Archive for July, 2007

Does Facebook REALLY Have Any Competitors?

Tuesday, July 31st, 2007

Facebook new logo

With all due respect, I have used to have accounts at hi5, Friendster, MySpace, Orkut, and several other social networks, but I found them obsolete. Facebook is the cream of the crop – by a long shot. Second place is miles behind.

Now, I know many of you are sick of hearing about Facebook (as am I). But there are very important lessons to be learned from this social network that cannot be overlooked. The insights and knowledge are priceless. Therefore, I proceed…

Although Facebook does get grouped with the other social networks (SNs) above, are they all really in the same league? I mean really… none of the other SNs make sense like Facebook does. The proof is in the pudding: it seems that the other guys are now copying Facebook and/or trying to become more Facebook-esque. It was bound to happen.

Why is Facebook unrivalled?

  1. The people on my ‘Friends’ list are actually my friends. The same cannot be said for the other SNs.
  2. The Facebook interface is intuitive and easy to navigate. I get lost on the other SNs. The clutter gives me a headache.
  3. The other guys try to do too much. If I am looking for scrapbooks or comedy, I’ll look elsewhere. Facebook has focused on connecting people and ignored superfluous features.

There are other factors that play into my decision, but these are the most important. Facebook really has created a “social utility that connects you with the people around you”. Amazing concept? Not so much. Brilliant execution? Absolutely.

Enough said.

“Akismet” is an Anagram of “Mistake”

Monday, July 30th, 2007

Akismet logoIs this a startling revelation or do I just have too much time on my hands? For those of you unaware of Akismet, it is Automattic‘s comment spam killer. For those of you unaware of Automattic, it is the company behind WordPress. And if you don’t know what WordPress is, well then…

Was this coincidence planned? If that was the case, it wouldn’t be a coincidence I guess. Has anyone else noticed this? Probably not. Perhaps the creators classify comment spam as a karma ‘mistake’ on behalf of the spammer. Or perhaps I just need to get out of the house more often. Probably the latter. 

A Word On The Twitter Financing

Monday, July 30th, 2007

Twitter logoWord around the blogosphere is that Twitter is close to closing a round of financing. Michael Arrington estimates the round to be somewhere in the $1-5 million range. That seems a bit low given the amount of buzz and attention the company has been getting over the past 6 months. I would have expected a larger round, but this smaller round does make sense when you think about it.

The smaller the round, the less diluted the company becomes. The founders can retain majority ownership and control. Furthermore, I am guessing that only a small amount of capital is needed to take the company to the next level. After all, Twitter is a micro-blogging service. How much does it really cost to run a company that facilitates the dissemination of short text messages?

I think that a small round is a very smart move by the company. I assume that many were expecting a gargantuan round, only to be disappointed. By minimizing the influx of funds, Twitter can spur growth and still maintain company unity. The next round of financing will probably be a different story with a whole new set of challenges.

Gnomedex 2007

Sunday, July 29th, 2007

Gnomedex 2007 logoIn two weeks, bloggers and social media enthusiasts from around the world will convene in Seattle at Gnomedex 2007. This annual conference is becoming more and more popular, as more people are discovering its widespread appeal and social atmosphere. Conference mastermind, Chris Pirillo, describes the 2007 event as follows:

“This summer, hundreds of the world’s leading bloggers, podcasters, and tech-savvy enthusiasts will once again descend upon the city of Seattle, Washington (August 9th – 11th, 2007). The seventh Gnomedex conference is generating buzz in the blogosphere, which underscores our reason to produce it. Indeed, we will once again become the crossroads between producers and observers, between users and developers.”

I was fortunate enough to attend the conference last year and had a blast. Access to such influential individuals, entrepreneurs, tech executives, A-list bloggers, and industry experts is second-to-none. Furthermore, the education and insights gained from such an event cannot be matched.

I highly recommend Gnomedex to anyone looking to make a splash on the tech scene or simply gain some added knowledge from industry veterans. As I understand, there are very few seats remaining, so register soon. I hope to see some of you there.

By the way, if you are already registered, please let me know by writing a comment below and I will be sure to connect with you 🙂

Perception of Quality

Saturday, July 28th, 2007

Every successful start-up needs a revenue model. Some choose one early in the game, while others choose to wait. The latter strategy sounds very familiar in the web 2.0 world. These start-ups prefer to build their user base before settling on a revenue model. Not only does this tactic affect short-term cash flows, but also the long-term perception of service quality.

Quality? How so? Well, if a start-up chooses to provide a free service from the get-go, suspicions around the quality may arise. This may not seem obvious or apparent at first. Some people might even find this statement offending. But subconsciously, people may initially judge the service to be inferior simply based on the perceived monetary value. In other words, even though the service may be of high quality, the free price tag may signal low quality to some observers.

For obvious reasons, a given service needs to be tested, analyzed, and compared to other similar competitor offerings to determine the actual level of quality.

The downfall of charging for a service from the start is purchasing dissonance on behalf of the user. This creates a barrier to entry for service adoption. Subsequently, there is likely a longer path to critical mass. Having said that, revenues are being generated from Day 1. Furthermore, the perceived quality of the service will likely exceed that of a free offering. This strategy seems quite rare in the web 2.0 world, as start-ups are afraid to introduce initial barriers. Instead they try to build a user base as quick as possible, ignore monetization, then try to sell to a bigger company (AKA the web 2.0 revenue model). Failing that, they slap on Google AdWords and pray that they can generate enough page views to cover costs until the next round of financing – definitely not a sustainable model for about 98% of start-ups.

The “free-mium” model offers the lack of commitment and security of a free product, as well as the option to upgrade to a premium offering with added functionality. Many popular web 2.0 companies, such as Flickr and LinkedIn, offer this tiered system. 37signals is also very well-known for its suite of free-mium web applications. By offering a tiered system, a given start-up is able to project an image of quality and confidence. These two characteristics radiate from a company that can offer a free service, but is confident enough that the premium offering will sell itself.