Category: The Internet

Foursquare vs. Facebook Places

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I am a huge Foursquare users. I registered the day that it launched at SXSW, I’m mayor of sixteen places and have checked in over 450 days. Whenever i go to a place, i immediately think of checking in. I’ve also tried out all of the competitors, such as Loopt and Gowalla. While those are ok, Foursquare was the best for me.

So, when Facebook launcehd “Places” i was curious to give it a shot. And after just a few days, I think it’s going to be a viable competitor and will keep many mainstream users from ever using Foursquare. Here’s why:

There are three reasons why people use Foursquare:

  1. Socially. To tell their friends where they are so they can join them.
  2. As a game. To become “mayor” of a place and to check in more than other people
  3. MyWare. To log where in the world you’ve been

The first reason – to connect with your friends – is the most powerful and is the reason most people use a service like this. The main issue with Foursquare is that not many of their friends are on it, so this didn’t happen for most. It only worked this way for power users and early adopters who have other power users and early adopters as friends (people like me). This is where FB Places shine. The first day of using it, i had more friends on it than on Foursquare and it was immediately more useful for me. I could actually see where many of my friends were. Foursquare never did this well.

The second reason – to play as a game and to become a mayor – doesn’t work for FB Places. There is no game in Facebook. It’s just to connect. I can see rewards happening in the future the same way that some restaurants or shops post messages on their FB pages for free coffee or cupcakes. I actually do miss this on FB. I found myself not checking into a place this weekend for a second time because i asked myself, “what’s the point?” I knew it would annoy my friends and i was leaving soon anyway. I checked on Foursquare but not FB.

The third reason will never happen on Facebook but will on Foursquare. You can see my stats page here. It’s great to see and view all the places i’ve been. Will most users like this? Not at all. I’m a rare breed in my love of tracking myself.

To sum up, i really think FB Places is going to crush it. Despite Friday being the biggest day in Foursquare history and their claim that the rising tide will raise all ships, I think that unless Foursquare can continue to out innovate Facebook, I think FB will leave Foursquare behind in the dust. Once again, Facebook proves taht although it’s large and has an amazingly large userbase, they aren’t afraid to make big changes and innovate. This is why they are the internet king right now. Did anyone think that Yahoo! if they couldn’t buy Foursquare would actually build something. Yeah right.

Gearbox is Rolling

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The future is already here, it’s just unevenly distributed.   – William Gibson

I did see the future this summer – just in bits and pieces.  Let me explain….

As many of you know, i had an amazing experience at Techstars this summer. Not only did we evolve our company Kapost in a new and better direction, but we got to meet and interact with some incredible mentors and entrepreneurs.

There’s a company i worked right next to this summer called Gearbox.  This is two guys who are hard core robotics nerds – and i mean that in the best way.  They have the only desk i’ve ever seen at a startup that has soldering irons and wrenches.

When they first arrived to Techstars, it was clear that they didn’t really know the best direction to take their company.  They weren’t alone, lots of us had unclear paths.  But they had a passion for robots, gaming and mobile devices and were looking for how best to apply this. As the months passed, they decided on a direction that was well aligned with this passion – which resulted in the Orbbott or the “Gearbox Ball.”

What is it? This is a robotic ball that is controlled by your iPhone or Android device.  Not only is controlled but there are apps on your phone that you can use with the ball.  Apps like Sumo (where you play against another ball) or Golf or, my favorite, “follow me” app. This is an application where you put the phone in your pocket and the Ball just follows you around the room.  It speeds up when you’re far away and backs up if you approach it.  I don’t know why, but i love this idea.  It’s the best version of a robotic dog or cat i’ve heard of.

You can see a video below of them demo’ing their ball.  It’s a great idea. They’ve invented a whole category of toys called “Smart Toys” and i think i’ve just seen the future.  Thankfully, i was lucky enough to see it emerge from the very beginning.

Facebook’s Fundamental Problem

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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.

Fred’s 10 Golden Web-App Rules

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This past weekend i watched this video from Fred Wilson about what are the 10 Golden Principles of a Web application. Fred has been an investor for over 20 years and is on the board of some of this decade’s premier companies such as Twitter, FourSquare, Tumblr, Etsy, Delicous, and more.

The 10 Golden Principles of Successful Web Apps from Carsonified on Vimeo.

  1. Speed.  Fred sees speed more than a feature. Speed is the most important feature and he argues that this is more important with mainstream users an early-adopters who are more forgiving.  Everyday users have no tolerance for slugish apps.  I heard the same thing from Google when they presented at Techstars.  They measure everything and if it’s slow, they fix it.  Fred mentioned pingom as something they use to measure every portfolio company.
  2. Instant Utility.  If a user has to spend too long to configure the service – it won’t catch on.  YouTube is a great example of how it won by providing instant feedback rather than delaying the gratification.
  3. Voice.  Consumer software is media today.  Consumers approach in the same way the approach magazines, tv shows, etc.. Software has to have a personality and if it has no attitude, then it won’t catch on.
  4. Simplicity.  Just one main feature at launch.  Fred points to Delicious as a perfect example of this.  Make the app super simple and then go from there.  There are lots of good posts on how to focus on this.
  5. Programmability.   Make your app accessible from other developers.  This means read+write API’s and if’s not “write” it’s not an API and might as well be RSS.   Allow other developers to add energy, data and richness.  In Fred’s mind this is absolutely essential and he’s hesitant to invest in anything that isn’t programmable.
  6. Personalizable.  You want make your app infused with your user’s energy.
  7. REST URLs.  Make your app easy to navigate – give everything a URL. This also makes is discoverable from Google.
  8. Discoverable.  There are millions of web pages and web applications.   This point means SEO but it also means that your app itself should be self-promoting.  This means social media and branding.
  9. Clean.  This is UI requirement.  You need to be able to come to the page and be able to immediately determine what to do and what’s going on.   It has to be inviting and simple.
  10. Playful.  An app should be fun to use and it’s use should encourage future use.  Weigh Watchers is a good example as it establishes points and goals and getting the points and acheiving goals is something that should be embedded in each application

There one more interesting point he spits out at the end about the name and brand of a company.  He talks about how important it is to him that the company purchases the actual name of the company.  For example, Foursquare was playfoursquare.com and they insisted that they change.  He also insisted that del.icio.us become delicious.com.

The 10 principles are interesting to think about and a good checklist for any startup to have.  I’ve definitely been guilty of ignoring some of these in my past work.   Interesting stuff

The Daily Beast Recognizes Dartmouth as a Top Producer of Tech Talent

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This month, The Daily Beast pointed out in “Tech’s 29 Most Powerful Colleges” and it had Dartmouth at the top. As The Beast says,

Our goal was to identify which colleges, compared student-for-student, have turned out the most undergraduates destined for high-tech greatness. While our results included many prestigious names, the rankings produced surprises as well. At the top of the list is a spot nearly 3,000 miles away from Silicon Valley.

That right baby! These results don’t surprise me. Making my way through the tech entrepreneurial world, I’ve encountered lots of Dartmouth alums as both entrepreneurs and VC’s. Dartmouth also has a long history in pioneering technology. Some key notes:

  • In 1956, a Dartmouth math professor coined the phrase “artificial intelligence” and “AI” (link)
  • In the 60’s, The Dartmouth Time-Sharing System, was the first large-scale time-sharing system to be implemented successfully – setting the stage for the large server farms we see today at large companies such as Google.
  • 1964, Dartmouth created the BASIC programming language which became a extremely popular language in the 70’s and 80’s.  In 1975, Bill Gates and Paul Allen developed a version of BASIC as their initial plan for Microsoft and today’s MS Visual Basic is still a derivative of that initial creation.
  • Since 1991, computers have been mandatory for all students and in 1988 had campus-wide email working (before AOL!)
  • In 1999, Wired magazine named Dartmouth the #1 most wired College in the country and in 2001, it became the first school in the country to be completely wireless (link)

It’s clear the Dartmouth is doing something right.  It’s nice to get the recognition.

Microsoft vs. Apple

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There’s been lots of talk about how Apple’s market cap is about to equal Microsoft’s.  People love to discuss this because of the battle the two companies have fought over the past 3 decades.  Microsoft famously beat out Apple for PC dominance in the 80’s and 90’s by being open while Apple remained stubbornly closed.  Today, many people look at the Android/iPhone battle in the same light: one company with a superior product (Apple) and another that may be less polished but open to be used on other people’s hardware (Google’s Android)

I’ve heard quite often over the past year how Apple is crazy to go down the same path again.  However, i read a good summary today by Mark Sigal on O’Reilly’s blog about why this isn’t the case.  His five main points are:

  1. Retail Distribution: During the PC Wars, everything came down to distribution and presence on limited retail shelf space. To be successful, you had to be on the shelves of retailers like ComputerLand, CompUSA, Circuit City, Office Depot and MicroAge. Given the wide variety of hardware OEMs making Wintel-based PCs, both shelf-space for Macs and the technical know-how to sell them were severely limited, making a differentiation story like Apple’s a hard sell. Today, Apple Stores drive a superior environment for consumers to experience hardware hands-on and get educated about the full breadth of Apple products. An aside, this is a consumer touch point that Google absolutely lacks.
  2. Pricing overhang: A primary reason for Apple’s crushing defeat by Microsoft was Apple’s misguided notion that it could charge grossly higher dollars for Mac products than Windows-based PC offerings. Contrast this with the present, where Apple is consistent in their assertion and awareness that it cannot and will not leave pricing overhang (i.e. a sufficient pricing gap between its products and the competition). This avoids the past dynamic where consumers saw picking Apple products as an either/or decision, in terms of price vs premier experience. iPod, iPhone, iPod Touch and iPad all have followed this course.
  3. Developer ecosystem: It is a truism that in platform plays he who wins the hearts and minds of developers, wins the war. In the PC era, Apple forgot this, bungling badly by launching and abandoning technology initiatives, co-opting and competing with their developers and routinely missed promised milestones. By contrast, Microsoft provided clear delineation points for developers, integrated core technologies across all products, and made sure developer tools readily supported these core initiatives. No less, Microsoft excelled at ensuring that the ecosystem made money. Lesson learned, Apple is moving on to the 4.0 stage of its mobile platform, has consistently hit promised milestones, has done yeomen’s work on evangelizing key technologies within the platform (and third-party developer creations – “There’s an app for that”), and developed multiple ways for developers to monetize their products. No less, they have offered 100 percent distribution to 85 million iPhones, iPod Touches and iPads, and one-click monetization via same. Nested in every one of these devices is a giant vending machine that is bottomless and never closes. By contrast, Google has taught consumers to expect free, the Android Market is hobbled by poor discovery and clunky, inconsistent monetization workflows. Most damning, despite touted high-volume third-party applications, there are (seemingly) no breakout third-party developer successes, despite Android being around two-thirds as long as the iPhone platform.
  4. Consumer technology adoption: During the PC era, large enterprises essentially dictated the industry winners by virtue of standardizing on a given vendor or type of solution. This created a winner-takes-all dynamic, inasmuch as consumers would ultimately buy the same solutions that had been blessed by large enterprises. By virtue of its conservative nature (remember the motto, “No ever got fired for buying IBM”?), staid Microsoft always felt like a safer choice than crazy Apple. And besides, accounting could solicit bids from multiple hardware vendors, which they liked. By contrast, today’s breakthrough adoption begins in the consumer realm and filters back to enterprises, not the other way around.
  5. Microsoft-like resilience: I remember too well the Microsoft mantra “Embrace-Extend-Extinguish,” which basically meant that any segment worth owning Microsoft would ultimately dominate by the 3.0 version of its competing product.  They were ruthless in squeezing the lifeblood out of competitors through any means necessary. But, give Microsoft full props for manifesting an unyielding resilience to keep working its product offering and market assault until victory was at hand. Considering Apple’s rise from the ashes to re-create a very profitable Mac business — the dominance it has created with iPod and iTunes; the powerhouse iPhone and iPhone platform and the ambitious, and already well-regarded iPad — does anyone wonder about Apple’s resilience? By contrast, Google remains almost completely dependent upon search and advertising, despite launching so many new product offerings and seriously pursuing M&A over the past several years. Arguably, Google’s famously loosely coupled structure leads to a lot of seeds being planted, but so too, it seems to a less than laser-like focus on seeing those seeds to cultivation and full harvest. It begs the question, “Can a tiger change its stripes?”

I carry around both an iPhone and a Droid so I’m witness the battle every day when i pull both out and decide which to make a call or text on.   They are both good phones.  The Android phones get refreshed every month when a new manufacturer comes out with the latest, whereas i have to wait a year for each new iPhone.  That said, the iPhone is better and because of points 1-5 above, i suspect Apple will clean house for at least a few more years.

Online Journalism Conf: Traditionalists vs. Pioneers

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I went to the International Symposium on Online Journalism this past Friday and Saturday.  There were a variety of speakers at this conference.  I noticed that there were three types of participants.   There were:
  1. Traditionalists
  2. Journalists
  3. Pioneers looking for new ways to publish.
The current revenue model in publishing is changing and the traditionalists resent this.  Newspapers and print media, which once had a good business model, are now losing money.  This one change has dramatic impact on journalism and media.   Some speakers, such as Jim Moroney at the Dallas Morning News, are enamored the newspaper structure.  In his speech on Friday, he mentioned that it costs him $36 million a year to staff his newsroom and he’ll look for every way possible to pay for this, from raising prices to charging for specific pieces of content.  He specifically said that he won’t shrink the staff nor use citizen journalism.  This strikes me as stubborn and destined to fail.  First, people – especially younger audiences – don’t want to pay for content and asking them to do so will just alienate them.  Other traditionalists such as Jim O’Shea are moving journalism into the non-profit realm.  Maybe this is the best place for hard-core journalism, because as Jim stated, advertising will supply only 5% of Chicago News Coop revenue.
On the other end of the spectrum there are the pioneers that are embracing the Internet. The web is proving to be best at interactivity. It’s not a place to simply replicate the written word of newspapers and magazines.  The sites that win are sites that embrace the social or interactive nature of the web.  The first speaker of the conference, Steven Kydd at Demand Media, is one of the pioneers.  While it’s debatable whether it’s journalism, Demand Media is discovering new business opportunities by interacting with the web and with writers and creating new opportunities from the crumbling media businesses.  David Cohn at Spot.us is another looking to create a media business around the interactivity of the web by creating a platform to crowdsourcing funding and sourcing of news stories.  New media will be interactive and vibrant.  Several great panelists such as Cindy Royal on Friday Jan Schaffer on Saturday understand this and gave great talks of how they are showing us new methods of journalism that actually work.

Last.fm Will Be a Charts Site

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There was an announcement today from Last.fm that read:

CBS-owned (NYSE: CBS) social music discovery and radio service Last.fm announced on Tuesday that it is discontinuing the on-demand song streaming service on its website, which had been available for the past two years in the U.S., U.K. and Germany, and will no longer host music videos.

What, Last.fm didn’t like paying tons of cash to have people play music for free? That’s amazing! Of course they cancelled this. They were offering free services which grew traffic but not monetizing those users at all. Not surprisingly someone asked why their offered the freebies. The release continued to read:

The company also said a number of new digital music services will now support “scrobbling” of tracks to users’ Last.fm charts. They include Spotify, The Hype Machine, MOG, We7 and Vevo.

This is the only reason i know of that people use Last.fm. People want to know what their most popular track is and it’s interesting to see what are the most played tracks. Where does this lead? It leads to last.fm being the Neilsons or Comscore or Billboard of the future. This site will tell us what’s popular and by who. In my mind, this is the future they have.  I wonder if CBS is regretting paying $280 million in cash for them.

The Deck: A Fascinating Ad Platform

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There’s an intersting advertising network that i learned about at SXSW this week called The Deck. They do one thing differently and it substantially impacts everything else: they get rid of the CPM. Selling ads by the 1000 holdover from the days of print media and TV where companies wanted to align ads to circulation and ratings. Deck does things differenly.

If you look at the three constituents of ad sales: publishers (the web site), readers, and the advertisers. The CPM is beneficial only to the advertiser. With CPM, publishers optimize their site for page views. This results in chopping stories into 3 pages, making photo galleries, lack of ajax, or other gimicks that result in more page views at the expense of user enjoyment. Typically when sites begin to focus on monetizing, they get worse for the reader, not better.

The Deck is an ad network. They represent both publishers (Twitteriffic, Daring Fireball, etc.) and advertisers (Rackspace, Gowalla, KickApps, etc.). They subjectively vet both of them.  The also have the following rules:

  1. They will only represent websites of a certain type. In this case it’s sites focused on design or technology
  2. They will only place ads of products they like or endorse
  3. They then will place only one ad per page of one size and of one format. They charge the advertiser a monthly rate and sign yearly contracts wht the publishers.
  4. Their ads have up to 80 characters and one image

Does it work? Definitely. They are way oversubscribed for both advertisers and publishers. Even though advertisers get less impressions, they are more effective. Thus, 7 out of 10 advertisers return month after month. Publishers have more attractive, less cluttered sites and no longer have to worry about chasing pages. Sure they want an audience and the bigger the better but whether it’s 3 page views per user or 10, it doesn’t matter

The author of Daring Fireball has a story of when he was using Google Ads instead of Deck. For a while his most successful, in revenue terms, article was one where he compared a certain design to a man’s toupee. What he found was all the Google Ads next to his article had to do with men’s hairpieces.  He also found that men’s hairpiece keywords are very highly priced and he earned 7x the amount of money on that page than other pages. This was troubling for him because he then started thinking about what words are valuable to Google when writing articles rather than what he readers want. His revenue (and interests) were properly aligned with advertisers nor readers.

Deck is an interesting example of someone innovating around ad networks. I find it fascinating as i really don’t like the CPM either. But, does it scale to other, non design/technology sectors? Maybe. I think it requires the readers to be intelligent and (somewhat)affluent. So i could see Travel or Cars having a similar ad network. But it gets harder after that.

iPad Thoughts

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I’m not sure if you’ve heard about the iPad.  Unless you’ve been under a rock, you can’t avoid the Apple madness.  I’m up in San Francisco this week and couldn’t help but feel the Apple riptide and get drawn into the hype.  So I watched the announcement and here are my thoughts

The iPad is super-duper slick.  I can see some great use-cases for it, such as:

  • If i was pitching a presentation to someone at a restaurant, in an elevator, or anywhere – the iPad would be a much better way to present the presentation than a laptop.  I could see it becoming a must-have for entrepreneurs
  • If i had kids and a family room with lots of people, having a family iPad that people use publicly would be great. Anyone in the family could us it in front of the TV or as the home iTunes download system for movies and TV shows that syncs with their AppleTV
  • Games. This could be one of the most sick gaming machines. It has the graphics, accelerometer, and connection needed to really be badass. I could see someone making a truly unique iPad gaming experience.

All these great ideas and reviews make me love the iPad but i’m not going to get one.  I’m not feeling it yet (not because of the video joke and jokes) and here’s why

  • i have an iPhone and i have a Macbook. I’m not feeling a huge need to have an iPad. If i did, i would want to replace my MacBook and i don’t think the iPad is powerful enough to be a replacement yet. I want all my songs on it (need more than 64 GB) and i want to run a browser and email at the same time. Until those happen, my laptop is vastly superior.
  • The A4 chip seems like a bad idea.  No way Apple is going to consistently be better than Intel or AMD at making low power chips.  Maybe they can now and early billions from it, but it can’t be a long-term solution
  • No camera bums me out.  I’m not sure but i think I’m going to want to take pics with the iPad. Maybe not but i like video skyping and i like taking random pics.  Give me a camera

If you know, you know that i feel that i’ve seen the future. I know what i want and where i want Apple to take me.  It’s this:

  • I want an iPhone device that has huge storage, enough for music (b/c i don’t see cloud music solution for another 5 years), and a fast enough processor that i can put all my files on it and use Google Docs and Dropbox for shared files
  • A portable keyboard and docked monitor so i can plug my phone into them and use it as a desktop computer when i’m at home or at work.
  • Over time, the files get saved more and more in the cloud and my phone become a portable processor, harddrive and network card.  That’s all

I saw with the iPad a keyboard doc and saw this future is coming.  It’s coming but slowly.  i can’t wait