5 Things Multi-Billion US Dollar Companies Like Facebook & Google Have In Common
At the time of writing, Facebook is the world’s largest social network with 1.44 billion monthly active users; together with Whatsapp & Instagram (which it acquired), it is also the primary way people stay connected with and update each other on their lives.
Besides that, it also has a market cap of 226 Billion USD.
On the other hand, Google is the world’s most popular search engine and is the primary way most people search for information online, they also happen to own the primary tools for business correspondence and online video consumption in Gmail and Youtube.
It currently has a market cap of 368.5 Billion USD.
EVER WONDERED WHAT THESE 100+ BILLION USD COMPANIES HAVE IN COMMON?
I did some research and found these interesting traits these companies share.
1. THEY SOLVE A FUNDAMENTAL PROBLEM THAT EVERYONE IN THE WORLD FACES
One of the reasons why companies like Facebook & Google can grow so big is because they are solving a problem that everyone in the world faces. There is a need for their product and solution anywhere in the world, which is what makes them so scalable and able grow to such a scale once they’ve found the solution to the problem that they’re solving.
GOOGLE: ORGANIZING THE WORLD’S INFORMATION
The internet has tons of information, and everyone wants to find what they’re looking for, simply because we humans are naturally curious beings, and are constantly on the lookout for knowledge, answers and interesting things.
However, it was hard to do so because the internet is so vast and so unorganized.
That is where Google developed its search engine with a superior algorithm to make it easy for all of us to find what we want on the internet and went on to dominate the world.
Today, if you have anything you want to know or find, you can just “Google” it.
FACEBOOK: CONNECTING FRIENDS
Everyone has friends, and we all want to stay in touch with each other in some way or another.
We humans, after all, are highly social beings. We are naturally curious about how our friends are doing, and love interacting and sharing things with people we care about. We also like receiving comments, attention and being talked to. It is a fundamental human need.
Facebook utilized technology to create tools that help facilitate various interactions among friends and help us expand our ability to stay in touch and build relationships with each other in a much easier and convenient way.
2. THEY ARE USUALLY NOT THE FIRST IN THE MARKET
I also realized that they are usually not the first in the market. Because the problem that they’re solving is a fundamental one that everyone faces, there are naturally a lot of people trying to come up with a solution for it.
YAHOO, ALTA-VISTA, META-CRAWLER AND SO MANY MORE
Before Google came along, there were already many search engines available, and all of them are huge and have received substantial venture capital funding.
I remember vividly how I would stay in the computer lab with all the search engines open in my browser searching for pictures of planes (I was a huge fan of fighter planes as a kid) when I was in primary school back in 1997 (I was 7 years old then).
The reason why I had to open so many tabs on so many search engines was because the results are all different and you get a lot of irrelevant links that appear when you search for F-15 or F-18 fighter jets.
FRIENDSTER, MYSPACE AND OTHERS
I still remember how everyone was going around asking friends to
“Write me a Testi, write me a testi (testimonial)!”
back in high school.
Literally everyone was using Friendster back then.
They are all big companies in their own right and have taken in millions in venture capital funding
3. THEY ENTER A WARZONE: A COMPETITIVE MARKET WITH MANY BIG PLAYERS BUT NO CLEAR WINNER
THE “SEARCH ENGINE WAR”
However, none of them have really solved the problem thoroughly yet. They were all big, but there was no clear winner. No default search engine that you would go to.
The practice back then was to search for the same thing across all the search engines until you found what you were looking for as I did with my search for pictures of airplanes and fighter jets when I was in primary school.
“Hey, I still can’t find what I want to find on these search engines”
which was the reason why they decided to come up with an algorithm that could help users find what they were looking for as fast and accurately as possible, which eventually became Google.
THE “SOCIAL NETWORK WAR”
Almost everyone had a Friendster account back in my high school days. Myspace was also really big in the US.
From all the videos and interviews I watched about Facebook and Mark Zuckerberg since back in Facebook’s early days in 2004, Mark Zuckerberg said that he never thought of wanting to build Facebook or to compete with anybody, he just realized that he still couldn’t type in someone’s name and find some information about someone even with Friendster and MySpace around.
He never thought that he would be the one to solve that problem for in his mind someone like Friendster, Myspace or Google would probably be the ones who would solve it.
The problem back then was that although Friendster and Myspace were hugely popular and everyone was on it, people usually did not use their real names, so your friend Bryan might be SilverSurfer89 and your friend Amanda might be BlackAngel91 or something on Friendster & Myspace, hence you couldn’t really find someone and useful information about them by typing in their names.
Mark Zuckerberg mentioned that he actually suggested the idea to Myspace so they would do it, but they refused and think that what they had was already good enough, that left Mark Zuckerberg no choice but to start thefacebook which became the facebook we know today.
4. THEY MAKE SURE THEY SOLVE THE PROBLEM THOROUGHLY
Friendster, Myspace, Yahoo & Alta-Vista all got something right. They have all solved the problem to a certain degree and have gained reasonable success.
However, their downfall came when they thought that they have solved the problem and are comfortable with what they’ve built so far, that was when companies led by people who are truly passionate about solving the problem thoroughly kept innovating, kept improving, eventually overtook them and left them in the dust.
SEARCH: THE SEARCH BAR
If we think about it, how is Yahoo, Alta-Vista & Google different from each other?
They all have a search bar where you type something in and get a list of results in the form of links. The search bar is what all of them got right, the first half of the solution, but the problem is not fully solved yet, because a lot of the links that were returned were irrelevant, and it was also clouded with ads and all sorts of distracting content.
In other words, you still could not find what you really wanted to find in an instant.
SOCIAL NETWORKING: A FRIEND LIST
The same goes for social networking & connecting people. Friendster, Myspace & Facebook all have a friend list and people’s profiles. That was the part that they all got right.
But human to human interactions are much more complex than just having a list of friends, otherwise that would just be a digital version of a phonebook, a lot more needs to be done to truly connect people better and help friends stay in touch.
NOT BEING DISTRACTED BY INVESTORS & PRESSURE TO MONETIZE
When a company has reached a certain size and has taken on venture capital funding, they would be under pressure to aim for an exit either through an acquisition or an IPO, and one of the milestones that they might need to achieve before they can do that is to try to monetize their product.
The danger is that if the focus of a company shifts from trying to solve the problem to monetization too early, before the problem has been solved thoroughly, the company might be heading for disaster as another company that is determined to solve the problem thoroughly first might overtake and destroy them entirely, just like what Facebook did to Friendster & Myspace.
GOOGLE: OPTIMIZING THE ALGORITHM
For Google, the way to solve the problem of helping users find what they want on the internet quickly and accurately was to keep optimizing the algorithm until that was achieved.
CONNECTING PEOPLE: A COMPLEX PROBLEM THAT INVOLVES COMPLICATED HUMAN INTERACTIONS
On the other hand, Facebook’s mission to better connect people is more complex due to the complicated nature of human social interactions.
We don’t just want to know who our friends are, we also want to talk to them, find out more about them, see who their friends are, be able to give them attention, attract attention, share things and much much more.
FACEBOOK: KEEP ITERATING NEW FEATURES TO BETTER CONNECT PEOPLE
Hence, for facebook to be able to solve the problem thoroughly, they had to keep innovating and keep coming up with new features and see which works and which doesn’t.
Facebook has come a long long way since the day it started, where it was essentially just a directory and friend list of students studying in campuses.
How many of you still remember the “poke” function, which still exists today, but nobody pokes anybody anymore these days. Then there was the superpoke, where you got to draw on people’s wall and post funky emoticons and birthday cakes. That was hot for a while but din’t really stick as it got too cluttered and now it is gone, replaced by a much better and well oiled news feed and timeline.
HOW FACEBOOK’S NEWSFEED & PHOTO-TAGGING FUNCTIONS KILLED FRIENDSTER
I am the kind of person who would stick with one thing once I find it to be good enough. I am not too eager to switch to new things and try out every single new thing that’s out there. Peer pressure doesn’t have that big an effect on me as well.
So when I eventually got on Friendster, I loved it!
I loved the testimonials I got, amazing and sincere things my friends wrote like:
“Johnson is a really nice guy….
I actually feel very sad that they are all gone now and I din’t have a chance to download them before Friendster deleted everything.
Needless to say, when facebook first came about, I was very reluctant to open an account, because it seems like exactly the same thing as friendster, but much more childish, because people were just poking each other and drawing graffiti on each other’s walls, something which I din’t find particularly interesting.
However, I suddenly realized that all my photos were on facebook, because my friends would upload them on facebook and tag me in it. I wanted to see my photos, so I had to open a facebook account.
After a while, I realized
“Hey! You can see what Tim did last night!
What Audrey had for dinner last night!
What Bryan was thinking…”
etc all on your newsfeed. Not just that, you could also like things and comment on things.
Slowly but surely, I got hooked, and realized that I din’t go back to Friendster anymore, because Facebook is so much more interesting and has so much more tools for you to stay in touch and interact with your friends!
FRIENDSTER & MYSPACE STOPPED INNOVATING TO SOLVE THE PROBLEM THOROUGHLY
If you ask me, that’s how Friendster & MySpace died.
They thought they had solved the problem. They stopped innovating, stopped iterating and focused on trying to make money by introducing paid photo collages etc.
IT IS A FEATURE WAR IF YOU’RE TRYING TO SOLVE A PROBLEM THAT INVOLVES COMPLEX HUMAN INTERACTIONS
Some people might disagree with me on this, but in my humble opinion, if the problem you’re solving is one that involves complex human to human interactions, it is going to be a feature war, where you have to keep coming up with tools and keep iterating until you find the right set of tools that work and solve the problem thoroughly. Some might work, some won’t but you have to keep doing it until you’ve found the optimum set of tools to solve the problem you’re trying to solve thoroughly.
Due to the intricate & varied nature of human interactions, one single tool won’t work, you need a set of tools. This is because facebook wouldn’t have been able to solve the problem of connecting people better if they just focused on optimizing the friend list and profile page.
SOLVE THE PROBLEM THOROUGHLY
Ultimately, it is absolutely crucial for companies to be passionate about solving a problem thoroughly and stay focused on that until they really get there.
5. FINAL RESULT: A CLEAR WINNER, DISTANT 2ND PLACE & A COPYCAT BY A BIG COMPANY
At the end of these “wars”, I realized that they almost always end the same way.
“Those who do not learn from
history are doomed to repeat it”
There will be a clear winner who enjoys close to monopoly status in the market and in the process becoming a 100+ billion USD behemoth, a distant 2nd place, and a 3rd late entrant usually by a big company who also wants in on the game, but realizes it is too little too late.
GOOGLE, YAHOO, BING
For the “Search Engine Wars”, it is obvious that Google came in 1st, you can say that Yahoo came in a distant 2nd (although they’re struggling right now, became more of a news portal and has much of its meager market cap propped up by its stake in Alibaba), and the new late entrant by a big company in the form of Bing (by Microsoft).
FACEBOOK, TWITTER & GOOGLE+
For the “Social Network Wars”, Facebook won, followed by a distant 2nd and differentiated product offering in Twitter, and now, it is Google’s turn to be the big company to come in with a late entrant in the form of Google+.
So yup. That’s usually how it ends.
SO WHATS THE NEXT BIG THING?
The important question we’ll have to ask ourselves today, however, is this:
“Where is the next Google or
Facebook going to come from?
Which problem will it solve?”
I believe that history is bound to repeat itself, and there is a reason why things happen in a certain pattern over and over again.
The challenge, however, is to be able to apply the principles and lessons you’ve learnt from the past, and apply it in the present. It is easy to look at things retrospectively, but it’s another thing altogether to be able to identify the opportunities while it is happening right now in the present.
So we have to ask ourselves this:
“Right now, as we speak, which are the
industries that are solving a fundamental
problem that everyone in the world faces,
has many big players, but has yet to have a
clear global winner, much like what was
happening during the ‘Search Engine Wars’
and the ‘Social Network Wars’?”
Once that has been answered, we would need to figure out how to solve those problems thoroughly and be passionate enough to execute on them, keep working on them and see it through.
ALL THE BEST!
I have personally identified 2 key “wars” that are currently on-going where they are all solving a fundamental problem everyone in the world faces, all the players are big but there isn’t a clear winner, and have all gotten half the solution right.
I happen to also be very passionate about solving both these problems, and strongly believe I know what those companies are missing, I have what it takes and the solutions to solving these problems thoroughly.
(I will tell you more about them soon)
I just need to keep testing, keep iterating, keep rolling things out one at a time until I reach that point.
I am focusing on rolling out a solution for one of these problems right now and it will be available soon.
This is the very first step in my impossible grand plan to help Malaysia fulfill its full potential, to achieve enough financial and economic influence by building a multi-billion USD company that would make a significant positive impact on the world.
Wish me luck! And all the best to all of you if you’re pursuing something similar too!
Leave your email here if you’re interested to check it out when we launch!