This in the first in a series of “observations” I will be writing about. For those who read these observations, you will quickly realize they are more ramblings than very structured and profound writing. I hope you come back to read more nonetheless.
Everyone is now in the midst of a social turmoil, and I don’t mean of the “Jasmine revolution” type; I mean the facebook, twitter, path, etc type.
The fact is that most Internet end-users are at least on one social network of some kind - the 900 Mn+ facebook users community provide substantial coverage by itself - and, in all likelihood, you will be on more than one (the number of social networks that users in the Bay Area adhere to are obviously much higher and lack any connection to the real “mainstream” world). Moreover, I was recently told by a start-up that the inbound of data that is shared socially is 10x from what it was 2 years go.
So first question is: what type social networks are out there:
- Unless you are in Russia or China, or maybe some significant pockets in Brazil, India, South Korea and Japan, it is likely that you will be on Facebook. Facebook became holistic carrier of all “friends & family” social communications. There are other significant players in this space - from the Chinese ones (Ren Ren, Kaixin; I would not fully put the more gaming-focused QZone from Tencent in this bucket) to others that are trying to differentiate from the now overly crowded facebook networks - Path obviously coming to mind and Pair at the extreme social network of two…
- The broad multi-cast social networks (I know many would call this the micro-blogging and blogging space) are dominated by twitter with the exception of (you guessed it) China where sina’s weibo and qq’s weibo, to a lesser extent, rein supreme. On the blogging side, tumblr seems to be seen as the “new service”, with Blogger as the “old/ancient one” and Wordpress somewhere in-between.
- For business or professional networks, LinkedIn leads the charge. There are obviously serious local competitors in some markets (yes, e.g. China again) and some other interesting plays (e.g. Branchout on facebook), but LinkedIn is undoubtedly the leader. It became the “digital utility” by which almost everyone connects in the professional environment… just like giving someone a card or showing someone a CV.
- There are also the location skewed/based social networks, obviously with players like foursquare. Many still believe this is not a separate category of social engagement or, at least, one that cannot be fully separated from a more holistic platform (think facebook with facebook places). That said, they are here, they have strong follower-ship and one may allege that being “mobile first”, they have many advantages over some of the online incumbents.
- There are other social networks, typically vertically focused with a very specific audience in mind. Obviously plays like Yammer for Enterprises come to mind. This is an interesting space since the clear question is always “is there a clearly separate social market for which end-users still need a solution”.
Enough on taxonomy. What is the point of all of this?
Going back to the beginning of this post, I used the word turmoil. Why is it turmoil?
(1) Users are constantly in a state of anxiety on whether they are on the right social networks or not. “Should I now join path? How about foursquare?”
(2) Users are also in constant anxiety because of what they should post, share and how to interact with others. “Facebook anxiety” may well become a psychological trait from which new and significant revenue sources will emerge.
(3) What you post, when you post it, who you interact with on social networks (LinkedIn, twitter, etc) also becomes your digital credibility. It affects your Klout score (“Oh, so I should also be on Klout”), it affects what others see when they search for you/research you, it affects … who you are to the world.
So, all these tools/platforms have certainly made us more accessible to others, more visible, more “in touch” with much broader groups of family members, friends, acquaintances, professional connections and… world-at-large. That said, they seem to have created all these anxieties which now we have to bear; they are sometimes all-consuming. They also seem to have led us to more superficial interactions, in particular with our close friends… when one of them has a child will we call, or will we just put a comment on their facebook post (already better than a quick “like”)?
Some years ago, I wrote a fictional piece on a Future where the “Internet” would go down for a day, and people would be forced to go outside and would finally rediscover the world around them - nature, their friends, other people - and that would, in and of itself, become a new defining experience. The new “offline experience”.
It doesn’t sound that fictional any more.
It is Tuesday, January 31st and I land first thing in the morning at San Francisco International Airport. My flight - with United, of all airlines - landed 1 hour ahead of schedule, so the friend who was picking me up at the airport is still not here. I sit down in the waiting area, as if I am waiting for someone else to land, maybe even waiting for myself.
I just became a venture capitalist. To be more precise, effective of February 1st, I am a newly minted (without the minted part) VC. Yet, I am feeling a bit strange and I can’t quite put my finger on it.
My friend is finally here and I finally pick up my rental: a modest Nissan Versa, which will later in the week get me some massive kudos with the founding team of a start-up that I will end up negotiating with.
I head to Alameda, as I have decided to stay with friends. Somehow, while driving from SFO to Alameda, through the Bay Bridge, everything becomes even more surreal. The weather is amazing and it doesn’t even seem like these guys are in Winter. Have I landed in the wrong hemisphere? Drivers are calm, polite and I get no honking for my “sorry-just-trying-to-figure-out-this-thing” driving. This is not Beijing. Not the place where I have lived for the last 6 years. I can actually see the blue sky…that’s how I know.
After Alameda, I head to Oakland, for the customary “I’m-here-please-make-me-official” part of applying for a social security number. I do that with gusto, although the room is rather gloomy. I had been warned that a social security office at the end or beginning of a month requires courage. “I am a courageous guy” - I thought, and decided that jumpstarting that process would be important. I might as well have waited a couple of days, since my my all-important Social Security Card would take more than 2 months to arrive.
I then head to open a Bank account (I know you can’t without a social security number, but I am feeling lucky), to take care of a “local” pre-paid SIM, to buy my work laptop, etc.
At the end of the day, I sit down at my friends’ home and I realize something: I am not really a venture capitalist. I mean I am not really a VC yet, am I? You see, I have been in mobile for a long time. I have lived all over the world, worked with all types of companies in this space, had all sorts of roles … but one thing I have not been is a VC. I am now the managing partner of a VC fund and although I have all these skills that will certainly help me - deep understanding of the industry I will invest in, biz and corporate dev deal-making experience, operational experience and even some experience dealing with start-ups - I am still not a VC.
Over the next few days, weeks, I have an intense schedule of internal meetings, meetings with start-ups that we are looking at, networking, and I realize I might not be that far from being a VC after all.
Then something happens, something that clears my mind. I start negotiating with a start-up on a specific deal. Through the process I realize that the rights and wrongs are very unclear; that there a lot of options that work (every deal is unique); a lot of options that might not work at this specific time, but might actually work later on and vice-versa (timing is of the essence); etc etc etc.
Through all my interactions those first few weeks, and through my first VC deal process, I finally realize with distinct clarity that being a venture capitalist is not a state or a job, it is a process and a profession. A profession which is, as many would put it, a “vocation” or even a “calling”. Although I am religious, the calling that the venture capitalist faces is very mundane - it is about the excitement or even rush of the deal, the continuous quest for learning (in particular through others, through entrepreneurs), the possibility - sometimes the thinnest of possibilities - that you will be linked to something that just happens to change the world.
Now I am ready to start becoming a venture capitalist.
Our investee Sounder launched their app “Sounder Just Talk” on iOS this past week. For more info check out Sounder on iTunes and the exclusive walkthrough on Engadget.
Well done to @michaelf and the @sounder team and looking forward to the updates.
A couple of weeks back, I responded to Sarah Lacy’s question on twitter regarding whether facebook doing an “fb phone” was idiotic or not, with a comment on their need to experiment and the fact that their mobile strategy is still awol. She responded in true form with “@ngpedro i think it’s called “instagram” they paid $1b for that strategy!”.
I am not sure if she was being ironic or serious, but in any case it made me think about what are facebook’s blindspots beyond mobile photo sharing.
I am a mobile guy and therefore my immediate reaction was to focus on their mobile blindspots. It is quite likely then that the following list will not be an exhaustive one, but in any case probably worthwhile debating:
- Gaming: while facebook is a leader in online gaming, starting as a casual game platform, but having clearly expanded into some pretty hardcore areas (e.g. FPS, etc), this is clearly not the case in mobile. There is an on-going fight and early pure plays like OpenFeint, as well as the mobile OS platform owners themselves (e.g. Apple with the Game Center overlay), and even the traditional game platform owners themselves (e.g. Sony with Playstation Suite) are readying up for the fight. I have heard from several Game developers that facebook is actively incentivizing them to deploy their games on mobile using the facebook plaftorm, but these are still early days. Given this is one of the key areas that drives usage of facebook online, this will be a vital battlefield.
- Person-to-person communications: with the acquisition of Beluga, much was expected, but while fb Messenger is an interesting product, it hasn’t fully occupied the person-to-person space in mobile. Players like Whatsapp, textPlus on the messaging space, Skype and Viber on the VoIP arena, newly redesigned services such as push-to-talk plays from Voxer and others (including “our own” Sounder), and finally the mobile OS platform owners themselves (Apple with iMessenger, Facetime; Google with Talk, Voice, Gmail, G+ with hangouts, among many others) already command large communities. While person-to-person may look to be an extension to what facebook delivers, it is actually at the crux of social interactions, which is the space facebook has historically dominated online. Net net, this space matters.
- Content delivery: while the App Center will try to take a stab at the delivery of mobile applications and position facebook as a potential gatekeeper (still a very big question mark whether facebook can have a substantial role in this space, but it does seem to have a legitimate claim), there is still the matter of content beyond applications. The delivery of Music, TV and Movies is still an evolving arena with many players positioning themselves, but also experimenting. The relevance of a multi-screen strategy may put facebook at a disadvantage, but can facebook fight Apple (with its iTunes + devices combo), Google (with its cross-device OS plays + Youtube + Music, et al) for people’s valuable time and attention while they are consuming content?
In summary, while facebook is a dominant player online and one with already tremendous traction in mobile, it still has some very “visible” blindspots. The advent of “mobile first” plays that are scaling fast, the control levers that mobile OS platform owners (among others) have, and the inherent fragmentation of the application space, make life substantially tougher for fb.
A player that has occupied so much of the consumer’s time and attention is now faced with the non-trivial challenge of having extended itself so much that it will inevitably come under attack from many different players; not just the “expected” ones. Let’s see how it fares now that it is the incumbent, and no longer the challenger.
Metago is a leading mobile device application firm headquartered in the Atlanta, Georgia metro area. The Company sells innovative applications and cloud services for organizing, managing, sharing and backing up content on Android mobile phones and tablets. For more information on Metago, visit us online at
Contact: Kent Krueger
Vice President Sales, Marketing & Customer Experience
770.250.1943 X 102