Facebook’s Ghost Unicorn

The little-known story of Facebook’s top competitor

How can you be first to market, have a prophetic product with traction, and still have to shut down your business?

This is the real story behind the first college social network. It signed up 75% of campus within its first month. Seeing the undeniable traction, the founders left school to focus on it full-time.  

Campus Network had all the makings of Facebook, and yet it failed a year in.  

Startups bite the dust all the time, but what’s remarkable about this one is that it got so many things right. Not only did it launch before Facebook, but the product was far more advanced. 

Where did it go wrong?

Novel, but not too novel

Campus Network was a pioneer. It had the first versions of what would later become iconic features including a profile, feed, and comments on photos. Meanwhile, Facebook was basically an online yearbook. 

"Why would you go to a site that only had poking and a photo when you can share photos, share music, and share your thoughts on a blog?" -Campus Network co-founder


The problem: it was only 2004. Campus Network was a radical set of cutting-edge features — light years ahead of familiar convention.

Facebook, a site that only had photos and poking, was compelling because it was novel enough to pique interest but familiar enough to breed trust. Fun + not scary = just right. 

Simple is shareable 

“I use Campus Network like a blog, a photo album, instant messenger, and bulletin board.” -Stanford student

Campus Network is hard to explain because it’s so many things rolled up in one. And what’s hard to explain slows down growth. Density of features on a page is a useful proxy for simplicity and, in turn, shareability.  

Campus Network was a packed house: 

Campus Network: Facebook competitor


Facebook was relatively minimalist: 

Early Facebook: 2004-2005

This illustrates a paradox that every product grapples with: simplicity sells, but you need features to increase engagement. The real challenge is building powerful, feature-rich products that delight the users who know you, and still feel simple to those who don’t.  

But when it comes to early incarnations, simplicity is critical to jumpstarting the growth engine. You need to effectively answer every new user’s first two questions:

  1. What do I do?
  2. How do I do it?

Nail your wedge, then expand. 

Are you Ben & Jerry’s or Amazon?

There is one assessment that changes everything: are you a Ben & Jerry’s or an Amazon? Ben & Jerry’s: grow organically and profitably. Amazon: go big or go home. 

Social networks fall squarely in the latter. People like to be where people already are. This was how Facebook sharpened its advantage. 

Campus Network launched in January. Facebook launched in February but already started expanding to other schools by March. It would take Campus Network 6 more months before it was ready to expand. By then, Facebook had established a foothold in dozens of schools; it monitored Campus Network’s movements and followed up with a savvy “surround strategy”: launch in nearby campuses to accelerate word of mouth and squeeze Campus Network out.  

Facebook also hunkered down for a long battle. It raised money to fund its expansion effort, while Campus Network turned down VCs, choosing instead to self-fund. I have a soft spot for self-funded companies, and they can beat VC-backed darlings, but deep pockets is a necessary evil in winner-takes-most markets. 

In short, Facebook studied the chessboard, tailored its strategy, and executed like nobody’s business. It used simplicity and speed to crush Campus Network.  

What’s more, simple products make it easier to go fast — when you’re not bogged down with features, you can be nimble with less effort. That’s how Facebook expanded so swiftly, while Campus Network spent months on a rewrite.

Simplicity reinforces speed. 

Seeds of culture

I have a theory that the DNA of a company is shaped by the events of its earliest years.  

Facebook looks inevitable today, but for a long time, its fate was clouded with uncertainty. Unlike companies that swiftly reached product-market fit, Facebook had to fend off many tough competitors.  

It had to be vigilant to survive, and still acts that way to this day. After all, culture doesn’t just produce success, it is the product of early success. What works early on gets reinforced.  

Ask founders and early employees about their big triumphs and challenges, and you uncover a window into the psychology that rules the company. Values, paranoia and ambitions are best assessed with context:  

  • When were you most unsure if the company would make it? Why? How did the company overcome it? This exposes insecurities and playbooks for success
  • When did you know that you were out of the woods? This gauges paranoia level
  • What was the first big milestone for the business? What was the most recent milestone? This tells you what’s truly celebrated, and how it’s changed (if at all)

Recap 

  1. Being first doesn’t matter, being last does
  2. Be novel enough to pique interest, but familiar enough to breed trust 
  3. Simple and fast tends to be a winning pair — not only is each powerful on its own,  but simplicity also reinforces speed
  4. Raise money and expand quickly if you’re in a winner-takes-most market
  5. Ask about early triumphs and challenges to assess a company’s DNA
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