High ROI Initiatives for the New Obama Administration

I have a number of friends/acquaintances who are involved in various ways in the incoming Obama administration. I wrote to them roughly the following note:

I realize that everyone you know is now deluging you with their advice on how the country should be run, in the hopes that you could get their ideas to the right ears. I wanted to take the liberty to share with you also three ideas which would have no significant marginal cost, and would be of great value in addressing the current economic crisis. I also realize that you and the rest of the transition team have undoubtedly thought of these ideas; I am adding in my vote that these are initiatives with high returns on political and financial capital.

1) Increase immigration by people with capital. There are approximately 2.2 million vacant homes in America. There are far more than 2.2m families in the world who want to move to the US and hope that their child grows up to be President. These immigrants will create economic activity and fill those vacant homes. This fact should allow the administration to override the forces that oppose immigration.

2) Radically simplify the tax code. I’m sure you’ve seen the estimates that the cost of compliance with the 67,204 pages of US tax law is equal to 10 to 24% of total tax revenues. Worse, the cost of compliance is effectively a regressive tax. With the right tax structure, you can increase (or keep flat) government revenues, while simultaneously increasing corporate profits and creating jobs. I realize that many people will oppose a flat tax, but even if you simply introduced a progressive tax with no deductions, exemptions, etc., you would make compliance dramatically more efficient. The big obstacle to reforming the tax code is that every politician has a pet interest that the existing tax code subsidizes. The current air of crisis may create a unique opportunity to get politicians aligned that fundamental reform is necessary….which it is.

3) Promote healthy eating. This is great for the environment, saves money, and promotes health…particularly for lower-income urban residents who tend to eat unhealthy diets. There are non-coercive and money-saving measures that the government can take to promote healthy eating. The easiest way to address our health-care crisis (the elephant in the economic room) is to promote people being healthy, and improving their diet is by far the simplest way to do that.

Outsell report: Social Media in Scientific, Technical and Medical Information Part 1: Social Networking

I enjoyed reading Outsell’s new report on Social Media in Scientific, Technical and Medical Information Part 1: Social Networking.

The most useful aspect of the report is that it includes the most extensive list I’ve seen of gated professional online networks. A trend I’ve been following for a long time (and worked on while running Circle of Experts) is gated online communities for professionals. If you want to know where scientists, businesspeople, doctors, etc., are congregating online, this report can give you guidance. For another (free) list and more information on this topic, see http://leadernetworks.com/.

The report does have some holes:
– It does not discuss the millions of small online communities on the Yahoo Groups, Google Groups, etc. platforms.
– It does not include Albourne Village, the leading online community for the hedge fund/private equity sector.
– It lists only a few expert network companies in which the client pays, but omits the largest ones: Gerson Lehrman, Vista Research, Evalueserve, etc. For a longer list of expert network companies (and also great advice if you’re seeking consulting opportunities/a job), see 8 Steps to Running a Diversified Job Search on the Web.

The most insightful point in the report is that it observes the very conspicuous lack of trade associations. You would think that the industry trade associations would be aggressively building online communities for their members, but there are surprisingly few examples. There is a business opportunity in helping associations to go on-line, before they become disintermediated.

(Disclosure: Outsell recently listed Evalueserve as the fastest-growing Market Research, Reports & Services (MRRS) company globally, in a separate report.)

Seeking Consultant for Research on Deal Origination by Private Equity and Venture Capital Funds

We are seeking 1-3 volunteer consultants who would like to help do research and prepare some analytics for a series of articles and slide presentations on deal origination by private equity and venture capital firms, particularly their use of Web 2.0 technologies. This is an ideal project for someone interested in learning more about institutional investing and Web 2.0 technologies. The focus of this research is how private equity and venture capital firms create a steady incoming flow of relevant potential investments.

I am in the process of leading the first ever research project on deal origination.  We plan to publish the results of this study in the Journal of Private Equity and some other leading journals covering the private equity/venture capital industry.

In the past few months, I have presented to a range of industry conferences on this topic. You can see the slides from some of my presentations at http://www.teten.com/deals . Chris Farmer, formerly a Principal with Bessemer Venture Partners, is working with me on this research.

BENEFITS
+ Compensation: None
+ Hours/work location: Flexible. Work at your convenience and your preferred hours from home. Typically 3-10 hours per week, more depending on your availability and interest.
+ Class credit (if you have a professor who approves your participation, and/or if you can recycle this work for a class)
+ Interact with private equity and venture capital thought leaders.
+ Gain public visibility for your research on the private equity/venture capital industry. Potentially gain co-author credit.
+ Learn about blogs, social network sites, and other Web 2.0 technologies.
+ Significant creative input and flexibility.
+ Very positive references (if merited).
+ Access to the co-authors’ network of investors for future job oportunities.

YOUR RESPONSIBILITIES
+ Research background on the private equity/venture capital industry. Pull data from academic research and other sources.
+ Code 150 interviews we have conducted with institutional investors globally, and execute certain analytics based on this dataset. Create Excel graphs and slides based on this dataset.
+ Write portions of research papers on this topic, and pertinent blog posts.
+ Interview executives in the private equity/venture capital industry and at companies that interface with the industry (investment bankers, Web 2.0 companies, data providers, etc.)
+ Using your sales and marketing skills, win publication opportunities and speaking opportunities targeting the private equity/venture capital industry.

QUALIFICATIONS
+ Strongly prefer someone with a current or recent MBA, JD, or other comparable advanced degree. Summer interns are welcome.
+ Strongly prefer experience in financial services: investment banking, investment research, private equity, and/or venture capital
+ Require strong writing experience. Particularly value a high GPA in writing-dependent courses.
+ Excitement about being part of the team understanding in depth a critical part of the institutional investment industry.
+ Highly motivated self-starter who has a track record of continuous self-improvement, high achievement, and aggressiveness.
+ Strong interpersonal communication skills.
+ Poised, professional demeanor.

HOW TO APPLY
Contact via e-mail only; do not call. Save your resume in Microsoft Word format with the name “Last Name-First Name-Year.doc”, e.g., “Clinton-Bill-2008.doc”.

Include with your detailed resume:
+ Dates/hours of availability during December 08-Fall 09.
+ Writing sample
+ Physical location. You can do all of the work on this project remotely. However, if you are in the New York or Boston area, that is preferable.

Please make sure that you include all of the information that we request above, or we will not be able to consider your application. Please send resume and cover letter to Careers @ Teten.com with “Research Assistant” in the subject line.

Notes from conference on NY Games community

Following are my notes from the first panel of Friday’s min-conference, “GAME THEORY/PLAY MONEY“, sponsored by DIGRA-NY. This is a new initiative to bring together the NY games community. The conference looked fascinating, but I unfortunately had to leave after the first panel.

BIOGRAPHIES OF SPEAKERS:

James Grimmelmann is Associate Professor at New York Law School and a member of its Institute for Information Law and Policy. He received his J.D. from Yale Law School, where he was Editor-in-Chief of LawMeme and a member of the Yale Law Journal. Prior to law school, he received an A.B. in computer science from Harvard College and worked as a programmer for Microsoft. He has served as a Resident Fellow of the Information Society Project at Yale, as a legal intern for Creative Commons and the Electronic Frontier Foundation, and as a law clerk to the Honorable Maryanne Trump Barry of the United States Court of Appeals for the Third Circuit. He studies how the law governing the creation and use of computer software affects the distribution of wealth, power, and freedom in society. As a lawyer and technologist, he aims to help these two groups speak intelligibly to each other. He writes on such topics as intellectual property, virtual worlds, search engines, electronic commerce, online privacy, and the use of software as a regulator. Recent publications include The Structure of Search Engine Law, 93 Iowa L. Rev. 1 (2007), Virtual Borders, First Monday (Feb. 2006), and Regulation by Software, 114 Yale L.J. 1719 (2005). In 2007, he was named one of Interview Magazine’s “New Pop A-List: 50 To Watch (Age 30 or Under).” He has been blogging since 2000 at the Laboratorium (http://laboratorium.net/). His home page is at http://james.grimmelmann.net/.

Katherine Isbister is an Associate Professor of Digital Media at NYU-Poly, and also maintains an affiliation at the ITU Copenhagen Center for Computer Games Research. Dr. Isbister has written two books: Better Game Characters by Design: A Psychological Approach, and Game Usability: Advice from the Experts for Advancing the Player Experience. Better Game Characters was nominated for a Game Developer Magazine Frontline Award in 2006. Current research interests include emotion and gesture in games, supple interactions, design of game characters, and game usability.

Aram Sinnreich is a Visiting Professor at NYU’s Department of Media, Culture and Communication, where he teaches courses on video games, intellectual property and digital culture. He is also the Managing Partner of Radar Research, a media and technology consultancy. He has written about media, culture and technology for publications including The New York Times, Billboard, Wired News, Truthdig and American Quarterly. As a Senior Analyst at Jupiter Research in New York for over five years (1997-2002), he produced research covering the online music and media industries and provided hands-on strategic consulting to companies ranging from Time Warner to Microsoft to Heineken. Aram’s kicked World of Warcraft, and is now quasi-addicted to Spore.

Mary Flanagan investigates everyday technologies through critical writing, artwork, and activist design projects. Flanagan’s work has been exhibited internationally at museums, festivals, and galleries, including: the Guggenheim, The Whitney Museum of American Art, SIGGRAPH, The Banff Centre, The Moving Image Centre, New Zealand, Central Fine Arts Gallery NY, Artists Space NY, the University of Arizona, University of Colorado-Boulder, and venues in Brazil, France, UK, Canada, Taiwan, New Zealand, and Australia. Her projects have been funded by the National Science Foundation, the Pacific Cultural Foundation, and the National Endowment for the Arts. Please visit her site at: www.maryflanagan.com

Liel Liebovitz received his doctorate from Columbia University in 2007. His dissertation, titled “Thinking Inside the Box: Towards an Ontology of Video Games,” examines the personal and social processes of play. Liel also served as associate professor of communications at Barnard College, and taught at Marymount Manhattan College. He is the author of two books of non-fiction: “Aliya,” published in 2006 by St. Martin’s Press, and “Lili Marlene,” scheduled for publication by W.W. Norton in 2008.

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Sinnreich: There’s a land grab going on in academe: every department wants to own games.
Flanagan: A similar land grab happened with film studies. There’s also a lot of money involved in this for grants.
Sinnreich: Growing 30-40% YOY, while film is flat and music is down. Also, military is very interested in this.

Liebovitz: Can we formally define a game?
Sinnreich: No, not possible.
Flanagan: most innovative games don’t fit within clear definitions.

Liebovitz: Why are video games compelling?
Flanagan: there are many innovative ways to define games.
Sinnreich: there is expectation of transformability.

Question: Are video games as a medium likely to have any long term sociopolitical effects? (compare with longstanding debate about argument of impact of TV on crime/politics)

Grimmelmann: TV didn’t radically change human nature. Viewers kept on living their lives.

Question: What about idea of forming guilds in Obama campaign: “yes we can?”. Does this create energy that could be used towards sociopolitical goals?

Isbister: TV was an isolationist blip. Games move us back to doing things together.

Sinnreich: I just wrote on my blog that Barack Obama is the first mashup candidate. He’s black and white, foreign and domestic. Instead of being a flat neutral candidate, he’s more than the sum of his parts. He’s like “Careless Dead” (mashup of “Careless Whispers” and “Dead or Alive”).

Isbister: Constants include: people like to be social. People have emotions.
Flanagan: We do a lot of social activist games. A game is a framework of action/agency. If we frame that so certain types of actions are allowed (e.g., certain types of communication in WoW are allowed) we impact the culture. Must think about how games create epistemological systems.

Question: What is the role of ‘glory’ in video games, e.g., the high scorers list which motivates people to join it?

Flanagan: you have the creatives, who re-skin; come up with new clothes; reengineer the structures. You also have disrupters, who like to vandalize.

Sinnreich: Games are a model for the free agent economy.
Isbister: I tell my students that eventually on their business card, they’ll put on their business card which guild they were in; what their high scores were.
Grimmelmann: rack of medals on a uniform is just a score, in the ‘game of killing people’

Sinnreich: football, soccer are martial games.
Liebovitz: There’s a huge misnomer in games, which is the idea of interactivity. However, when you actually study the game, you learn that you’re operating within a very tiny window of what the designer allows. However, the game is designed so that you think that what YOU are doing is driving your choices.
Sinnreich: Video games are information spaces which can be explored. One of the biggest questions of the era: if you give someone the tools to explore/discover the space, are they exercising free will /agency, or are there actions being overdetermined? Jon Zittrain’s new book is about that.

The first video game I fell in love with was Atari 2600 game, called Number Crunchers. You drive your car over numbers, and whoever goes over the biggest numbers wins. However, there was a bug: if you slid on the number sideways, you got stuck on the number, and you would go to 100 very quickly. That to me was compelling; I had to buy that game.

Grimmelmann: you have to balance between being entirely passive, and giving someone too many options. It’s like dancing, and the tension between being in the lead and the follower role.
Liebovitz: Cheating has become so common in video games, and is written into the code. This is a major subindustry in the code. It’s the “invisible towrope”: you look like you’re skiing but there’s really an invisible towrope.

Sinnreich: there’s a dance going on.
Grimmelmann: one of my favorite children’s books is “There’s a Monster at the End of this Book”, in which Grover tries to stop you from flipping the pages of the book. It subverts the medium.
Flanagan: In Animal Crossing, you can stop and get coffee. There’s a pleasure of discovery in doing that. This is a machine-operated diagetic space. The computer does stuff when you’re not there, to convince you that the world is bigger than just you.
Liebovitz: nothing suggests agency in a game like the ability to stop playing. Question for Isbister:, please comment on relationship between player and character. Games enhance your own powers.

Sinnreich: When I was playing GTA 4, I had to choose whom to kill, but had 2 perspective: my own moral sense of values, and the game’s values.
Isbister: I feel the tension of wearing the narrative suit which doesn’t fit
Flanagan: In the video game “Eve” (?), you start out as a debutante in heels and a ball gown at the opera. The singer turns into an opera singer, who then turns into a monster you must chase..in high heels. There were many blog posts I saw about how this impacted game play?”I really felt like I knew what it was to be a woman.” (laughter)
Flanagan: “Values at Play” is a collaborative effort between a game philosopher and me. We’re exploring what it means to make human values the center of the design. We’re not trying to make decisions about which values are ‘better’, but to think about design issues.
Flanagan: Big theme of game developers conference was growth of independent games, which were winning a lot of the awards.
Flanagan: Values are embedded in a game whether we acknowledge it or not. I just did an interview with Salon.com. They asked, “Do all games have to have shooting?” I recently went to a school to look at a dance game. One of the kids said, “This isn’t a game, because you can’t kill anyone.” What a strange generation to think play=killing someone.
Isbister: bestselling games are always simulation and sports. The key values of these games are novelty and consumption. They make a new version of the sports game every season, and you can’t play the old game.
Sinnreich: Casual games are the way out of the box of ‘you have to kill someone’. There are more adult women than teenage boys playing video games in the US right now?especially Nintendo.
Sinnreich: For the first time, all the mainstream console games are truly networked, and all the major games integrate that network functionality into the games. So we’re not tied to games that are stored on little metal disks.

Question: What are challenges of ‘governing’ the economy of a game?
Grimmelmann: Eve Online has a very tolerant attitude to money changing. It’s based in Iceland. I wonder if it’s being used as a channel for currency.

Howard Bloomfield is looking at doing tests of different regulatory regimes in games.

Question: The video game Rock Band recently beat out itunes for music rights to Beatles catalog. Aram, you wrote that the music industry is shifting to getting revenues mainly from licensing.

Sinnreich: The dominant form in which people listen to music now is the playlist. It’s not a question of ‘album’ vs.’ single’. There is not an ipod user who hasn’t experimented with making his own ‘greatest hits’ record. The Beatles catalog is perfect test case for merging the interoperability of video games with a pure consumption oriented medium.

———————-
Audience questions
Question: Can a game not be Calvinball by definition?
Grimmelmann: The contextualizing of Calvinball in regular games is critical. Calvinball doesn’t make sense unless you know croquet, baseball, etc.

Question: “America’s Army” was a video game developed specifically as a recruiting tool. Comment.

L :We’ll never have a truly successful propaganda video game, because it’s too interactive a medium.
Teten: What can managers learn motivating power of video games?
Sinnreich: the Chinese gold farmers who work in WoW, they play WoW in their off-hours because they’re with their friends. When I was at a dot-com, we played Age of Empires on the company’s LAN.
Liebovitz: Heidegger said humans are different from all other animals because they know they’re mortal. Games free us of that onus.

Question: Who’s doing interesting research in games.
Flanagan: Esward Costranova
Liebovitz: JL Sherry, who’s found little correlation between games and violence.
Isbister: ‘pencil test’. Researchers asked people to study a certain interface in which you manipulated a pencil with your mouth?either clench your teeth (frown) or hold a smile. The people who had to hold a smile liked the interface much more.

David Rose on What's Next in Business: tomorrow's game changing technologies

Following are my notes on David Rose‘s talk at the recent Liminal Group conference, “The Future of Business & Strategy Summit”, on “What’s Next in Business: tomorrow’s game changing technologies”:

I’ve invested in over 75 companies, but I consider myself mainly an investor.
Started my first Internet company in 1998. it took $20m to get to product ship.
2000: 2nd internet company. Took $2m to get to product ship.
We most recently invested in Pond5, which does user-generated stock footage. When we invested, it had a management team, had launched, had revenues. They had only spent $20K.

It’s dramatically cheaper now to get to launch.

No one knows where it’s going.

4 major seminal ideas you must know if you want to be able to function going forward.

1) The long tail.
2) Web 2.0
3) Globalization
4) The singularity (Ray Kurzweil)

THE LONG TAIL

Typical record store has 40,000 tracks in inventory. Rhapsody has 400,000 unique songs streamed monthly.

Barnes & Noble has about 130,000 titles in a store.
Majority of Amazon’s books are sold outside the top 130,000.

Supply side drivers:
-centralized stocking
-virtual distribution
– delivery on demand

Demand side drivers
-internet connectivity
-search engines
– recommendation software
– Sampling tools

WEB 2.0

Web 0: brochureware
Web 1.0: transactional sites
Web 2.0: transactional sites

Uses example of Shakeshack in his neighborhood, which has a daily Flashmob (organized via Twitter)

The Web as platform
You access everything through your browser
The architecture of participation: you are part of something else.
You (and they) own your data

Software as a Service

About 1.5 years ago we changed Angelsoft to a pure SaaS model. We upgrade every 5 weeks.

– no physical delivery costs
– no version issues
– continual upgrades
– perpetual revenue stream (retainer)

Collective intelligence: wikis
Blogs. 6 mos. ago I just launched my personal blog.
Podcasts
Social software
Messaging (Twitter)

Cross-device mobility: computers, smart phones, cell phones, digital signage

Outsourcing:
– most efficient, most effective or cheapest option
– production of things, services, ideas
– Can outsource to companies, teams or individuals
– One-off or long term

Recommends CrowdSpring.com—you post the price you want to pay, and people do the work on spec. Had a portfolio company who used this to design a logo.

Can offshore to contract manufacturers, wholly-owned subs, or teams for hire.

Use a service like Panjiva to evaluate a range of suppliers.

Open sourcing: now being used for applications, tools, information (Wikipedia), and operating systems? Vast majority of websites run on Apache, an open-source toool.

Self-service: slowly pervading our entire world. It includes technical support. You see this with ATMs, gas stations, airline checkin. Retail check-out (including Home Depot).

Communications: wireless, VOIP. Every Mac comes with software to allow 4-way visual chat.

THE SINGULARITY

Ray Kurzweil argues that the rate of change of technology is accelerating at a constant rate. In other words, it’s exponential growth not linear growth.

In medical technology: there’s accretive benefit from explosive growth in computing power and increasing miniaturization. There’s also reverse-engineering of the human brain. Put that together: you can download your brain into a box. He predicts this will happen by 2045.

Digg, icanhascheezburger, InstantAction, FakeSteveJobs at NY Web 2.0 Expo

Following are my notes on the Friday keynotes from the NY Web 2.0 Expo

Jay Adelson, founder, Digg

We’re about to add 90m Facebook users as registered Digg users.
Collaborative filters are key to monetizing of social networks

Ben Huh, icanhazcheezburger.com
LOLcats started out in primordial soup of the internet.
Every piece of web 2.0 content came from a user.
In 4/07, 8m page views/month. Had grown from blog to web 2.0 component, because it allowed people to build LOLcats.
100% user-generated content
8,000 submissions/day.

9/07: 15m page views/month
Huh and some other investors bought the site.
Our goal: make users happy for 5min/day
6 posts a day
9am ET start, when people come to work
Strict promotional guidelines
We normalize the system

Rules: we don’t allow photos of cat on a stove with the flame on, but it can be next to the stove
3/08: 37m page views/day
3/08: launched a network: ROFLrazzi.com . Just acquired failblog.com, which is growing faster than icanhazcheezburger
Now 100m page views/month.
8 sites.
5 FTEs who moderate comments, pictures.
We lower the bar for content creation. The lower it is, the better content you’ll have.

Shawn Fisher, head of strategy/M&A for IAC
Future of video games.
Instant Action is defining the $2b online core games market.
Overall video games market is $34b

2 types of video games:
-$7b in console based: $400 for hardware, $60/game. Add an extra $50/year for cost of ownership
PC is $150/year for online connectivity, and $60/game. Much cheaper because you don’t have console cost.

Only 8% of console titles reached 650K units (breakeven on avg. investment)
It’s an expensive product, takes a long time to produce, expsnvie for users…but high engagement.
We see room for breakthrough in this market. See see new category of games: hardcore games moving to the web. Most publishers won’t focus on this — too disruptive and cannibalistic.
Altenative: full and engaging video games that function 100% in browser.
Advantages: low cost, rapid development, entirely online distrution, high engagement, free for basic access
That’s what we’re building.

New brand :instantaction. First web-based videogame platform. Multi-player game. Console quality delivered in the browser.

We fund and develop original IP.
700K registered users. 30mins./day avg. time on site.
Over 127 countries
50% users in US, 50% outside. Core demographic male 13-34.

Dan Lyons, Fake Steve Jobs

Just joined Newsweek as a columnist.
As an old media guy, attending this conference is like attending your funeral in advance.
Started this in June 06
He put Fake Steve Jobs on hiatus when he saw Steve looking so sick.
Wrote book, “options”, on his secret life.
Started blog, RealDan, which everyone says sucks.
He started the blog because:
1) had free time
2) fear. I saw what was happening to the news business. I tried to get a job on the dot-com side of Forbes, but was rejected. I was 48, grey hair.

I wanted to parody both Steve and also blogging as a form. This was mostly fiction. This was a comic strip that evolved into news.

Some people thought I was steve and wrote to me asking for features.
In a few months, I had 90,000 people reading this. That’s more readers than I had at the first newspaper that hired me. Soon I had 1.5m readers.

Rich Karlgard (Dan’s boss) launches search for who fake steve jobs is. Dan told him who he was.

Brad Stone of the NY Times broke the story. At this point, at least 100 people knew about it, so it’s not surprising I was outed.

Why does it work?

Once I was outed, this still worked. The community really liked his stuff.
– Consume & create
– Fake Vladimir Putin: a character who lived entirely on my blog, who argued with fake Noam Chomsky.
– It’s a performance space

Josh Schachter: Lessons Learned in Scaling and Building Social Systems

One of the best speakers at the NY Web 2.0 Expo was Josh Schachter of delicious, who spoke on Lessons Learned in Scaling and Building Social Systems:

BACKGROUND

Built delicious in 2003, sold to Yahoo in 2005. I just left Yahoo a few months ago.
Billions of page views/month.
4m users at time of sale

3 kinds of scale: technological, personal, and software.

Technological scale
– partition users into multiple sets (sharding, clustering). I built delicious into one big database.
– caching. Avoid going into the database.
– replicas. Must have multiple copies of the data.
– mysql issue: we got a 60x performance speedup by making some changes
– autoincrement: will hurt you later. Don’t do this.
– put proxy in front. Don’t let the dialup user take up your whole server
– sloppiness. Use an offline process to decouple interactive processes from the rest of the system.

Social Scale
– different features at different scales
– at beginning, make it easy for users to find one another. Don’t let them say ‘hi’ and see no one respond. Minimize barriers to entry and minimize transaction costs.
– as you grow, you have to design features to mitigate traffic. E.g., on delicious, the ability to follow your friends.

3 reasons a social app has value:
– utility, network effect, revenue
– Delicious initially focused on utility.
– have to provide value to the user *before* there are a lot of users online
– you have to provide these motivations in this order: 1) provide utility, 2) get a network effect, 3) monetize

For a long time, biggest apps on Facebook were Superpoke, etc. They have very little functionality, but a lot of users, because they are simple enough to spread rapidly.

App must be self-marketing without requiring sign-in.

Compare initial marketing vs. actual functionality. Initial marketing of delicious was: bookmarks for people with multiple PCs. But really, we became a search engine for bookmarks.

Half our traffic came from RSS.

Figure out drivers for infection. Firefox Extension was our biggest driver.
Choice of language matters: key to say ‘do not share’ instead of ‘private’, to discourage not sharing. ‘Not sharing’ sounds like something your mom would criticize you for.

Kids change their social network partly because it allows them to update the network to reflect their current status

Delicious doesn’t have a chat feature because I didn’t want the flame wars you see on wikipedia admin pages

Must prepare to deal with spam and abuse

Lengthen or destroy feedback loops.

If you kick off a spammer, you’ve taught them what they did wrong. But they’ll be back. So on delicious we let them use the system but didn’t let anyone see them.

When xdrive had problems with spammers, they just inserted a 20sec delay on downloading files. That frustrated them and they moved to a different system.

Make pretty URL’s; they’re easier to remember & forward.

We were one of the first sites with a public API. I used this as a tool to recruit people who might have built competitors otherwise

Scaling yourself. The first thing you do will be wrong. Iterate quickly.

Write down all your ideas. It’s good for future patent work.

If people in engineering have to read support tickets they’ll build around problems

Figure out user motivations

put the whole staff in the listening session. Measure and record everything.

Average user has 60 tags.
8% of users will use 12345 as password
Another few % will use 123456
And about 15% will use your domain plus their ID

His best observation: SMS is the next command line. The next 1b people online will only have SMS.

Social Web Aggregation – The Next Killer App, Part 1

508664515_853780cf3a Remember the good old days? Back when you had to log on to one email system at work and then at night dial up your favorite BBS’s one by one, replying to all of your emails while you were logged in? (I’m showing my age – if you don’t actually remember that – just use your imagination)

But then along came the internet and the idea of a universal email client — one application from which you could handle all your email across multiple servers. And you didn’t even have to be online to read and reply to email — you could do it at your convenience.

Remember Usenet? The same thing happened there. You used to have read in real-time while logged in, but before long came aggregators that allowed you to subscribe to the content you wanted and read it at your leisure. Eventually Google pretty much took it over and turned it into Google Groups.

AOL became the largest ISP at one time not just because they spent millions on marketing, but because they offered a simple, unified interface to the internet, accessible to the typical user.

As the web grew, it became apparent that it was far too complex to simply navigate via hyperlinks from one site to another. There needed to be a centralized directory of web sites. A couple of smart people realized that they could monetize that and Yahoo! was born.

While no one might ever have imagined it was possible, the web became so complex that it outran the capacity of a topical directory, and along came search engines to fill the gap. Was Google really THAT much better a search engine than all the others? Or did the "I feel lucky" button that promised one-click satisfaction have something to do with their success?

Some of the web’s biggest brands have been built around a fairly simple aggregation concept:

  • Amazon provides access to the pretty much the entire library of published books (and more, now, of course).
  • eBay aggregates individual buyers and sellers.
  • craigslist aggregates all types of classifieds, not just buy/sell.

And now the web is social. OK, it’s always been social, but now it’s mostly social. According to Comscore, "The number of worldwide visitors to social networking sites has grown 34 percent in the past year to 530 million, representing approximately 2 out of every 3 Internet users." In some countries, such as the UK, social networking sites account for more than 75% of all web traffic.

So where’s the super-aggregator for the social web?

Facebook wants to be it. So does MySpace. Google too. A host of startups are aggregating social networking profiles, online video and more – even multiple Twitter and Jaiku accounts.

Users are starving for this, even if many of them don’t realize it yet. As more and more social networks pop up, particularly those with niche focus, the space becomes increasingly fragmented. A new social network focused on one particular topic no longer competes with just other social networks on the same topic, but with all social networks vying for the user’s attention. And as anyone who’s ever studied GTD or any other productivity methodology knows, fragmented attention is counter-productive.

The inevitable trend is that unless social networking sites make it easier to aggregate their data, they’re going to lose their most active users to social network burnout (it’s already started). A widely-adopted, highly effective aggregation tool could stave off that trend and put the social web back on course to being an indispensable productivity tool, rather than a waste of time and a security risk.

It’s clear from the internet’s evolutionary past that whoever can figure out how to make a simple, unified interface to the social web is well-positioned to make a ton of money. But they’re going to face some significant challenges, and the technology is just one of them. I’ll address those in Part 2.

Image: Aldo Gonzales via Flickr

The CEO's New Social Network Strategy – A Cautionary Tale

One of my associates in Link To Your World, Carter Smith, did a great post today on The CEO’s New Social Network Strategy. Carter very effectively skewers both the distorted perspective many corporate leaders have about social networking and even moreover, the people with absolutely no field real field experience who then try to consult with them about it.

Enjoy!

Classmates Scraps IPO Plans

United Online (Nasdaq: UNTD) is scrapping its IPO plans for Classmates Media, which includes social networking pioneer Classmates.com and the popular MyPoints consumer loyalty site. What particularly called my attention to this was the analysis of it over at Fool.com by Rick Aristotle Munarriz, which echoes some of the things I had to say about Classmates in our upcoming book, The Emergence of The Relationship Economy. Here’s what Rick had to say:

It didn’t hurt that Classmates.com is considered a social-networking pioneer, at a time when News Corp. (NYSE: NWS) is laughing its way to the bank on its MySpace purchase, and Microsoft (Nasdaq: MSFT) is bankrolling a suspicious investment that values Facebook at a whopping $15 billion.

Investors weren’t born yesterday. They didn’t need an Ivy League college degree to know that pioneer badges can be worthless. So what if Classmates predates MySpace, Facebook, Bebo, or Google‘s (Nasdaq: GOOG) Orkut? If rings around the bark are all that mattered, Friendster and Tribe.net would be Wall Street rock stars.

Classmates blew it long before the IPO got shelved this morning. The site was in the right place at the right time, but it was positioned the wrong way. Instead of embracing the open-ended ways of the real stars of social networking, Classmates spent too much time as a walled community with little to offer those who weren’t willing to pay for access. The site had amassed user registrations 50 million deep over the years, but just a sliver of those were paying customers and active participants.

Here’s what I wrote in The Emergence of The Relationship Economy regarding Classmates and freemium business models:

Many users have criticized Classmates’ highly restrictive free functionality, which allows members to establish profiles, search for other members, and read public message boards; posting messages or contacting other members requires a premium membership. Other sites with similar models, such as Ecademy, have garnered similar criticism. While there is nothing inherently wrong with this business model, it does generate more customer ill will than those with less restrictive free membership functionality.

We recommend that unless compelling ROI can be demonstrated in other ways, companies offer a free level of basic membership that has sufficient functionality to keep people engaged on an ongoing basis. This not only creates customer goodwill but also generally offers increased value to premium members by having a larger pool of engaged users available for search and interaction.

Here’s the ironic part… Classmates knew this was a problem — they just didn’t know what to do about it. Take a look at this excerpt from their S-1 filing:

Although we have recently experienced an increase in the number of paying subscribers, this trend may not continue. Most of our paying subscribers elect to purchase our services as a result of a limited number of features. For example, we believe that our recently introduced Classmates digital guestbook feature is responsible for a significant portion of the increase in our new pay accounts since the end of 2006. If our social networking pay features are not as compelling and we do not stay current with evolving consumer trends, our free members may not subscribe for our pay features. Any decrease in our conversion rate of free members into paying subscribers could adversely affect our business and financial results.

This is a perfect example of why understanding the marketplace and what users will and won’t accept is so critical. Not getting this right has cost Classmates millions.