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Monday, March 22, 2010

What Will Be Facebook's Adwords?

In the summer of 2004 I was interning at an NYC investment bank. We were all handed a booklet that contained the resumes of everyone in the program. Eduardo Saverin was part of our group and stuck around for about 2 days, deciding to abandon the corporate world in favor of his startup. On his resume, he had listed "Co-founder of The Facebook (, an social network for Ivy league undergraduates that currently has 11 thousand members and is valued at over 6 million dollars. (I can't remember exactly so those numbers might be a bit off, but they are "ball park" close).

A few short years later, Facebook is now open to the masses, recently surpassed 400 million members, and eclipsed Google to become the most visited site in the United States.

Facebook did a great job to popularize itself. Mark Zuckerberg pitched his social graph thesis to gain interest and the creation of a developer's platform was an ingenious move. Facebook has made it in a big way. It has a larger user population than all of the United States by more than 100 million people. Think about that for a minute. If every man, woman, and child in the United States had a Facebook account (which most do), we'd still be short another 100 million people (so throw in another 12.5 NYC's and we are even stevens). Even more powerful, of those 400 million users, a large portion checks their account at least once a month, at a minimum. It is a large and sticky service.

The company is reportedly on pace to produce between $1-$2 bn in revenue for 2010, which is fantastic, but I wonder what will be Facebook's money maker that puts their revenue engine in line with their customer and product achievements. A similar story was seen with Google. The search engine was beloved by all that used it, but it's monetization method was not easily found. Larry and Sergey reportedly attempted to sell it to Yahoo! for a few million dollars as this seemed like the most lucrative exit. It wasn't until their flagship advertising platform, AdWords, was conceptualized and implemented that the cash started to really flow in. Facebook is clearly beyond this point, but what will take them from a $1-2 bn dollar company to the place they should be for a service with their size and integration into our world. What will be Facebook's AdWords?

Update: An article on TechCrunch points to a patent the company recently filed, which features a very global-esque looking virtual currency icon. If all money continues to go digital, could Facebook become the banking or transaction platform of choice for the web? It is already the platform that many use to share pictures, plan events, and communicate.

Friday, March 5, 2010

Thoughts: The Marriage Ref

Everyone's family is crazy. We all argue about the stupidest things. We get into heated arguments over things that are absolutely trivial.

To this day, my mother still hounds me about a head board that I used (and lost) freshman year of college to prevent my head from touching a stupidly unsafe in-wall heater positioned directly above my bed. I can tell you this for sure, that piece of furniture is long, long gone. It has been 9 years since our tragic loss. But yet, my mom will sling a "Jeff, have you figured out where it is?" or a "can you go back to your old dorm and check for it?" every now and again. Once we get going down this road, the discussion quickly devolves into how careless I am and how insane she is. I guarantee you, if she reads this posting, I will get a call. It will start off with some laughing and banter (Mom: "Oh ha ha, you are funny, I don't care about that stuff, I don't act like that ha ha") and will end along the lines of "Well Jeff, don't come back up to Vermont until you find that damn head board. You ruined your bed and don't even care" (hangs up the phone).

Seeking to capitalize on everyday squabbles such as these, the NBC braintrust unleashed a new show called "The Marriage Ref" where a panel of hosts reviews a family's fight and then declares a winner (and, more importantly, a loser). The first show had a star-studded line up, featuring funny woman Tina Fay, funny man Jerry Seinfeld, and all around beauty, Eva Longoria. Jerry Seinfield is also the shows executive producer, so it has to be good, right? Nope. I'm not a buyer.

Why not? I couldn't put my figure on it initially. My family gets into fights that are equally, if not more, stupid, silly, and annoying than the ones presented. And I certainly don't have Mr. Seinfeld or Mrs. Fay providing witty commentary or funny insights. But I just couldn't watch this show. I wanted to break my TV. Then I realized why.

Even though my family gets into its fair share of absolutely inane arguments that would fit in nicely with the ones presented by the show, I love my family and can thus deal with the complaining, the fighting, the absurd whatevers that inevitably take place. I don't love the families presented. Not at all. I can look back at past personal family feuds and smile and laugh. Our problems seem funny. But, without my love for the individuals involved, there is nothing keeping my inner Hulk from becoming immensely angered and annoyed, so I really don't see this show ever agreeing with me. Anyone else watch this show and have opinions?

Hi Mom!

Monday, March 1, 2010

Kevin Costner is Full of Sh*t

Kevin Costner is full of sh*t ... when it comes to startups at least. Build it and they will come. I implore you, do not listen to this man! This line of thinking is out in left field (har har).

I have to admit, I used to subscribe to this tag line. A few years back, I felt that if the idea was there, all that was barring a venture from success was time, effort, and determination. As a result, several of my early projects were drastically over engineered and tragically under utilized.

Case in point, in a 2005 project a friend and I wrote an entire professional network platform. It was Facebook meets LinkedIn (this was back when FB was still only for college kids and LinkedIn was lame). We were going to make the professional network that young professionals wanted and needed to join. We would monetize it somehow, but with the eyes and ears of tomorrow's top earners, we felt this would "fall into place" (don't follow this either). We wrote over 50,000 LoC. It did everything: secure login, password reset, profile creation, group formation, group messaging, secret groups, public groups, photo upload, friend requests, etc. etc. etc. We saw about 150 members over the next few months with few "sticky members." The issue wasn't that we had built a bad product / service, but more that we hadn't done our homework and gathered real world data before setting up shop.

What could we have done differently? We should have given a big middle finger to Kevin Costner and incrementally tested our thesis: young professionals (especially those in major urban environments a la New York City, Boston, DC, and so on) need a better way to network in the work place. At the very least, before we wrote a single script, we should have sent out an email to our friends (we probably could have gotten 500+ addresses, all in our target demographic) and asked if this perceived pain point (them: "we need better networking capabilities!") was a reality. If yes, did our proposed solution solve the problem? Make it worse? After passing these first sanity checks and receiving some initial buy in, we then could have produced a vastly trimmed down initial service (minimally viable product) to test actual adoption and utilization and gone from there. These would have been intelligent, no brainer steps to have taken. But as developers we often don't do this. We get into the groove and let the code fly. Projects like this burn you out both emotionally and entrepreneurially. You only have so much fuel in the furnace and hours in the day, so choose wisely.

This insight sprung up in my head over the past week when discussing a friend's startup idea. (No, not Bad Dinosaur). He had built a great product and wanted me to test it out. I told him I'm not going to be one of his likely early adopters and to go to XX [a popular blog dedicated to people he'd likely want to start off with] and start recruiting people (could even do this before any coding whatsoever). See if they are interested. If so, why? If not, why not? Which of the first features did they think were absolutely necessary, which were nice-to-haves, and which were unnecessary?

When giving a startup a go, you certainly have to have that optimistic dedication and drive to succeed as Kevin Costner demonstrated in "Field of Dreams." But rather than going whole hog right out of the gate, leveling his entire farm, and hoping for the best, Mr. Costner likely should have only hashed out a pitchers mound, picked up a few bats, and laid down some old shirts as bases. Then he could see if a any corn stalks began to rustle at night, or if that voice in his head starts to whisper further instructions ("now add bench seating, we want bench seating" || "no, I meant build a basketball court, dummy!").