Monthly Archives

March 2008

Blogfriends shuts down

By | Blogging | 22 Comments

Social feedreader and Facebook application Blogfriends has closed down. You can read their announcement here.

This is a great shame. I have been a big fan of the service since it launched, it has brought efficiency, variety and serendipity to my feedreading to the extent that I have pretty much stopped using any other reader.

Now I guess I will have to find a new one.

Social networking goes to the long tail

By | Social networks | 3 Comments

I have written before about how whilst the growth of the leading socnets is flattening niche socnets seems to be accelerating and the success of Ning is further evidence of that trend.

These charts from Techcrunch tell the story.

In both traffic and socnets they host they have grown 5-6x in a year, and a quick bit of maths shows just how far they have travelled down the long tail. At 3.5m uniques in Feb and 200,000 socnets on the site, the average Ning socnet has 17.5 unique visitors. The maths is crude as it assumes all the visitors are only members of one Ning socnet and I would also expect that rather like blogs many of these socnets are idle, but my point stands even if the 17.5 is an order of magnitude out.

If the trend to niche socnets continues then data portability will start to become more and more important, which will in itself unleash another wave of innovation.

The end of &nbsp erros

By | Blogging | 7 Comments

Thanks to those of you who pointed out the errors that were appearing in the text of my blog posts. They were being caused by Sribefire, the post editor I use. They have just released an upgrade which has hopefully eliminated the problem.

Please let me know if you see any other problems.

I’m a big fan of Scribefire by the way – if you blog regularly you might like to check it out.

The death of the destination site

By | Blogging, Casual Games, Facebook, Music, MySpace, Social networks | 9 Comments

Over on Snipperoo Ivan is pushing the idea that the destination site is on it’s way out. The idea follows on nicely, of course, from his obsession with widgets, but as usual I think he might be on to something.

Ivan’s main point is that many, many people use search engines to get to sites, even if they know the URL – ie they type the name of the company or the URL into Google instead of into the address bar, and, therefore, if they are using search to find you, you need to be where they end up. In Ivan’s words:

My take on it is the ‘everything everywhere’ version – i.e. if people are using search to find you, you need to be where they end up. And while this might seem to mean simply ‘hold the No. 1 slot in Google’, what it actually means is that you need to distribute your presence rather than consolidate it in one place. The, wherever they seek, you are there. Whatever they search, you are there. This gives control to the ‘user’ (as in UGC) to construct their own view of online, rather than expecting them to come and find you where you choose to hang out.

That means doing things like having a presence in Facebook and Myspace and weaving your brand into conversations in all the places your customers hang out. As an aside I think that brand marketing will increasingly be viewed in this way, and that direct marketing will go the VRM route.

So far I have argued from a search perspective that URLs and hence destination sites are becoming less important. I think the same is also true from a surfing perspective – at least it is for me.

There are two sites which I go to everyday, this blog and Facebook. As much as possible I like to use services that operate within those environments, particularly Facebook – there are two reasons for that – firstly the apps are improved by being socially aware and secondly (and probably more importantly) I use them more often because I am already on Facebook. As examples I use Blogfriends as a feedreader instead of Netvibes, and Visual Bookshelf to record the books I read instead of the functionally superior LibraryThing.

The extent to which the web is getting recast as network of fragments (to borrow a phrase from Ivan) really came home to me the other day when I wanted to put a widget on my blog which shows which books I’m reading. Unfortunately Visual Bookshelf doesn’t offer that functionality, so I went back to check out LibraryThing to see if they could help. What I wanted from LibraryThing (which they didn’t have) was a Facebook app and a blog widget that enabled me to use the site and show people what I’m reading without having to go back to LibraryThing. I don’t want to go to the destination site because I only want to use the fragments.

This is related to a couple of larger memes that have been bubbling for a while. Firstly the atomisation of content – which is all about personalisation enabled by web technologies that facilitate the microchunking and syndication of content, and secondly the re-organisation of the internet around people.

I’m into all of this stuff because it is having, and will continue to have a profound impact on the way we build and consume content from music through to games through to movies and from UGC to professionally produced content.

VC pitches should tell a story

By | Entrepreneurs, Venture Capital | 4 Comments

Scoble blogged an interview with Mitchell Kutzman, partner at Hummer Winblad under the headline VC admits he hates boring powerpoints. I echo that. Scoble wrote:

At PodTech the CFO told me to be quiet when I told them that their Powerpoints should look like Steve Jobs did them. He wanted the boring “pack tons of points onto one slide with a boring, conservative background.” You know the type. Bill Gates used those in most of his talks.

I knew VCs wanted a great story and wanted the same thing we all want: to be a little entertained. It’s just that I didn’t have proof until today.

“There’s nothing deadlier than having a lot of text on a slide and then reading every word to us,” he says in the video before giving us more background about what VCs do want to see in their slide decks.

We still need data of course, but the basic point is good – if the story isn’t good then all the data in the world is unlikely to get us to the point of investment.

There is more detail in the video, which was shot on an N95 and is a bit shaky. You have to wait until the second half before the camera turns to Kutzman. The video runs to 3m45s.

Some thoughts on board packs

By | Entrepreneurs, Venture Capital | 10 Comments

Boardroom

In my experience board packs (i.e. the pack of information sent by a company to the board prior to each board meeting) could often be better and are sometimes the source of conflict between management and their non-exec directors. That happens because as documents they have their own history and inertia to change which stops people thinking about them from first principles.

This is my attempt to put that right…

The purpose

When I open up a board pack I want to know how the business has performed in the last period and how the team feels about the prospects going forward. It really is as simple as that.

Often in good companies the information in the board pack is pretty much the same as the information the management team uses to manage the business. If you find yourself generating information just for the board (and I mean generating, not summarising) then it is probably worth asking why it is that the board feels it needs different information from the management team to assess the performance of the company.

Contents

Where it gets slightly more complicated is that there are absolute and relative and quantitative and qualitative aspects to answering this question.

On the quant side a good board pack will include the key metrics of the business compared against plan, both for recent history and going forward. The most appropriate time increment for a startup is usually monthly. Choosing the metrics well is obviously important and will be an evolving process. The trick is to strike the right balances between meaningfulness of metric and ease of data collection, volume of information and workload for management, and finally stableness of metrics and the pace of change of the business.

On the qualitative side a short statement from the CEO about how she feels about the strength and pace of development is always very helpful as is a brief update on matters important to the company from the relevant departments. That might cover progress against known issues in development, a developing relationship with a key partner or any HR issues. There shouldn’t be too much text though, and repetition from one board pack to the next is a bad sign.

Some pitfalls

Some of the ways I have seen board packs lose their way:

  1. they become bloated – new things are added but nothing is ever removed, and then producing the board pack each month becomes a big effort
  2. non-exec directors keep asking for new things to be added – this is a sign that either the KPIs are wrong or there is a lack of trust in the information provided
  3. the way data is presented changes each month to present the business in a flattering light (e.g. metrics or the basis for comparison changes) – this can quickly lead to a lack of faith in the numbers which will create all sorts of problems if the business ever hits a sticky patch. Not to dwell on this point, but if a company is even half way successful everything will be much easier if the board understands the business properly, warts and all.

A final thought

Done well a board pack builds trust between the executive and their NEDs and leads to shorter and more productive board meetings. That is something worth working for.

Will VRM be commercial?

By | Advertising, Open Source, Venture Capital | 22 Comments

I attended an NMK seminar on vendor relationship management (VRM) last night (thanks to Ian Delaney for organising a great event).  This is an area I have been getting excited about recently, and I posted some early thoughts here (the comments are also worth a read).

Unfortunately I had to leave the seminar early so I’m not sure how the debate finished, but for me the striking thing about the first part of the discussion was the motivations of the key proponents of VRM.  Their agenda was mostly about consumers taking control of their data – i.e. taking it back for themselves away from the silo CRM systems of their suppliers.

I have been thinking of VRM slightly differently – as a more efficient way of managing the information flow between suppliers and (potential) customers.  For me the beauty of VRM is that it eliminates the waste on both sides of the advertising equation – most adverts that suppliers pay for hit people outside their target market, and as consumers most of the ads we watch are not interesting to us.  With VRM suppliers get to focus their communications 100% on people who are interested in their message (a key enabler of conversations).  Similarly as a consumer I can be more engaged with vendors messages as I know they will be relevant for me (admittedly this part feels further out).

In the vision of Adriana Lukas at least the promise of VRM lies more in having our personal data in a single place and being able to mine it ourselves.

That sounds great as well, but from an investment perspective it doesn’t feel like the same scale of opportunity as the VRM vision I described above.  In a related point there are strong ties between the open source and VRM movements which lends a further non-commercial air.

Nothing wrong with that of course, it just means that VRM might fall outside of what I’m paid to focus on.

It is early days, but it feels to me like there is a lot of potential in this concept, but big new companies are only going to come out of the VRM movement in the next three to five years if the agenda is more avowedly commercial than I heard last night.

The interesting question for me is whether that is on the agenda.

Speakers at the event last night were:
Adriana Lukas, Alan Patrick and Jeremy Ruston.

Socnet usage patterns

By | Facebook, MySpace, Social networks, WAYN | 2 Comments

A couple of weeks ago Alan Patrick wrote an interesting post on socnet usage patterns. Back in November in a post on the essence of social networks I wrote about the difference between object-centred socnets (e.g. Flickr, Delicious) and ego-centred socnets (e.g. Myspace, Facebook, bebo) and commented that:

most of the activity on ego-centred sites is about self expression, self investigation and building groups of friends. These are ‘burst of energy’ rather than ‘keep doing it for years’ activities and hence questions about the sustainability of the traffic and page views on these sites are legitimate.

Alan has taken the same thoughts and built a theoretical model of what that means for traffic on ego-centred sites. He writes:

Consider the chart below – of the 100% of time most people spend on any one social network, most is in the early days – setting up the friends, playing with the features etc – and then erodes over time. Below is a theoretical graph, showing an average halving of activity every 3 months over the 2 years average time that a person exists on a social network in any meaningful way. (Note – I don’t mean people necessarily leave after 2 years, just that activity – on average – is fairly low. You can make less extreme power laws if you like, but the result described below is much the same until a fairly low tailoff rate is assumed)

Now imagine how that curve works in a Social Network that grows from next to nothing to say 50m users over 4 years until growth tails off. As you can see, the traffic initially grows far faster than the new user growth, so its boomtime in impressionsville….but as growth starts to slow down those users’ reduced activity starts to kick in, and the great crash in usage traffic then kicks in (see below).


All of which means that the long term value of these sites is all about how low traffic goes in the tail on the right hand side of the first chart – i.e. what is the steady state sustainable activity. Alan commented on my recent post about niche social networks that there is likely to be more activity in the tail on niche sites (which is what we hope and believe with WAYN).

I would also say that as the major ego-centric socnets increasingly recast themselves as portals it will depend on the quality of the content they bring – be it music on Myspace, games and other apps on Facebook or TV on bebo. Further you have to consider the full user experience which goes beyond the quality of the content to include ease of discovery and the added benefits of consumption in a social setting.

Can AOL develop Bebo?

By | Facebook, MySpace, Social networks | No Comments

The Sunday Times had a feature on the AOL Bebo deal this weekend.  It contained the following passage:

What intrigues analysts is that Bebo looks cheap in comparison with the
valuations placed on Facebook and MySpace.

News Corp spent $580m to buy MySpace in 2005. The site is No 1 in America and
analysts value it at between $5 billion and $10 billion. Last October
Microsoft bought 1.6% of Facebook, valuing the company at $15 billion,
although analysts estimate it is worth less than that.

Jeff Lindsay, analyst at San-ford Bernstein, said that the problem with
social-network sites in general and Bebo in particular is demonstrating that
they can generate money from all those users. “One big factor is the
maturity of their advertising,” said Lindsay.

News Corp is one year into a $900m deal with Google to advertise on MySpace;
Facebook has Microsoft’s backing; but until this week Bebo didn’t have major
support.

Lindsay said that, without that backing, growth prospects in the United States
– the world’s biggest market – look uncertain and these uncertainties are
reflected in the price.

Reading that it struck me that this deal is very different from the two other big ones we have seen in this space so far.  Newscorp and Microsoft did deals with Myspace and Facebook in the hope that the ties with a social network would benefit them.  The knowledge transfer and operational benefits were expected to flow more to the acquirer than the target.

If Lindsay has it correctly the Bebo AOL deal is the other way round – and that makes sense to me.  AOL is a US/global company and needs to operate US/global properties – and Bebo is not that large in America.

The intriguing question therefore is how AOL will go about leveraging it’s undoubted power in the US market to help Bebo take share from Facebook and Myspace.  The folks at AOL are smart and they will know that communities are fragile things.  They will need to manage this deal very differently to the host of advertising related acquisitions they have made in the last year where the strategy has been to integrate pretty rapidly.

The early word from buy.at is that post deal integration is going really well and I’m sure AOL will figure it out.  At first blush you would think the fact that the Birch’s are leaving Bebo will make their task more difficult, but reading that Sunday Times article and others it looks like Joanna Shields may have been running the company for a while anyway.

Their success will have a significant impact on the way other media companies evaluate their synergy cases when considering acquisitions of other social networks.

Data portability and the home of the social graph

By | Advertising, Facebook, MySpace, Social networks | 7 Comments

Phil Wilkinson wrote an interesting post on data portability today.  He is of course thinking about things from a social shopping perspective, but his points are relevant for all social applications.

I think by now most of us are sold on the idea that we should be able to extract our data from sites like Facebook and port it to new services we want to use, like say Crowdstorm.  And that should include our friends lists.  What I liked about Phil’s post is the idea that every additional service we use will enrich our social graph, and that would be for the benefit of everyone when the enriched data is ported back to the originating site, and then beyond.

In my view, the user controls the data, not the site. The process should go along the lines of:

  1. Import the social graph data from any chosen site or service
  2. Add value to it by enhancing the data within (such as adding trust between people or contextual shopping knowledge)
  3. Utilise that data as part of the service to improve the consumer offering
  4. Allow that enhanced social data set to be exported again to any other source

In this view of the world our social graph data lives not in one place, but rather in a sea of connected islands with activity on any one island potentially enriching the experience on any of the other islands.

For example if I add a friend on Facebook who is already on Crowdstorm (but not connected to me) and that friend has recently bought a new plasma then my Crowdstorm experience will be enhanced when I research my new TV there.  Furthermore, our ties on Facebook will be strengthened if it pops up in our newsfeeds or something that I have read the review of the plasma or accepted a recommendation to buy it.

This way our different social graphs would exist as different connected islands and would each enrich each other.  The principle islands would be our favourite socnet, our email social graph and our mobile phone social graph.  The smaller ones would be the other sites we use – e.g. Crowdstorm, Mybloglog, Twitter etc.

At a quite basic level connecting these islands will allow you to sync your networks (should you wish to do so) – e.g. by pointing out that the person you phone the most is on Facebook and you haven’t buddied up with them.

Where it gets more exciting is when applications that run in Facebook etc. take advantage of the extra data that becomes available.  For example games in Facebook could automatically compare your score with those of your best friends as defined by how often you call them.  Alternatively games running in Facebook could be customised based on which other services you use – adopting shopping themes for Crowdstorm fans, technology themes for people who are in the Mashable community.  Really running with this a second (it is Friday..) the data about what I read that sits in Blogfriends could be used to target ads when I am on Myspace.

Exposing our social graph data to the world and encouraging portability will unleash a lot of value, firstly by virtue of the fact that we are able to use this data for the first time, and then secondly by virtue of the fact that the very act of using the data improves it.  It is this last part that will really make a difference.