In Facebook’s initial public offering filing, Mark Zuckerberg says his company adheres to “the hacker way.” Experiment, try a lot of new ideas, prototype them, and keep moving. It’s an ethic that the company will need more than ever when its shares are trading at a projected multiple of 25 times revenue. To meet elephantine expectations, the social network will need to hack its way out of its comfort zone and into untapped markets.
Such expansion will require rapid innovation in business models. So, in the spirit of the hacker way, here are some “white-space” zones that will require Facebook to innovate new business models:
• FaceDates: There are dozens of dating apps on Facebook, but as with most app categories, the level of quality and trust is low. Facebook already knows where you live, your relationship status, who your friends are, and what kind of movies, books, music, and politics you like. Surely, it can find a way to get singles to pay for a premium dating service that surpasses eHarmony and Match.com.
• FaceBands: In North America, many people are shut out of concerts and other events by high ticket prices, exacerbated by Ticketmaster’s near-monopoly. At the same time, small- and medium-sized venues for live performance have all but disappeared. Suppose Facebook scoured the fan pages of bands and artists and partnered with midsized concert venues? The result could be an innovative way to target the right fans in the right places to fill those venues.
• FaceHealth: In the pharmaceutical industry, aging populations, new technology, and inevitable cost-cutting will create an opportunity for a variety of services for test marketing new treatments and running clinical trials. Along these lines, Facebook might leverage what it knows of what people post about their health to create a new business that helps the pharmaceutical industry with one of its biggest problems: speed to market. The startup social-health network PatientsLikeMe.com is already doing much of this.
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Mark Johnson is a Senior Partner at Innosight.