Facebook's business model relies on three key elements: business logic, products, and narratives. Narratives play an important role in encoding and decoding messages between the business and users/stakeholders. However, narratives often include extra elements that influence how users perceive the product and company. Facebook's original narrative focused on connecting friends but users have shaped their own narratives around identity, relationships, and reputation on the platform.

1. BUSINESS MODEL INNOVATION
NARRATIVES BULDING BUSINESS LOGIC
The Social Network Case
M.CHIARA CACCIANI
20.12.2011
1

2. WHY BUSINESS MODEL DESIGN?
2

3. “Design is a creative activity whose aim is to establish the
multi-faceted qualities of objects, processes, services and their
systems in the whole life cycles”
T. Maldonado
2

4. MEANINGS OF OBJECTS, PROCESSES,
SERVICES AND THEIR SYSTEMS
2

5. Business Model as:
SYSTEM THINKING
CH
R
RESEA
NARRATIVES
USERCENTREDAPPROACH
LY S I S
A N A LY S I S P H A S E
A
AN
CT
JE
PROJECTING A
PRO
N E W N A R R AT I V E
3

6. CH
R
RESEA
WHAT IS A NARRATIVE?
4

7. NOT A STORYTELLING
5

8. fr om:
THE MARKET
THE USERS
THE BRAND
5

9. 6

10. MEANING GENERATION CYCLE
as expected to be
7

11. LOGIC
BUSINESS
message
BUSINESS GENERATED
NARRATIVE ENCODED
DECODED
USERS PARTNERS
STAKEHOLDERS
8

12. BUT THIS IS WHAT’S HAPPENING
9

13. LOGIC
BUSINESS
extra elements
NARRATIVE
WHAT USER NARRATIVE ROLE
CO-CREATION
BUSINESS
NARRATIVE
WHY
USERS PARTNERS
STAKEHOLDERS
HOW
10

14. LOGIC
BUSINESS
NARRATIVE
WHAT
PRODUCT
W H Y THE PLATFORM ROLE
USERS PARTNERS
STAKEHOLDERS
HOW
BUSINESS
NARRATIVE
10

15. LOGIC
BUSINESS
NARRATIVE
WHAT
PRODUCT
WHY is changing now
USERS PARTNERS
STAKEHOLDERS
HOW THE REVERSE MEANING
GENERATION CYCLE
BUSINESS
NARRATIVE
10

16. Narratives as analytical tool
YSIS
FACEBOOK GOOGLE+ TWITTER
AL
AN
11

17. + BUSINESS LOGIC
$
+ PRODUCT
+ NARRATIVES
12

18. + BUSINESS LOGIC
$
+ PRODUCT
+ NARRATIVES
12

19. $
12

20. SHARING
CONVERSATION GROUPS
USER
$ IDENTITY
RELATIONSHIP PRESENCE
REPUTATION
12

21. -server Network
-deal with -deal with Network -server Network
-implement the Network -deal with Network Network -server Network -Interpublic monitoring Give power to co-creation everybody <13
server co-creation monitoring co-creation
website co-creation server co-creation -deal with Network server co-creation monitoring co-creation group -hackaton the individual; with a verified
server co-creation overloading overloading -Interpublic -hackaton Be a network everybody <13
-deal with overloading -hackaton -Chase credit organization giving people e-mail account
-hackaton -hackaton group organization infrastructure, with a verified
server -PR with -Ivy league overloading -Interpublic organization connect friends everybody <13 card - develop the right tools
A place to Ivy league organization organization connect -Chase credit -develop API an always e-mail account
overloading universities and -hackaton -Interpublic create a everybody -Interpublic everybody <13 group -develop new and people with with a verified -Microsoft timeline and to e ciently
collect info and Stanford Help people -Interpublic Help people everybody <13 -code transition -code transition friends and card opengraph present
-PR with -hackaton Stanford organization group friendship <13 with a group with a verified -Chase credit home same interests e-mail account -indipendent opengrapy communicate,
about students and understand group with a verified to platform people with -Microsoft software
universities organization students understand -Chase credit to platform network: verified e-mail -Chase credit e-mail account card -develop FB lite through FB developers protocol where big
ourselves to sta the -Chase credit e-mail account same interests -indipendent based on a
and sta the card social graph account card -Microsoft platform and -Nielsen corporations
be shared with surrounding card through FB developers stable and real
surrounding -Microsoft -Microsoft -indipendent the social graph Homescan and
our friends, world -high school -Microsoft platform and -Nielsen -email account time -www.face
world -indipendent -indipendent -email account -www.face developers -Digital Sky -email account governments -www.face
platform to students -email account -www.face the social -email account -www.face Homescan -opensource connection book.com
-harvard email -theface -schools email developers developers -opensource book.com -Nielsen Technologies -opensource have greater book.com
-theface (37,000 -all email -www.face -opensource book.com graph -opensource book.com -Digital Sky software among friends -personal referral
account host user book.com account software -personal referral Homescan -NBC software and greater -personal referral
book.com schools) account book.com software -personal software -personal referral Technologies -users behaviour -wordofmouth
-opensource generated -personal referral -opensource -users -wordofmouth -Digital Sky -Spotify+34 -users information -wordofmouth
-personal referral -opensource -personal -users referral -users behaviour -wordofmouth -NBC datas -F8
software contents -wordofmouth software behaviour datas -F8 Technologies more behaviour datas and -F8
-wordofmouth software referral behaviour datas -wordof- -Microsoft datas -Microsoft hotmail
-users -users -NBC -Microsoft computational
-users -wordofmouth -Microsoft mouth hotmail -Microsoft hotmail
behaviour datas behaviour resources
behaviour datas hotmail -F8 hotmail
datas
-rent -self-service FB adv -rent -self-service FB adv
-rent -self-service FB adv -rent -self-service FB adv -hosting servers -Virtual gifts
-rent -self-service FB adv -hosting servers -Virtual gifts -hosting servers -Virtual gifts
-host: facebook.com -colleges and local businesses banner -rent -colleges and local businesses banner -hosting servers -Virtual gifts -employees -sponsored groups
hosting server ADV: colleges and local businesses -hosting servers -Virtual gifts -employees -sponsored groups
(200.000$) -sponsored groups -hosting servers -sponsored groups -employees -sponsored groups -employees -sponsored groups -Acquisition of: Octazen Solutions, Divvyshot, -traditional banner adv, sold on a national
banner and special promotion page -employees -sponsored groups -traditional banner adv, sold on a national
-rent -traditional banner adv, sold on a -employees -traditional banner adv, sold on a -traditional banner adv, sold on a national -traditional banner adv, sold on a national ShareGrove, Chai Labs (10mil$), Nextstop basis [CPM and CPA based]
-traditional banner adv, sold on a national - acquires FriendFeed (50mil$) basis [CPM and CPA based]
national basis [CPM and CPA based] basis [CPM and CPA based] basis [CPM and CPA based] (2.5mil$), drop.io, Zenbe
national basis [CPM and CPA based] basis [CPM and CPA based]
WALL + GROUP + POKE PHOTOS + TAGGING OPEN REG + NEWS PLATFORM + FB ADS FB CONNECT LIKE+OPEN STREAM API FB PLACES TIMELINE + OPEN GRAPH
A place to Help people create a connect Be a network Give power to
collect info understand friendship friends and infrastructure, the individual;
about the network: people with an always giving people
ourselves to surrounding social graph same interests present the right tools
be shared with world through FB software to e ciently
our friends, platform and based on a communicate,
platform to the social stable and real where big
host user graph time corporations
generated connection and
contents among friends governments
have greater
and greater
information
and
computational
resources
13

22. -server Network
-deal with -deal with Network -server Network
-implement the Network -deal with Network Network -server Network -Interpublic monitoring Give power to co-creation everybody <13
server co-creation monitoring co-creation
website co-creation server co-creation -deal with Network server co-creation monitoring co-creation group -hackaton the individual; with a verified
server co-creation overloading overloading -Interpublic -hackaton Be a network everybody <13
-deal with overloading -hackaton -Chase credit organization giving people e-mail account
-hackaton -hackaton group organization infrastructure, with a verified
server -PR with -Ivy league overloading -Interpublic organization connect friends everybody <13 card - develop the right tools
A place to Ivy league organization organization connect -Chase credit -develop API an always e-mail account
overloading universities and -hackaton -Interpublic create a everybody -Interpublic everybody <13 group -develop new and people with with a verified -Microsoft timeline and to e ciently
collect info and Stanford Help people -Interpublic Help people everybody <13 -code transition -code transition friends and card opengraph present
-PR with -hackaton Stanford organization group friendship <13 with a group with a verified -Chase credit home same interests e-mail account -indipendent opengrapy communicate,
about students and understand group with a verified to platform people with -Microsoft software
universities organization students understand -Chase credit to platform network: verified e-mail -Chase credit e-mail account card -develop FB lite through FB developers protocol where big
ourselves to sta the -Chase credit e-mail account same interests -indipendent based on a
and sta the card social graph account card -Microsoft platform and -Nielsen corporations
be shared with surrounding card through FB developers stable and real
surrounding -Microsoft -Microsoft -indipendent the social graph Homescan and
our friends, world -high school -Microsoft platform and -Nielsen -email account time -www.face
world -indipendent -indipendent -email account -www.face developers -Digital Sky -email account governments -www.face
platform to students -email account -www.face the social -email account -www.face Homescan -opensource connection book.com
-harvard email -theface -schools email developers developers -opensource book.com -Nielsen Technologies -opensource have greater book.com
-theface (37,000 -all email -www.face -opensource book.com graph -opensource book.com -Digital Sky software among friends -personal referral
account host user book.com account software -personal referral Homescan -NBC software and greater -personal referral
book.com schools) account book.com software -personal software -personal referral Technologies -users behaviour -wordofmouth
-opensource generated -personal referral -opensource -users -wordofmouth -Digital Sky -Spotify+34 -users information -wordofmouth
-personal referral -opensource -personal -users referral -users behaviour -wordofmouth -NBC datas -F8
software contents -wordofmouth software behaviour datas -F8 Technologies more behaviour datas and -F8
-wordofmouth software referral behaviour datas -wordof- -Microsoft datas -Microsoft hotmail
-users -users -NBC -Microsoft computational
-users -wordofmouth -Microsoft mouth hotmail -Microsoft hotmail
behaviour datas behaviour resources
behaviour datas hotmail -F8 hotmail
datas
-rent -self-service FB adv -rent -self-service FB adv
-rent -self-service FB adv -rent -self-service FB adv -hosting servers -Virtual gifts
-rent -self-service FB adv -hosting servers -Virtual gifts -hosting servers -Virtual gifts
-host: facebook.com -colleges and local businesses banner -rent -colleges and local businesses banner -hosting servers -Virtual gifts -employees -sponsored groups
hosting server ADV: colleges and local businesses -hosting servers -Virtual gifts -employees -sponsored groups
(200.000$) -sponsored groups -hosting servers -sponsored groups -employees -sponsored groups -employees -sponsored groups -Acquisition of: Octazen Solutions, Divvyshot, -traditional banner adv, sold on a national
banner and special promotion page -employees -sponsored groups -traditional banner adv, sold on a national
-rent -traditional banner adv, sold on a -employees -traditional banner adv, sold on a -traditional banner adv, sold on a national -traditional banner adv, sold on a national ShareGrove, Chai Labs (10mil$), Nextstop basis [CPM and CPA based]
-traditional banner adv, sold on a national - acquires FriendFeed (50mil$) basis [CPM and CPA based]
national basis [CPM and CPA based] basis [CPM and CPA based] basis [CPM and CPA based] (2.5mil$), drop.io, Zenbe
national basis [CPM and CPA based] basis [CPM and CPA based]
WALL + GROUP + POKE PHOTOS + TAGGING OPEN REG + NEWS PLATFORM + FB ADS FB CONNECT LIKE+OPEN STREAM API FB PLACES TIMELINE + OPEN GRAPH
GROUPS
CONVERSATION SHARING
f
USER IDENTITY
RELATIONSHIP PRESENCE
REPUTATION
13