Facebook’s latest financial results were their best yet. Their 2018 revenues & net income both grew by 38% percent and their historical comparatives have not stopped increasing.
On paper, the company is exceptionally healthy.
But despite these strong financial results, Facebook knows that their very survival does not depend on ad revenues and the very thing that has made them successful.
Because they see the trends. They know that privacy is an increasingly important topic and that their model is squarely in conflict with privacy since their targeted ads rely on mining our personal data.
So Facebook can do one of two things:
1) Look at their numbers and say everything is A-OK, à la Blockbuster (and most firms today truthfully)
2) Look to the future, see the trends and understand that their model will be a dying breed, and look to reinvent itself
Facebook is choosing path #2. Which is why I love the launch of their new project Libra
so much. It’s a bold move, but one that recognizes that future trends are more important than historical performance.
Libra is a cryptocurrency designed to be a global digital currency. Facebook already has millions of users on their apps (Facebook, Whatsapp, Instagram), so now they are looking to monetize these users through way of a cryptocurrency where all of these users can exchange Libra tokens seamlessly with each other.
It makes a lot of sense and the world is likely ready for something like this. If it works out, they can pivot from their current model into a completely reimagined one and ride the trend wave.
Firms can learn a lot from this. Don’t just be comfortable with historical performance. There’s a shift happening in the profession and those that can ride the next wave will be well-positioned for the future.
And with that, let’s get to this week’s Future Firm Weekly Top 5: