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The Facebook Problem? Huh? (Scratches head) People, the same rules still apply!
The web is talking about the "problems" with the new Facebook platform.
Last time I checked, customer acquisition was a real benefit, no? Don't people usually pay for customer acquisition? As far as I'm concerned, the main reason why I suggested that Oddcast build a Voki app for Facebook was exactly that... to get more users. That's a phenomenal benefit for developers. Oh, wait.. is Facebook also supposed to invent a business model for you, too. That's like saying that AdSense sucks because it doesn't promise you customer conversions too, just traffic.
The problem of not making money with your app is not a Facebook problem. Its your problem! It shouldn't be up to Facebook to figure out your business model, too! Figure out a way to monetize your audience. If no one wants to pay for the Where I've Been app or you can't figure out how to stick relevant travel ads on it, then it shouldn't exist. If the Where I've Been app existed at whereivebeen.com, it would have the same exact issues. Facebook is not a parallel universe where the rules of needing a business model don't apply. This is real life, folks... and if you can't figure out a way to get the bills paid, well, sorry... This isn't Facebook's fault. Don't put your mouth in front of the firehose and than complain that the water comes out too fast and that you have a small bladder.
I don't really think this is a Facebook specific problem either. In fact, its actually a testament to how pure the signal usually is on Facebook. Right now, I have 25 posts in my newsfeed. Of the 25, 8 of them are notifications related to my friends adding or subtracting applications. The rest are actual usage of those apps, like Twitter updates, or people adding photos or friends or whatever they usually do on Facebook. That might be a lot, but compare that to my e-mail inbox. Of my last 25 threads in Gmail, 14 of them were not from humans. They were confirmations from purchases, notifications for folks joining the nextNY mailing list, ads, etc. On top of that, 4 more were blog comment notifications, which were initiated by humans at least, but not direct conversations.
I'm sure Facebook will adjust this issue, though, but it's not a huge problem. At some point, there will be equilibrium in the app world and people won't be adding or subtracting nearly as many apps. Plus, I don't really need to know when someone took something down... and maybe I shouldn't need to know that someone added something. If you invite me, fine... but I don't need to see that people are just playing.
In any case, I think the same basic rules of needing a business model, needing to be compelling enough to stand out from the crowd, needing to scale, etc. still apply in Facebook. Let's not forget that. It's still the web, people, not Fantasyland.
June 24, 2007 in Venture Capital & Technology
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Charlie - you are the nth person that has said to me "but Brad - isn't customer acquisition a great thing." However, you're the first person that has made the real argument - which I completely agree with - which is that it's up to the company to figure out how to convert those Facebook users to "real users" (where "real" is defined as something that generates revenue of some sort.)
I've seen a bunch of things lately - including most of Facebook apps - that generate "traffic" but no "conversions." If these are the customers you acquire, they are relatively useless, especially if they live only within the Facebook infrastructure (unless Facebook automagically turns on advertising for these page views / engagements and gives you a cut.)
Your point that it's the app developers responsibility is definitely true, but Facebook can help a lot if they want. It's in their best interest to do so - they have an excellent parallel here with Microsoft's historical ISV and SI program - which I'll blog about some time.
BTW - on the AdSense analogy, I think you meant AdWords since you were talking about customer conversions.
But is it really customer acquisition Charlie? They're using your app - yes, but you (the publisher) are not getting new registrations, nor are you building any direct relationship with the user, nor can you throw any javascript powered ad code in front of them. A user of a Facebook App seems more like a qualified lead to a user, than a user himself.
I sort of like the way Upcoming.org built their Facebook app - with plenty of links back to home base. They could have built a native app where all activity occurred within the confines of Facebook, but they instead chose to try and convert those Facebook app users to "real" users - perhaps at the risk of not growing as fast.
agree & agree. facebook is a terrific opportunity, and monetization on the internet is not a new issue.
there are certainly things people will have to learn about developing facebook apps, however you certainly CAN develop a direct relationship with your customers, either via the Facebook platform API, or via your own co-reg, or simply just by friending your customers & talking to them on facebook (not that hard at all).
i had a chance to chat with Facebook CTO Adam D'Angelo up at Foo Camp this weekend, and he explained a lot of questions i had about the Facebook platform, and while not everything is obvious, there is certainly a good bit of flexibility in how they are handling / enabling customer interaction via apps & 3rd-party companies.
in fact, i'd say it's really the opposite of what people think. the amount of access to customers is even BIGGER on facebook than on a typical website, because the social graph info is built into the facebook api.
in short: the opportunity is huge. access to customers is different, but possibly better, not worse, than on other sites / platforms. figure it out, and you will benefit handsomely.
- dave mcclure
http://500hats.typepad.com/
Damn straight, Charlie. Well said.