How a startup founder lost company, $100 million by relying on Facebook

Facebook is burnt on abusing user privacy at all cost

Minor changes in how social media giants like Meta’s Facebook and Instagram operate can dent the profits of an emerging companyA startup founder’s story is testimony to the same, for he claims that his startup lost $100 million by relying on Facebook.

In a Twitter thread, Joe Spieser, the founder of explained how an algorithm tweak by Facebook led to a $100 million loss and eventual shutdown. The website is a women-centric site devoted to  uplifting content like recipes, positive stories, and animal videos.


How the website died because of Facebook

With Facebook’s help, the website built a user base of 20 million social media followers. When Facebook tweaked its algorithms in 2018 to deliver customised content to people’s feeds, the company lost 90% organic traffic on Facebook. “[Zuckerberg] didn’t like the fluffy content we were producing and he wanted to be taken more seriously.”


Owing to this, LittleThings founder had to fire over 100 staff members on top of losing $100 million. “It was a death sentence,” he wrote on Twitter. According to Speiser, there’s a lesson to be learned for all business starters here. “Can you ever truly sleep well at night knowing at any time it can all be taken away with just a simple algorithm change?,” he wrote.


In 2018, LittleThings had no choice but to shut down. Speiser believes startups should be wary of starting businesses that rely too heavily on Facebook or any other social media platform.


After Facebook changed its algorithm, it has been at the centre of controversy. Users were reportedly fed more sensationalist content for better engagement and click rates. Internal leaks from Facebook showed that even company employees thought dangerous content would be amplified by Facebook as a result.

What do you think about this founder’s take on Facebook reliance? Let us know in the comments below. For more in the world of technology and science, keep reading


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