This last Tuesday, I attended SNAP Summit which was a pleasantly surprising and meaty collection of interesting insights into the art, science and business of creating social applications.
Facebook launched its developer platform in May 2007. The glow is off, but now big players have settled down to make the social application ecosystem work.
As a financing and exit strategy panelist, VC Jeremy Liew pointed out that the social app exits are small-ish. Mid single digit millions are the maximum exits to date, and usually in a combination of cash and private stock. They pointed out the inherent issues that the potential exits are not big enough to justify the still low chance of a home run and high opportunity cost of not participating in other areas. The same panel continued to point out that patience is the only thing that will solve this. It’s only been 10 months since the launch of FB platform, and Open Social is only slowly becoming something.
Jeremy Liew also pointed out (possibly bad paraphrase) that to many Facebook, social applications, and Open Social will be viewed as another distribution channel. It’s very important to note that it still happens to be a highly effective and potentially viral distribution channel hence it’s popularity among developers, even if you believe that the best time is past.
BJ Fogg, a Stanford research professor who co-taught the Facebook app class at Stanford, talked about Mass Interpersonal Persuasion. Probably the most eloquent way I’ve heard of why Facebook opening its platform up means some powerful things. A critical, organized mass like the one that’s developing around social networks means that masses of people can be moved like never before.
Dave Morin, platform manager at Facebook, believes that you’ll see more interesting applications leveraging the Facebook API to access the social graph off of Facebook. He has admitted earlier that the progress has been slow in this area. Off-Facebook leveraging of the social graph has not been explored because it’s much easier to get distribution when staying in the Facebook sandbox. But as people look to add value, some of most valuable uses of Facebook’s social graph will be on the open web. You’ll be able to utilize the flexibility of the open web combined with leveraging the value of that social graph.
What was revolutionary about Facebook was that it became the biggest Internet network to ever open proprietary and valuable data, allowing developers to leverage this data to create compelling applications through its easy-to-use (fun for developers!) API. It would be as if Google opened it’s search algorithm and gave you immediate access to many (not all) of the calculations that go into brewing up a search or data discovery system.
Now that the dust has settled, I agree that you’ll see integrated development and marketing strategies that include Facebook and other social platforms moving forward. That’s the obvious observation.
But as with everything around the Valley, be aware that the longer horizon of maybe five years out is where you’ll see the really interesting stuff when people really dig in and focus on building out compelling applications and uses. False hype be damned.