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Facebook 'Grants' Devotees a Disappointment

[qi:004] Somewhere in San Jose, Calif., devotees of all things Facebook have gathered to celebrate the cult of Mark Zuckerberg and the little company he started. Dave McClure might call it his Graphing Social Patterns conference, but we all know it’s all about Facebook, Silicon Valley’s Furby. And while the fanboys gather and rejoice, they should also pay heed to some of the red flags fluttering in the hot air.

The company apparently sent out an email earlier this month informing all those who applied for grants via the fbFund to start over. We emailed Facebook to check the authenticity of the email, but had not heard back from them at the time of posting. (Given that there is a Facebook app for the application process, we take that as a confirmation.)

The fbFund was unveiled at the TechCrunch 40 conference last month, and as part of the announcement, Facebook backers Accel Partners and Founders’ Fund earmarked $10 million in new funds to give out to app developers as “grants” of between $25,000 and $250,000 each.

“It has become clear that we will receive proposals which contain similar or even identical ideas. As a result, and in order to protect other developers and us from claims that we or anyone else copied material without the creator’s permission, unless we agree otherwise in writing, we can’t promise that any materials or information you submit here will be kept confidential, or specifically that we or others might not develop similar or identical products or services. To make sure that everyone understands the conditions of submitting a grant application, we will not review any materials you have sent via email, and any materials you may have sent have been deleted.”

However well-meaning their intentions are, if the email is indeed authentic, then let me point out the obvious: the Facebook brain trust didn’t think through the implications of their announcement, and rushed to the podium, literally and figuratively. That deserves an “F,” especially for a startup that promises to be social operating system.

Is this a one-time oversight, or part of a pattern? The latter seems to be the case. Previously, the much hyped start-up botched up the launch of a smart feature (news feed), that caused a ruckus and a short-lived backlash. Luckily they dodged the bullet that time. Similarly, at the launch of the Facebook platform, the company showed its organizational ineptitude, keeping partners on tenterhooks.

Launch partner companies have been struggling to deal with uncertainty and last-minute changes to the tools and services made available by Facebook, multiple sources have told GigaOM.

Remember that when Facebook was subpoenaed a few weeks ago by the New York Attorney General Andrew Cuomo over issues of “safety,” what got the political opportunist riled up was that the company “ignored” complaints from undercover investigators about “inappropriate sexual advances to underage users.”

The veracity of the charges is up for debate, as commentators in response to my previous post let me know, but regardless: you don’t just ignore complaints from an AG. It was a huge tactical blunder. Add in the fbFund fracas – you can feel that something is not right here.

These repeated botch-ups are signs that the wheels on Facebook, arguably one of the fastest growing startups in Silicon Valley are starting to wobble. Or maybe the autocratic Zuckerburg is a cat with nine lives.

Two Facebook-related blog posts I recommend:

* Anil Dash: Blackbird, Rainman, Facebook and The Watery Web

* Kara Swisher: Facebook Apps are for toddlers.

9 Responses to “Facebook 'Grants' Devotees a Disappointment”

  1. This was a big misstep for sure. I actually discussed these Intellectual Property issues with some people when the fund was announced.

    I thought there were risks that facebook was exposing itself to with this fund and having developers submit ideas.

    Live and learn and pick yourself up. That is the mark of a smart company. They will make mistakes for sure, let’s just hope they learn from this one.

  2. This is intellectual property 101 for a major law firm with deep roots in Silicon Valley.

    So where were the experienced “board members” in all of this.

    Can’t lay the blame solely on the management team…they need those seasoned advisers to help them escape those pitfalls.

  3. agreed, they kinda screwed the pooch on that one last week. not a terrible misstep if they clean it up quickly & get their act together though.

    might make more sense for Mark & Chamath to not be involved in investment review, since it sounds like the issue was legal concerns over IP infringement. probably easier for them to either own it exclusively, or make it arm’s length & let Accel & FF handle it; tough to try & straddle it.

    but in any case, pretty small problem on the overall scale of things. they’ve got a lot bigger fish to fry right now.

    (and you’re right, we do like it as much as a Furby ;)

  4. I don’t get it.. It doesn’t sound like Facebook ignored the AG’s complaints at all. They ignored complaints from undercover investigators – probably because they were undercover and seemed like nobodies.

    And, underage can be as old as 16-17 years old, depending on the state. Think about the kind of sexuality that is impressed upon (and accepted by) 17 year old girls, seniors in High School …

    I’m not saying it’s good, but I’d guess that by the age of 14 or so, these kids are well-versed in sexuality, and it’s – as always – probably not Facebook’s #1 priority to police its users.

    You’re right of course that they would eventually need to do something… So I’m not sure what my argument is here. I guess, just, that it doesn’t sound like they ignored an AG. They ignored random complaints.

  5. I miss the point of the post!! Its know that facebook is filthy rich and is a startup and headstrong.

    Mistakes happen and they will go on … Common even Apple, Microsoft and Google have PR goof ups. FB has been clear from the begining – play by our rules.

    And are bold enough to say we will learn from mistakes. So, what are you saying?