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Why is Google+ Google's Biggest Strategic Blunder?

  12/28/12 23:42, by jdubray, Categories: Mobile, android, Business Strategy

 

Why not start the new year by giving you a glimpse at the future of Social Networks and show why Google is best positioned to own that future.  

Social networks have been mostly driven by Zuckerberg's "Social Utility" vision and that is certainly the core of Google's vision. Even Dalton Caldwell who made a big splash last year, is perpetuating the fallacy that there is such a thing as a "social utility" and he even got kickstarted for it. 

Why will the vision of a Social Utility disappear?

Just how limited is that vision? Take a look at the resource model of "the social utility" that Dalton is building:

  • users
  • posts
  • messages
  • streams
  • interactions (as in like, repost, ...)

The problem with that kind of vision is that:

a) it's too easy to build: even I can build a social back-end like that with, say, Canappi and MongoLab (MongoDB) in minutes, entirely customized for my very own social network app. Why would I need a "utility" back-end? (more on that later).

b) it has no viable business model: who could believe a single second that a hundred billion (or more) market cap hides behind people bragging about what they have done, seen, read... This is so clear today after the Instagram debacle. So much so that any rumor about  Facebook's nth attempt to find a sustainable business model propagates like wildfire (selling access to a mailbox that nobody ever uses, $100 per email. Really?) Would these rumors exist if Facebook and the Social Utility had a robust business model?

c) this is not what people want: allow me to make a prediction, by the end of 2013, generalist social networks focused on reporting past events with posts and streams will be under a massive attack carried out by dozens, if not hundreds, of topical social networks focused on the future, i.e. focused on making activities happen with friends (who really cares about followers?). The Social Utility will lose that war. 

The amazing fact here is that Google owns the key to destroy Facebook, instantly, not by competing with the incumbent head on, as yet another social utility like Google+ since that space has already matured enough to follow a sustainable innovation path. Google must compete by orchestrating a "multidimensional" disruption and focus on empowering as many topical social networks that chip away the time people spend on Facebook, one post at a time.

Let me explain.

Most people have 5 to 10 major interests in their lives. Whether it is food, gym, sports, kids, music, gaming, shopping, photography, movies, professional interests, medical, reading, homework ... People are also far more interested in making things happen and organizing their future than bragging about what just happened. Only people with big egos think other people want to hear about every detail of their glamorous life. Could a generalist social network like Facebook or Google+ be in the position to organize everyone's life around any interest, in any region of the globe? I don't think so either.

I already stopped using Facebook and Google+ and found much more value in Linked In for anything professional and I am sure I am not the only one, nor the last one. The value of my social networks is not about their size but  about the activities I can do with them. That is disruptive, and there is no amount of instagrams or some magical Graph API that can resist that disruption.

I can't wait until Starbucks adds the "I am having a coffee here, meet me if you'd like" social network. Does anyone think that Facebook or Google+ would be better positioned than startbucks to integrate a "social signal" to the point of purchase (POP)? Does anyone think it would makes sense to do it in an app other than the Starbucks one? Here is how it would work:

 

 

Automated social signals, integrated with the tasks consumers are doing are going to be a big part of the future of Social Networks. Why? there is a huge business model for that.

Does your life look like electricity? Are you aspiring to become a faucet? Yet, that's the vision behind Facebook's timeline and App.net's Streams. What would you rather use? a big bragging machine or a way to make your life more enjoyable by always having something fun to do? Yes, that's what I thought: Social Networking is not just a question of "circles" and back-ends or APIs. Should the social space look like a utility or should it reflect the diversity of everyone's life? Aren't we forgeting a bit the "Social" part and focusing too much on the technology? 

Why does Google own the key to that world?

One little thing would make the world of topical, activity focused, social networks thrive overnight, a world that would dry up Facebook's streams, with people rushing towards the cool things to want to do with their friends. 

Our industry is focusing on the wrong problem. The Web has trained the pundits to always seek scale and commoditization (with a "Utility" mentality), when in reality mobility is totally and forever changing the game, mobility moves the value consumers seek towards the integration with the tasks they want or need to accomplish (in a perfect Innovator's Solution case). Clay Christensen calls that the "circumstances". Never before computing could reach that level of integration, and all that Facebook, Google or guys like Dalton can think about is pictures, posts and messages. 

That world of activity focused social networks can achieve scale too, but in a very different way: with protocols rather than a utility platform. Yes, you heard me correctly, "as-a-service" is about to take a whole new meaning. 

Here is how Google can change the future of Social Networks and pretty much everyone lives, not to mention its own future. With Android (and gmail), Google owns your contact list. There is no data more valuable than your contact list and only a very few trusted companies like Google can mine that value. The reason why people like Dalton thinks App.net and the Social Utility model has value over a custom-built back end is precisely because he thinks he can own the "users" once he achieves scale, one social app at a time. But he has a huge bootstrap problem, he needs tons of social apps to get a decent amount of users, they will only come if users can join and relationships can be formed easily. A contact app does not have that problem, it's already full of users, the right kind of users -friends. To enable users to join easily a variety of social networks he would need to create an independent app or share that user lists with all social networks. Social networks might be uneasy to share their users directly with others. How would a user find its friends in that kind of list? What would be the incentive to use an independent app operated by App.net? In addition, the social utility architecture creates a big unwanted coupling between the list of friends and the data model that supports the activities that the social network focuses on. That unwanted coupling can only be resolved with a protocol, not a bunch of generic APIs and resources.

Would Google be stupid enough to not mine this, not-so-big, seamingly unsignificant, data? The probability is actually quite high. By all means, Google is driven by engineers who like to solve big engineering problems. I respect that, they may well have assembled, with Amazon, the best R&D on the planet, but they need to align this incredible, mind blowing, engineering power with two cents of strategic thinking. (The kind of thinking that would tell them that accessories that make you look like a freak are generally not a big consumer hit).

Why are contacts so strategic?

You may ask, how can a simple protocol conjugated to the most boring app on a device can change the future of Social Networks? It's all about making it easy to establish relationships, as a matter of fact, as easily as devicely possible.

Google and its Platform has a unique ability to associate social network ids with contact ids, in complete privacy. Once that happens, users can see the networks their friends have joined, directly in their contact app, and touch the social network icon to add that friend or if they are not member yet, join the network and add themselves to their friend's circle (I used Google+ and Facebook icons in the mockup below for convenience, but really these icons will be the ones of the topical social networks that are currently being built).

Here is how it works for our two social networks (Face+ and GoogleBook):

a)    User A joins a social network "Face+", the app informs the device OS which notifies the Google platform of the event

b)   The platform then notifies every friend’s that has a contact matching User A that user A has joined "Face+".

c)    User B has also joined Face+, he browses his contact list and select the friends he wants to add to specific social apps.  All these friends are added to the User B’s friend list on the corresponding social app and a notification is sent to the friends who can choose to add User B to their network.

What kind of protocol could Google design to achieve this "as-easy-as-possible" UX? Here is a proposal (the protocol itself is just steps 1,6,7 and 9):

 

And voila, Google can raise an army of social networks, overnight, that will take a big dent into Facebook's user base -in an epic Innovator's Solution textbook case. Facebook cannot respond to that kind of attack because it does not own a clean contact list (especially the contacts who can participate in activities) and it will not be able to integrate fast enough with people's interests and activities to act as manage that contact list effectively, nor could it canibalize its client to 3rd party social apps. Worse, if anyone still needed a proof to show that Facebook is completely clueless when it comes to its strategy, it allows its own users to add their Facebook friends to their on-device contact app... they are basically giving away the keys to their kingdom, one contact at a time...

So why is Google+ Google's biggest strategic blunder? With Google+, Google took possibly the worst possible path possible. Even Microsoft didn't make that mistake. Just by implementing a simple protocol on top of existing components, Google could have taken down (and still can take down) a threatening competitor which is going after its advertising dollars. This approach would have been well aligned with Google's DNA, which understands how to monetize an ecosystem of affiliates. It is just that this time around, unlike AdSense, they also needed to create the affiliates. Furthermore, there would have been little risk that Apple would react to that. They don't chase this kind of opportunities, they see themselves as a sleek device company, not as a software company. When it comes to software and especially platform architecture, Apple's mindset is a decade behind. But most importantly, and unlike the general Social Utility model, Google could bring a "unique" social touch to the Android community, unmatched in the mobile space. It could attract a large number of great social apps, all powered by strong business models like the imaginary "Let's meet for Coffee" app. Imagine these apps combined with Google Now? Seriously, who could let this kind of opportunity go when all you need is a simple protocol and neither Apple or Facebook can catch up?

Sight ... Google would have been able to claim the SoMoLoCo space entirely (Co as in Commerce, I'll explain in Part II the different kinds of Business Models Google could develop in a Social Network ecosystem).  

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