This week, Inside Facebook asks people who have built businesses on the Facebook platform why they believe in the company. These are the people that are truly invested in Facebook, whether or not they bought stock.
First up is Clara Shih, co-founder and CEO of Hearsay Social, an enterprise platform that allows financial services, insurance, retail and other brands to manage their online presence — on the local and corporate levels — and maintain regulatory compliance as they engage on social media sites.
Seeing the potential of Facebook
“It was the first f8 on May 24, 2007,” Shih says. “I remember the date because it changed my life.”
Facebook announced its platform that day, enabling any developer to build applications on the site. The company also introduced the idea of the social graph. This stood out to Shih, who had been working at Salesforce at the time.
“It really got me thinking about what Facebook could become. I realized that your trusted online identity combined with News Feed could be transformative for businesses.”
Shih got to work on an app called Faceforce, which pulled Facebook profile information into a company’s Salesforce system to augment CRM data. Shih says that when Faceforce went viral, it was validation that her thoughts about Facebook were on the right track.
Developing a business idea
The success of Faceforce ultimately led to a book deal. Shih wrote “The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences, and Sell More Stuff.” She says researching the book led her to want to start her own business focused on Facebook marketing.
“The more that I learned as I talked to brands and users, the more I became convinced Facebook would be the next Google,” says Shih, who previously worked in strategy and business operations at Google. “It became clear that social media is here to stay and it will be as big, if not bigger, than the Internet.”
When “The Facebook Era” made the New York Times bestseller list, it was further validation that Shih was onto something. She reached out to former Stanford classmate Steve Garrity, and the two decided to create Hearsay Social, which is a marketing platform that serves businesses with a corporate/local structure and addresses issues of compliance. The company launched publicly in February 2011, with Farmers Insurance, State Farm and 24 Hour Fitness as customers.
“Facebook has successfully changed consumer behavior,” Shih says. “It changes the way consumers find new information, content and recommendations. That’s transformational for marketers.”
Confidence in Facebook
Shih says Facebook’s growth rate combined with an opportunity to interact “the way we prefer to interact,” gives her confidence in the future of the platform.
“Facebook gets us back to basic human behaviors,” Shih says. “Facebook is all about people. We have innate human desires to connect, and Facebook is facilitating that.”
Shih says this works particularly well for “relationship sellers” — like the insurance companies and other businesses that use Hearsay Social. Facebook enables these companies to connect with individual consumers at scale.
Facebook and developers
Hearsay has had a good working relationship with Facebook since it began. Shih believes the social network has created “a win-win-win situation” with its platform.
First, developers have great revenue potential because of Facebook, Shih says. Facebook itself benefits because it can get into new industries without having to build its own products, for example instead of making a music feature, it can integrate Spotify, Vevo and others, which drive up the value and stickiness of the site. Finally, users benefit because they get access to all the innovation from third-party developers.
Looking forward, Shih believes Facebook will continue to transform industries and monetize in new ways. She says the company has only scratched the surface of its potential and suggests Facebook could get into social search, commerce, television or even out-of-home advertising that uses near-field technology to recognize who people are when they walk by.
“In the near term, they’re doing a great job innovating with new ads,” Shih says. “In the medium term, they’re in the best position to monetize mobile and internationally. And in the long term, the possibilities are endless.”