Facebook's success as a public company is anything but guaranteed.
Let the Facebook road show—and the dissection of its future as a public company—begin.
In The Age of the Platform, I write extensively about how platforms by themselves guarantee nothing. Think about how companies like AOL, MySpace, and Yahoo! have fallen from grace in recent years. And I'm hardly the only one who feels this way. Eric Jackson on Forbes makes the case that Google and Facebook might suffer similar fates within five years. Is it possible? Sure. Though I suspect it won't happen, primarily because these companies understand Clayton's Christensen's innovator's dilemma: in a nutshell, the very things that make a company successful ultimately cause its demise.
Even so, let's examine Facebook and the forces that could derail this 900-million-member social network. At a high level, there are three: Facebook itself, the competition, and the unknown.
What Facebook Does
Facebook 2.0 has already launched. Its access to capital means that it can buy patents and photo-sharing apps for more than $1.5 billion in less than a month. Bigger deals come with greater rewards, but also with greater risks. Instagram represents a significant amount of the company's cash stash and, at a minimum, may impede its ability to do other deals.
More than ever, flawless strategy and execution (if there were such things) by themselves guarantee nothing. Perhaps Amazon, Apple, Twitter, Google, or another heavyweight will crush Facebook. Maybe a new social network, one not based upon personal connections, will supplant Facebook as the 800-lb. gorilla. The Experience Project is one of a slew of networks organized around a fundamentally different concept.
And I could write a book about the impacts of luck and timing on the success of any company.
As I write this, I have no doubt that somewhere around the globe someone is working on an idea that will cause major disruption. Never has it been easier and less expensive to start a company. The barriers to entry have all but evaporated and, given how quickly things change these days, I can certainly see a day in which Facebook is no longer "hip."
Will Facebook be relevant in five years? Probably, but the company isn't aiming to be just relevant. It wants to be dominant and, on that, I'm much less certain.
PHIL SIMON is a sought-after speaker and the author of five management books. His most recent, Too Big To Ignore: The Business Case for Big Data, will be released in March of 2013 (John Wiley & Sons). @philsimon