Monthly Archives: September 2007

why microsoft wants facebook – it’s not what you think

Posted by Todd Sawicki on September 25, 2007 View Comments

Much has been written about the purported potential investment of Microsoft in Facebook mostly focused on whether a $10 billion valuation is justified or not. That’s not the focus for this post. My point is to focus in on why Microsoft so desparately needs Facebook and it’s not about having a social network with all it’s users and advertisers. Microsoft doesn’t need a portal ala Yahoo! or a big page view generator like MySpace – no what Microsoft needs is a next generation development platform. And what’s the hottest development platform these days? Facebook.

ms hearts fb

Living in Seattle, the heart of Microsoft country, I am fortunate to have lots of friends who work for the company. What I hear from those friends is that Microsoft is worried to death that Microsoft’s bread and butter – owning the most valuable development channel – might be going the way of the DoDo.

Now we already can see that the desktop OS is losing importance as traditional client apps are all moving online into the browser. As was often predicted – the Network has become the Computer. But Microsoft isn’t worried about the shift from the desktop to the web per se – they’re worried that their development platform for the web – ASP.NET – is about as cool to the next generation of developers as their Dad’s or Mom’s Oldsmobile. Microsoft has been a ginourmous success largely because they have historically not only owned the platform but more importantly owned the developer community. If there’s a company that understands ISV relations, it’s Microsoft (as discussed previously here).

The number of next generation developers (18-25 year olds) learning .NET is fading fast compared to PHP or Ruby. And since Microsoft’s bread and butter is owning the developer channel. And throw FBML and FQL into the mix and you’ve got Microsoft wondering about why it’s no longer the cool kid in school. When was the last time you saw an article about a really cool .NET app versus articles about really cool FB apps? Exactly. LAMP stack or bust is the usual moto at web companies these days.Since FB is the cool new development platform then Microsoft gets a whole lot of cool with Facebook. Another generation of developers and the economics that come with that. And if FB does become the social graph/network OS – that’s likely a very valuable platform to own. So you can begin to see why Microsoft hearts Facebook.

Quickly – on the topic of valuations – two posts worth passing along are from mr. facebook dave mcclure (organizer of the upcoming don’t miss it FB conference – Graphing Social and Silicon Alley Insider (henry blodgett’s new very good news commentary site). Both essentially argue that it’s not an insane number. And assuming FB is on a MySpace like growth curve then I tend to agree (MySpace is on pace to hit $70 million a month in revenue in ’08).

something even cooler then the iphone or ipod touch…

Posted by Todd Sawicki on September 20, 2007 View Comments

So as cool as I think the jukebox in the sky was back in the day, as cool as the iphone or ipod touch seem to be, what I think’s even cooler is the jukebox in your pocket.

I am enjoying all the hysteria and hype in the cult of mac section of the blogsophere over the iphone and the ipod touch (daring fireball and ilounge are too good examples).  And with the inclusion of WiFi in both mp3 players (the iphone too me is an mp3 player with a phone thrown in not the other way around not that this is a problem or a criticism just a point of view), there is a lot of interest in downloading and sharing music OTA (mobile industry geek speak for over the air).   As someone who helped manage the development of the first commercially approved jukebok in the sky (back when I was at Loudeye during the first web boom), you would think seeing the jukebox in the sky vision come to reality that I would be excited.

To be honest, I am amazed that we’re still downloading music to devices.  Yep you heard that correctly.   That’s why I think the discussion about wifi and comparing the iphone and touch is missing the point.  Given storage capacities for portable storage – you no longer need to download compressed music.  It should all come pre-loaded. Literally every song commercially available in the U.S should come pre-loaded on your favorite new mp3 player.  And trust me – I have to believe that would be a game changing device.  In fact, even way cooler then the iphone or touch.

No way you say, that would be way too much space.  Well back when we were at Loudeye and we built an online digital archive of essentially EVERY (yes EVERY) commercially available CD in the U.S.  That ran to about 400,000 CDs.  At an average length of around 40 minutes in uncompressed WAV format that equals 400 MB per CD.  400,000 x 400 MB sounds like a really big number and that comes out to 1.6 TB.  Now back in 2000 when we built that system – a single instance of that much storage was a multi-million dollar expense.  When compared to bandwidth it’s easy to see why a single instance was a lot more practical then imagining a day when 100′s of millions of instance would need to exist if it’s meant to be carried around in everyone’s pocket.

So what does that same 1.6 TB storage solution cost today?  Now what’s interesting is that a terabyte hard drive costs a few hundred dollars.  Yes, my technically knowledgeable friends are saying – in a few years we’ll likely have the 1.6 TB ready to go into an iphone or ipod.   Ahhh – hold on – we don’t need to wait any longer.  If we compress that music the way Apple already does in iTunes suddenly we don’t need 1.6 TB, we only 160 GB!  That’s right – the entire iTunes catalog of music could come pre-loaded on the latest and greatest ipod classic.  What I surprised is that some entreprenuer isn’t already doing this.  Every teenager in the US would kill to own EVERYTHING in the music space.   And in the word’s of Seth Godin, it would be one hell of a purple cow.

Now that would be cool.  And it’s going to happen.  And Mark Cuban can’t wait.

People’s Dirty Little Secret – They Can’t Live without Ads

Posted by Todd Sawicki on September 13, 2007 View Comments

As a followup to my post on how the line between editorial and marketing is bluring (if as I argued it ever existed), I wanted to share this anecdote.

Back in the day (mid-90′s) I worked at the Disney Channel in marketing (no I wasn’t on the brand or creative side of the team – i worked in subscriber acquisition and distribution two areas which would serve me well in my online roles down the road).  When I started at the Channel (as we called it inside the Magic Kingdom and no no one called themselves cast members) we were a niche paid monthly movie service focused on being a family friendly version of HBO.  Unfortunately there wasn’t much of a market for a niche move service so the Channel re-launched itself as folks know it today as a basic cable network competing with Nickelodeon.

One of the key benefits that we launched the new basic cable version of the Disney Channel around was being ad free.  We had the benefit of always having been ad free as a pay movie service so we could negotiate the license fees around being ad free.  And for those who can’t remember back then there was a big uproar with the FTC about advertising and its impact on young tv viewers.  Put the two together and we had a big win – or so we thought.

And so the Channel re-launched in all its ad free glory.  And you know what happened?  People started complaining that the Disney Channel didn’t have ads!  Seriously it was the #1 complaint.  Who would have thunk it!  Turns out people have been so trained to watch ads that they can’t sit still for more then 10-15 minutes without a break.  Doesn’t mean they liked they ads, it just means they couldn’t enjoy tv without the sense of a break.  So what happened?  Disney started running house ads for other programming which is still the format you see today on the Channel (and in large part because the Channel was contractually prevented from running 3rd party ads).  So the moral of the story is that people are a lot, and I mean a lot more, willing to sit through ads then they will ever otherwise admit.

People Search Article

Posted by Todd Sawicki on September 12, 2007 View Comments

Good article over at Search Engine Land from my new found buddy search and developer relations guru Vanessa Fox on People Search.  Vanessa interviews the players in the space including the CEO’s of Spock and Wink.  Very exhuastive review of the article.

Vanessa quotes me (and notes my former role at Spock) in response to a question of what Facebook might mean to the people search market:

“When people search companies started, the assumption was that they would help aggregate and distill the multiple identities people were creating online.  The goal was to create the complete view of you—likes, dislikes, background, friends, etc and since that information was spread around the net—aggregating that disparate information potentially provides a ton of value.

What none of the people search engines expected was Facebook.  In a social network like Facebook, users willingly handing over all the information that people search engines are trying to cull and aggregate.  Thus in a world where everyone is on Facebook, Facebook becomes the only place people need to go search for people.  Now, if everyone doesn’t flock to Facebook and other dominant profile-based networks emerge, then people search engines provide the important layer on top of those networks helping to connect the dots across them.”

Facebook is really an interesting question to the people search question.  Right now Facebook isn’t even close to being the single destination envisioned in my quote but in a world of what-if’s its an interesting question.

As a former member of the Spock team – I want to see them succeed so I am biased, but it will be an interesting horse race.  What’s perhaps even more interesting is that a year ago the question was more likely to be how does one compete against Google in the space.  Now no one questions how to defend against Google but instead focuses on how to beat Facebook.   Of course given how crappy Facebook’s search function is on their site, I think the folks at the various people search engines are likely sleeping a little more easily.

[Note I am advisor to Facebar not Facebook - folks always seem to make that mistake when reading my LinkedIn profile]

Marketing and Editorial – The Line Blurs

Posted by Todd Sawicki on September 11, 2007 View Comments

Reading Stefanie Olsen’s summary of this evening’s sessions from the Conversational Marketing Summit (another great example of why living in Seattle can be a PITA when the center of the web 2.0 is 700 miles away and staying here can mean missing out on interesting events) reminded me of how blind the world can be to the reality of the world around them. The tone of piece and likely the same for many readers is that there is still this chinese wall between editorial and marketing. As Seth Godin noted in his book All Marketers are Liars (one of my favorite godin books even if overlooked in the canon of godin books) people love to tell themselves stories about their idealized view of the world even when deep down they know the truth is often much more crass. And with the rise of huge financial incentives for publishers of online content to conform to contextual ad-targeting technologies and payouts – the line has already been covered up much the way batters cover the line at the back of the batter’s box.

The notion of content as a non-commercial, purely for spreading the soul of the creator is a fantasy and myth that has lived for centuries. DaVinci and Michelangelo did works for hire. Their masterpieces were all commissioned works – that means they were done for commercial purposes. Dickens was paid by the word and boy did he get his money’s worth as any high school lit student will tell you. Newspaper have lived for sensational head lines because that sold newspapers – and in the old days (see Deadwood) the publisher and editor were one and the same person. Having worked at Disney I can tell you that many folks view Disney animation as the infomercial department. Each animated movie a 2 hour commercial for the rest of the Disney merchandising empire.

It sounds crass but you know what? It isn’t.

People like brands, they like commercialism when it means something to them. It’s why people pay to where Nike logos – that’s because Nike stands for athletic performance. And when content and editorial reinforces that brand it works for them.

Now let’s fast forward to the world of web. What has happened particularly when it comes to content is this tiny little thing called Google Adsense. See what Google Adsense does is match banner ads based on keywords on a webpage. So now folks who write for websites or blogs have a financial incentive to write for the ads. In some cases this has lead to spam sites (the very ones that inspired Jason Calacanis to create his latest venture Mahalo) and in other lots of sites and blogs dedicated to high-paying & popular keywords (see travel, finance, etc.). The people who publish those sites definitely have one eye on their Adsense earnings whenever they write (do a search for top paying adsense keywords and you will see exactly what I mean). So in a world where contextual advertising rules the day, then that world will likely have a very blurry line between marketing and editorial.

how the iphone price cut lost its cool

Posted by Todd Sawicki on September 7, 2007 View Comments

The iPhone’s (aka JesusPhone) price cut is the price cut heard round the world.  But why are folks up in arms?  Because suddenly the cult of cool might not be nearly so exclusive anymore.

It’s not about $200 – it’s all about having your uncool, cheapstake friends now saying – heh I can get a JesusPhone too now.  A bunch of folks are arguing whether its fair but that’s not the point – fair isn’t the issue – the crying foul is about losing its coolness.

Part of being cool is being early, being exclusive essentially above the crowd and definitely not being mainstream.  When things go mainstream they lose their cool.  It’s a fact of life that has been plauging marketers of luxury and seemingly cool goods for years – the trade off between mainstream profits and revenues vs. the chic of being hip and exclusive where the hipness sells the product for you.  There’s a reason why BMW doesn’t sell a $20k car or that Porshce doesn’t either.  Their brands are about the mystique of exclusivity and the iPhone for a moment was the same.

Despite their cries over the iPhone going mainstream, the hipsters (aka early adopters) know and want their little prizes to go mainstream.  They need to be the predictors of mainstream trends or otherwise they lose the cred from their friends and families as the purveyors of taste.  But what pisses them off is that their window of coolness instead of a year or two was reduced to three months.  Three months is just not long enough to prance around with your superiority dance and impress all your friends.  It takes a good 6-12 months to do that.

Trust me if the iPhone price cut had occured in January not a word would have been uttered because those hipsters would have been ready to dump their JesusPhones on the masses next year and ready to move onto the next new thing.

blist goes online

Posted by Todd Sawicki on September 6, 2007 View Comments

blist, founded by Kevin Merritt, is starting to come out of its shell. Kevin launched his blist blog today as well as now offering some tantalizing clues as to what blist is going to be about on the company’s website. To quote:

If you can make a list, you can make a blist. If a blog is a web log, well, a blist is a web list. A blist is a list with some structure.

You can create all kinds of useful blists – one might be a list of dates, like a calendar, another might be a list of contacts, like an address book, a third might even be a collection of pictures, books, wines, or stocks.

blist lets you organize all these lists, connect one list to another, and share any part or all of the information easily online.

Create. Organize. Share. Connect.

Kevin and the team are working on some really cool stuff that the rest of you are going to have wait to see (I’m under one of those survivor-esque NDA’s where I have to give Kevin my first born if I say anything). But you can go and sign to be on their beta list here. And if you’re a Seattle entreprenuer, then definitely look up Kevin – he’s up for pizza at Zeke’s down in Kirkland.

heh I came up with the idea of facebook first – yeah – that’s the ticket

Posted by Todd Sawicki on September 3, 2007 View Comments

There has been a lot of news of folks claiming to have come up with the idea of Facebook before the Facebook folks did. And all I could think of was Jon Lovitz’s Pathological Liar character from SNL. First there was the lawsuit from the ConnectU guys, then last week another contender for the ‘heh facebook was my idea’ title popped up. Although in fairness to the latest contender – aaron greenspan – he’s using his claim only as a clever ploy to get press and blog coverage (and it worked like a charm – as I make the mental note for future pr efforts I’ll likely be responsible for in the future). Anyway, I digress.

My point in reading about the posts in my normal valleywag loving way, is that it doesn’t matter who came up with the idea for Facebook first. At it’s core, it’s not that unique. Seriously how unique is a social network? What are there 5,000 different social networks littering the landscape these days? Seriously how many social networks can hit swinging a dead cat around the latest web 2.0 conference? Who invented the first social network – was it myspace? friendster? heck what about seattle’s own classmates.com? Good core business ideas are usually so obvious that lots of people think of them.

Heck – I could make a claim to have come up with the idea for YouTube first. I did co-found a company called SimplyTV with the idea of putting independently produced video online and on-demand way back in 1997 – heck the Internet as we know it was barely alive back then. Even if that wasn’t enough – I did it again at Loudeye when we created a service called MyHomeMovie.net back in 1999-2000. And the point of MyHomeMovie.net was for users to submit their homemade videos to our website for public playback and sharing. Wait that sounds exactly what the YouTube guys claim inspired them to start YouTube! Those bastards stole my idea – I better sue! Am I really claiming credit for YouTube? No. I am not that delusional (oh wait I need to someday so I can get my next startup some pub by making that claim).

And I’ve got more examples of other startups from my own ideas (for instance in early 2003 I wrote a business plan called Project Navigator for an open source wifi network that today looks a lot like FoN – those guys out of spain – even pitching it to some folks in town before getting advice that wifi was likely a couple of years out from being a mass market deal) to many others that look exactly like successful companies today.

x

So why doesn’t it matter that I or dozens of others came up with an idea before someone else who was successful with it? Because in startups and businesses – it’s not the idea that matters – it is the timing and execution that matters. Great execution and good timing will still be bad and likely result in a place on TechCrunch’s Deadpool list (a theme blogged about before here). But great execution and good timing usually mean success. And in this case the Facebook team nailed it. Yes execution means a lot of unique ideas in terms of expressing the idea into a tangible reality but the core idea was not unique. Why has Facebook been successful – clean layout, the news feed, more recently the platform and easy ways to add friends are all obvious and oft-mentioned. Was Facebook the first social network? Nope. Is it a raging homerun anyway? Absolutely. Does Facebook deserve it’s success? Yeppers.

Why was YouTube successful where I and my colleagues weren’t? Super simple method of uploading video and early adoption of flash video come to mind. Would a YouTube have eventually occured if YouTube hadn’t come along? Most likely.

It would be great to be remembered in the lore of where an idea originated or product but if I am not the one or part of the team that executed the idea to success then I and others don’t deserve to be remembered in all truth other then as an obscure footnote to history – quick inside baseball note (feel to skip ahead) this is also a throw in to you mcclure – remember my footnote when you’re current project is a huge success :)

So the next time person X or person Y claims to have come up with the idea for something – a better way to look at the claim might be through the lens of our friend the Pathological Liar – “Yeah I came up with the idea for X, yeah that’s the ticket.”