Two revenue model types in tech
In the tech world, you can boil most revenue models down into two simple concepts: Bridges and Walls.
When we look at a bridge, we see that we otherwise would have had to go through incredible lengths to get somewhere, but now thanks to to this magnificent, freshly-painted bridge, we can simply drive right over a river, canyon or reservoir of untreated sewage that we could never easily cross. In this case, a way to fund the building of this bridge is a toll booth.
And toll booths are a perfectly reasonable way to make money. Once the bridge has been paid for, the future tolls often go to building more bridges and roads. A company that creates a way to manage all your sales contacts and gives you access to leads? Totally a bridge to sales that would be very difficult for one individual to build. Some of that money will go into developing the product further and getting more data. Everyone wins!
Then we have walls. As opposed to creating something that helps us overcome an obstacle, the tech company creates the obstacle in the first place. We have a previously unobstructed roadway and someone builds a wall and tells you if you want to go through the gate, you need to pay them. This is a way tech companies who have not otherwise created value, or already gave away their “bridge” for free try to make money.
Apple – bridge or wall?
Apple does this with their phones and tablets, prohibiting the people who own the actual hardware from putting the software they want on it without the developer paying the gatekeeper. Trying to circumvent this process means you get labeled an onerous term like “jailbreaker” and subject to loss of warranty, or even a possibly useless phone.
LinkedIn has similarly placed walls around our circles of contacts, charging you to send a message to someone your don’t know when it’s the exact same functionality you use for free to send a message to someone you do know.
Facebook – bridge or wall?
Now Facebook, continuously grasping at straws to come up with new revenue models to appease its investors has joined the “imaginary wall” fray. First, it starting hiding page posts that were previously seen by all fans from a brand’s audience with EdgeRank (the wall.) Next, it started building more walls so really most of your likes needed to be gained by paying for them or already having a large audience to work with. Then, once you built a fanbase, they decided to start charging brands to have their posts seen by the very users they already earned mostly by paying Facebook for them (this is like paying for a mailing list to invite people to a party at your bar, then having the mailing list company demand money every time the cocktail waitress asks someone if they would like another drink.)
Their latest scheme is to copy the LinkedIn model and charge you for messaging people you don’t already know, something that again used to be free. The wall around this activity was built ages ago, without even telling anyone (meaning it’s entirely possible your long lost high school sweetheart messaged you in 2010 and you would have been married with a kid by now, but instead the message went to a box called “other” that you didn’t even know existed and, distraught over your lack of response, they instead took an oath of silence, became a monk and moved to Tibet). Your ability to message acquaintances and strangers has been curtailed for quite some time, but only now did Facebook finally wake up and realize it was something they could charge you to circumvent.
This wouldn’t be as big of a deal had they thought of this too-obvious revenue model when they were still at 500,000 users. If there was any truth to the scene in the Social Network where Jesse Eisenberg/Mark Zuckerberg has the “aha!” moment that “people want to know who is single, who is getting laid, who isn’t, then charging users to send creepy “hey, so I see you’re friends with Brad and we both like Primus and Outback Steakhouse” messages to friends of friends, maybe they wouldn’t have ever needed an IPO, and this model would be seen more as a bridge than a wall.
LinkedIn did the same thing from the beginning and you don’t see people complaining about it as much because how the site works and makes money was apparent all along. Facebook never considered how to make money until they had to. Now in desperation, they are erecting walls all over the place to try to see if people are willing to climb them for a fee.
Looking at the bigger picture
Of course, it’s initiatives like these which are not well thought out that fail the hardest. As someone selling a service to Chief Marketing Officers, what do you think the first thing I’m going to do is once this becomes available? My alternative to this is for about $1 a click, I can target Facebook Ads to the CMOs. But once they click, then what? Unless I’ve set up the world’s most perfect sales funnel, only a small percentage of these clicks will turn into a conversation, let alone a sale.
Now while some people might balk at $1 to say, have a message seen by that hottie they met at a party via a friend, $1 to send a message directly to the inbox of a CMO is a bargain to me. It’s cheaper than LinkedIn and sends more information than an ad, and possibly has the social currency of “we’re friends with the same people” vs. LinkedIn where everyone seems to connect to anyone these days. And, for the CMO, this is going to make this poor executive want to bail the hell out of Facebook very fast or scramble for whatever the latest setting is to disable it. Most people still think of Facebook as a way to connect with friends, not business.
In most social networks, it’s who the userbase becomes and what their needs are that defines development and ultimately revenue, but Facebook is hopelessly out of touch, since it still thinks it’s like a chair. While they are being cautious with a limited and throttled rollout, it’s not until they fully unleash the feature on the masses that they will see what a complete disaster it could become.
If anyone out there is somehow willing to pay a buck to message me on Facebook, I want my cut of it. You can also just email me – I accept PayPal.