Lessons from the Facebook IPO on how to manage expectations
By Luke Sklar and Amber Hudson
Was last week’s IPO for Facebook the lunch-bag-let-down of the year or what?! After all the media yapping about this thing, I guess I expected a titch more drama from the 3rd largest IPO in US history (behind Visa and GM. My, what company FB keeps): soaring highs, plummeting lows, screeching traders and frenzied media. Sure, a computer glitch added a touch of commotion. But really, it all kind of…fizzled.
Some say the $38 initial offer is the right one, hence the price-hovering. But I’m wondering if there’s more to it. When a brand is this big, with this much attention, when you open the kimono you start to see the icky bits.
- Sheryl Sandberg: she’s the one that found a way for FB to actually start making a bit of money. She’s also leaves the office every day at 5:30. Gosh darn it, good for her.
- The Winklevoss twins: from claiming they came up with the idea of FB to lovers of pistachios
- Eduardo Saverin: just before the IPO, he renounced his US citizenship
- Mark, with his snarky attitude wrapped in a cotton hoodie
- Privacy screw-ups
- Ad revenue is growing much more slowly than at Google (in fact, GM is pulling its $10 million advertising budget with FB)
- Buying mobile street-cred via Instagram. For…a…BILLION…dollars.
- Then there’s the $104 billion market cap, 100x more than its earnings.
Mo money, mo problems.
As one of the Four Horsemen of the Internet, Facebook (along with Google, Amazon and Apple) is shooting for the stratosphere, and they are now under the microscope. No one, I mean no one could possibly live up to the expectations (helloooo, Obama). Has FB sold its soul? Will they become the dated department store, with specialists succeeding around them? Me thinks so.
Here are the lessons for you, dear marketers: It’s not about being the biggest, it’s about being the best at what you do. Pleasing 1 billion consumers isn’t enough. You need to have a real growing business (anyone sick of the word “monetize”?). By the way, how many of you have clicked on a Facebook ad…ever. On top of that, you’ve got to watch your talk-to-do ratio: do more, flash less. Big brands are scrutinized. So when you are talking, you’ve got to manage expectations so that you’re not set up to fail.