I love me some insider gossip. If it’s gossip about the tech industry I feel a little tickle in my lizard brain driving me to ingest it as soon as possible. If it’s juicy gossip about the self-styled Masters of the Future and the Present we find in droves here in the SF Bay area, that itch becomes a burning sensation that only the ointment of reporting will …..
Okay, I seem to have gone off track. Suffice it to say I like reading Valleywag to pass the time. Among the stories about bro-grammers behaving badly, the obviously impending tech bubble implosion, and the founders of companies like Google treating their workforce like a personal harem, a few stories have emerged about the demise of Facebook. It seems a lot of people are asking if “the Zuck” is too old to run Facebook anymore. Then the numbers came out and Facebook stock was down 17% in a single quarter, along with many of the more recent darlings of “the Valley.” And only yesterday a reporter attended the F8 conference and remarked it was “the performance of a dull man who’s become the leader of a dull company, and is fine with being boring.”
So what’s going on with companies like Facebook? The problem with these companies is the same problem faced by the pop music and fashion industries in the early 70’s, right after they rebranded themselves as “youth culture.” You see back in the 2000’s the startup hubs in areas like Silicon Valley, New York, and London were struggling to recover from the massive ego and fear driven tech bubble that almost took down the burgeoning computer industry. At the same time the makers of actual products such as shoes and expensive eye liner were staring with impotent fury at a vast market of X, Y, and Z(?) generations who seemed to completely defy their spreadsheets and carefully crafted market research data. Into this void stepped people like Mark Zuckerberg, Sergey Brin, and Larry Page. They had the brilliant idea to give away a product people wanted to use so long as they voluntarily let you attach tracking devices to them. The people in New York, Los Angeles, London, and Paris who’s incredibly expensive cocaine and champagne habits depended on being able to talk about marketing segments were intrigued, but they didn’t bite. In order to get them to start shelling out the morally contemptible amounts of money the engineers thought they were entitled to make, the Lords of the Future and the Present needed something more.
They then reached back to an earlier, halcyon time and crafted a myth. It was a fine myth. It helped define principles and seemed to have enough historical precedent that people could let themselves believe it. The myth these men (and they were and are men) crafted was simply a spin on the old “youth culture” trope. Young men right out of (or still in) college were thrown forward as being guides for navigating this seemingly impenetrable jungle of unwashed youth. Only another young person could relate to these young people so it naturally seemed like only a young man could produce a product these young people would use. The myth of the “teenage tech millionaire founder” was officially written into cannon.
Of course it’s all complete bulls**t. Most companies that make succeed, even here in the Valley, do so because they are being run by experienced people who understand their markets and know how to do things like not tolerate extreme harassment of women in the workplace. Your average early-twenties guy is going to be an idiot about most things. I can speak with some authority about this subject having been, at one point, a guy who was in his early-twenties. He might be brilliant, but he will still be an idiot. If you take that guy out of the usual gauntlet of sticks and rocks we call life and put him into a padded echo chamber of elitism, he will never have the idiot beaten out of him. At that point you get a guy who beats his girlfriend for an hour and a half ON CAMERA and doesn’t think it’s any big deal. or you get a guy who sets up a “love nest” and bills it to his company as being work related, or just fill in the blank with whatever you want here.
But let’s say you luck out as an investor. Let’s say you pick a dude with a reasonable amount of empathy who takes his role seriously. He works at being the CEO founder. He takes courses on business management and seeks out mentors. He listens to people who know more about certain subjects than him despite being smart himself. The company does well as a result. Of course you still have a problem. Unless that guy is Dick Clark or Peter Pan he is going to age. The company was sold to customers, investors, and the world at large as “hip” and “disruptive” and “fresh” and “young.” People bought into the sales pitch because some pink-cheeked man was tossed up on a stage to talk to a room full of men with salt-pepper hair and paunches about what “the youth of today” want from their experiences. It’s been more than a decade and those infante terribles are now either staring down thirty or went sailing past it already. Companies like Google have tried pivots into other markets and products, but companies like Facebook have no other products and have painted themselves into a corner as far as that is concerned. They cannot move into new markets without diluting their brand or completely hiding what they are doing from the world.
Two things are resulting from this inevitable conflict. Investors and taste-makers in the startup world are out looking for the new kids on the block they can toss up in front of the money people and the former darlings of the world are having to grow up … fast. Investors around the globe are waking up in a strange bed and looking at their investments in the full light of day without the blasting club music to cover up the pickup lines spouted last night. Former studs are asking if they want to go get some breakfast, but all the investors seem interested in is either grabbing their purses to escape or desperately attempting to figure out how to spin this to their friends who watched them pick him up last night. The kids, on the other hand, are finding it harder and harder to just wink and toss their heads toward the door when seeking out capital injections. They need to actually work on things like “business plans” and “stability” and “profits” where before they could just toss out words like “new paradigm” and “total experience.” They’re seeing a new crowd taking over the old haunts and are realizing it’s time to grow up.
And yes, growing up is boring when compared against spending your entire paycheck on parties and exotic trips. However boring is what lets you retire at 65 and not live off cat food and heating oil checks from the government. Unfortunately a lot of companies have nothing else to offer. Their business model is “all night party” so they’re sort of stuck. Either they need to move aside or change their entire company.
It looks like Mark Z is making an attempt to turn the aircraft carrier that is Facebook. He might do it, but I’m betting it’ll still just slowly run out of fuel and drift around like LiveJournal and MySpace before it.