Facebook v. Google, Round 1: Blood, but not unexpected

31 10 2007

NYTimes, TechCrunch, ReadWriteWeb, GigaOM, Mashable all report on OpenSocial.

Richard MacManus from ReadWriteWeb probably puts it best: this aggregation is what Google does best, and it’s now Facebook v. MySpace v. Everyone Else (under Google).

The tactical move is to stop the constant attention Facebook is receiving from developers, at least evening the playing field for everyone. The details are a little unclear, but if it opens up any advertising opportunities for Google (even non-compulsory, as Google will likely get most of that ad space anyway), there’s at least some benefit in there for Google again at the top of the food chain.

There’s some attention paid to the one-upsmanship between Microsoft and Google, which really doesn’t amount to anything substantial. More reasonable attention is paid to whether this hurts Facebook. It’s a more significant blow to MySpace as Google’s speed is showing how truly slow MySpace is to react, showing MySpace’s lack of technology chops, and making MySpace irrelevant in the showcase showdown for the ultimate platform.

I undoubtedly believe this hurts Facebook in the long run, but it’s not unexpected. If Zuckerberg is as smart as everyone says, he may have already seen something like this coming. They’ve got a great product, and bought some lead time in being the developers’ choice for some time. Whether this limits Facebook’s potential growth remains to be seen.

What’s up next? The challenge to be really good at targeted (and social behavior-based) advertising, what I believe is Facebook’s only real chance to put a significant chink in Google’s armor.


Opportunities in the Food Chain of Google, Facebook

29 10 2007

It’s a wild and crazy time, or even week for that matter, and I’m not just talking Halloween here. I’m talking about the showdown for the domination of the ultimate web platform.

Erick Schonfeld, new editor at TechCrunch, writes about Maka-Maka, a codename for adding a social layer across its entire suite of applications.

I think to anyone familiar with Google’s ambitions, this really shouldn’t be a shock. What’s crazy here is the effect that Facebook’s platform has had to really up the ante, accelerating plans across the board to capitalize on the creating of an ultimate social graph – or more importantly – of building the ultimate web platform. It’s rather remarkable that we now speak about Facebook in the same breath as Google ($212 billion market cap!).

As Schonfeld explains, it’s clear that Google has more data about your behavior than anyone. And some will be quick to point out the privacy, and big (and evil) brother concerns. Remember when there was initial resistance against AdWords advertising against Gmail data? Google’s applications (Gmail spam protection alone) are so well executed at times that they start to creep into your life. And I’m not necessarily upset about it.

At least they’re not in the middle of a scandal about nosy, meddlesome Facebook employees messing with people’s personal Facebook profile, as Valleywag reports. I’m not going to play conspiracy theorist, but I do know Facebook will be very wise to come down on this hard and fast, both with disciplinary and technology measures if they want to be the ultimate gathering place to live your online social life.

Stan Schroeder at Mashable writes about the possibility that Google could, just possibly, be vulnerable. No matter how much you might want to think that Google is vulnerable (especially EnjoyPerth.Net), it’s not very vulnerable in its central goal of organizing information.

So the question for startups is: what are the new opportunities for new startups? A Facebook or Google platform aren’t the only choices either: Salesforce.com is becoming a platform force with AppExchange, and you’ll be able to utilize not just Facebook, but MySpace, LinkedIn and other powerful APIs soon enough as well.

The question then becomes: can you aggregate a large enough audience to reach critical mass, or perhaps more importantly, to actually be relevant in the ultra-competitive startup world?

Want to start a niche social networking site? Most of the time, I would frown against it BUT a fun, useful app built on an existing infrastructure could be a more lightweight and more effective path.

Vertical search? Farecast is still my best example of doing this in an innovative, yet user-friendly manner. However, you still have to execute something that people want. People want to save on travel; they generally don’t need a special search engine to search blogs (Technorati). I’ve written about creating value mattering in the noisy world of startups, but it’s just as important that you actually solve a problem. Fix something that’s broken, plain and simple. If cocky companies like Facebook and Google can admit they can’t do everything, they may just have a point.

If this new platform hierarchy creates a food chain, then Google and Facebook (right now) are at the top of the food chain though: the pinnacle of where you want to be. Most everyone is probably going to have to rely on them somehow. By and large, that’s going to be OK, but we all need to realize that’s how the ecosystem is set up and prepare accordingly. If you want to think big, just don’t get stuck way, way at the bottom of the food chain.  This new game is NOT a zero sum game, and the smart ones who keep this ultimately in mind will find there’s plenty of opportunities to solve problems and make money.

Eerie fires in the place I called home

23 10 2007

Within my first couple months of moving to San Diego, I witnessed ash rain down and blanket everything like snow from a snowstorm.

Probably the best description is it brings about a sense of eeriness that the place I called home just a month and a half ago is in the middle of another huge firestorm, a disaster that’s called for around 300,000 to evacuate from their homes and may not have yet seen its worst days. I’m glad I’m not living in the middle of a fire, but feel an odd sense of obligation to help if help were needed as San Diego still feels like home.

Disasters do happen unfortunately, but a fortunate reality is that these fires will lay the groundwork for future assessments. My hope is that San Diego comes out the stronger for it, but that’s for another day.

Today for those who call Southern California home, my best wishes and prayers go out to everyone affected.

Virgin Money Re-branded from CircleLending

15 10 2007

Virgin Money was just launched today, re-branded from CircleLending, which Virgin Money purchased a majority stake in as the New York Times points out.

The article quotes Alenka Grealish that the segment is at a “smaller scale than Virgin usually enters into, but it’s an interesting one.” It’s also an opportunity that funded startups such as Prosper are attacking as well, clearly a sign that people see this as a huge growth opportunity.

Charismatic Virgin founder (and personal hero) Richard Branson will be giving away red dollar bills with him and his mother, a reminder of the help that his mother gave him by giving him exactly one of the loans that Virgin Money will be supporting.

What is slightly different is that Virgin Money (and CircleLending as its precedent) will focus on established relationships. Others like Prosper focus on peer-to-peer lending, something I find could prove more problematic but ambitious nonetheless. There is something to be said about the necessity of stability gained through transactions that involve established institutions, sometimes above the peer-to-peer ambitions. Virgin Money is going after banks to this end.

As an adjunct to talking about the future of web startups, it instantly hit me as the marriage of a great idea and one of my favorite brands.  If there’s a big market here, then Virgin Money is now bound to be a giant part of that.

TechCrunch also points out that today that Google leads social bookmarking above geek favorites such as del.icio.us and bloglines. Google, above all, is a testament to the magic that can occur when a truly useful product and golden brand are married.

Mint: when I first heard it instantly thought it was a great idea and got the hint that it was a great management team. Sure enough, it was the winner of TechCrunch40. Apply the same idea, and I think if Mint is able to create a great brand (a.k.a. Quicken), this could be a huge business.

Brought back to the future of web startups, it only strengthens the idea that small “idea” companies that execute well at early stages will marry with established brands. It’s only every once in a while that a Google pops up. Under every great brand from Google to Amazon to Virgin to Facebook and so on, many more ideas can see the light of day to a truly large viewing audience.

Future of Web Startups: Time & Money Are Finite

11 10 2007

Paul Graham (founder of YCombinator) has a tremendous article on The Future of Web Apps. In a very straight-forward way, he lays out that web startups will increase probably by orders of magnitude.

Indeed, people’s desires are infinite as is the web. Commoditization continues to push the price of a web startup to zero.

Two things are finite: time & money (resources of any kind). Today, web startups must be fueled by either. It’s interesting glossing over some of the comments that cover the rich kid advantage. As such, the rich kid advantage is still prevalent. It can be surmounted by enough ingenuity and persistence, but it’s still present.

Where the time & money limit really applies is in user adoption, ultimately what matters in a web startup as Mr. Graham also points out.

So, I will still reassert that the time is ripe to start a startup. Mr. Graham again says as much in the post that you have to move on your idea immediately or someone else will, faster than ever.

However, the finite nature of time & money will further require that your startup produces value for the consumer. Businesses are still ultimately measured by the amount of value they create. Value can be created by way of increase of time or money in magnitude or in efficiency. If you take this definition broadly, it means save me time, make my time spent more valuable (enjoyable is a subset of value), save me money, or give me more for my money. This is the definition I would use as a user, as a founder, and as an investor.

Creating value is a very basic test, but it’s the true test in the picture of an efficient future of web startups.

Great Leaps in Choice, Life On-Demand

11 10 2007

I’ve posted on Promise of Choice, Life On-Demand on the iLetYou blog. I’ve really grown to think the ZipCar concept is a wonderful one, which is also complemented by CityCarShare as well. It’s starting to grow into a great example of the potential choice and on-demand living with these new concepts.