Another Business Crushed by Latest Facebook Algorithm Change

Another Business Crushed by Latest Facebook Algorithm Change

Online publisher Little Things shut down yesterday in the wake of yet another brutal Facebook algorithm change.

They are not the first casualty, nor will they be the last.  In fact, it’s happened to me personally.

Four years ago, I spoke with Sarah Lacy on stage at her Pandoland conference.  I was quoted as saying, “Don’t Be Google’s B*tch.”  By that, I meant that ecommerce stores should build a direct relationship with their customers, rather than continuing to rely on Google’s finicky, ever-changing algorithms to drive sales.

At the time, I was running Acumen Brands.  We had just raised  $100 million of venture capital, and were attempting to grow a billion dollar ecommerce brand.  Despite my advice against being “Google’s B*tch,” our hopes to build that billion dollar brand were highly dependant on FACEBOOK’S algorithms… we had in effect become “Facebook’s B*tch,” merely trading one master for another.

Shortly after this interview, Facebook indeed changed their algorithms, and our business was crushed.  They changed their algorithm to reward viral, sharable content over and above retail content – retailers were decimated, publishers were rewarded.  Though we tried to build a more direct relationship with our customers, despite our best efforts, the traffic driven by Facebook’s organic algorithms remained an outsized driver of our revenue.  Despite our best efforts to build a direct line of communication with our customers, traffic driven by FB’s organic algorithms remained an outsized driver of our revenue.

We were not alone — any retailer that relied heavily on organic reach to their Facebook fans suffered the same fate.  Oddly enough, Little Things started out as online pet retailer Petflow.com.  The same algorithm change that crushed the Facebook portion of my retail business, crushed Pet Flow as well.

Seeing an opportunity, Joe and the rest of the team made lemonade out of the lemons, creating the publisher Little Things out of the ashes of Pet Flow.  The strategy worked quite well for a while, but eventually, a few dozen algorithm tweaks killed their publishing business as well.  After a string of algorithm tweaks, the same content rewarded by old algorithm changes was now being punished by new “better” algorithms.

Learn from history, store owners.  Don’t be Google’s B*tch.  Don’t be Facebook’s b*tch.  Don’t be anyone’s b*tch.

 

Written by
John James, M.D. is the CEO of Engine, an upcoming ecommerce software platform currently in closed beta. I paid for medical school with an ecommerce business I founded in my dorm room over twenty years ago, and eventually raised over $100 million in venture capital running Acumen Brands. Email me -- john at engineinsights dot com.