Facebook, the network effect and the value of open standards

Wired, along with every other tech site at the moment, has yet another article on Facebook and its upcoming IPO. I have the feeling that what I took away from the article, however, is not what writer, Fred Vogelstein intended. Specifically, this:

Zuckerberg obviously needed a lot of luck to get Facebook where it is today. But when I met him for the first time in 2007, it was clear he’d already become a student of what made entrepreneurs like Bill Gates at Microsoft, and Larry Page and Sergey Brin at Google, so successful. They all created businesses with powerful network effects — businesses, as Zuckerberg explained it to me, that at a certain point attracted new users simply so they could interact with existing users. “I think that network effects shouldn’t be underestimated with what we do as well,” he said.

Zuckerberg understood that people began using Microsoft Office because they didn’t want to risk being unable to open documents, spreadsheets, and presentations passed along by colleagues. There were other word processing or spreadsheet programs that were often better, but Office was good enough to keep people from taking a risk on them.

This is why open standards matter.

As soon as we accept de facto proprietary standards, we allow inertia to benefit the biggest player in the market. This will allow the dominant company to keep out competitors and thus stifle innovation – at least until they become so awful that we become willing to accept the pain of shifting to some other locked in proprietary monopoly.

Open standards, by definition, ensure a level of commonality between applications and – significantly – ensures data can be freely passed from one to another. This ensures that our data continues to belong to us, rather than being owned by whoever happened to encode it.

Proprietary standards are inconvenient, offer little long term security for our data and are a barrier to sharing data with others. They should be avoided.

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