge Analytica was harvesting and using information from Facebook users to
help push political propaganda. Those revelations led to a lot of public outcry
which resulted in a congressional hearing, where Zuckerberg was grilled by the
senate for 2 days, with people moving a campaign to #DeleteFacebook. All that
seems not to have shaken Facebook as it has always emerged from all such scandals
unscathed, growing even bigger. This seeming immortality is largely because we
simply do not have a better alternative.
Today with over 2.5 billion
monthly active users, Facebook is worth over half a trillion dollars, making it
the clear leader by several miles in the social media space worldwide. This
market dominance isn’t simply because there hasn’t been a better idea since
Facebook launched. There has indeed been a lot of great ideas and features that
has led to the rise of other platforms on the social media space. From WhatsApp
to Instagram and then Snapchat, we have seen the rise of really cool social
applications that have caught the attention of the different demographic
segments of society. Since we have seen the rise of cool alternatives, why has
Facebook maintained this dominance, you may ask. Over the years of its
existence, Facebook has mastered the art of copying the best features of its
competitors and potential competitors, sometimes buying up, not just the idea,
but the entire teams also. As Chris Hughes, a co-founder of Facebook said, “He can choose to shut down a competitor by
acquiring, blocking or copying it.” As we also saw in the 2010 movie, The
Social Network, Mark has a special gift for taking good ideas and
turning them into something really phenomenal and game changing.
Facebook acquired Instagram in
2012. I really didn’t understand why Instagram accepted, seeing they were
positioned to be the next big thing that would have probably relegated Facebook
over a few years. That possibility has been further reinforced as we have seen
that the acquisition gave Facebook another breath of life. After they integrated
both platforms, we could now post pictures on IG and seamlessly link them to
Facebook. Facebook also acquired WhatsApp in 2014, expanding its amount of real
estate on smartphones. After Facebook’s attempt to buy over Snapchat failed, it
decided to copy Snapchats disappearing photos and videos feature, and
implemented it first on Instagram and eventually across all its platforms. That
move somewhat stifled the growth and success of Snapchat. Even after Snapchat
went public to raise more money, it still hasn’t been able to take on the
giant, Facebook.
These ruthless and monopolistic
tendencies isn’t peculiar to Zuckerberg and Facebook alone, it is widespread
practice among the BIG tech companies. From Facebook, to Amazon, Apple, Aphabet
(Google), and Microsoft, these giant companies are notorious for devouring the
talent, technology and entire businesses of aspiring competitors. These
anticompetitive tendencies have been in the computing and technology circles
for decades now. In the 60s and 70s, International Business Machines (IBM), was
taken advantage of its market dominance at the time, to stifle competitors.
This eventually got them into an antitrust case that spanned almost 2 decades,
taking up productive time and reducing their influence, giving rise to companies
like Microsoft and Apple.
In 1998, Microsoft got entangled
in an antitrust case for taking advantage of its dominance of the PC operating
systems (OS) market with its Windows OS
to force customers to use its browser, the Internet
Explorer as their default browsers, pushing aside competitors like the Netscape Navigator browser. Even though
the suit did not succeed in dismantling Microsoft into smaller companies, like
the IBM case, it made Microsoft more cautious and ensured it exercised restraint
in its future dealings. Like Adam Smith said “Monopolies prevent the competition that spurs innovation and leads to
economic growth.” That case spurred innovation in the browser space, giving
consumers choice and a shot at better browsing experience. Imagine what we
would have done without the likes of Mozilla
Firefox and Google Chrome coming
along with better speed and user experience. It also paved the way for the rise
of companies like Google, Amazon and Facebook.
It’s not like these tech
behemoths have been allowed to continue in their ruthless practices unchecked, we
have seen politicians like Senators Elizabeth Warren, Ted Cruz and Amy Klobuchar
calling for more oversight and possibly breaking up these companies into
smaller entities to ensure free and unfettered competition. These companies
have all gotten themselves into one legal dilemma or the other with the Federal
Trade Commission (FTC) or the European Union Commission Competition Department,
resulting in fines worth billions of dollars. But that’s a paltry sum compared
to what these companies make from their sharp practices. One of such cases was
against Google. The EU regulator slammed google with about $5 billion antitrust
fine for abusing the dominance of its Android mobile OS and unfairly forcing
smartphone makers to preinstall google apps in a bundle on their android
devices. Google in its defence said it has only given consumers options as they
are allowed to easily install alternatives if they don’t want to use the Google
preinstalled options.
So What Are Zoom’s Options?
Some have argued that Zoom should
look to raise more money and wade off the competition from Facebook. The truth
is, raising money alone does not cut it, as we saw with Snapchat. The Snapchat experience
has made investors shy away from investing in companies they perceive to be
competitors of the ruthless Facebook, as they have seen time and again that
Facebook almost always wins. Competitors simply can’t raise the money to take
on Facebook. Asides money, you also need the talent. It’s good to have smart
engineers that can build great technology products (like Google Plus), but it’s
more important to have a team that can build products that the consumers want
and can’t get enough of. Google tried to get into the social media space with
Google+, but it was too little, too late.
Others have suggested that Zoom
can decide to focus on enterprise customers (large corporations and small
businesses alike). While that sounds good, we must also remember that there are
big players like Microsoft with Skype for
Business/ Microsoft Teams and
Cisco with Webex battling in that
segment already. So what exactly can they do?
If
you can’t beat them, JOIN THEM. For startups in the tech space
who are constantly faced with the reality of getting their cheese moved by the
BIG companies who are constantly looking to adopt new features from other
services to improve on their own apps, it is almost impossible to win. The best
bet has always been to sell to rival BIG companies (the enemy of your enemy is
your friend) or form a partnership that stands a fair chance of success. Zoom
should seriously consider toing this route. I’d propose they sell to Alphabet
(Google). Yes, Google, despite being BIG, has largely failed in all its
previous attempts to break into the mainstream social media circles as much as
it has desired. Asides Google+, we
have seen Hangouts and Duo. All those haven’t done as well as
the Facebook platforms. I strongly believe that there’s a great chance of
success for both Alphabet and Zoom if they can come together, leveraging on the
talent and resources of both companies to take on Facebook dollar for dollar.
While it remains uncertain whether
or not we will see a landmark antitrust case against Facebook or any of the
tech behemoths, that will open up competition in the tech space, it is
important that tech start-ups while making efforts to build great products and
features for consumers that are better than what we currently have, stay open
to the idea of collaborations and buyouts as a means of fostering stronger
competition in the tech space, that will eventually result in better and
perhaps safer user experience.



