Long before the pandemic made in-person coffee conversations a nostalgic memory, I was chatting with a friend about the increased frequency with which large technology companies copied their rivals. Microsoft was quick to imitate Slack with Teams. Instagram ripped off Snap Stories and brazenly acknowledged that in its initial announcement. And today, Facebook-owned IG announced Reels, a competitor to the red hot creator platform, TikTok.
In case you were wondering, Instagram says Reels is a way to create 15-second, multi-clip videos with audio, effects, and new creative tools and share them with followers, and some will be part of the Explore space. Think of it as TikTok for Instagrammers.
My friend, who spent time in a Michelin star kitchen, quietly pointed out that the restaurant world does that all too frequently. If it is asparagus season, don’t be surprised to see restaurants across the spectrum, start offering asparagus dishes as part of their seasonal menu. Truffles are in season, well you get Truffles on everything, including the ice cream. If you don’t, then the customer will go to the other place, and you lose a chance to make money.
The same holds true in the world of technology — big companies have to serve whatever is in season. Any new behavior which becomes popular and gets engagement and steals attention from a big platform is viewed as a threat. And no company illustrates this loss of attention worth declaring a red-alert than Facebook. Mark Zuckerberg said as much during the Big Tech CEO hearings.
“Our job is to make sure that we build the best services for people to connect with all the people they care about,” he said in response to his strategy. He was getting paranoid about Instagram. In 2012, Photosharing on mobile was a new behavior, and Instagram was the company leading the visual social networking charge. “Instagram can meaningfully hurt us without becoming a huge business,” Zuckerberg wrote to one of his executives. By buying off the company, “What we’re really buying is time. Even if some new competitor springs up, those products won’t get much traction since we’ll already have their mechanics deployed at scale.”
Let’s assume Kevin Systrom and Mike Krieger decided to call Zuck’s bluff and decided to stay independent with Instagram. It is pretty likely they would have met the fate of Snapchat. Evan Speigel chose not to sell the company to Facebook and soon found that what made Snap special was cloned in Instagram and Messenger. Snap might have come up with the concept of Stories, and vertical advertising, Facebook, however, ended up owning the market. And they are doing it again with Reels, the TikTok clone.
Stories-format and TikTok formats are like “asparagus in season.” Remember how “stories” as a behavior became all the rage. The same will happen with TikTok, though not many will entirely come to understand the underlying dynamics that make TikTok work. It has been reported that even lumbering YouTube is building a competitor.
And the reason is that all “copies” are not the same. While copying a product is a practice as old as the history of the technology sector, what’s different is how big tech companies zero in on these new behaviors.
The new reality for all startups today is that they are in the Red Queen’s Race from Lewis Carroll’s Through The Looking Glass. Alice is competing with the Red Queen. Alice is running but remains in the same spot, and when she complains about it, the Queen responds. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
In this case, Alice is any startup that comes up with new behavior and manages to carve itself an edge. It doesn’t have the luxury to sit on its laurels for long, because as the Queen (big platforms) can take advantage of the new markets opened by the startups. And if a startup has to beat the big bad Queen, they need to run twice as fast — which means taking the early attention and turn it into a more significant moat. If they don’t, then they find themselves trapped in Red Queen’s race — and going nowhere.
Let’s take Slack vs. Microsoft drama. As modern enterprises have moved to a more distributed structure, it was somewhat clear there would be a need for tools that help enable causal and fast-paced real-time communication behavior. The companies needed more than just email. Slack correctly identified the behavioral shift and has become a publicly-traded company.
Microsoft recognized the shift to the new behavior and quickly created Teams. It also threw its corporate weight and fearsome distribution channel to become a Slack competitor. It isn’t about if it is better or not as elegant— it has its version of “asparagus.” If they didn’t, they would have to worry about what Slack could add to keep the attention and engagement of its customers. And that could mean Slack offering products that compete with Microsoft. The same worries plague other companies as well. If I were a betting man, I wouldn’t be surprised to see everyone from Google to Salesforce have a Slack-type behavior in their products.
We have seen this with online storage as well. DropBox and Box have correctly identified that we will all use online storage to sync and share documents and files. They both became multi-billion dollar publicly-traded companies, but they didn’t go unnoticed by Microsoft, Google, and Apple. Today, the big platforms all offer online storage integrated into their platforms and have left Dropbox running in the same place.
Inspired by Red Queen’s Race, US evolutionary biologist Leigh Van Valen came up with the Red Queen Hypothesis. He proposed that a species must continuously adapt, evolve, and reproduce to compete with other species that are ever-evolving. If not, they go extinct. Today’s big tech platforms are much more adept at evolving and growing. And if you are an upstart, you better take advantage of your edge or become extinct.
Zuckerberg understands that well. As I wrote earlier this week, TikTok is growing at blinding speed, and that has Zuckerberg worried. And rightfully so. He knows more than anyone else that attention is fleeting; viewers are fickle. Same folks who like spending hours on Facebook and Instagram will jettison the platforms for TikTok in a jiffy. He needs to figure out a way to keep them corralled.
In a tweet announcing Reels this morning, Adam Mosseri, head of Instagram, said: “Reels is a major part of the next chapter of Instagram.” Being subtle is not part of Zuckerberg’s strategy. It is time for them to make TikToks (aka asparagus.)
August 5, 2020. San Francisco