2 posts tagged “vc”
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:
- R. Tyler Ballance from Slide,
- Blake Commagere of Vampires / Zombies / Causes,
- Dave Genztel from SocialMedia,
- Jia Shen from RockYou,
- Joe Winterhalter and his colleague, Eric (didn't catch his last name), of Quizzes and
- James Hong from Hot or Not.
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:
- Aryeh Goldsmith (Acebucks)
- Sourabh Niyogi (Appsaholic)
- Scott Rafer (Lookery)
- Narendra Rocherolle (fbExchange)
- Matt Sanchez (VideoEgg)
- Sundeep Ahuja (Appfuel)
How useful are Facebook users to developers and advertisers? The final session addressed "How to Value Facebook Apps." The panelists were:
- Eve Phillips, (Greylock)
- Keith Rabois, (Slide)
- Naval Ravikant, (Hitforge)
- Angela Strange, (Bay Partners' AppFactory)
- Susan Wu, (Charles River Ventures)
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.
Today, TechCrunch revealed big news in social networking investing: Hi-5 got $20 Million in Financing from Mohr Davidow Ventures and Tagged apparently raised $15 Million from an unknown investors on a $102 Million pre-money evaluation.
Hi-5 I understand, but Tagged?! Whoa. That's a whole lot of mula -- especially for a social networking site that no one I know uses (especially given that I blog about Social Networking). A few friends I know that tried Tagged a while back disparaged it calling it an "agent de spam." So, I couldn't help but laugh when I read some of the comments on TechCrunch with similar observations:
Having not tried Tagged myself, I figured it wasn't fair to question the valuation until I learned more and maybe tried it myself. I started off trying to learn more about Tagged by visiting the website. However, I couldn't find a decent explanation of what Tagged is (beyond a social network) on the consumer site. It took jumping to the "corporate site" to find out anything about it. Even there, the explanation was basic, if not ambiguous:
Tagged.com is a premier social networking destination and an ideal place for advertisers to reach their target audience.
Tagged provides a fun, safe, and exciting environment for people to showcase their personalities and talents, and to connect with friends and meet new ones.
Tagged is experiencing dramatic growth Advertisers love Tagged because they get clear, uncomplicated access to our audience. Our team is dedicated to making every advertiser successful and can develop and support any type of ad campaign.
I couldn't get excited about the prospect of joining a social network that none of my friends/ aquaintences participate in, that I've heard spam nightmares about, that doesn't tell me exactly what "features" I'm signing up for, and which, apparently, "Advertisers love." Joining a site that admits to giving advertisers "clear, uncomplicated access" to me and my "friends". (Yeah, I know Google does it, but I also know exactly what I'm getting in return.) I was floored by the self-reported stats on Tagged, which illustrate that clearly my reservations aren't shared by everyone:
With numbers like that I can see why someone was willing to roll the dice with such a big investment. But, I was still unsure about why anyone would sign up. Unsatisfied with the explanation on Tagged's corporate site and unable to find an explanation of features anywhere else, I bit the bullet and started to sign up, hoping that the registration process would tell me more. It didn't.
- 30MM registered members
- 10MM unique visitors every month
- 1B page views per month
- 10MM hours spent/month
After providing my name, birthday, and email address, Tagged asked me to provide my password for my Gmail account - presumably so that it could suck potential network invitees from my address list. It wouldn't let me bypass that step. Afraid of spamming my entire address book, I terminated the registration process.
It amazes me that a company that doesn't overtly explain what it does or what features you'll get by signing up has been able to secure so many users. It also amazes me that so many people would actually give a company their email address and password and allow them to infiltrate their private address book without knowing what that company is going to do with the information. I guess this all proves that:
- On-line consumers aren't as demanding of on-line privacy as I expected, and
- The bubble and big risk investment are back to stay... at least for now.
July 23rd, 2007 at 3:45 am
Tagged’s system of invitation resembles that of a virus to me. It automatically checks all your e-mail contacts and sends invitations to a lot of people. But do you really want to tag them all? That is the question.
July 23rd, 2007 at 2:43 am
How did the spam site get a valuation of $117M? I have gotten more apologies from red-faced friends for inadvertent-spamming from using Tagged service then any other web service.
Also, can somebody explain to me why, if I click on the “browse” in Tagged, 80%+ of the pictures are of scantily dressed women? And many of them have joined on June 7, 2007; how convenient! When did the demographic of web surfer change? Why didn’t I get a memo?