Achieving Massive Growth (Qloud story 11 of 14)

This is post #11 about the Qloud experience.  The previous post was about about the launch of Qloud.  You can read that here

Once we launched, we grew extremely fast. I have to say that being part of a company that is blowing up is really really fun. Everyone is constantly happy. As a product person, this is what you work for and when it happens, it feels great.

We did some things that were shady and other things were legit and very smart. Some things we did:

  1. We wouldn’t let you use the application unless you invited 25 friends. We had a nice UI that let you quickly select 25 faces and then it would open. While extremely annoying, it worked really well.
  2. We integrated deeply into the new feed. We knew all of our users play history, including from iTunes and we’d launch really interesting news feed items to friends that read, “Of all the songs played last week by your friends, here are the 3 not in your library. Click here to play.” This is great music discovery, right in your news feed.
  3. We started understanding and using the link sharing networks. Lots of other apps were selling the ability to recommend users download other apps. You could buy space there and buy installs. We experimented a lot with all of them.  Some were pretty cheap and effective.  Interestingly, Steve Case really dug into this too. For someone with his success, we was not afraid to get into the weeds. I also give a lot of credit to our lawyer and BD guy here, Jim Delorenzo (now head of Sports at Amazon), for this success as he really figured it out.

I give Noah R-S (now Chief Product Officer at DailyMail) a lot of credit for hacking Facebook. He understood it at a level that probably only a few dozen in the world did.

We also started exploring a business model

Our growth was so fast that we’d get lots of calls from record labels and lawyers asking to shut us down. They saw the streams happening on Qloud and wanted it to stop. It took them a while to realize that we had co-opted YouTube for the streams.

Qloud and Facebook’s Platform (9 of 14)

This is post #9 about the Qloud experience.  The previous post was about about how we used YouTube as a music engine. Read that post here

The year is 2007 and we’re building as fast as we can our new music service.  It’s going to be a full-powered music streaming service on top of a collaborative music search engine and it’s going to be sweet.

Before we launched I went out to lunch with Sean Parker (known by many of you as Justin Timberlake in the movie The Social Network).  At the time he had left Facebook and was about a year into his new VC gig at Founders Fund.  We sat down to lunch and the subject immediately turned to our upcoming launch. He asked, “Hey, do you know about Facebook’s platform?”  I didn’t and he went to explain it to me.  Basically FB needed a way to expand and what better way than have companies build their product in to Facebook.  While the 3rd party companies would provide the development, Facebook would allow you to message and add their users as your users.  It sounded cool.

I went back to the team and explained this upcoming launch.  I got in touch with Dave Morin (yep, the Path founder used to be head of Facebook platform) and he gave us access to the platform.  Our plan was to build a subset of our service on Facebook and gain some early users.  Then, when we launched our new website we could make a claim that says, “We already have 10,000 users on Facebook.”

It did not go that way at all.

Launching on Facebook right when the Platform was launching was probably one of the best things we did. Because it was new, it had a bunch of early adopters.  It also had a bunch of loopholes that allowed us to market and message millions of users.  If you remember getting a ton of requests to join some stupid game, that was the platform.  We used to do things like “You can’t install our app unless you invite 30 friends.” and people did it.

Of course Facebook wasn’t happy about this, but we weren’t going to stop.  Kudos goes to our colleague Noah who really figured out how to growth hack the crap out of it.

Lessons learned: at both Kapost and Qloud, we grew because we attached ourselves to a tidal wave in the industry. In Qloud it was the Facebook platform and Kapost it was Content Marketing.  Facebook eventually would shut down the platform but not until much later.  Heck, even Zynga used it to become a billion dollar company leveraging Facebook’s platform. Sometimes the bright and shiny new thing in the industry is worth going after.


The next post is about the actual launch. Check that out here.

Some Predictions

With a new year (i know we’re a month old already) I’ve been wondering more about what the future holds.  I have a few thoughts i’d like to share and get your thoughts.  They are some prediction of the technology space.  Here they go: 


More and More Social Networks. 
I wrote in 2007 when Facebook released “The Platform” that they would take over the web.  Their product updates since then have great and as a result, they’ve been killing it for years and been gobbling up users (approaching 1 Billion now).  However, this year I saw more and more social networks emerge. You have Path, Instagram, Foursquare, FoodSpotting and others. It’s easy for me to see now that in the future everyone will be on Facebook but that’s not where everyone will share.  It will be fragmented.  Depending on what you share (Food, Books, Photos, etc.), you may be someplace else and sharing with a smaller group.  Facebook will continue to be a huge company but their days of being the only game in town are numbered. Social is now not a facebook-only feature. Everyone has it.  The future is more about what your social activity revolves around.  I’ve started to tell people that “facebook is a fad” and it’s old news.  That’s not entirely true but it’s more true now than ever. 

The Future of Local Publishing 
More and more people are trying to get into local publishing.  The local newspaper has seen its classifieds, sports, world news and national news all get marginalized by other outlets (TV, internet, twitter, etc.).  All that’s left is local.  I used to be bullish on Patch, but that’s waning as i don’t see them innovating and it seems to be too big and too expensive an operation at each location.  That may change though.  With that said, here’s my prediction for what wins in a local community:  

You have a site, this could be a WordPress site or Tumblr or whatever.  It’s managed by one to three super-engaged people who are not pulling a salary (or a minimal one).  They do two things.  First, they curate all the news from papers, blogs and other local sites that are reporting in their community. Second, they accept via twitter and their site submissions of links and news.  They curate both of them and then spit it out back to their followers on their site and on Facebook and Twitter.  This becomes the best real-time source of news.  

This works because it is impossible for one source to aggregate all the information themselves (what newspapers used to do) but it is all being covered by other people who are willing to share.  The new local publisher is a connector of local interests to other web sites.  I could see this being just a twitter feed or a Tumblr blog.  Whatever the destination is, it’s heavily conversational and constantly curated. 

Just some predictions i have.  Would love to hear your thoughts. 




Looking back at 2011

Some things i’ll remember about 2011:

Steve Jobs’ Death & Legacy. As Esquire says…

No one ever died the way Steve Jobs died. Other people have died of cancer. Other people have died in the public eye.  But no one has ever died with the inexorable logic of their mortality feeding into a logic of expectation that they themselves created and aroused.

Reading about Steve Jobs in 2011 was a terrific experience.  He inspired me to take my passion in products to the next level.  He was truly a special individual and will be missed.

Mavericks vs. Heat. The stage was set: a team of underdogs who lost to the Heat in 2006 vs. a team of selfish divas. Down 2-1 and nearly 3-1, the scappy Mavs fought back and took the title in the most exciting NBA Finals I’ve ever seen. Continue reading Looking back at 2011

Long-Form Content is Coming Back

I’ve noticed over the past year or so that the number of friends of mine who blog is decreasing.  I’m seeing less posts.  To me this is because Twitter and Facebook have taken all their thoughts.  The “I love Tron!” thoughts are now going into status messages and not into blog posts.  Which, to me, is fine.

But there’s actually been an increase in long-form posts i’m seeing.  The blogs i’m reading are full of actual articles of great stuff.  It’s great to get the “I love Tron” type comments on to Facebook and Twitter so the blog can hold longer form of actual thoughts and analysis.

I recently read a great article by Clive Thompson about just this topic.  His theory is that something more complex and interesting is actually happening.  He says, “The torrent of short-form thinking is actually a catalyst for more long-form meditation.”  He states, “We talk a lot, then we dive deep.”

Continue reading Long-Form Content is Coming Back

The Social Network Movie

I saw the new film The Social Network this weekend and loved it.  This was an interesting film for me.  It was the first film where i knew or met many of the major characters.

  • I’ve spent a good deal of time with Sean Parker.  We’ve worked together (briefly at AOL).  We’ve partied together when we both spent a week crashing at Spencer’s place in Hermosa. We’ve collaborated on a company together- my dad and I angel invested in Plaxo
  • I’ve met with the Winklevoss twins.   They came down to look at Ruckus in 2006 when they were still doing ConnectU
  • Others i’ve only met once or seen indirectly, such as Dustin and Peter Thiel.

But, it’s safe to say that i know the cast of characters which made the film incredibly satisfying.   Fincher and Sorkin nailed it as the characters in real life are very much how they are depicted.

The fact that this is a good movie can be attributed directly to Fincher and Sorkin.  The writing and directing is phenomenal.  Fincher takes his modern, slick style with awesome music and combines it with smart, quick dialogue.  You’re forced to keep up.  The result is great storytelling.  A mediocre plot become fascinating because of them.

The interesting parts to me are:

The ethical scale. In the web industry, there’s a huge hacker culture where technology grit and talent is valued over rules.  There are no rules.  Zuckerberg completely embraces this and the Winklevoss twins are on the other end of the spectrum.  Every other character is somewhere in the middle of this scale.   I see this every day when i see and talk to programmers who are trying to do something unique and innovative.  This is how Napster came to be.  This is how Skype happened.  It’s part of the web culture and i thought the film did a good job of showing the two types of people converging into the web business.

Sean Parker. He’s quite a character and I’ve had the pleasure of hanging with him a few times.  He is just as the movie describes as he’s very charismatic and love parties, high fashion, models and going to trendy spots.  But the film doesn’t do him justice in a couple of areas.  First, he’s a social software genius. He understands better than others how to make a site social and gain millions of users.  The movie makes him look like he totally mooched off Facebook.  It should be noted that he’s responsible for some huge contributions such as the News Feed.   In addition to the Peter Thiel money, he also helped with the Accel $10 million investment.  These are huge things.

There’s also a class system matrix here. You have old money (Eduardo and Winklevoss), you have no money (Zuckerberg) and you have new money (Sean Parker and Peter Thiel).    You have a kid with a chip on his shoulder making something extremely valuable.  Those with old money and traditional business models in their head (Eduardo and The Twins) want it and want to fit this round peg into their square hole.  The new money characters (Parker and Theil) know the true potential of Facebook, what it can accomplish, and that growing it now is the better strategy.  This was a very real dynamic and in fact i wrote about it 18 months ago when everyone in the media was writing about how Facebook pageviews are worthless and how they won’t be able to monetize and the social network business as we know it isn’t nearly as valuable as we thought.  It was all crap and it was because this is new unchartered waters.

The product is king. In the consumer internet business, the product on the page is the single most important thing.  Making the user experience tight, fast, and easy is the difference between a successful site and one that nobody uses.   This is why you can have two websites that do the exact same thing but one is a huge success and the other goes out of business (see the example between Mint and Wesebe).  This is especially true with social networks where it’s a winner take all game.  Network effects cause there to be one big site and lots of losers.  Zuckerberg knows this.  He intuitively understands the user experience.  Facebook is a great experience.  This is also why he discounts The Twins and their ambition.  Just having an idea is only a small part of making a site and a business.  He knows this, I know it and The Twins probably know this.

History of social networks and Exclusivity. For the casual viewer, i think the film might seem like Zuckerberg invented the modern day social network.  This just isn’t true.  Before Facebook there was Friendster, MySpace and half a dozen other social networks that had profiles and friend linkage.  Facebook’s defining characteristic was it’s default privacy settings – it’s exclusivity.  There’s an important scene in the film when Zuckerberg realizes that this is the idea behind the Harvard Connection and this idea makes social networks fun and more realistic.  This exclusivity was Facebook’s major point of distinction for the first few years of its existence and it’s interesting that this one point was not his idea.  Granted, he may have a better product sense than others and built a great site, but it was all founded on shady ground.  Putting in the work and developing the actual product is 99% of a web business, but if the main difference between Facebook and every other social network is not something you came up with, then that’s a problem.  And apparently that problem equals $65 million dollars.  Seems like more than a fair trade

Startup Culture. I thought the film did a great job of displaying web and startup culture.  Sure, it’s a group of people who don’t sleep but more importantly it’s a group of people who believe what they’re doing is the single most important thing on the planet.  They dream of kingdoms and a world domination.  Every feature they implement is a step in that direction which is why it’s ok to sacrifice social lives, money and sleep.  You saw that allure in this film.  That house in Palo Alto reminded me of the Fincher’s Fight Club house where another, different kind of cult was brewing only the one about Facebook was and is real.  It happens every day in the valley and across the world with startups.

All in all, I thought it was a great film and found myself thinking and talking about it for days afterwards.  You should check it out.

Facebook’s Fundamental Problem

I read a great post that opened my eyes to something interesting going on about Facebook’s privacy issue.   The issue has to do with how they position themselves in regard to being either a communications platform or a content platform – and how this impacts how they treat privacy.  If you look at this chart:

You see there are two sections: Communication and Content.  Both are directions that a company can focus on.  What’s interesting is the relationship between virality and revenue potential.   The more focused an application is on Communication, the easier and more quickly it spreads – but it can’t easily sell ads or monetize.  The more Content-centric an application is, the easier it is to monetize (ads are more relevant with higher CTR) but it’s hard to get the app to spread and grow.

Facebook started, of course, as a closed network for college students where they could “connect” and communicate.  As the statement above would suggest, this caused it to spread very quickly.  And it did.  However the site wasn’t making much  money.  Now, they find themselves with a slew (if you can call 500 million people that) of users and a desire to monetize.  It then makes sense for it to move up the scale and become more of a content company.  Thus, you see lots of Like buttons all over the place, a payment platform, and an ad platform to make this as effective as possible

The problem is with privacy.  Users were led to Facebook thinking it was on the Communication side of the fence.  However, it’s ambition is to be more in the middle because that is where it can both spread quickly and make money.  The privacy rules of a Communication web application and Facebook now are longer in agreement .  You can’t ask people to “Friend” and communicate with work people, parents, and close personal acquaintances and then also ask them to make that information public as if it is Content.  That there is a fundamental problem.

iLike & Myspace – it doesn’t make sense

myspaceilikeiLIke was purchased by MySpace this week for $20 million.  Hearing this annoucement, i couldn’t help think that something was off.  Something just doesn’t make sense.

Some facts: iLike has 50 million registered users.  That’s a huge number.  They are definitely one of the most popular applications on Facebook and one of the best applications anywhere for concerts. They have built some things that are quite hard to build such as:

  • A mp3 download store (link)
  • A music activity feed crawling millions of artists and millions of users
  • A ticketing system integrated with Ticketmaster
  • A self-serve advertising system

They have raised $16 million bucks and claim to be profitable.  Both Facebook and Amazon were interested in the deal.   If both of these are true why would they sell for $20 million? Selling for $20 means that the investors get their money back and then then $4 million gets spread around to shareholders.  Basically nobody makes any money that they are happy about.

To compare, Facebook just bought FriendFeed for $20 million and they have 1 million monthly uniques.  iLike has at least 3x that on the web and 50x total and they are growing.

Also, I can’t imagine why a dynamic, fast moving company would want to go work at MySpace instead of Facebook or Amazon.

  • MySpace vs. Facebook. One is doing a fantastic job of innovating and developing new innovative software (FB).  The other is bleeding users, bleeding cash (MySpace Music) and restructuring.  iLike has also actively been courting Facebook for the past 3 years. They’ve thrown Facebook / iLike parties and done everything possible to try to get a FB acquisition.  Going with MySpace is strange
  • MySpace vs. Amazon. One (Amazon) is in iLike’s backyard in Seattle and the other is down in LA.  One is making good inroads into providing a viable music store to iTunes.  The other (MySpace) started as a primary space for music but is now controlled by the labels and is getting worse and worse as they try to cut costs.

Both of those don’t make sense so then you have to conclude that they are just doing this for the money.  But if (a) they are profitable and (b) it’s only $20 million on $16m raised then that doesn’t make sense either.

My conclusion from all this non-sense:

  • iLike was not profitable and were running out of money.  They needed to either raise more money or sell.
  • Fatigue.  Working in the digital music industry and having success at it is exhausting.   Your main content source (music) brings with it tons of headaches.  The labels are working against you every step of the way
  • Facebook had no interest in getting into the music business.  I think they see content area as something for partners and although iLike probably asked them repeatedly, they backed away from the deal.  There is no better content company that is more integrated into Facebook than iLike.  If FB didn’t want them, they’re not going to get anyone.
  • MySpace paid more than $20 million.  They won’t disclose the terms but my guess is that there is some kicker in there that made the deal very attractive to the shareholders.  Too bad we don’t know what it is.

At least one or more of these have to be true.  What are your thoughts?