The Facebook Inflection Point Materializes

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The Facebook Inflection Point Materializes

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RITA MCGRATH

When I first proposed that Facebook could be facing a massive negative inflection point in my book Seeing Around Corners, my editor was nonplussed. It was mid-2018, and at that time it looked as though the company could do no wrong. It had by then succeeded in wiping out much of the traditional publishing business model, had successfully pivoted to mobile, gobbled up (together with Google) pretty much all digital advertising spending, acquired a stunning user base of over 2 billion people, made pivotal acquisitions of potential competitors (WhatsApp and Instagram) and was enjoying substantial user growth.

“You really think Facebook could get into trouble?” he asked me. Why, yes, I replied – the weak signals were already there.

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Institutions and ecosystems lag reality As I wrote in the book, social media “had a difficult 2018. It included the spread of ‘fake news’, false accounts, election and voter manipulation, the hijacking of online accounts, selling individuals’ most personal information to third parties, racial profiling, allowing the impersonation of celebrities, and targeting vulnerable populations.” And we were all to some extent scratching our heads at how we got to this juncture.

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Gradually, then suddenly A mistake many people make is thinking that just because a system has not reacted yet is that it never will. In 1879, for instance, Peter Collier, the Chief Chemist of the United States Department of Agriculture, investigated adulterated food products.

The problem, he and his colleagues concluded, was more of honesty than production. As Collier said at the time “Where life and health are at stake no specious arguments should prevent the speedy punishment of those unscrupulous men who are willing, for the sake of gain, to endanger the health of unsuspecting purchasers.”

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THE HARMS FROM SPENDING TIME WITH FACEBOOK PRODUCTS

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It isn’t that the company does not know that using its products can be harmful. Not at all – Facebook conducted extensive research on the effects of its products (particularly Instagram) on users, specifically on teenage girls, finding pretty horrific negative mental health consequences. But, as a major expose in the Wall Street Journal reports, “Some Instagram researchers said it was challenging to get other colleagues to hear the gravity of their findings. Plus, “We’re standing directly between people and their bonuses,” one former researcher said.” The article clearly shows the company prioritizing its own financial well-being over the mental health of its users, much in the same way the snake oil purveyors of old did.

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Unease with surveillance capitalism Dangerous mental health effects aside, I pointed out in my book that many observers are expressing unease with what Shoshana Zuboff has called “surveillance capitalism.” She defines it thus: I define surveillance capitalism as the unilateral claiming of private human experience as free raw material for translation into behavioral data. These data are then computed and packaged as prediction products and sold into behavioral futures markets — business customers with a commercial interest in knowing what we will do now, soon, and later… Right from the start at Google it was understood that users were unlikely to agree to this unilateral claiming of their experience and its translation into behavioral data. It was understood that these methods had to be undetectable. So from the start the logic reflected the social relations of the one-way mirror.

They were able to see and to take — and to do this in a way that we could not contest because we had no way to know what was happening.

FACEBOOK’S NO GOOD, VERY BAD, HORRIBLE DAY

RITA MCGRATH

Which brings us to February 2 of 2022, and an earnings call of historic proportions. For the first time, Facebook’s total number of users has declined. It’s struggled to retain young users. Its expensive Metaverse bets look highly uncertain, with no clarity around the route to eventual profitability. Regulators are blocking its efforts to create financial products. TikTok is drawing eyeballs away from Meta’s core platforms and was the most downloaded app in the whole world in 2021.

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BEYOND FACEBOOK – A LARGER INFLECTION POINT? R “Ray” Wang, in his wonderful book Everybody Wants to Rule the World offers a perspective on where all the digital giants, Facebook included, might be heading. See a replay of our Friday Fireside Chat here. He suggests that the decline of digital giants is likely to begin with an overwhelming backlash against them. It won’t be huge at first, of course, but “fissures” such as the choices made by Apple iPhone users, hearings in congress, and any number of calls to limit the power and reach of the big players are here, today. Eventually, immense pressure from the public will result in politicians responding with laws reining in these companies.

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The latest at Valize Meanwhile, we’ve been busy at Valize developing the next version of our SparcHub software, which provides visibility into the management of your innovation and transformation processes. We’re also offering on-line learning modules which help you quickly get up to speed on the processes of discovery driven growth, strategy and customer insight. Individuals can purchase them by clicking here. For enterprise plans contact growth@valize.com and we’ll get you some options.

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