Facebook Killed This $100M Startup With One Feature

🌈 Abstract

The article discusses the importance of not relying solely on external platforms like social media for the growth and sustainability of a business or content creation. It highlights the story of an entrepreneur, Joe Speiser, who lost his startup due to changes made by Facebook to its algorithm, and provides advice for content creators, startup owners, and established businesses on how to maintain control over their audience and not be at the mercy of external platforms.

🙋 Q&A

[01] The Rise of Web-Based Businesses

1. What are some examples of web-based businesses and content creators mentioned in the article?

• The article mentions the following examples of web-based businesses and content creators:
  • Businesses and side hustles based on web pages
  • Over 114 million active YouTube channels
  • Over 100,000 TikTok influencers worldwide
  • Twitter creators, Instagram models, Medium writers, and LinkedIn content innovators
  • Writers that started on Wattpad and now have their books published
  • Tweetbot, an app that simplifies Twitter's current application

2. What was the story of Joe Speiser's startup, Little Things?

• Joe Speiser started the startup Little Things in 2014, which grew to become a successful media company within 4 years:
  • Reached $75 million in revenue on track for 2018
  • Had 110 employees
  • Competed with popular news pages like BuzzFeed, ABC, CNN, and Fox
• Little Things was a webpage with several shows on various topics, including live sessions with over 4 hours of original content per day.
• The company had a large social media following of 20 million, 40 million monthly views on comScore, 15 million live programming views, and 900 million video views.
• However, the company was completely dependent on Facebook to grow and reach its audience, as all their content was published on their Facebook page.

[02] The Downfall of Little Things

1. What led to the downfall of Joe Speiser's startup, Little Things?

• In 2016, there were scandals around Facebook's role in the 2016 US presidential election and the company's data privacy practices.
• As a result, in 2018, Facebook decided to change its algorithm to prioritize "real news" over other types of content, in order to clean up its reputation.
• This algorithm change caused a 90% drop in Little Things' organic Facebook traffic overnight, as the company's content was deprioritized.
• Despite trying to talk to Facebook about how to remain relevant, the company was told to simply pay for ads.

2. What was the impact of the Facebook algorithm change on Little Things?

• The Facebook algorithm change caused Little Things to lose 90% of its organic Facebook traffic overnight.
• This had a devastating impact on the company, as they were about to close a $100 million deal with a large media conglomerate.
• Ultimately, Joe Speiser decided to sell the startup, as he could not find a way to keep the business afloat after the loss of their primary source of audience.

[03] Lessons Learned and Advice

1. What is the key lesson the article tries to convey to content creators and businesses?

• The article emphasizes the importance of not relying solely on external platforms like social media for the growth and sustainability of a business or content creation.
• It advises content creators, startup owners, and established businesses to find ways to control and maintain their audience outside of these platforms, so that they are not at the mercy of algorithm changes or platform failures.

2. What are some examples of how successful businesses and content creators have diversified beyond relying on a single platform?

• Fashion Nova, Gymshark, and other e-commerce businesses started by paying Instagram influencers, but then built powerful email newsletters to control their audience.
• Youtubers are now creating content for Patreon, their own websites, and even publishing books, to have more control over their audience.
• TikTokers with over 100k followers often pin their Instagram or YouTube channels, to direct their audience to platforms they can better control.

3. What is the overall advice the article provides to content creators, startup owners, and businesses?

• The article advises:
  • Find ways to control your audience outside of a single external platform, so you are not affected by changes made by that platform.
  • Do not rely solely on one external platform, as they do not owe you anything and will act according to their own growth priorities.
  • Diversify your marketing and audience-building efforts beyond just social media platforms.
  • Ensure you know how to market your business even without the internet, so you can thrive even if social media platforms become irrelevant.