Wednesday, May 12, 2021

Trust is the New Black

As we shift deeper into an attention economy, maintaining eyeballs will get ever more difficult. One of the things that will drive users off of a platform if they have a choice is loss of control, and compromised privacy. That is already an issue for holdouts that have not gone online in earnest. 

I have had more than a little interest in privacy for a long time. I knew it was coming, but the flagrance is still breathtaking to behold. Keep in mind, these are the *good guys*:

I posted a prediction that Facebook would reach $1 Trillion Market Cap back in 2012 when Forbes thought it was a short at $75B.

Facebook outperformed my prediction by hitting $900B ahead of schedule, instead of the $800B I predicted by now, but they definitely underperformed in capitalizing on their competitive opportunities to compete against Google. This situation is an opportunity for an aggressive, disruptive competitor as mentioned in the post below.

Facebook has not yet capitalized on The "Top Ten" strategies in the post below. In fact, the thing that prompted my reaction to this post is that the current move is counter to the strategies I believe are winners in the coming world. 

"The overall strategy is to ethically join forces with users, suppliers and advertisers against the competition. Do a 'grand slam' attack sweep of all low hanging fruit by leveraging their existing user relationship. Justify it by honoring the security and privacy of users."

Facebook, Google, and Microsoft, and to a lesser extent Apple and Amazon, are vulnerable to a nimble competitor in their most profitable, high-margin areas. 

Facebook's explosive growth is nothing compared to the growth we will see if the right competitor arrives on the scene providing social network, communications, storage, information on demand, online apps, and verifiable user privacy and control of their data. Those big companies have enormous built infrastructure, personnel, funds, and user bases. However, all of those are partially offset by legacy issues, management issues, shareholder obligations, and prickly user relationships. 

The big companies are predicated on old scenarios, costs, capabilities, and user expectations. All of them have to step over the various things these entail. The manpower used just for vendor relationships alone would be sufficient for an agile, strategic emerging competitor. 

A new competitor, starting with a clean slate can use all the knowledge gotten by trial and error by the other players. Judicious choices can be made to partner with users in areas that have high margins, and are easy to service. One big value add that is available at negligible cost to a new competitor is to keep faith with users. Keeping faith with users creates certain opportunities that can only be had with a trusting relationship. That ship has sailed for the big competitors in this space. 

All these companies are looking, basically, for ever more elaborate ways to cheat their users. Facebook, by being a bad partner with respect to privacy, Google for being a bad partner for pursuing advertising revenue at the expense of ruining their search engine, Microsoft for continually breaking faith with users and charging ever more for less, Apple for creating an ever tightening and expensive walled garden, and Amazon for being, well, Amazon, have all created a demand for replacements that will provide better value and a safer, more honest relationship. 

When you look at the enormous size and reach of these companies, they seem invulnerable, but they are definitely not. They have incredible resources, but nothing can erase their history as a user and vendor partner that is dishonest, unfaithful, and predatory. They cannot force their users to stay if they have a better place to go. 

Google and Facebook can have their ad revenue snatched away almost instantly by an ad platform that demonstrably performs better. Such a thing is entirely possible, driven by trust -- something nigh impossible for those companies to get. 

Apple and Microsoft have 'rights' to their specific offerings, but they don't entirely control manufacture, and each passing day makes their current offering increasingly vulnerable to better alternatives. 

The majority of Amazon's sales are actually by third party vendors. These sellers would jump ship in a heartbeat if there was even an equal competitor, let alone a better one. Their ongoing mistreatment of people in their ecosystem makes them vulnerable to the right competitor to simply step in and take over. 

I am enjoying the show, but I am also chipping away at designs to take advantage of the opportunities that missteps by these companies are making. 

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