Facebook's Avoidable India Scandal

There are three big lessons other tech companies can learn from Facebook's mistakes in India.
Posted February 16, 2016

Rob Enderle

Just when it seems like a young company is "getting it," they often make a huge avoidable mistake that can cause me to rethink whether they "get it" at all.

There are some recurring lessons that Facebook, in particular, should understand because of the business it is in and the folks on its board. A key reason is that you should never launch a major product or initiative in another company without substantial leadership in that company.

The triggering issue is India's complete rejection of Facebook’s Free Basics Internet service and the public backlash against the company. Both of these were avoidable if the firm had simply used Facebook (or maybe LinkedIn) to ask about how they should approach this issue.

Facebook Should Have Used Social Media

Social media can provide a wealth of information because you can connect to huge numbers of people instantly and ask questions. What I find fascinating is how many companies don’t successfully use the technology they sell. For Facebook not to use social media effectively to create a service for a foreign country suggests they really don’t comprehend either the power of the platform or, like a lot of managers, would rather risk product failure than have someone more knowledgeable tell them that what they were attempting was stupid.

It looks like Facebook, the king of social media, doesn’t really understand how social media works. Sadly, they aren’t alone. If you look, you’ll often find companies that sell analytics don’t use or understand analytics, and in my opinion, Google, which is one of the biggest sellers of ads, has yet to demonstrate on any consistent basis that they fully understand how to advertise.

You Can’t Launch a Major Offering Outside Your Home Country

This is something that Facebook’s board should have known backwards and forwards. It was a lesson hard learned by pretty much every car and device manufacturer on the planet The problem with trying to penetrate a very different foreign market is that your assumptions of that market will likely be false, so you depend on in-country resources to design, service and market the offering. Facebook’s lack of understanding of India was at the core of their failure, and certainly the majority of Facebook’s board should have pointed to this critical strategic misstep before it was made.

Bottom line: you have to be in-country to launch something as significant as Facebook Free Basics.

Some Lessons

There are certainly lessons to be learned from Facebook’s India disaster: You need to be in-country to launch a major offering and assure its success. A company must understand and effectively use the tools it creates — not only so it better understands them but so it intimately knows what parts need to be fixed and improved.

In my opinion, the fact that you can see LinkedIn being more powerful at identifying Facebook’s issues showcases a real weakness in Facebook’s long-term value to its customers and itself.

Photo courtesy of Shutterstock.

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