Betting On Facebook Is A Poor Strategy


I caught the article on Zynga’s IPO (Facebook: Zynga’s Number 1 Frenemy) and it further exposes the reality distortion between a platform provider and a value producer. There is a temporary symbiosis between the gaming provider Zynga which leverages Facebook’s platform. Zynga’s valuation and revenue is derived from access to a marketplace Facebook created.

Facebook’s honeymoon period allows it to avoid the pressures and scrutiny of investors seeking profitability in its fundamentals. As soon as that happens, the game theory which will take place from the need for profitability to justify its valuation will create a hostile situation between the platform provider and its developers.

What does this mean to you? In my previous article on platforms and positioning, the encouragement is to ensure you manage the items for promotion in a cohesive way. There are a lot of platforms out there, many of which are on social media. It is highly convenient to develop a profile, content and promotion on one of the many social media sites. The problem is that it is not your system. If the rules change (and they do), then where does this leave you?

Building your own asset on your own systems is less convenient, but you have something which you can control as the world around you changes. I have seen some dangerous business moves out there in the hype of Facebook or other social media. Abandoning building systems that you control and presents your brand to the world in lieu of a Facebook page or another platform leaves you vulnerable.

The rules are continually changing. It may seem enticing to be on someone’s list as a provider of services or build ten thousand fans. However, you may be building someone else’s asset and will have to start over one day.

How about working on the substance of your value proposition and ensure you are social-proof. Your own tribe of people that care about what you offer coming to a place which you own may be less glamorous, but it gets to the real numbers of revenue, loyalty and value. Build your own assets.

What are your thoughts?

Published by Don Dalrymple

I partner with founders and entrepreneurs in startup businesses. I write and consult on strategy, systems, team building and growing revenue.

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