Business Models - Wednesday, April 23, 2008 16:17 - 5 Comments

The Two Fatal Flaws Of Facebook

From Techcrunch: Facebook Platform Faces Rough Road Ahead

It comes as no surprise to me that the hucksters are out trying to huck each other into believing that there are millions to be made on the Facebook platform.  The disagreement, it seems, appears to be over how much money people are making.  Here’s a tip: when people are trying to convince you that there is money being made, run the other way.  What is this, a late night infomercial for a get rich quick scheme in real estate?  Sheesh.

There are two very critical and fatal flaws in the Facebook platform.

1. Network Effects Eroded - When your platform success is built on a community, a come one, come all approach to application development hurts you.  The Windows platform won because of the proliferation of applications, and no constraint that your enjoyment of the app was bounded by how many of your friends were using it.  The abundance of apps on Facebook has fractured the community to the point that each app looks like a ghost town, save a very, very select few. Continue Reading…