3 Mistakes Facebook made that can destroy your small business

3 Mistakes Facebook made that can destroy your small business

Did you know that Facebook is now banned in Papua New Guinea for a month while they investigate fake profiles, fake news stories and crimes committed on the platform such as pornography sharing? In addition to Facebook losing this market they also hinted at the country developing their own social media platform.[1] This may be a small hiccup on Facebook’s larger operations since only 10% of Papua New Guinea residents have internet access but at the height of Facebook’s privacy scandal their stock price plummeted almost 20%.[2]

Some of you may wonder how market sentiment affects the bottom line of a big business like Facebook. How about almost $100 Billion loss in the value of your business? If you scale that down to your small business would you be able to bounce back? [3]

Here are 3 essential lessons you can learn from the Facebook Privacy Scandal:

1. It is essential for your small business to be transparent
If you watched the congressional hearings you may be shocked to hear the CEO of Facebook, Mark Zuckerberg, testify that Facebook knew users data was being exploited but did NOT inform the 87 Million users. They made a decision (possibly to save face) to handle the matter internally even though their users were directly impacted.[4]

This is a major issue of violation of trust as people expect that a large company like Facebook which is data driven would prioritized protecting their data. In addition, if there was ever a privacy breach consumers like myself would hope that we are contacted and notified. As a small business owner you should know the value of your customer’s confidence and should do your best to maintain their trust. When something happens that may affect your customer’s experience, whether or not you are at fault, you MUST keep your customers in the loop. These incidents can include shipping delays, production problems, and definitely data breaches! Sweeping your deep, dark secrets under the rug and covering up mishaps with lies, misinformation or omitting information can foster a distrust within your customers that can ruin your reputation and impact customer loyalty.

2. No small business is perfect so when you make mistakes you have to be accountable
“Facebook itself has repeatedly claimed that it’s not a media company, and has no interest in making editorial judgments — and that it’s largely up to users to sift truth from lies.”[5]

“Fake News” is a big buzzword that has been slinging back and fourth across political parties. The term refers to biased or false content being posted on Facebook under the disguise of trusted publications. The dangers of this scenario is that people are misinformed about many topics in which the information seems credible while Facebook is profiting from it. This misuse of Facebook’s advertisement system which reached an estimated 126 million people and boosting profits, is believed to have political influence 2016 american presidential election.[6]

It was reported that Facebook knew about Russian interference on their platform before the Nov. 8 election that year. As a small business owner you have to be proactive NOT reactive. When facing serious issues whether it’s theft, negative customer feedback, or mistakes, you have to identify your faults first. Ask yourself not only “what have I done wrong and how can I do better?” but also “what can go wrong?” before it does. This is essential for growth. Study your competitions problems, look for issues that have not come up yet and come up with solutions before the problem manifest itself.

3. In business there are many ways to get ahead but your company has to maintain its integrity
Zuckerberg was scrutinized harshly on the reports that find that Facebook can track a user’s internet browsing activity, even after that user has logged off of the Facebook platform.[4] Although there is a business advantage to this such as being able to gather more data about the user experience and creating more precise ad targeting and ultimately improving your product, ultimately this tactic may be morally questionable to some. When running your business you may find some opportunity to significantly impact your revenue but you must weigh the moral cost of these decisions as well. For instance, suppose as a restaurant owner you hear that the competing restaurant across the street had some customers get sick after eating there. You may be tempted to exploit that fact to your advantage but you must first ask yourself is this what customers expect from my brand or is this what I expect of my company to represent

Learn these lessons so that one day when your small business is worth ~500 Billion dollars you don’t get banned from an entire country while they contemplate developing your competition.


  1. http://www.bbc.com/news/technology-44290012
  2. https://www.fastcompany.com/40558580/facebook-isnt-worried-about-the-impact-of-its-privacy-scandal-on-its-bottom-line
  3. https://ycharts.com/companies/FB/market_cap
  4. https://www.washingtonpost.com/news/the-switch/wp/2018/04/10/transcript-of-mark-zuckerbergs-senate-hearing/?noredirect=on&utm_term=.4e2118d78990
  5. http://www.businessinsider.com/mark-zuckerberg-facebook-is-responsible-for-the-content-on-its-platform-2018-4
  6. https://www.nytimes.com/2017/10/30/technology/facebook-google-russia.html
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