Soul of a Social Network

Unlike other hosting services where we can host our photos, music, data, or other things, hosting friends list ( on a social networks) is a bit different. Photos, Music, and Data are “objects”.  Friends are not objects. They are real people with emotions and thoughts. They can identify good from bad and have feelings about certain things or certain way of doing things. This makes hosting of friend list different than hosting any other “possessions”.

A social network not only has to provide competing services but also has to appear very genuine in its interaction with its users. It should give a perception of being an active “listener” and not causing “harm” to the social fabric. More importantly, it should not appear to be piling on the private information of people and profit from it. People, in general, understand that the Social Networking company has to make money to provide the service to them. But if they feel that the company is just bent upon extracting money off of their personal profiles, there would be a sense of disenchantment among the users.

Recent euphoria about G+ validates this theory. G+ seems to be more open than Facebook and for a large portion of users, it appears to be closer-to-heart than Facebook. It violates privacy almost as equally as Facebook does. But still people are happy to give it a pass. Difference being that G+ appears to be listening to what people are talking about. Hordes of Google Product managers + Engineers are openly soliciting feedback in public stream. I myself had a hangout experience with G+ product Managers where I shared my opinions and gave some inputs. Whether or not these suggestions are accepted is another thing…but atleast Google plus appears to be making an effort to be closer to people’s hearts. And thats what counts when you want to host their friends list and be a provider of their social fabric.

Soft Power of Google

Last few weeks were very hectic in the Social Media world. Google came out with Google plus, and then the tech bloggers started evaluating it. Overall theme: Google+ beats Facebook in the Look & Feel as well as in the Features, but it will be a steep climb for Google to fetch users from Facebook.

I would put things in a different perspective. Its not that Google will win this contest…its that Facebook might (or will) loose it.  Advanced usability features of Google plus will make a difference, but the biggest difference will be made by Facebook’s shortcomings.

Soft Power: Google vs Facebook

Google wields a huge soft-power over its bigger Social Networking rival. Analyzing the sentiments in blogs and comments, it is quite evident that there is a general sense of “enjoyment” or “happiness” in the tech community. It appears that people just want someone to pose a challenge to Facebook’s increasing dominance.

Maybe it is Facebook’s blatant breach of Privacy, its apathy towards developers, its philosophy that users revolt but eventually concede to the changes. Or maybe its Facebook’s open PR attempt to malign Google. Maybe people are just awestruck or a little bit envious by the meteoric rise of Facebook. I can not pin-point exactly what it is that people do not like about Facebook but it is still (and will remain for a long time) the biggest Social Network in the world.

Maybe people did not have a choice..and now that they feel that there might be an alternative to Facebook, they feel overjoyed. Its kindof like the Arab spring where people are joyous that they have an option to get an alternative rather than listen to a dictatorial regime.

Its not that Google is everything good and Facebook is everything evil. Google also breaches on People’s privacy quite openly. But most people do not feel “happy” or “over-joyous” over the success of bing (search engine from Microsoft).

So why are people so happy about Google Plus and not about bing? Difference is Google’s soft-power that has a comforting and soothing effect on people. Something that Facebook and Microsoft do not have in their DNA.

Google Plus

Reading about Google+ a lot. It seems that it solves some of the basic problems that I discussed in my last blog post about Twitter.

Interesting to see how G+ will do with the masses. Techies live in a different world…so I am keeping my fingers crossed for the mass release.

Venture Capital Industry – Needs overhaul?

I am currently in Silicon Valley and as most other people, this time I am trying to “feel” it. I lived here in the past but did not try that. Certainly, you cant feel it if you dont want to. But to live the dream, you have to “feel” it. Open your eyes and look around. Almost 20 companies come out every single day. Almost 100 networking events take place every week. Total amount of VC money flowing into the Silicon Valley startups is more than anywhere else in the world. Possibly it is even more than the sum total of money elsewhere in the world.

With this much optimism, there comes the noise. Yes, a lot of good companies are coming up, but with them come up a full breed of companies which were never meant to be successful. Most of the companies fail to take off and die prematurely. Some of them are funded and some of them perish even before that. It is a common perception among VC community that 90% of startups fail. Seems that everyone has agreed to this rule. Looking closely, this rule says that even well seasoned VCs cant figure out which companies will succeed. They make their judgment based on some criteria and 90% of the times those criteria give wrong results.

Bottom line: There is 90% error in choosing the right company for investment.

Is it not a very high number given the fact that we live in this age where more and more focus is on accuracy and error-reduction? Imagine getting a fish-o-fillet sandwich 9 out of 10 times you order a hamburger at McDonald’s? Or imagine a calculation error 9 out of every 10 times you buy stocks online? Something is very wrong with the VC money now a days? Is it the lack of good foresight or is the market full of VC firms who make investments as if they are buying a lottery ticket? 90% failure rate can not be caused by just the incompetency of the entrepreneurs. It is a cyclic process; if incompetent entrepreneurs get money; then they run their company shabbily…only to go burst after 6 months. They know that the threshold of getting the money is low and therefore never try hard enough to reach the superior level which is required to execute a successful company. I do not intend to say that getting money is easy. Its not. Should it be made even harder? Maybe. Investors should try harder by tightening the monetary control to elevate the entrepreneur’s motivation for succesful exit from the venture. Simple question: Why is Private Equity more successful than Venture Capital industry? Answer: Superb financial control and execution.

Something needs to be done. I don’t know what that is, but something has to be done. We can be realistic and try to improve this result in incremental fashion (20%, 30%, 40% success rate), but at least a beginning has to be made so that we do not go back to the Dot com burst stage again. Some well reputed VC firms do invest in a very sophisticated way; and they get good ROI also. My question is about those VC firms who do not have enough experience or credibility for making good decisions. We saw one tech-burst not so long ago; should they be allowed to convert a tech-ride into a possible burst scenario again? Should there be some industry obligations? Or is it ok to accept them as they are…after all its the money of their private investors and they have the right to use it in any way they want?

New adventures in finance

Last week, I spoke to the CEO of Increditrade about their service. This is a new startup trying to provide Web2.0 capabilities in the Financial industry where rules and regulations are so tight that the independence and freedom of 2.0 is just a dream. There are some players in stock trading arena, such as Zecco who are doing quite OK. Increditrade takes one step forward in the integration of web2.0 in stock trading experience.

Most of us have almost Zero knowledge about how to invest in the Stock market. We read few articles, search few websites, maybe read some analyst reports and eventually invest based on our instincts. Sometime it works, sometime it does not. Increditrade is providing additional feature to the users to help them make sound investment judgements.

Business model of increditrade is dependent on the assumption that an investor who got X% return from the market in past 3-5 years is a good investor. And if customers are given an opportunity to look into his/her investment patterns, then they would be willing to look into it before making their own judgement about investing. Maybe, they will be willing to even pay for this “peek” into some smart investor’s portfolio or decision making process. Simply put, as a customer, I have to pay some $$ to increditrade which in return will allow me to look into the portfolio of a trader who has consistently made significant profits in the past few years. In addition to that, I will have all 2.0 features like collaboration, chat, blogging etc.

Technically, increditrade will have seamless integation in the backend with major stock trading players like Etrade or Scottstrade. Also, smart investors will get some payment for sharing their portfolio with the public. Ofcourse, their names and account # will be withheld from public eye.

I like the idea. Its innovative, different, and definitely attractive. It is a differentiating factor for the company. There is a white-space in the market and increditrade is definitely playing with the psyche of the common man. Whether or not people would pay for the service is a diferent question which will be answered in near future.

Some things to consider:
1. How to attract critical mass of users who are willing to pay?
2. What is the payment model? Is it one time fee OR is it a subscription based model? My intution says that the company would go for subscription based model, but we’ll see.
3. How do we stop fraud? What if one user makes the payment and decides to copy the content and put it on his/her blog?
4. How do we ensure the security of the account holder?
5. Even smart investors make bad decisions sometimes. How will a customer learn to differentiate good decisions from bad ones.
6. There might be confusion about the investment strategies of different “peekable” smart investors. How can this confusion be minimized so that the end consumer “feels” that the site is providing value rather than adding on to his/her confusion.

Overall, its an innovative idea, and I might be peeking into some smart investors’ portfolio very soon.

Web2.0 is getting old. Whats next?

It is official now that Techcrunch is buying Fuckedcompany. When I heard these rumors, it came as a surprise to me. Why would a company specializing in upcoming startup ventures be possibly interested in another company who makes money (hopefully) on failed ventures. Philosophically, it does not make any sense. But strategically it is a good move by the Techcrunch management. In management principals, they are adopting what MBAs call as “risk mitigation”.

As all business cycles, Web 2.0 also has ups and downs. We all saw the hype that was created by the acquisition of Myspace, and Youtube. Even Time magazine could not remain unaffected by the hype and decided to name “You” as the person of the year. That was the peak of Web2.0. Things started to cool off a little after that. We have not seen any mega deal for Web 2.0 companies. New startups are definitely coming up every single day; but most of them seem to be following the same “community” model with “hopeful” advertisement as the main revenue model. This can not be sustained for a long timg. We need something new. Something that would change the landscape. Something that would force people to turn their heards at the technology and say “WOW”. As of now, that is missing the Web 2.0 startup scene and thats why experts have started predicting the downward slope of Web2.0.

Recent blog by Peter Rip gave a very interesting comparison of the current user hits for Techcrunch, Gigaom, and Technorati. In liew of recent slowdown in viewership of Techcrunch, I completely agree with Michael’s (and Techcrunch Management’s) decision to mitigate their risk by preparing themselves for low cycles of Web2.0 businesses.

So, where do we technology savvy people with flair for new ventures stand? Well, if Web2.0 is getting old, then there must be something new coming up. Afterall, its the law of nature. New things replace existing ones which in future get called “old ones”. So, whats next? There is big hype about Web3.0. Experts are still arguing about what 3.0 is? Some call it Semantic web, some call it detailed widgets, personalization. My opinion is that technologies that help the users in their daily lives will be the next hype. It happened with Web 1.0 (email, chat, ebay) and 2.0 ( blog, myspace, youtube).

What do people want now? I want everything to be simple. Very simple. Not only on internet, but in my daily life. I want accurate weather information. I want to see news that affects me directly (not interested in whats happening in Afghanistan…unless thats affecting me directly). I want to get traffic report for my route, not for every highway in 100 miles radius. I want internet to give me what I want. I do not want to see advertisements on TV/Internet. Come up with a new method to make revenue. Advertisements have been there for almost 100 years now. Isnt it time to change the model? Come up with technologies that helps me with my daily life. Something that affects me positively and directly. If that means altering existing definitions, then do that. Web2.0 did it quite effectively. Why should we expect less from 3.0?

MyToons: Youtube of Cartoons? In wonderland!!!

Few days back an interesting site launched its Beta version: Mytoons It looks like a great idea becuase Text, Audio, Video, Pictures…all these types of contents have been completely gobbled up by Internet sites. Noone needs introduction to Youtube, Flickr or Blogs. The only untapped item in the content list is “Animation”. On top of that, I think that the content sharing websites will become “vertical”. So we will see more and more proliferation of websites specializing in one particular category. MyToon seems to be following the same trend and it is trying to capture the Cartoon/animation segment of the data.

It seems to be a good idea, but I would refrain from putting my money on the site. Some ideas look good on paper but lack the mass appeal because of poor understanding of the market.

Youtube and Flickr are widely popular, primarily because of the fact that the users can generate content for these websites. Digital cameras and Video creating devices are readily available in the marketplace. Most videos and pictures on these websites are home-made. That is the real strength of youtube and flickr. I fail to understand how I can create an animated film by readily available devices in my home/marketplace.

Some Issues with Mytoons:

1. Users will not be able to create content and this will make it extremely hard for the website to reach its critical mass.

2. If users start putting Animated films from Hollywood studios on Mytoons, then it will be in deep trouble because of pending lawsuits.

3. “Barriers of Entry”: How will Mytoons compete against giants: Youtube/Flickr if they decide to enter this market segment?

4. Technology: Mytoons supports only Firefox and Flash 9. A lot of users will be disappointed if they are unable to visit the site first time. I had a hard time seeing the product myself. My opinion is that they released the product a bit early. Its not even BETA ready yet.

My two cents: Good luck and make some changes to the business model very fast. In its present form, I am not ready to put my money on it.