SNAP Summit, Facebook Apps and the Open Web

27 03 2008

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.

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It’s NOT Freedom of Information, It’s Protection of Information

3 01 2008

It’s pretty rare that I wholeheartedly agree with, or even care about, one side of a disconnected tech argument. This time I do.

If you haven’t followed it, today the argument is over Robert Scoble’s account suspension from Facebook for participating in a Plaxo test product that scrapes user information from Facebook.

Kara Swisher seems to agree that Robert Scoble is fighting for freedom and portability of information. I flatly disagree. Scoble also freely admits that he broke the Terms of Service.

Instead, I agree wholeheartedly with Michael Arrington and Loren Feldman (his video is quite good). Scoble wants to free YOUR information. Where there could be some disagreement is that I don’t necessarily think that Scoble has malicious intent. Gathering your rolodex to plan your next career/business move is not malicious. So if his account gets reinstated, I wouldn’t really care.

But go one step further and the entire system breaks down. Facebook then no longer has the potential of being a trustable silo of private and public information. No one will ever post their cell phone or primary e-mail addresses. Or remotely sensitive personal information.  Once that contract breaks down, then Facebook falls far from that $15 billion valuation.  You can’t make exceptions. That’s the reason why rules and terms exist. Plain and simple.

Facebook really got it right this time. There may be some business motivation, but they still got it right.  And that’s all that matters.





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.