Tag Archives: Mark Zuckerberg

Instagram Gives Facebook Investors 3 Fresh Reasons to Worry

The departure of Instagram’s founders marks a pivotal and potentially perilous moment for Facebook. It has long been rumored that Kevin Systrom, who maintained an iron grip as chief product officer of the Facebook subsidiary, aggressively defended his fast-growing and youthful fanbase from desires to include more ads on the platform. The departure of Systrom and Mike Krieger, the other co-founder, follows on the heels of the founders of WhatsApp, who also left Facebook with concerns that the company was not behaving in a manner that put the interests of its users first.

Whenever a visionary founder leaves a company, it is a moment of great risk. For Facebook investors, the risk is even greater because Instagram has become the growth engine of the company, as the legacy Facebook product has stagnated and lost users in key markets.

Instagram is Facebook’s future, and CEO Mark Zuckerberg’s biggest test. Here are three things Facebook investors should watch closely for — and fear:

1. Changes to features that allow for more aggressive marketing customers

Instagram users hate ads that are not relevant to them. Systrom did a masterful job of ensuring his customers get exceptionally relevant content the majority of the time. Facebook has often erred on the side of clickbaity content and ads that are dubious in value and more like run-of-house remnants that pick up pennies off the floor.

Allowing those types of adds onto Instagram will signal to its finicky users that Facebook wants pennies off the floor more than it wants to maintain an intimate user experience.

2. Additional executive departures from Instagram

An obvious sign that cultural change is uncomfortable is executive departures. Systrom built a loyal team that bought into his world view. This removes the few checks and balances that remained against Facebook CEO Mark Zuckerberg’s obsessions with gathering data and monetizing it.

Should a revolving door start to spin at Instagram near the top, it’s a likely sign that changes by the new regime do not sit well with the early crew that made Instagram the rock star it is.

3. Surging negative dialogue on the platform

Part of what has made Instagram so awesome is that it lacks all the toxic discourse of Facebook and Twitter. That’s by design. The community has low tolerance for negativity and they are often turned off by the constant mudslinging and barrage of negativity on other social media.

However, angry, unhappy people always follow the users because they want a loud voice. The current feature set on Instagram makes it difficult but not impossible to create the types of negative content we saw take over Facebook and Twitter and gain real purchase. Should we see signs that Instagram is becoming a less happy place, that’s a real flashing red light for investors.

Instagram is the future of Facebook. How the company handles its crown jewel after the departure of its founding team will be a litmus test for its long-term ability to stay relevant and grow quickly. Surely Zuckerberg knows all this, and in the upcoming months we’ll see how he plays his new hand.

Vivek Wadhwa is a Distinguished Fellow at Carnegie Mellon University at Silicon Valley and author of The Driver in the Driverless Car: How Our Technology Choices Will Create the Future.

This article first appeared on Marketwatch.com and is published with permission from the author.

Copy and Steal — the Silicon Valley Way

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In a videoconference hosted by Indian start-up website Inc42, I gave Indian entrepreneurs some advice that startled them. I said that instead of trying to invent new things, they should copy and steal all the ideas they can from China, Silicon Valley and the rest of the world. A billion Indians coming online through inexpensive smartphones offer Indian entrepreneurs an opportunity to build a digital infrastructure that will transform the country. The best way of getting started on that is not to reinvent the wheel but to learn from the successes and failures of others.

Before Japan, Korea and China began to innovate, they were called copycat nations; their electronics and consumer products were knockoffs from the West. Silicon Valley succeeds because it excels in sharing ideas and building on the work of others. As Steve Jobs said in 1994, “Picasso had a saying, ‘Good artists copy, great artists steal,’ and we have you know always been shameless about stealing great ideas.” Almost every Apple product has features that were first developed by others; rarely do its technologies wholly originate within the company.

Mark Zuckerberg also built Facebook by taking pages from MySpace and Friendster, and he continues to copy products. Facebook Places is a replica of Foursquare; Messenger video imitates Skype; Facebook Stories is a clone of Snapchat; and Facebook Live combines the best features of Meerkat and Periscope. This is another one of Silicon Valley’s other secrets: if stealing doesn’t work, then buy the company.

By the way, they don’t call this copying or stealing; it is “knowledge sharing.” Silicon Valley has very high rates of job-hopping, and top engineers rarely work at any one company for more than three years; they routinely join their competitors or start their own companies. As long as engineers don’t steal computer code or designs, they can build on the work they did before. Valley firms understand that collaborating and competing at the same time leads to success. This is even reflected in California’s unusual laws, which bar noncompetition agreements.

In most places, entrepreneurs hesitate to tell others what they are doing. Yet in Silicon Valley, entrepreneurs know that when they share an idea, they get important feedback. Both sides learn by exchanging ideas and developing new ones. So when you walk into a coffee shop in Palo Alto, those you ask will not hesitate to tell you their product-development plans.

Neither companies nor countries can succeed, however, merely by copying. They must move very fast and keep improving themselves and adapting to changing markets and technologies.

Apple became the most valuable company in the world because it didn’t hesitate to cannibalize its own technologies. Steve Jobs didn’t worry that the iPad would hurt the sales of its laptops or that the music player in the iPhone would eliminate the need to buy an iPod. The company moved forward quickly as competitors copied its designs.

Technology is now moving faster than ever and becoming affordable to all. Advances in artificial intelligence, computing, networks and sensors are making it possible to build new trillion-dollar industries and destroy old ones. The new technologies that once only the West had access to are now available everywhere. As the world’s entrepreneurs learn from one another, they will find opportunities to solve the problems of not only their own countries but the world. And we will all benefit in a big way from this.

Reprinted with permission of the author.

India Deserves Better than Mark Zuckerberg’s Watered-down Internet

Facebook chief executive, Mark Zuckerberg, is taking intense fire in India over an initiative that his organization Internet.org launched, to provide limited Internet access to the masses. He seems genuine in his desire to bring digital equality to the world: in an op-ed for The Times of India, he defended this initiative, called “Free Basics,” citing the example of a farmer named Ganesh, who would be able to find weather information and prepare for monsoons, look up commodity prices to get better deals, and invest in new crops and livestock.

Zuckerberg is on the defensive because he doesn’t understand the culture and values of Indians. He doesn’t realize that Ganesh cherishes the freedom that India gained from its British colonizers in 1947 and doesn’t want a handout from a Western company. Ganesh may be poor, but he doesn’t want anyone to dictate what sites he can visit, what movies he may watch, or what applications he can download.

Like a billion other Indians, Ganesh can afford a cellphone that lets him call and text anyone, anywhere. He is saving up for a beautiful new smartphone, just like the ones he sees other people using, which costs around $40. He would rather spend 50 cents a month for 100 megabytes of unrestricted data access than compromise his freedom and dignity.

Zuckerberg is right about the benefits of Internet access: it will enable village artisans to access global markets; farmers to learn about weather and commodity prices; and laborers and maids to find work through sharing-economy applications. With unrestricted Internet access, they will have access to same ocean of knowledge as we do and become our equals online.

And here is the problem with Free Basics: the Internet access on offer is not unrestricted. Facebook and the mobile carriers get to decide what websites people can visit, and Facebook becomes the center of the Internet universe. Users can’t do Google searches and explore the web; they can only go to supported sites and search Facebook.

Zuckerberg compares this limited service to libraries and hospitals. But imagine a private corporation being allowed to decide which books your children could read and which videos they could watch— and to monitor everything that they did. Imagine the corporation’s dictating what services your hospital would offer and what treatments it would provide. Would you accept that?

The debate centers on the concept of net neutrality—whether a mobile carrier should be allowed to favor which websites a person visits. This is not an Indian issue; we are fighting these battles in the United States. The Federal Communications Commission enacted rules in March 2015 to require broadband providers to treat all data equally rather than provide preference to some sites. A federal appeals court is challenging these rules at the behest of the telecommunications industry.

Google has the same motivations as Facebook—to bring billions more people online. But it is pursuing a more sensible strategy: it is setting up fast and free WiFi Internet access points at 400 railroad stations all over India. These are frequented by tens of millions of people. Facebook could one-up Google by setting up access points at thousands of schools, libraries, and villages. This “no strings attached” approach would earn it gratitude—and signups— rather than resentment.

The ultimate solution, unrestricted Internet for everyone, is, however, something that Facebook, Google and others are already working on providing, via drones, balloons, and microsatellites.

With its Aquila Unmanned Aircraft and laser technologies, Facebook has demonstrated the ability to deliver data at a rate of tens of gigabytes per second to a target the size of a coin—from 10 miles away. This is 10 times faster than existing land-based technologies. With interconnected drones, it will, within two or three years, most likely be able to provide Internet access to the most remote regions of the world.

Google is further ahead in its efforts. It has already piloted a technology in Brazil, Australia and New Zealand to beam Internet data from the sky. Google’s balloons, called Loons, are essentially floating cell towers that can relay a signal to a mobile device on the ground.

And then there are low-orbit microsatellites, which Oneweb, SpaceX, and now Samsung are building. These beam Internet signals by laser to ground stations.

Google was supposed to launch Loons in India, but India’s defense, aviation, and telecommunications ministries raised technical and security concerns and stopped the project. When the telecom providers figure out that with unlimited, inexpensive, Internet access, their cell and data businesses will be decimated, they too will place obstacles in the way of these technologies.

This, therefore, is the real battle that Facebook should be fighting. If the goal is to provide everyone with Internet access, Facebook and the Internet-freedom groups that it is fighting should be working together to lobby for a change in government policies—for when the new space-based technologies are ready.

Vivek Wadhwa is an entrepreneur turned academic. You can follow him onTwitter at @vwadhwa and find his research at www.wadhwa.com. First published in The Washington Post.