Posts Tagged ‘Facebook’

Are you seeing a trend? You gotta prove the hypothesis

Tuesday, January 18th, 2011

The Pinta and NinaThe journey of a startup is like a hypothesis to be proven. Chains of big, small, nested, one layer giving birth to the other experiments to be run to prove it. Unless you prove it, everything remains an idea, the seed of which remains in your head. To allow the seed to germinate and the shoots to pop-out, you have to convert the idea into something tangible.

In a high-technology startup, an entrepreneur looks at a series of trends or observable phenomena, as scientists calls it. The trends give you a certain set of assumptions. Based on the assumptions you run multiple controlled experiments.

Something similar happened to me in just around summer last year. I developed this belief, “If there are 300m youngsters on facebook, then they would look for jobs within the boundaries of facebook.” A hypothesis was born.

How do I prove it? Not easy, without having a full blown product with a good user-interface. A step in proving the hypothesis is figuring out the variables in the controlled experiment, that first variable for me was validation from a small group. Facebook Dev Garage, Bangalore chapter happened in October and I presented at the event (Thx, Vijay). A scrappy prototype cooked with 2-3 days of effort over Facebook API and Amazon S3 was well received in a crowd of 140+.

Then things took back seat and the hypothesis was semi-forgotten; The Morpheus Batch 5, broken laptop, sickness, family chores, visitation from extended family, yada-yada. Then the year-end downtime happened, I wrote a blog post and restarted the experiment and whipped the code out from woodwork. After several weeks of intermittent coding, last week, I quietly released the consumer facing version to check the reception of the antenna. Then I got a resume. One experiment was over.

Tonight, I incrementally rolled out an alpha version and started another experiment. It is still very brittle, has a simple user-interface, but is set out to run that experiment to prove the larger hypothesis.

The Pinta & The Nina were the two ships (out of three) used by Christopher Columbus in it’s first voyage across the Atlantic Ocean in 1492. The replicas are shown in the pic above. Picture courtesy Christopher Columbus foundation.

From Google to Facebook: The shifting monetization landscape

Saturday, December 4th, 2010

Last year, Bloomberg reported that Google, which has the market share of over 65% in search, made a $54 billion impact on US economic activity. For every $1 a company spent on search related advertising, they receive an average of $8 through profits through Google Search and AdWords. Google created a platform where businesses optimized their web presence, thus increasing monetization.

Google supplied the two necessary ingredients for a successful platform (a) Monetization and (b) Users. Rest was left to the developers to figure out as to how to connect the dots and monetize. A lot of startups were built assuming Google’s existence in mind. Entrepreneurs started developing on Google–the platform.

Things have changed in last year, with facebook becoming the destination of choice. What Google lacked as a platform, Facebook has provided a set of tools and APIs to allow developers to build on it.

On the other hand, a lot of people are calling facebook a closed platform, but if they look deeper, Facebook’s set of tools and API is the connecting link to the outside world. Facebook Connect (which has 100m+ websites using it) and the Open Graph are the window to the outside world. The former connects a facebook user to a website, whereas the latter brings the data residing outside into facebook. Combined together, this gives facebook a full-duplex connectivity with “objects” which are not within the facebook ecosystem.

As facebook accelerates the opening of the proverbial “walled garden” via even better tools & it’s API, the pace of development would also increase.

Let’s compare the google vs. facebook ecosystem. Google monetizes it’s document graph while facebook on top of social graph.

Google vs facebook: Encoding intent

Google builds on the fact that a user encodes it’s behavior by creating documents (or webpages). For example, a personal blog post has an author’s stream of consciousness encoded in it. When Coca-cola creates a webpage, the brand and it’s product intentions are encoded in an HTML document. Google then deduces the intent and the interlinked behavior and churns everything through it’s algorithm for search, discovery and monetization using it’s advertising programs. Compare this with facebook, these encodings are verbatim; relationships are threadbare. Furthermore, the intent & relationships are identifiable via the explicit intentions laid out by people connected to it. While Google monetizes the various nuggets of implied behavior, facebook does the same via harnessing the collective force of explicit intentions.

Why build on facebook? I strongly believe that as the web becomes increasingly complex, the findability of a document becomes next to impossible, we’ll go back where we started–Our personal network. The network of trusted friends and advisors for help; whether we are looking for answers to questions, recommendations for products, or simply connecting with strangers. We’ll traverse through our social graph and use the intent of the graph to get the results for our queries.

Facebook is emerging as a platform beyond intent (ad networks, lead generation) and casual interaction (social gaming, virtual gifting) but also a serious destination for tangible-goods commerce, content discovery and business to business interactions.

If you look at advertising, facebook could corner a large pie of the $140 billion brand advertising market. Compared to Google, I don’t have to search on facebook to see an ad, nor facebook has to harvest my clickstream, the sheer presence and precise demographic data and my conscious stream makes an impression commanding much higher CPMs compared to other real-estate. Search advertising on which Google builds it overall revenue of $10billion annually is just overall $25 billion worldwide. I can speculate that a portion of this would also move into the facebook ecosystem as tools for discovery and search start showing within the facebook ecosystem. The latter could add to facebook’s share of performance advertising.

Virtual and tangible-goods commerce are still under evolution. Though, facebook credits do not bring a huge windfall yet, Facebook is working on a paypal-like competitive offering which may be extended to the apps ecosystem. This is going to revv-up the revenue from non-advertising sources. Couple this with local deals from facebook places, which is still building momentum.

In case of facebook, the precision of explicit intentions is high compared to implied behaviors from reams of webpages. There is a huge possibility that facebook’s impact on the economy to be 10x than that of Google as facebook is also a destination rather than a powerful traffic cop. The space to watch is the discovery and commerce within the facebook ecosystem. There are unexpected opportunities being presented to developers and entrepreneurs to develop applications beyond gaming and now is the time to get-in!

Is Google’s mass exodus a good sign for innovation in Silicon Valley?

Wednesday, March 5th, 2008

Facebook snatched Sheryl Sandberg from Google to hire her as a COO. With the stock price stagnating, a lot of other heavy hitter techies like Gokul Rajaram (Product Manager for AdSense), Justin Rosenstein (GDrive developer), Benjamin Ling (Product Manager, Google Checkout), Nathan Stoll (Product Manager, Google News), and Kevin Fox (GMail UI guru) have left google for other happening pastures in recent months. Some of them were ‘quite rested after vesting in peace’ and exited. A few of them are cash rich and have become investors (Ariel Poler, Chris Sacca, Aydin Senkut, et al).

They are joining brand new startups and/or investing in one. It looks positive as a lot of venture money would follow the Google name.