Building your Business in a Changing world

Building your Business in a Changing world

Tefen interviewed Mr. Blake Chandlee, VP of Global Partnerships for Facebook, regarding Facebook as a business tool for growth and innovation.

Founded in 2004, Facebook Inc. provides one of the world's leading social networking services, helping people to communicate more efficiently with their friends, family and co-workers. The company develops technologies which facilitate digital mapping or a "social graph" of real-world social connections, thereby making it easier for information to be shared between users.

Facebook now has more than 500 million active users, 50% of who log onto its website each day. Statistics show that people spend a staggering 700 billion minutes per month on Facebook.

Mr. Blake Chandlee joined the Facebook team when it had "only" 20 million users, most of whom were based in America, and was given the mission of internationalizing the company. He currently serves as VP of Global Partnerships at Facebook.

Blake chandlee

The world is changing

According to Chandlee, the world as we know it is undergoing fundamental change. We need to open our minds and throw off the blinkers if we are to embrace and fully understand how the evolving interaction of private individuals amongst themselves and with the commercial world will affect our business lives in the long term. Now is the time to keep up with the social networking movement or risk being left behind. People power is the name of the game and users are enjoying a much greater influence on the business world than ever before. We have moved on from a world in which brands control the message, to a place where brands can suggest the message but success is ultimately controlled by the consumers.

"I'm probably one of the oldest people at Facebook, by about 10-15 years", Chandlee explains. "I grew up in a world before the internet. If I wanted to go to the cinema to see a movie I would open a newspaper to see where it was playing. The world has changed. It didn't happen overnight, it took the last 12-15 years, but it's been a fundamental leap to where we are today."

The whole search engine phenomena began when Jerry Yang and David Filo created Yahoo, a simple tool which tells you "these are the cool websites that we found" and progressed to the complex algorithmic search business that has been driven by Google and Microsoft over recent years, culminating in the user-generated content which we experience today. We access the Internet for local news, sports scores, political trends or for socializing with family and friends, the new big influencers on our lives and decisions.

The Facebook Concept

Facebook ranks as one of the top players on the net, along with Twitter, Flicker, Youtube and Linkedin for professionals.

According to Chandlee, at the end of the day it all comes down to the people involved. The Facebook concept is simple: create an intimate environment in which two friends can connect together. In this day and age you need to get personal: understand how to engage and introduce yourself, whether you are a government, a brand, a charity or an individual. Successful networking means understanding the role you play in these relationships and the overriding objective of all this "interaction."

Mark Zuckerberg, CEO of Facebook, and Chris Cox, head of the product team, have a clear idea of the role that Facebook plays in the world. Our society is shaped by different trends at any given time and the way forward is to ensure that everyone across the world is given a voice to influence these trends. The best way to organize the wealth of information available across the globe is via the people themselves. This bottom-up approach establishes a "social graph" or map of human connections with an unbelievably powerful impact.

Chandlee reveals that Mark Zuckerberg, CEO of Facebook, always viewed Facebook as a movement, not as a website. To make it easier for people to join forces and translate their vision of achieving something great into a concrete existence, a company was set up.

Chandlee explains that Mark believes this is just the beginning of Facebook, despite the already staggering 500+ million active users around the world (users that have a Facebook account, have logged on and taken an action in the last month). Over 50% of these users come back every single day and over 200 million users visit Facebook on their mobile devices.

Building a business

Facebook has a different approach to building a business. Although its 2,000 employees are dwarfed by companies like Google with a workforce of 25,000, they have a unique and innovative angle on how to use technology to build a company.

Chandlee points out an interesting distinction between internet companies who are entering new markets. "When I helped Yahoo for a number of years, we wanted to enter a new market, in France. This is a powerful and robust internet market for advertisers so we positioned 100 people on the market, including a general manager, a bunch of products teams, functional heads, sales people, P&L division and we basically set up a company.

However, when it came to internationalizing Facebook, Mark Zuckerberg relied on technology and the user community to turn a primarily American service into a global company. Rather than focusing on geographic location, he turned to language. Facebook revolutionized the idea of commercial expansion by building a translation application which allows users to come in and help translate the site for us. We translated to Spanish, the first language we tested with this app, in about a month. We translated into German, our second language, in two weeks and we translated to French in 24 hours. Now we're in 90 languages around the world, reaching around 98% of the world's population."

Key components

Facebook's management look at the world as a combination of the following three components:

1. The users, these being the people around the world using Facebook,
2. The developers, meaning people who build applications on top of the social graph
3. The marketers, who are those people trying to communicate with the above audience.

"We look at each constitute in separate ways, but the common theme is that everything has to be efficient, effective and scalable. We are building a service not for the local markets but for global markets, which customize themselves through language and content," Chandlee explains.

Facebook offers a platform on which to pursue authentic relationships between individuals. The company aims to provide a user-friendly and confidential environment in which people can be their real selves. According to Chandlee, the main challenge is to achieve the ideal balance between user privacy and the freedom to interconnect whenever you want to. Through customized sharing of information, people stay in control of who can view key data, such as status updates, photos and comments. "For instance, if I want to share a photo, I might not share it with everybody but only with my closest friends". This gives people a sense of security and the confidence to use and trust Facebook.

One of Facebook's unique tools is the News Feed, the personal user newspaper, in which users spend most of their time exploring what their friends are currently doing.

Chandlee explains that there are billions of connections, photos and status updates on Facebook. As networking becomes more popular, people spend more and more time in their social environment. "I read the other day that the world's largest photo sharing site, Flicker, had just reached its 5 billionth photo. Facebook already does 5 billion photos a month. This is mainly because users can tag their photos on Facebook, which turns sharing photos into an opportunity to socialize.

Sharing information in social networks

As trends shift, people are neglecting the traditional portal groups, the former port of call for finding information, and are steering towards social networks, in which they often discover information, provided by friends and family. Evidence of this is shown by Facebook being the chief traffic driver to the portals, YouTube and videos. As Chandlee explains, "It has revolutionized the way we need to think about finding information and how this information flows. We have created a free platform which is open for anybody to build on. This is an innovative theory, which is different from anything which was previously acceptable. We took a different view of the world and now everybody is opening up. The onslaught of so-called "open API" means that you can't even grab a burger before the whole world knows about it. Currently Yahoo, one of the largest portals on the world, is leveraging Facebook's social elements around its website to try and socialize itself. They do not pay us to do that, we support it because we think it's good, we want the world to be social."

Major gaming companies, like Disney and EA, are also trying to figure how to socialize their business. According to Chandlee, it seems that the users prefer to play against their friends rather than against strangers or the computer. For instance Farmville, a successful and famous game where the users can plant crops, enables information to be shared on social networks.

Advertising brands in social networks

Banner ads currently have no role to play on Facebook. "We took them out about one and a half years ago and it's the best thing we have done for our business and for our advertisers around the world," Chandlee explains. "We built a publishing platform on Facebook pages, which allows any brand in the world to have a presentation on Facebook, in a similar manner that a user would, in order to connect with people, publish and socialize themselves. This is not a micro site which is seated somewhere else and which people have to consciously go to. It wouldn't pay for us to build micro sites, which require thousands of engineers and web developers all over the world. "

The main factor which Facebook believes is fundamental to advertising is good dialog with the customers. You need to want to listen to what customers really think about brands and then respond to them.

"We have to fundamentally think about the added value we will bring to our customers". Chandlee continues. "We don't believe in interrupting the user's experience with traditional banners in order to advertise a business. Brands should instead become an integral part of a person's profile - a combination of his friends, family, the kind of shoes he wear, the kind of car he drive, his religious believes and more."

Facebook is quick to spend quality time with big brands, politicians and governments so that they understand how they can best leverage its platform to meet their goals and objectives. As a publishing platform, Facebook is designed to engage with people and include the brand experience in their lives without interrupting them. Innovation plays a significant role and advertisers must be creative and modern to promote their business on Facebook. According to Chandlee, Facebook's developers are constantly trying to build advertising units that enable brands to interact better with users.

For instance, Starbucks now has over 16 million connections to their brand. However, they are not trying to sell people coffee. Instead, they talk about their association with breast cancer awareness and their coffee growing in Africa. They might introduce a new flavor of coffee at some point, but their presence is not designed to try to push brands on the people. By attracting interest in the social responsibility of your company, you gain consumer confidence and, indirectly, boost customer willingness to consider your brand product.

Chandlee concludes by saying "We are now focusing on a couple of intriguing challenges: mobility and devices of every shape and form. We are constantly inventing new products, such as the Facebook places, which allow you to check in to actual places, and the universal payment platform that we're exploring right now. Facebook is expanding to embrace a wide variety of media platforms, including mobile phone, IPAD and GPS car systems. Our prime motivation is to generate added value for our users while building products on a scalable level."

By Adi Sheleg, Senior Consultant, Tefen Israel

Sharon Ginzburg, Consultant, Tefen Israel