Meta's Anti-fragility

As Nassim Nicholas Taleb defines it, anti-fragility is the quality that allows a system not only to resist shocks but also to become stronger from them.

Can companies in a market economy be anti-fragile? In the modern, market economy, where the life span of companies keeps getting shorter and the pace of technological change keeps accelerating, perhaps this is an impossible standard.

However, I believe Meta is one company that could be considered worthy of this tag.

I can think of at least four events which posed an existential or serious risk to Meta (or Facebook at the time). The company negotiated and emerged stronger from each of these challenges.

1. Shift from desktop to mobile - The rise of the smartphone was an inflection point in how we interacted with technology. The center of gravity of computing moved from the desktop to the smartphone. People in the developing world started spending more time on their smartphones. In the developing world, not only did people start spending more time on their smartphones, but for many, it was also their first computing device.

   As this shift accelerated in the late 2000’s, many questioned whether Facebook could adapt its user experience and monetization model effectively to the smaller, more personal mobile screens. By declaring the company would be “mobile first”¹, Facebook not only transitioned smoothly but also set new standards for mobile advertising.

2. Launch of Google Plus - When Google launched Google Plus, it was seen as an existential threat to Facebook, akin to Microsoft’s challenge to Netscape in the browser wars. As Google Plus appeared to gain rapid popularity after its launch, Facebook shifted to war mode² in a way only deeply mission driven, founder led companies can. Over the next couple of years, the threat from Google Plus was laid to rest for good.

3. Apple and App Tracking Transparency Rules – Apple’s introduction of App Tracking Transparency rules posed a significant challenge to Meta’s advertising model, threatening to undermine its revenue streams by making user tracking more difficult. Despite a short-term revenue hit, Meta’s AI investments allowed it to surmount these challenges³ while competitors like Snap have been unable to recover. The weaker companies in the space have been weeded out and Meta will now take a larger slice of the admittedly smaller online advertising pie.

4. Emergence of Tiktok - Tiktok’s recommendation algorithms completely revolutionized the way content is recommended to users⁴. Unlike its competitors, Tiktok surfaced content from the entire network of users rather than just your personal social network. Although this led to some early losses for Meta, aggressive investment in Reels has largely arrested the growth of Tiktok. Further, the impending ban or sale of Tiktok is likely to strengthen Meta’s hands further.

Is there another company that has navigated so many challenges and emerged stronger? What is certain is that overcoming these challenges has likely allowed Meta to develop the muscle to potentially handle challengers or threats better than any other company.

Couple this with a visionary, war time, founder CEO, and you have a company that only a brave person will bet against.

Even so, it remains to be seen whether Meta’s anti-fragility is just a function of Mark Zuckerburg’s vision and leadership. Great companies can outlast its founders, whether Meta can pass that test remains to be seen.