Facebook will surpass one billion members in early 2012. If it were a country it would be the third largest in the world. It may soon be the largest, beating India and China, in a few more years. The social network is fueled by information exchange technology designed for consumer (or friend) networks that could not have existed before the world-wide Web. The Internet, now just 15 or so years into broad acceptance, was key to enabling these kinds of collaboration systems.
What’s the value of Facebook’s core intellectual property—its software and technology—today? If you were handed the CD with the source code to the most powerful social network on the planet, what could you do with it? The answer might surprise a lot of people who’ve spent their lives building and selling commercial software systems.
For some time now, software has been about the innovations and inventions that architects and engineers could capture and protect. The product was their angle. But Facebook’s biggest value is not its technology but its network. It’s the community of nearly one billion members who go to Facebook, many of them several times a day. Even superior IT platforms cannot compete with the overwhelming advantage of a one billion member community. You don’t go where the great functionality is, you go where your friends are. You want to see their updates and know where they are—and you want that information now.
What’s happening today with information exchange technology in the consumer world will be the same in the business-to-business world. You need great innovation and invention to penetrate the market, to get started. And then you need a great strategy to drive adoption in the market, to build the community.
It’s a race to get critical mass in the market in which you compete and the larger the community, the bigger the prize. What would Facebook be, if say, its numbers were the size of a city instead of one of the largest countries?
The world of global commerce and supply chain—the sourcing, ordering, shipping, receiving and paying for product—is both a huge industry and a critical function for every country on the planet. It’s also highly fragmented, inefficient, uncontrolled and unmonitored. Even the biggest companies run their global operations in a state of “blindness” because they cannot efficiently and cost-effectively share information with their trading partners. There is no B2B community platform leader in the market today. It’s wide open. All the big software players who’ve dominated the industry for the past 30 years are focused on “old guard” software—the software of record keeping within a single company. Think of it as Facebook if you could only see the status and updates of people who share your last name—it just isn’t that valuable anymore.
Today, companies need technology networks that empower them to see a product in every stage of its lifecycle—in real time. They need to make quick decisions to re-route shipments and engage partners and suppliers to meet consumer demand. Without a way to see all of this, they will fail. It’s much more serious than what happens on Facebook. Any given post can carry with it implications for thousands of other linked companies.
To get your entire trade network on the same page you need software and systems that go beyond your single company. You need systems that can connect you with your community. In commerce and supply chain, these systems are network systems and they are transformative. They are code breakers. They enable, for the first time in history, massively scalable information sharing across entire trade networks that span the world.
But the key to their power is the breadth and depth of their communities. Just as in social networks, people will go where they know they’ll find action.