By now you’ve all heard that Myspace sold for $35 million. And of course you remember that about six years ago it was bought for $580 million. That’s some ugly math. Ugly enough to distract from any real lesson beyond, "Wow, someone lost a pile of cash."
It’s easy enough, today, to look at Myspace and say that its downfall was inevitable and there was no way it could compete with the superior Facebook. But, Mark Zuckerberg’s skill at developing a social network company notwithstanding, hindsight is 20/20.
Before we get too happy dancing on the bones of the fallen, let’s remember that according to Compete’s estimates, Myspace still has almost four times the traffic as the top real estate websites. So if you measure success based on impressions or followers or friends or eyeballs, then take that for what it’s worth.
Myspace collapsed. Here are some thoughts tuned for the real estate industry.
Is a custom design really that important?
One of the most obvious differences between Myspace and Facebook is visual. The visual clutter of Myspace was intense. Facebook, however, has a relatively clean and clear design.
When talking with real estate professionals and the website vendors who love them, the topic of "template-based websites" and their apparent evil comes up frequently. The theory being that real estate experiences should be very unique and fully branded to suit the real estate professional.
Now, I want to say right off the bat that I do think that good branding work is valuable. Very valuable.
But I also want to say that I have seen enough website disasters that were made in the name of "branding" that I think more real estate professionals would be better served if they approached branding in a deeper way or ignored it altogether.
Facebook’s clean, simple template made Myspace look garish and amateurish immediately.
Is your site focused?
Near the height of Myspace’s growth, it signed a three-year deal with Google that allowed the search engine to power Myspace search and provide advertising. The deal was worth $900 million.
A big pile of cash, and being the site with the most traffic, is a good place to be. There can be drawbacks, however. And I’m not even going to mention hubris, because that’s too obvious.
That $900 million deal to fill Myspace up with Google ads made sense in many ways. But the people it made sense for weren’t the users. The site was already a cluttered mess in terms of visuals.
Adding in another layer of cluttered mess doesn’t help. When that layer isn’t a part of the primary task of the website (connecting people and music, in this case), it helps even less.
Making money on your website is good. But when it isn’t aligned with the needs of your site visitors, and your business model depends on having lots of site visitors, then you’ll want to be pretty careful about your strategy.
For real estate online experiences I see this sort of thing creep in now and then as well. Many brokerages offer a great deal more services than helping people buy or sell a house. Those other revenue streams are very important.
However, when the additional services start to crowd out the primary task of the website then your visitors can get confused and distracted. This isn’t good for traffic and it’s definitely not good for helping people complete the primary task of the website.
The ebb and flow of fashion
As noted above, Myspace’s approach to design outsourced all of the branding work to the users. The tactic involved allowing for immense amounts of personalization. It looks terrible most of the time, but people love their own terrible design.
Facebook, the next-in-line of the social networking sites, maintains strict control over the look and feel of the site. This tactic involves maintaining a consistent experience. It may limit personal expression, but people enjoy knowing what to expect on any given page.
The two sites represent a continuum when it comes to user control. On one end is personalization, and on the other end is consistency. Neither of these is right or wrong. Sometimes people want to express themselves and other times they want a consistent experience.
The general desire for personal expression is something that comes and goes, like fashion. The chaos of all of the early Internet dot-com Web experiences was replaced by the consistent experiences and interfaces of the past four years.
Myspace was on the wrong side of that fashion trend.
The thing to keep in mind is that fashion changes. I’ve already heard young people describing Facebook in the same terms they use to describe email and mentioning instead their preference for Tumblr — a site that allows for greater personal expression than Facebook does.
There are also fashions in real estate. Not just in terms of property types or neighborhoods, but in terms of how people want to experience their search to buy a home or find a buyer.
Fashion changes over time. It’s worth considering what fashions are important in your market in terms of search experience. The only way to discover this is to spend time listening to customers.
Looking at your competitor’s websites won’t give you the answer to this question.
Technical decisions that impede the ability to improve
Myspace was built in ColdFusion. Back in the day, using ColdFusion was a totally acceptable way to build a dynamic website. But advances in coding languages eventually surpassed ColdFusion.
At that point, when open-source technologies became more capable than ColdFusion, Myspace was at a crossroads: migrate the site to a new coding framework or keep using the current code.
This is one of those hard decisions that no one can really make from the outside. So it’s pretty unfair for me to criticize the company for not switching to more capable technologies. But not moving to better coding languages has a number of downsides:
- Talented developers tend to want to use newer technologies that they can build on and improve. This will have an impact on whether they work with you or not.
- Your available talent pool for maintaining older code decreases over time, making it more challenging to accomplish major updates.
- Delaying migration of the code increases the cost of the migration. This becomes a vicious circle. You are eventually in a situation where starting from scratch is less expensive than migrating the code. You don’t want to be in this situation and neither does anyone on your team.
Sure, this is geeky stuff. But there is an important lesson in it: By working with substandard tools, your ability to do things is impeded.
You can watch as others do things with better tools. You can identify how their tools are better than yours, and in which ways. But you can’t decide to upgrade your tools because the cost is too great in time or money. You can’t improve.
It wasn’t just that Facebook was a better or more fashionable experience than Myspace. There were moments and situations that were within the control of Myspace leadership when they took actions that didn’t help them in the long run. This led to its collapse.
There are lessons in all collapse stories — lessons that are more valuable than the ultimate sale price of a company.