The Information has a fascinating piece illustrating why, while building a business around e-commerce is seen as attractive by some tech moguls, it is easier said than done.
"It was 2020 and Mark Zuckerberg’s focus on his latest project began to intensify.
Online shopping was booming, and the CEO of Facebook - now called Meta Platforms - wanted to transform Facebook and Instagram into shopping destinations. Zuckerberg threw himself into the effort, hosting daily meetings and taking a hands-on approach far beyond what was typical for a CEO of a huge public company. He showered the commerce team with capital and engineers so it could accelerate its progress - more money than the group had asked for, according to a person with direct knowledge of the matter. He even talked about wanting to eventually drive Amazon-like levels of commerce through Meta’s properties, this person said.
"The shopping push made sense: Facebook and Instagram have billions of users, and Meta’s recommendation and ranking technology, which the company has spent years honing to tailor its feeds and ads to users’ tastes, could in theory be effective at showing people products they were likely to buy. And a significant portion of Meta’s huge ad business was already promoting products that people were buying elsewhere on the internet. But employees worried that Zuckerberg’s expectations were exceedingly high, and some were concerned his lieutenants were unwilling to tell him so.
"Now Meta’s dreams of making Facebook and Instagram into shopping destinations are in tatters. In the two years since Meta launched Shops on Facebook and Instagram, sales have fallen short of Zuckerberg’s expectations, according to multiple former employees. The commerce team has also struggled with high turnover and persistent debates over strategy, triggering disagreements among leaders about what work to prioritize.
You can read the entire story here.
- KC's View:
One of the conclusions I reach from reading the piece is that at least part of the reason for Meta's problems is that Zuckerberg's priority going in was sourcing more and more data that would allow it to make more and more money. Say what you will about Amazon, but the premise there always has been to start with customer needs … sure, it collects data and wants to make lots of money, but the assumption - largely correct, I think - has been that those things are the results when shoppers are satisfied.
The other thing is the degree to which these descriptions of Zuckerberg seem to validate the view of him espoused in The Social Network. In retrospect, the writing by Aaron Sorkin and acting by Jesse Eisenberg seem more on target with every passing day. (Maybe it is time for them to get together with director David Fincher for a sequel?)