Product Development. May 8th, 2012

At Amplify we spend a lot of time talking about product roadmaps. Our startups constantly question how their product should look / work.


Here is my advice to anyone who questions the direction of their business and or features they would like to bake into their products.


It's pretty simple. Always ask your team:


"What is the fundamental problem we are trying to solve?"


What is the 1 problem you are solving? If you build or design something that adds one extra step to solve a problem get rid of it.


Features are smaller problems that must first be solved before making your way to a larger problem.. You should only have as many features as needed to solve your core problem.


The essence of every great company is 1 problem they continue to solve for.


--
Chris Olson
@topherolson

Is Facebook a 100 Billion Dollar Company? May 5th, 2012


Below are notes taken from a teleconference on Facebook hosted by Michael Pachter, Head of Private Shares Research:


How is FB doing in mobile advertising?

  • Sponsored story in timeline, monetizing it through click through (rate is low however)
  • Opportunity: location based ads
  • There are certainly risks however is their current mobile strategy

How is their ad platform working for other advertisers besides Zynga?

  • CTR are low, there is a low perceived value
  • Curated search is huge in terms of potential and should dictate what they do in the future
  • Their ad platform provides a big stagnation risk for FB here, as generic advertising won’t work for much longer (i.e. banner ads etc.)
  • Consensus: FB ad sales force sucks, needs to be professionalized, which would take years to do correctly

Is Zuckerberg the ideal CEO for FB’s future?

  • Signs show that Zuckerberg probably doesn’t have it in him to run a company as big as FB is about to become
  • Host believes he (Zuckerberg) doesn’t have chops to pull it off - Would be better suited as Head of Experience or something in that nature
  • He will have to start listening to shareholders in the very near future after the IPO
  • Substitute? Sandberg is competent to run the company

Instagram acquisition

  • Instagram was both an opportunity (half users under 14 yrs old, mobile generation)and threat (Google would buy them)
  • Price was preemptive bid because somebody was sniffing around
  • Other similar sites that are complimentary and could work well under FB: Pinterest
  • FB doesn’t want to compete with developers (would never buy Zynga, for instance)
  • Overall sentiment is that we are definitely in a bubble for small private companies

Will FB ever build its own OS?

  • Not likely at this point, as they firmly believe in the future of their mobile platform
  • Downside of building OS: would be difficult for developers to deal with
  • Hard to do without hardware

Law suits: FB will probably settle with Yahoo (magnitude of damage around $100M or less, so not that large)

2B shares were locked up as of last November

  • There is a lot of concern about what investors might do with their shares (such as Sean Parker), not necessarily employees

Zynga’s paid growth coming mostly from Facebook’s encouragement (FB credits)

  • Like Zynga’s, FB’s revenue opportunities are directly correlated with user’s involvement/engagement and how long they have been active on the platform

--
Chris Olson
@topherolson

Inconsistent vs. Consistent Startups. February 6th, 2012

A few weeks ago we posted an Infographic on Amplify's Facebook Page about Inconsistent vs. Consistent Startups. People asked some questions and these were some of my thoughts.


Path and Milk are great examples of consistent companies. They have raised a pretty small amount of money considering how much talent is involved. Both teams are small but very strong. With less than 15 members each service has generated over a million users. They have yet to establish revenue models (Path does charge for a few Camera Filters) but I would say these companies are still in the premature phase of Discovery and Validation.


Groupon falls into the inconsistent category. We've recently learned Groupons team was much larger when it released its S-1 compared to Facebook's and Groupon had significantly less in revenue. Groupon was spending an extraordinary amount to acquire new users. The daily deal site was making revenue from day 1 but the value they produced to small businesses is currently in question.


Is that to say that a startup doesn't have to start making money to be consistent, as long as they are growing a user base?


Yes and No. I think we are quickly leaving the realm where growing a user base means you don't have to think about a revenue stream. People have picked a place to spend their time so startups should look to leverage those connections on each network.


Google+ still has yet to catch on, most of their traffic is currently coming from very strong/expensive customer acquisition strategies. Is that to say there couldn't be another popular social network that could emerge next to those two giants? Who knows, Pinterest is making a very compelling argument. All I know is I'm a big fan of current startups leveraging existing networks. I believe that's the future.


--
Chris Olson
@topherolson