About a year ago (5/26/2012), I wrote a blog post identifying Facebook as a company Apple needs to watch out for. Here’s the article: http://zdubpost.com/2012/05/26/apple-needs-to-change-facebook-is-about-to-ruin-them/ It’s a bit over the top when it comes to all the random graphs I through in, but it gets across one major point. Apple has built all of its sharing products to only work inside the network formed by Apple devices, and Facebook (like Microsoft not too long ago) has built all of its tools to work on any device including Apple.
Fast forward to today and more than 500K people have downloaded Facebook Home a new app that creates and home screen experience deeply rooted in your Facebook experiences. More importantly Facebook is stepping up their engagement with a sub-sect of Android users, making FB’s utilities more valuable than the ones that come with their phone. Specifically – Facebook Messager. But to understand what FB has done, we first have to dig into two things, what they’re disrupting (iMessage) and what FB’s core focus is.
Group Messaging on iMessage has been a great long-term viral growth asset for the iPhone
Tell me if this sounds familiar – The first friend in your group gets an iPhone, shows it off, it’s cool. The second and third friend in your group get an iPhone a few months later, again they show it off, now they start showing their apps and it looks cooler. You personally don’t feel a need for an iPhone because you see it as a luxury, or at least not great enough to justify switching plans. But then a few things start happening; iPhones are now basically on every carrier, iPhone apps continue to get better and better, and by now like 5 of your 20 or so friends have them. This is where iMessage takes over the sales pitch – you start getting texts from individual people but they’re clearly meant for a whole group. You start seeing full conversations happening, but you only are getting bits and pieces of them, they aren’t easy to keep pace with on your phone. You’re friend later that week shows you an iMessage group conversation on his iPhone and you realize, for him the conversation looks like a conversation. Over time you’re phone number starts being left out of conversations, because you’ve had trouble keeping up with them, you tend not to engage in them as much, so you get forgotten from time to time. At this point friends start having inside jokes you don’t understand and you feel a lot more pressure than you did before to buy a iPhone. Now I’m not saying this is everyone’s experience, but it is literally the story of how I got an iPhone. It’s not the reason it became a part of my consideration set, but it was one of the major differentiators for me. I suspect for Apple it’s a major tool to drive iPhone user growth after the initial early adopters in a social group buy one.
Who does Facebook want their customer to become
Facebook wants to change the way people communicate. Facebook wants to make their users expect personalized experiences from what content they see, to what ads are shown, and so on. Facebook as a company has done great things to nurture/build a user base that demands – TV on demand, custom news feeds just for them, and ads that are actually relevant verses interruptions. (Talk to all the businesses in the world who rely on “spray and pray” marketing models to find relevant customers, most love Facebook as an ad platform but don’t realize the thing their customers are becoming makes every other ad channel less and less effective if they continue to “spray and pray”.) In the pursuit of changing the way people communicate, raising people’s expectations of personalized experiences, and encouraging more engagement between networks (friends), FB also must aggressively pursue removing any and all barriers between its users and the tools that make those things happen.
Facebook Home is a problem for Apple
More than a year ago FB launched Facebook Messanger apps for Android, iOS, and all the other major mobile operating systems. When they did this they extended the very popular one on one and group chat service from desktop to mobile. It helped, in many groups Facebook Messanger replaced the text message, especially for group chat on mobile – taking share from both Android texting services and Apple’s iMessage. Fast forward to Facebook Home and now they’ve gotten access at the operating system level on a select set of androids. As of today they have 500K users and growing. But that isn’t the stat that matters, what matters is how many people those 500K people talk to via text message on a regular basis. A big trend of small apps over the last two years have gone after the iMessage problem I documented before, making their way into a lot of phones and making the idea of an internet based messaging service vs. tradition texting models pretty palatable for users. Mobile users have shown they are ready to switch, they want effective group chat between all their friends… not just the other ones on Apple. With Facebook Home, FB has created ~500K users already who have raised their hands to say “I want to use Facebook to communicate with friends because of the added values it brings”.
Value = group texting across phone, desktop, no matter the OS + text tracking that show’s who has seen what messages + low barrier to entry since all but 3% of my friends are already on Facebook.
The average person has about 10-20 people they talk to regularly via text, and many of those conversations are in groups. If Facebook all of a sudden becomes the messaging platform of choice for 500K people, that means on a regular basis 5-10MM people are going to start having conversations on FB Messager. As those 5-10MM people begin to convert to using FB Messager first they could start reaching 50-200MM people via FB Messager… And since this is a free software platform – no cost, or device type requirement creating a barrier to use – this adoption could happen pretty quickly. As it does, iMessage will no longer be something the masses might consider to be a differentiator for iPhone. As more and more features on the iPhone become table stakes for users to choose a smart phone, and the top 20% of AppStore Apps start appearing on both Android and iPhone – the mobile phone market place is going to start looking a lot more like the desktop computer market place of the 1990′s. Apple’s iPhone will just be another phone and they’ll have to invent another product category to keep growing.
This one app by Facebook isn’t going to take down Apple’s iPhone, but over time companies with similar missions to Facebook are going to take away Apple’s dominance on any connected device. If your company is trying to build an exclusive in network experience like Apple, you better lead/invent your categories so you end up with a large lead. Companies like Facebook and Google are in every category working to break down network walls to allow every person access to the world’s best tools.
Thanks for Listening,