AI Algorithms Are Facebook's Most Valuable IP

I recently read a Wall Street Journal article about Facebook and Instagram (which is owns).

When Facebook wanted to create an AI (artificial intelligence) algorithm to select which items should be featured on users' News Feeds, it spent a lot of time and manpower creating it.

However, when its Instagram unit wanted an AI algorithm to create a curated photo feed for users, "three or four engineers got the job done in less than five weeks".

This is because they took Facebook's algorithm, tweaked it, and trained it with Instagram data.

Arguably, these algorithms are the most important IP (intellectual property) at Facebook because:

1. They control the user experience and customer value.  If the algorithms don't do a good job selecting appropriate content, users may find a competing platform that gives them what they are looking for.

2. They provide leveraged simplicity for Facebook engineers because, every time they want to create a new application, the algorithms build on their accumulated learnings and because quicker to implement.  We're talking exponential leverage.

How Important is User Design and Simplicity in Software?

I am a management consultant who specializes in the four areas of Strategic Simplicity®: change simplicity, market simplicity, decision simplicity, and user simplicity.

How important is user simplicity / design, especially with software?  

It can change an entire corporate strategy.

I consulted and worked for a large multinational bank that developed an IT strategy to develop it's own web portal—which would eventually serve as the user interface for all of its legacy applications.  They even hired away some key executives from a prominent travel website, who were responsible for the travel site's state of the art portal design.

Around the same time, this bank entered the Chicago area and bought a local bank 1/10 its size. The larger bank expected to shut down the smaller bank's technology group and move customers to it's platform.

It turned out that the small local bank's software was rated much higher than the larger bank's in a survey conducted by a prominent banking magazine.  Their user interface was so good that the larger bank had to do an about-face with its strategy.

They ended up scrapping plans for its own portal, and they ended up shutting down the larger bank's software and switching to the smaller bank's platform.  The newly hired key portal executives ended up leaving, and the smaller bank's technology executives (who thought they would lose their jobs) ended up running the larger bank's tech operations.