Both Facebook and Twitter made announcements in the last week relating to platform changes. Facebook, at the company’s ‘F8’ conference, sought to play down fears stemming from recent News Feed changes, with CEO Mark Zuckerberg noting that the company would ‘not break things anymore’. Twitter CEO Dick Costolo, meanwhile, discussed reports that his company has been investigating the removal hashtags and @ replies and somewhat allayed user fears of their demise. These announcements have been widely discussed amongst social media users, and it’s fair to say the reduction in Facebook post reach has many spooked about what might be coming next. Most of the time, social networks have implemented change reasonably well, but with increasing revenue pressures and networks investigating new ways to monetise their products, it’s inevitable that there will be some mis-steps, that not all change will be well received by core user groups.
This raises an interesting dichotomy of growth, particularly related to publicly listed companies. All the major social networks (Facebook, Twitter, LinkedIn and Google) are now listed on the stock exchange, placing them under increased scrutiny and pressure to meet market expectations. In this environment, change is no longer an option, it’s an essential part of their business process. In order to meet market requirements and ensure best return for investors, listed companies need to evolve and find new ways to increase user engagement whilst also maximising revenue. This is an incredibly difficult balance – Facebook’s News Feed changes were implemented to ensure users see the content most relevant to them, rather than all content because there’s now just too much to sift through. For businesses using Facebook, this also means they can only guarantee they’ll reach all their fans by paying for advertising to target them, even though those fans have already indicated they want to see updates from the brand. Is this better for users or better for the network? There’s no definitive answer to this, but these are the kinds of changes that can turn public perception and, if not handled correctly, decrease engagement and, ultimately, revenue. But it’s necessary – it’s necessary for all networks to adapt to ensure continued growth in an ever-changing market. So if you’re biting your nails stressing about the next wave of reforms coming to your favourite social channel, you better buckle up. Change is coming. Whether you like it or not.
Initial Public Offering
At some point in a company’s growth, an initial public offering becomes a logical next step. Listing your company raises capital, which can then be used to fund further expansion, helping a company build beyond what they would generally be able to through private funding. Think of it as a business loan for a friend – your pal has a great idea for a gardening business that will make him tens of thousands of dollars – he just needs the money to purchase the necessary equipment – you give him the money to buy what he needs then take a share of the profit when the business comes to fruition, rather than just getting your money back. This is the basic principle of an IPO, just on a much larger scale. Investors take the risk based on what they know of the company, the business then uses the capital raised to expand and meet expectation. Understandably, this process is subject to extremely strict governance measures, ensuring full transparency and accountability. Where a private company can operate, essentially, how they please, public companies have nowhere to hide. All your practices, all your processes, these are now open to the investing public. You’re no longer reporting to a small management group or board, there are potentially thousands of people with a vested interest in your performance. That’s their money you’re working with, they expect you to come good on your commitments.
The Balance of Change
This is the yin and yang of expansion – you need the additional capital to grow beyond your current capacity, but that increased capital brings with it increased expectation and reporting requirements. Whereas companies often start with minimal planning, building and expanding as they grow, the regulations imposed on listed companies are far more complex. Revenue pressures intensify and businesses need to continually develop strategies to stay ahead of the game. In the social space, this pressure is compounded even further, with new platforms rising and evolving at breakneck speed. User experience, too, is the key product for social media platforms, so every change has a high level of inherent risk. While evolution is required, each step needs to be carefully considered before putting weight onto that corporate foot. Every change needs to have user experience front of mind. Without users, the networks have nothing. No one wants to become the next MySpace.
The one thing we, as users, need to understand and accept is that change is going to happen. While you may have an attachment to how things have always been on Twitter or have an aversion to the amount of ads on Facebook, you need to accept that things are going to evolve. As noted, the social media giants have generally done pretty well at not upsetting the applecart, but if you’re working in the social space, you need to learn to embrace change. The platforms need users like you and I, they want to deliver the best user experience they can to ensure you stick around. We need to trust that they’ll get it right, need to work with new features and updates and understand the benefits, rather than opposing the unknown. We need to welcome change when it comes and ride with it, rather than lament how things could have been.