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Appsaholic Facebook Developer Conference Recap

Tonight is the first chance I've had to write about the Facebook Developer/ Influencer conference that I went to last week.  The event was an invite-only afternoon of panel discussions hosted by Seth Goldstein of SocialMedia.  Attendees included about 50 developers, entrepreneurs, investors, and a couple of bloggers, and the discussions ranged from "When, if ever, will Facebook start 'taking back' core chunks of its platform?" to "What metrics really matter for gauging success on the Facebook platform?"

The conference began at Noon with lunch and networking followed by the first panel discussion at 12:30: "What is Engagement and why is it so important?"  In the first session, Dave McClure from 500 Hats and Seth Goldstein  set the stage for the rest of the event.  Dave emphasized the importance of establishing more meaningful metrics for measuring the success of Facebook apps - beyond counting user installs.  His point was well taken... Clearly we need a way of measuring user engagement in apps, especially given that people are often compelled to download apps that their friends send to them and never use them again.  Just because an app has great word of mouth success initially, doesn't mean that it will latch on for the long haul.  Similarly, time spent on the app isn't the right measure for success either.  As Seth asked (and I'm paraphrasing), 'What's a more important to Facebook's success- a graffiti app that allows Facebook users to draw for 3 hours, or an application that encourages shorter but more frequent interactions?'

Rumor has it that Facebook will be unearthing at least a few 3rd party app success metrics internally in the next couple of month, but it remains to be seen whether they'll share this information with the world.  So far, Facebook hasn't released any helpful metrics for measuring user engagement on apps.  Perhaps this is because they don't have them, or perhaps they're holding their cards close to the vest in the hopes of determining the best way to move forward (i.e. by taking back parts of the API they already opened and/or extending new Facebook features that leverage lessons learned by observing user engagement stats on leading apps).  Either way, in order for the 3rd party developer community to flourish on Facebook,  developers will need a better understanding of what makes a winning app and which apps are the most successful based on those metrics.

The next session of the day was about "Creating, Spreading and Scaling Multi Million User Facebook Apps."  The all-developer panel included:

Slide had over 10 million Facebook users at the time of the conference, and Tyler initiated the conversation by talking about what he thinks users want to do with their friends.  In cases where users have a large number of Facebook 'friends' (Tyler had a whopping 630 at the time), Tyler felt it was important to be able to quickly engage with lots of people, while having the option to more intimately engage with closer 'friends'.   He attributed the success of applications like Happy Hour, which allows users to send virtual drinks to their 'friends', to this very phenomenon.  Dave Gentzel from SocialMedia, who developed apps like Happy Hour and Food Fight, agreed that user engagement is key.  In addition, he felt that speed in development was a key component of success.  Anything that's taken him longer than 2 days to develop hasn't paid off.

Tyler also brought up the issue of Facebook's need to communicate more proactively and effectively with Developers.  He and others expressed concerns that Facebook had made some code changes without talking to developers in recent weeks, which resulted in killing thousands of profiles within Slide's database alone.  Generally, the developer panelists felt that Facebook's attempts to help a large number of small developers may unintentionally hurt larger developers.  As I've mentioned in previous blogs, I'm a huge proponent of investing in developer relations.  When you allow ISVs/ developers (at least large ones) to plug into your API, you should be treat them as strategic alliance partners and give them insight into what you're planning in exchange for quality assurances.  If you don't, you run the risk of alienating thousands of your users if/when something goes wrong with the apps that plug into your platform.

Blake Commagere, who helped develop popular facebook apps like Causes went on to talk more about developing Facebook apps.  It took 4 engineers to develop the Causes app (which was written in Ruby on Rails).  Blake pointed out that to develop a successful Facebook app, you don't need 100 app servers, you just need to make sure the app and database are solid.  By way of example, Causes runs using 11 app servers, which serve 2.5 million users, and it is working well.  Joe and Eric who developed Quizzes, only use 4 servers for their app.  They emphasize the importance of focusing on app quality and investing time in apps that will grow spread quickly virally.

All of the developers mentioned that that Facebook platform is a little sluggish at times.  James Hong from Hot or Not said that to combat delays, his team opted for using Ajax.  The challenge here is that most ad networks don't currently consider user action as the way by which advertisers pay for ads. Instead, it's still page changes.  In principle, the ad networks James knows say they're happy to move towards a user action model, but in the meantime, there are monetary disadvantages to using Ajax on Facebook.  But, most of the panelists seemed okay with the tradeoffs in the short-term because they increase user engagement long-term.  At the time, Hot or Not is apparently making $1000/day off of AdSense, and rumor has it (according to a member of the audience) that Graffiti is making $100,000 month!

Ads were a hot topic on all panels - including the developer panel - with the need for relevant content delivery emerging as a key theme.  Most of the developers on the panel said they'd been approached to do demographic based behavioral targeting of users.  What I found interesting is that the only data anyone would cop to hearing advertisers request is: sex and geography.  If this panel was any indication, for all of those personalization fans out there (of which I'm one), it looks like we're a ways off from seeing any meaningful movement in this space.

The 2pm panel was on "Facebook Advertising Models."  Panelists were:

Perhaps the most interesting part of this panel was how so many people are attempting to create ad networks on Facebook.   Matt Sanchez from VideoEgg says he has 20 sales people selling in 4 countries.  Aryeh Goldsmith is creating a new Facebook economy and customer loyalty company by introducing a fake currency to Facebook called Acebucks.  At best, the currency takes off and does just what Linden Dollars are doing for SecondLife.  Appsaholic is hoping to become a fully independent monitor of Facebook Stats (think the AC Nielsen of Facebook).  While, Slide wants to be the "single largest content delivery platform to unique users" across all social media OSes.

How useful are Facebook users to developers and advertisers?  The final session addressed "How to Value Facebook Apps."  The panelists were:

One VC in the audience reckoned that each Facebook user is worth about $500 each.  While, Angela Strange from Bay Partners, whose AppFactory is actively seeking investments in start-ups that make Facebook applications, used a guideline of 25-30 cents per user per app.  In watching this last panel and listening to the excitement relayed through the questions from the crowd and VC responses, it's clear that there are a lot of people pinning their hopes on Facebook (and other Social Media Platforms) continuing to open their APIs and thus encouraging the growth of a new developer economy that pushes apps for so-called social media operating systems.  There is a frenzy of enthusiasm about the potential, but it remains to be seen whether potential becomes reality.  The VCs aren't taking any chances.  Each of the panelists said that when they're looking to invest in a company that develops Facebook apps, they need to see the potential of those applications beyond the confines of Facebook.

For those of you interested in future developments in the Facebook space, Dave McClure mentioned that he's planning a Facebook conference of his own on October 7-9. Stay tuned to his blog for details.

3 comments Tags: venture capital, advertising, technology, social networking, vc, zombies, happy hour, quizzes …

25 + Start-ups to Watch

In case you were wondering why this blog went from daily to naught this week - One of my best friends was in town this week, visiting from England, so I took a break from blogging to play tour guide.  As of today, I’m back to blogging as usual.

If you’re wondering what’s next in the world of web 2.0, Business 2.0 magazine has some interesting ideas.  Of particular interest, check out their gallery of 25 Startups to Watch.  The following is the list (and some of my thoughts on each company):

  • StumbleUpon: Great feature that allows you to find websites and videos you might like on-line based upon the recommendations of friends. Think of it sort of like Digg but for recommending websites and videos.  It enables you to find websites that you'll like based upon your personal networks and the preferences you set of people with similar tastes.  It is the perfect accompaniment to Stickis, which allows you to see the comments people in your network have posted on various websites.  I'd love to see Stikis and StumbleUpon link-up to offer an integrated service.
  • Slide:  I've not tried Slide yet, but I've been hearing a lot of buzz about it in the geek circles in San Francisco. It lets you create slide shows of your personal photos which can be inserted into a blog, MySpace page, Sent out via RSS, or streamed to your desktop as a screensaver.  It is an interesting idea, but I suspect there will be a lot of competition in this space with photo sharing sites like Zooomr and Flickr and companies like SharpCast (computer, mobile and PC sync) and photo everywhere messaging concepts like NowThen.
  • Bebo: Social network with 30 million users.  Bebo is especially big in the UK.  Aside from having the conventional greatness of other social networking sites, it takes privacy setting seriously (which I like) and has an on-line whiteboard facility, which is handy for sharing.
  • Meebo: Let's you manage all of your IM clients from one site. I'll be interested to see how Meebo does against eBuddy, which is a "free web based messenger that enables you to chat with your MSN, Yahoo and AIM buddies" without downloading a separate client. eBuddy also works via mobile.
  • Wikia: This site was co-founded by Angela Beesley and Jimmy Wales, one of the founders of Wikipedia, who I  recently talked about seeing speak at the Social Media Club meeting in San Francisco.
  • Joost: I'm looking forward to seeing how Joost pans out.  It's an on-line video website which focuses on broadcast quality television - like IPTV on demand.  They've just signed a deal with Viacom, the output of which will be interesting to watch.  The on-line video space is getting crowded between Joost, YouTube, Revver, Grouper, BitTorrent and others.
  • Dabble: Makes a tool for organizing videos into playlists and favorites.  Hmmm... Not sure how I feel about this one.  Think I'll stick with video search engines and recommendations I find in blogs until someone convinces me otherwise..
  • Metacafe: This site is kind of like YouTube, but it pays users for page views. As I mentioned before, the on-line video space is really crowded. With YouTube saying they're going to find ways to pay users for involvement, I'm not sure how I feel about Metacafe's long-term prospects for success.  That said, they do claim 17 million monthly visitors, so they're off to a good start.
  • Revision3: "A production studio for geek-oriented online shows."... Certainly a growing market full of opportunity!
  • blip.tv: Platform for syndicating on-line shows... Looks like a hot market.
  • fon.com: Now this looks interesting!  Fon.com is based in Spain and is attempting to build the world's first worldwide wi-fi network.  They're selling wireless routers for $30.  According to the description on Business 2.0, consumers "hook it up, register their node, and agree to share their broadband with other "Foneros" for free. Those who want to charge outsiders for access can do so, and Fon gets a cut. Likewise, if someone wants to pay $2 or $3 to use the Fon network for a day, Fon takes a share of that revenue. Just over a year old, Fon's network boasts more than 70,000 hotspots." This could be huge, especially given that wi-fi on mobile phones is a growing feature.
  • Loopt: Loopt lets you see where your friends are anytime, using your GPS enabled mobile phone.  Boost Mobile has integrated Loopt into it's service offerings.  There are many interesting applications to social networking... Check out my previous posts on GPS to see what I mean.
  • Mobio:  Mobio makes mobile applications and wigets.  They do quite a bit in the mobile location based service space. Mobio just launched at DEMO in January. I've not played with their app, but their demo looks an aweful lot like Microsoft Life's mobile beta. 
  • Tiny: Tiny's Radar service is like Flickr but for mobile phones.  It lets users send photos from their mobile phones and have their friends comment on them. This sounds very similar to NowThen, only it's restricted to mobile phones.
  • SoonR: This company lets you access information on your PC from your mobile phone. I saw a lot of solutions like this when I was at Palm. I'm not sure why Business 2.0 thinks this is such a big deal.  Win-Hand Anywhere, a strong competitor, has been around for years.  I'm not convinced that that remote PC access is the way forward. The problem with software like SoonR and Win-Hand Anywhere is that if your computer is off, you can't access your data. I prefer "server in the sky" applications like Avvenu, Orb, and GotoMyPC which allow you to access your information from anywhere (including your mobile phone). 
  • Turn: I don't know much about this but it looks very cool... According to the site: "Avertisers first enter the prices they're willing to pay for various results - $5 for a sales lead, say, or $50 to $60 for a completed transaction. Next, they upload their text-or graphics-based display ads. Turn's software then analyzes the ads using more than 60 variables - including content, brand strength, and keywords - and determines the right publishers to serve up the ads."
  • admob:  Like Turn - Could be very useful to advertisers: "AdMob offers a place to buy ads for delivery to cell phones."  It seems to me that Millennial Advertising, which I talked about in my January 26th blog should also be on this list.
  • Spot Runner: This looks like a great resource for small businesses. It's a "one-stop online shop for low-cost 30-second TV ads. Local businesses can browse a library of premade spots and personalize them for airing in their local markets."
  • ViTrue:  This is a great idea. Though, I think they need to improve the way they explain their service on their website.  It looks a bit like parts of what I proposed as a potential monetization strategy for YouTube.
  • SuccessFactors:  I met with these guys when I was working in London as a Management Consultant a few years ago. I evaluated their software and other eHR and performance management systems and found theirs to be the most intelligent and well designed. Definitely a company to watch if you're into enterprise systems.
  • Janrain: Single sign which allows users to juggle multiple passwords for multiple website.  This is the alternative to open ID.
  • Logoworks:  I've not used this site, which offers the ability to publish business cards, stationary, etc. for less than conventional on-line publishers, but I'm always interested in deals!
  • Rearden Commerce:  I've been hearing a lot about Rearden recently.  They offer a "web-based "virtual personal assistant" application that smoothly integrates hotel and flight reservations, meetings, and other events into your daily agenda." They've got a strong user base with 150 companies and their 500,000 or so employees using the software.
  • SimulScribe: This company has voice recognition software that converts voicemails to text.  Voice transcription software is a growing and hot marketplace. I know of at least one (stealth-mode) start-up working on the next generation of this type of software, which will can be leveraged for all sorts of things you haven't thought of.

Some other companies that weren't on the list, but I think are worth watching are:  Shozu (mobile 2.0), IMT Labs (the company behind Spleak, the chatbot), and Kiptronic (advertising platform for podcasters).

On a different note - If you're interested in technology (especially mobile), you might be interested in this, the new blog from my friend, Derek Snyder, from Microsoft’s Mobile and Embedded team.  So far, he's talked about Windows Mobile 6, how to cancel your Verizon contract in less than 30 minutes with no penalty, how to get a free extra battery for your Blackjack, and more.

4 comments Tags: flickr, mobile, youtube, digg, shozu, microsoft, social networking, bittorrent …