I’m not sure about the purpose of this commercial which I tend to find very depressing and not really inspiring. Facebook is understandably under pressure from its investors for monetising after it’s disappointing IPO and a flurry of announcements were made recently in that domain, not always convincing by the way.
I am neither certain this campaign will help sell on site advertising nor that this will help improve Facebook’s image in the eyes of its disgruntled investors.
On day 4 of our Blogger Bus Tour, we met with Carlos Diaz, the CEO and founder of Kwarter and Guillaume de Cugis, CEO and co-founder of Scoop’it, two French entrepreneurs who left their country in order to take their venture to the next level and … change the world! (this post was originally written for the Live Orange Blog)
Kwarter, how it all started
Kwarter started off with sports. The idea is to use your mobile in order to connect and comment, hangout. There is also a gamification (see my Vlab piece on that subject) angle of using such kinds of applications while watching TV and changing the user experience: the more you engage, the more you get points and also credits and eventually, you are able to redeem your credits to get t-shirts and other freebies.
The start-up decided to tackle sports as their first topic (Fan cake, the first social game to be edited and released by Kwarter is just about that) because “just watching TV isn’t enough anymore. The trend seen in Silicon Valley is to turn each passive experience into an interactive one”. The focus is on American sports only at the moment: American Football, Hockey and Baseball … but it should be a piece of cake (sorry, I couldn’t resist it) to extend it to European preferred games such as football and handball.
[Carlos Diaz, CEO and founder of Kwarter]
Diaz, the founder of Bluekiwi Software, whom I have known for years and I was very happy to see again in San Francisco, started the company in Summer 2011 and did a quick prototype which helped him raise seed money very quickly. All this is very classic, although many start-uppers tend to forget about it; the name of the game is: prove the concept quickly, put together the technology, build the user engagement model, and find the business model … fast. Things have to go fast in the land of the Gold Rush.
a pivot around the initial business model
“The first idea was to have our own application and build traffic based on our brand. The ten next years will be about Gamification” Carlos Diaz added. In 2011 they Kwarter’s pilot was turned into a platform for other brands because they realised that they had to do this for others, not under their own brand. A few weeks later, they signed a deal with Turner and Bud Light; just that! Turner will kick-start its operation about the Baseball playoff. And we are not talking about small business but “half million dollar deals!”.
Diaz – like many others we saw in Silicon Valley – has managed to make his company pivot around its existing business model and hit the bull’s eye. Well done!
big corporations doing their shopping
“I was really amazed at the way on how large corporations were shopping for innovation in the Valley” Diaz went on. “What we do with Turner will be very disruptive: whatever you do will be displayed on the screen. For instance, as baseball players will be displayed on the screen, an overlay bubble will be shown with comments from Kwarter such as “20% of people believe this player will do a home run!” Baseball fans won’t have to wait for too long for the launch date will be October 5th, 2012.
Twitter (but not Facebook) is paying for TV channels to use its service
“So far we see the Twitter mentions on TV. But Twitter is paying broadcasters for this” Diaz said. “This is why Facebook isn’t seen on TV because Facebook refuses to pay for that kind of display”.
setting up one’s business in the Valley
Is it easy to set up a business here when one comes from Europe? “Sometimes I feel like Silicon Valley is like Disneyland” Diaz explained facetiously. “People are very naïve and they think that building a business is easy but it’s not. Just being turned down in Europe isn’t sufficient to launch a good company in the States” the French entrepreneur added.
“in 1999, Silicon Valley was a boring place!”
De Cugis said that “in 1999 and 2001 Silicon Valley was a very boring place. It all changed with Social Media, when some tech tsars became stars. It took me two years to adapt to the way of doing business here. After six months you realise that if you want to be part of this game, you can’t be part of it because you’re not part of the ecosystem and I started getting very frustrated. Then I realised all this was for real and I adapted to the way I needed to think of this as a real business. One year isn’t enough, it takes two years at least. And partnering is one thing but you need to have a good reason to come here.
living in the Valley is expensive, taxes much higher than France
“This is a difficult move” Diaz went on. “Personal life is very expensive here, even more if you have kids. A house with 2 kids costs $6,000 per month! Taxes are a lot higher than even in France. And this is because life is so expensive that people want to get very fast. This is why people want their projects to take off in such a hurry. People are very focussed on their jobs but they sort of work round the clock and have no vacations. Here there is nothing apart from tech, everyone is in high-tech. Even the salesman from the AT&T shop wants to start his own start-up”.
Scoop’it, from Toulouse to the Valley
Scoopit also went to NYC and hesitated between NYC and Silicon Valley. In NYC, the tech scene is competing with a lot of other things though. “If you go to the local Starbuck’s there, there are few chances that you will bump into a tech entrepreneur” De Cugis explained. “Here it’s a small city, there are only 700,000 inhabitants. You could go to a meet-up every night. And all that happens in Soma, you don’t even need to drive up to Silicon Valley.
setting up your business in Paris is a mistake
Although many would disagree, Diaz declared that “founding your start-up in Paris is a mistake, unless you are into Fashion or if you want to become a leader in your own country. All successful French start-ups (e.g. Meetic, Priceminister,…) aren’t known by anybody here. In order to do something to change the world, to be a game changer, one has to have a large market to start with” Diaz contended.
changing the world is hard
Yet, changing the world is hard… even in the Silicon Valley, and if believing in one’s dreams is important, one needs to avoid pulling the wool over one’s eyes. This, in a nutshell is what I withdrew from that passionate exposé by Carlos and Guillaume.
Dalton Caldwell, 32, is the founder and CEO of app.net but how he got there is a long story. A native from Texas, he went to university in Stanford, Calif., then joined Symbolic Systems in 2003. He was a precursor in social networks (check his bio on wikipedia) at the time (2003) when Friendster was around; he is the creator of Imeem, which was “originally a Skype-modelled Desktop social network in a peer-to-peer approach”. After multiple incarnations it became a music sharing system, the 75th largest website in the world and “the first legal music downloading system”. Imeem, as it was called, was eventually acquired by Myspace in 2009. Caldwell was also awarded the best mobile app award by Techcrunch as early as 2008, when mobile was unknown to most. Now you start to understand. Dalton Caldwell is a trail-blazer, and anything but the average start-up founder, he is a true wizard, a brilliant mind who is responsible for the latest buzz in social media in the valley … and the rest of the world. Imagine that, he turned down an “acqui-hire” offer by Facebook which could have made him even richer than he already is.
Now, will app.net replace Facebook and Dalton Caldwell be the new Zuckerberg? If he dons the same kind of hoodies, needless to say his philosophy is entirely different; and I have to admit that I like it a lot … Let’s zoom in on app.net with the notes taken during the interview we had with him last week during the blogger bus tour in Soma*, San Francisco:
[Dalton Caldwell, the CEO and founder of app.net]
Caldwell launches mobile photo sharing app before Instagram and loses
Two and half years ago, the team started working on a mobile photo sharing “pre-instagram” application named Picplz. After they raised funds and came to realisation they would only lose the battle against Instagram, they did the right thing, folded Picpliz and went on to the next thing. It often happens like this in Silicon Valley. In the high-tech business, Pivoting moments like this happen all the time. Don’t forget that Google ended up being a search engine after Yahoo! had refused to buy their algorithm (as per the story described in Scott Berkun’s The Myths of Innovation).
Caldwell turns down acqui-hire by Facebook
The team then “took a few shots with the same infrastructure” and of Caldwell’s own accord, “this is why they were able to catch up so quickly with App.net”. The first idea was to help third party developers find how to integrate their apps within Facebook or Twitter. Caldwell’s team started building more tools for the Facebook platform and after opengraph “came to fruition, it all worked so well with Facebook that they wanted to “acqui-hire” them”. Yet, Caldwell “wasn’t enthusiastic” to put it in his own words. A friend of his then suggested not to worry about the websites but to focus on the APIs. This was in 2008-2009. App.net wasn’t yet what it is now.
Social Networks becoming ad companies will shut down their APIs
If most social networks like Twitter and Facebook started off as APIs and helped build entire ecosystems around them, “[they] couldn’t stick to this because of monetisation” Caldwell explained. He then wrote a blog post (What Twitter could have been) on July 1 (a Sunday) in which he vented his frustration. Little did he know that his post would attract a hug following and that he was about to start something new. The blog post “took off, with hundreds of thousands of visits, (even though it only consists of a few paragraphs). In that piece, Dalton Caldwell contends that “every API will be closed by social networks because [popular social networks] went away from being API companies to become ad companies and it means that they have to control everything”.
if they decide to close their APIs, then why not build an API?
“The idea then became to build an API company!” Caldwell went on. “Most people don’t know how bad things are, and they will notice in the next few months that certain applications stop working” he said.
[apps.net : global feed page]
crowd-funding … in a matter of weeks
This is how app.net was given a front end which “looks like Twitter looked in 2007” the young entrepreneur added. Just as a proof of concept, for this front-end is not meant to be a Twitter replacement. Developers are proposed to build applications on it. Imagine a social chess game for instance, all built on the common API and digging from the common user base.
The new project son attracted 10,000 users in a matter of weeks. Which means that the $ 500k goal the company had set up for themselves by the end of August. “This is how start-ups work” Dalton Caldwell explained: “if Youtube had launched 6 month later or before it wouldn’t have succeeded. Social media made it happen it wasn’t us. We are just under 20,000 users now. No idea how long it will take for them to have million of users versus the current 20,000. I don’t know how long it will take us to reach millions, maybe it will never do. In fact in depends on whether somebody develops a killer application based on the App.net AP!” he said.
a lot of people got angry
Caldwell admitted to making a lot of people angry; with a few lines he put his finger on a fundamental issue which is plaguing the current development of social media. Social networks were developed with the idea that Marketing could be done differently and barely 3 years ago, the world was buzzing with Tara Hunt’s Whuffie Factor concept, a founding book placing social capital over financial value. With the race to monetisation – which grew even worse with Facebook’s IPO – all of this is gone for good. We are left with advertising and I admit to sharing Caldwell’s frustration; a frustration I had already vented a year and a half ago as President of Media Aces in France.
“We are building a privacy model and we are not going to impose a business model” Caldwell concluded. “Those who build the best apps will be rewarded and there are 6 apps in the application store so far” he said.
embrace the philosophy … well worth $50
It’s hard to tell whether App.net will scale to millions of users like other platforms. As a matter of fact, it’s not even competing on the same level at all. At any rate, for social media veterans like me, Caldwell is spot on in terms of how he approaches social media and it’s well worth $50 in my eyes. After all, app.net may well just remain a social network for the happy few who want to escape interruption marketing and the use of your private data and content by public companies. If only for that, I feel like joining App.net and supporting Dalton and his teams.
Caldwell may not be the next Zuckerberg after all, maybe just the other way round. Small is beautiful!
*Soma = South of Market (downtown San Francisco district situated south of ‘Market’, a major artery in the centre of the City.
I put this presentation together at very short notice in order to facilitate asession organised by Orange Business Services for its clients. This isn’t therefore a piece of scientific research, far from that, but merely a few random thoughts put together, in the light of what my team and I go through on a daily basis as well as the conclusions from our visits in Silicon Valley (Sept 17-22, 2012) as part of the blogger bus tour (check http://live.orange.com for details as well as Twitter for the #blogbus hashtag).
We got invaluable feedback, visions and first-hand information straight from the horse’s mouth during that trip and this has been very helpful in order to put together this presentation.
Even 10 years after their first introduction (LinkedIn was launched in 2003!), there is still a lot of sniggering or at least doubts with regard to how social media can fit in the business space. Yet, we have established that many a company has successfully managed to use these tools (and the philosophy behind it) to integrate word of mouth marketing into their Marketing strategies. This has been the subject of quite a few presentations which I have uploaded on the http://slideshare.net/orange and http://slideshare.net/ygourven spaces, so I won’t touch on that in today’s presentation.
I will therefore take the fact that social media can be used for business for granted and jump to the part dedicated to the analysis of what I think could well be the future of social media.
note: for those who haven’t yet got to grips with the benefits of social media in business and how it can be implemented, please refer to my slideshare presentation entitled: useful social media: what social media platform for what purpose? available from our slideshare corporate space at http://slideshare.net/orange
The good old days of web 2.0, the cluetrain manifesto, the pioneering days of the social web and social web marketing, those days are well and truly over. 8 years after the term social media was coined by O’Riley, and it may seem like ages ago in “Internet/dog years” actually. Yet… because we are missing these days doesn’t make any difference. The times have changed. let’s face the music and draw our conclusions from then on…
So what is the future of Web? Will the ‘non-searchable adjacent Web’ described by Geroges Nahon replace everything, therefore doing away with net neutrality and turning everything into a commercial space? Or will users flee en masse and start joining new social networks such as app.net?
Here are my thoughts in the following presentation which I will unveil today at midday in Paris in front of our customers.
The MIT Stanford lab was founded 22 years ago. Orange is a sponsor of VLAB and we attended a meeting on Sept 19 on the Stanford campus on the subject of gamification. Vlab had gathered a unique bunch of top international experts from Silicon Valley in order to debate this concept. Despite the fact that many think badly of Gamification, our users have explained that gamification isn’t about games but bringing gaming mechanism in business activities and this was all about rewarding and creating a great experience.
[this post was originally written on behalf of the live.orange.com blog]
1. Margaret Wallace(below)introduced the session. Margaret is the CEO and founder of Playmatics. She began her pitch by saying that games have been around for thousands of years. Her definition of gamification is “the application of games mechanisms in non gaming situations, it’s not about angry birds and such like” she said. Why bother gamification? there are a lot of detractors of gamification Margaret said; the Gartner hype cycle is placing gamification at the very top of the Gartner hype cycle “so you are here at the right moment” she added. There are many ways that games can be inserted in business, such as Nike running, Ford’s mobile app, energy orb (an orb which changes colour according to the status of the electricity grid) … even political groups are using gamification to recruit people Wallace said; Pdt Obama has a Foursquare account for instance. From then on she handed the floor to the other panellists.
Margaret Wallace (above)
2. Courtney Guertin (above), Co-founder of Kiip was next on the stage and he presented the concept that he and his partner have designed. The idea was to reward users, through mobile apps and disrupt the mobile app space. In July 2010 they built a demo and started sharing this idea around them. They ended up raising $ 300 k. But “raising money is the easy part he said; the difficult thing is building the business”. They then built the platform for rewards (thanks & acknowledgements). They also wanted to avoid building something “intrusive or annoying”. The business model is simple. They charge brands and users are rewarded for their engagement. Among his advice were to understand that the team is everything, and to be prepared for difficult days too. He added that brands, at the outset, didn’t realise that people of all ages were playing games. Not just kids but middle aged mothers and even people above 50 he said. Brands are now, after a few years, very knowledgeable about that and this is why gamification has got a bad name. What you really need to do is how you can create a great experience like this company that decided to change an escalator which no-one wanted to use, by turning it into a living piano; instantly people started to use this escalator for the sake of the experience that it was providing.
Andrew Trader (above), venture partner at Maveron was next. He has been part of the gamification world on both side: as part of the family team at Zynga and from the investment side too. The value of gamification in his mind starts with the value of relationship capital. This is what – in his mind – makes farmville so relevant. One has to try and incentivise users to engage more deeply; gamification mechanisms are similar in games like Farmville and business gamification he said.
Joshua Williams (above) from Microsoft jumped in the conversation at that time. The idea of gamification according to Joshua is “how we can get a task done in a more engaging and fun way, and less painful. To him there are a lot of challenges with gamification which are overlooked. It’s a double-edged sword but he think that it’s worth looking into.
Amy Jo Kim(above), founder and CEO of Shufflebrain said that a lot of her practice recently has been to tune reputation systems to make them more engaging. “We could call that gamification” she said. Her perspective, is that what makes games compelling is in the design; people are getting smarter faster she said. You have to design systems which have the dynamics of games she said. You have to look at the “large word of zero sum gaming” she said. She predicted we would see a lot of innovation in that space in the future.
Rajat Pahsaria(above) was last. Rajat is the founder and chief officer of Bunchball. Beyond the buzzword he said there are values to gamification such as rewarding users, enhancing the experience etc. “We have a wealth of big data which is telling us what our users are doing” he said. And this is what gamification does” he said, using these techniques which have been going for years, i.e. rewarding users.