With 1.5 billion active users and a market value of over $320 billion, Facebook dominates the social media industry. The company has become an industry titan and its blue logo is recognizable around the world. But it almost wasn’t. The company’s predecessor, MySpace, was projected to be the market leader in the early 2000s. And in 2005, when Facebook was still adding members at a growing rate, MySpace offered to buy the company but wouldn’t agree to the $75 million Zuckerberg wanted, so Facebook remained independent. Fast forward to present day and Facebook is in the Forbes top five most valuable companies globally while MySpace remains a footnote in social media history. But just imagine for a second, what things would look like if MySpace had agreed to Zuckerberg’s terms. Would Facebook still have been the powerhouse phenomenon it is today? The entire social media landscape would likely look very different, not to mention the impact it would have had on investors for both companies.
So what is the lesson here? As the old saying goes, hindsight truly is 20/20. It’s easy to develop complacency with any business strategy-especially one that is working. But the truth of the matter is that the world we live in is incredibly dynamic and there are forces at work in every segment of industry that can change the game at any minute. The story of Facebook and MySpace is not an isolated occurrence.
For instance, Yahoo missed the opportunity to purchase Google not just once, but twice! They declined to purchase it for $1 million in 1998. Realizing the mistake, they offered $3 billion in 2002 - a 300,000% increase in just 4 years! But Google stood firm with a sale price of $5 billion, which Yahoo declined. Since that time, things have changed dramatically for both companies. In 2007, Microsoft wanted to purchase Yahoo for $50 billion and that offer was refused. Currently, Yahoo’s estimated market value is around $5 billion, while Google has become the most recognized and used search engine in the world, worth approximately $545 billion. If only we knew then, what we know now. “After the ship has sunk, everyone knows how she might have been saved,” as the old Italian proverb goes.
But much can be learned through history, in fact, if we don’t learn from it, we are doomed to repeat it. So take a moment and imagine yourself in the position as leader of Yahoo, MySpace, Facebook or Google. Or think back to a business decision that you made, which turned out quite differently than your expectations. Now, reflect on not just what did happen, but what could have happened if the alternate path was taken. The world often looks very different. Sliding doors, indeed!
Now, use that same exercise when faced with present-day business decisions. Before making a decision, especially a big one, take the time to reflect on potential outcomes for all options. Use the experience and knowledge of past missed opportunities to inform present decisions which will then lead to future successes. In other words, use hindsight to develop foresight, which will lead to insight. This won’t guarantee the right decision will be made every single time, but it will make you more aware of the potential outcomes and any corresponding consequences or rewards.
Sarah Pearce is a professional speaker, business coach and social strategist and author of Online Reputation: Your Most Valuable Asset in a Digital Age.
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).