Facebook's Product Strategy: Decisive, Distracted or Disaster?

A year ago at the WSJ's D Conference, I was at a private dinner with a dozen VCs and founders of note. One famous attendee lamented to me that their daughter was on Snapchat all the time.

"What's that?" I asked, always on the lookout for the next Rapportive (bought by LinkedIn), Uber (crushing it), Gowalla (Facebook), Wanderfly (TripAdvisor) or GDGT (crushing it) to invest in.

"You don't want to know," they lamented.

I downloaded it that night and had that moment of dread that exists only after you have children in the world. If you're a parent, tell me if you've ever had this thought: "Why would anyone build something like this?!?!? Oh yeah, they must not have kids yet." I know I'm not alone in this thought.

Fast forward a year later and Facebook has copied Snapchat with Poke -- which is the slang word for intercourse in case you're over 34.  

Facebook is very proud of this product, so much so they've leaked all kinds of interesting nuggets to the press like the fact that -- gasp! -- Zuckerberg wrote some code for it and -- whaaaaaaaat?!?! -- he voiced the sound effects in the app!

Also, Facebook's PR machine can't seem to shut up about the fact that they copied Snapchat in just 12 days. Twelve days!  

Blogger-turned-angel-investor MG Siegler says the 12-day copy is a public warning to startups to sell to Facebook or watch your product be copied and distributed to Zuckerberg's 1 billion social slaves.

That analysis parallels the threats respected entrepreneur Dalton Caldwell says he received from Facebook executives.

Oh yeah, back to Snapchat, I never explained what it does.


Yes, you read that right: sexting.

Here's how Snapchat works: you can take a picture of 'naughty bits,' send it to a friend and they can view it for two or three seconds -- but only while your finger is connected to the screen of your phone.  

That last bit is important because, as the technical members of the class are already thinking, it keeps you from taking a screen capture (note: a screen capture is taken on an iPhone by pressing the on/off button on the top at the same time as the home screen button on the bottom of the device).

Obviously if you could screen capture the naked pic you would be able to forward it around, so thanks to this clever little hack, the 10- to 15-year-old girls who are pressured into sending naked picture of themselves are given the false impression that  their child porn texts won't torture them for the rest of their lives.

There are plenty of ways to hack the Snapchat hack, the most obvious of which is to take a picture of your phone.
And if you don't have an idea of how series the sexting plague is, according to this Vice article, young women are being blackmailed into virtual sex slavery -- and sometimes killing themselves -- over the issue.

… and this is just starting … and it's going to get worse and worse. 

Putting aside the abhorent nature of children sexting for a moment, Poke brings up massive questions about Facebook's product direction.

In talking with very smart people, here are the questions that came up over Mai Tais:

1. Why is Facebook focusing on a sexting app as opposed to solving revenue issues?

2. Why is Facebook doing massive PR about how quickly it was able to steal a tiny startup’s product?

3. Why is Facebook crowing that Zuckerberg was so involved in a product that is stolen, morally bankrupt and not transformative to Facebook's core challenges (undermonetization of its traffic and the growing failure of its app platform)?

4. What do Facebook's elite developers think when Zuckerberg comes into the room and says, "Let's all bust our asses for two weeks to copy a sexting app?" What do those same developers think when their friends at Google talk about Sergey Brin walking into the room and asking them to create dent-in-the-universe projects like Google Glass, self-driving cars and a dozen other insane products Google X has going on that you would be proud to tell your kids and grandkids you worked on?  

5. Is Facebook's app platform, clearly its biggest innovation to date, a bust? Why hasn't there been a second Zynga-like company that has been built on the Facebook app platform? Wasn't there supposed to be a Zynga in a dozen different verticals? What happened to the "social operating" system?

6. Is Poke a brilliant, Bill Gates-like market statement by Zuckerberg, showing the market that he isn't afraid to copy or overpay (e.g., Instagram) for any market innovation so decisively?     
What do I make of all this?

I think I need to get back to work on Inside.com -- which if I can keep my focus will be the biggest success of my career! Follow @inside on Twitter for hints, invites and previews.

Hoping you're having an awesome break, and I will see you all in the New Year!

Best, @jason

PS - When you guys reply privately to me, forward these emails with comments and CC me (jason@calacanis.com). Or, best of all, do a followup blog post, it gets me excited to write more.

PPS - Doing a live This Week in Startups with Evernote founder Phil Libin on Jan. 11 in San Francisco. If you want to be one of the 100 superfans there, sign up here. It's a whopping $2 per ticket, which we do to make sure folks don't resell the tickets.  :-)

PPPS - Mahalo has nine channels on YouTube as part of the (funded) partner program. They’re doing really well, and you might be interested in some of them. We're able to product this level of content for $300 to $500 a minute, which is like 5% to 10% of what TV costs. We are producing a slate of 15 more shows like this for 2013 and looking for advertising and distribution partners, so if you have any ideas, ping me!

Mahalo's YouTube Shows: