Disrupting Facebook

Divisional ascendancy applied to Facebook – how to disrupt the social network

Divisional ascendancy is the official term (more polished) for “divide and conquer”. In politics, sociology and economics, this term applies to breaking up larger concentrations of power into little pieces and tackling them individually.

When a startup is trying to “disrupt” a large market or has a big competitor, the best approach is to break up that larger company’s products, strategy, marketing muscle or sales approach down into its component parts.

Then you want to either:

a) pick on the part that the larger company is the weakest at or

b) pick the part that the larger company is ignoring or

c) pick the part that has the most margins (profit) or

d) pick the part that the larger company thinks is “safe” from threats.

Of course, it goes without saying that if you do this only in the context of the competition (the larger company) and not your customers (or the market in general) – you will fail.

Most larger companies are really a bunch of smaller organizations. That’s the first observation. Very rarely is the culture of larger companies so strong, coherent and consistent that it permeates everything they do and every organization that exists – which is why you see most of the “old guard” in technology unable to innovate, dominate and tackle new markets.

As an example, take a company with multiple products, and multiple channels.

While channel conflict is obvious -when the “partner” team wants to get business to the channel vs. the direct sales team wants to take that business for themselves, product conflict is less so.

Product conflict is when the company plays both the coach (platform) and the player (application) roles.

Take the example of Facebook – they’d like to be a platform, so the developer evangelism team goes out to recruit partners to build apps. Some of those apps become so big and large that they can become bigger than the company itself. When the platform teams notice that, they understand they are “leaving money on the table” for others to monetize.

Strategic or otherwise, they will end up building the app to compete with the partners.

This is a crucial point, that startups can exploit.

Sometimes (when the culture of the company is fairly weak) the two sides (platform and apps) tend to disagree and if there is no strong alignment, or clear answer if it is better to be either, then things go on for a while without clarity from the company. Which allows startups to pick up mindshare and hopefully market share.

In a particular observation about Facebook, I notice how on my mobile it has become an “Instagram” – very heavy on pictures / photo / video heavy and very text / links light.

They are ignoring text in favor of images is my guess, which makes sense for them. If you were to build a pure text, link sharing app for mobile among “friends”, which they are ignoring, I suspect you can disrupt their mojo.

The channel conflict happens more often. In many cases the Business Development team ends up helping partners to sell and fulfill on their “platform”. Left unchecked, they might end up undermining the direct sales team from winning deals directly.

This is quite possibly the best way to disrupt a large B2B company.

Historically, divisionally ascendancy has been the downfall of a few larger software companies – more companies die because of either losing focus on their customer or changing technology under pining or market demand.

The way startups can use this is to convert the battle against a larger company into smaller pieces.

The thing I have noticed, in B2B software companies among the ones I have seen, is that the easiest is to pick the areas the companies are weakest at (which makes sense) and hardest to pick are the areas where the larger company makes the most margin – hence has the most incentive to protect.

The most counterintuitive thing I have noticed is that where companies make the most margin is also where they tend to be the weakest.

The way it works is that your product is so disruptive that they will do anything to protect that margin, including giving away a part of their product free for a certain period – to prevent you from gaining any market share.

So, pick the one they are ignoring and then work your way from there. To do this, you will need to figure out a way to monetize the “ignored” part – where in lies the challenge.