Working on facebook applications in 2007 has taught me a lot about the web in general. The landscape has changed. In some ways, making successful apps on the web has now become a bit of a science. Here are three key insights about how a successful project should typically be designed:
Business Aspects
A very successful web application should achieve the following three objectives:
1) It should be viral - people would help spread it themselves
2) It should be sticky - people would enjoy coming back and using it over and over
3) It should monetize - usage of your application should translate into revenues of some kind.
There are many ways to achieve each one of the three things. Almost all applications on facebook aim for the first two steps — 1 and 2, but most do not seem to have seriously been designed for 3). That is why, when they are at 200,000 users a day, they are still not making a lot of money. But are they worth a lot?
Actually, having just 1) and 2) is good, too. Imagine if your first project resulted in stable traffic of 200,000 visitors per day with no sustaining effort on your part. That is 200,000 people (many of them returning visitors) every day who enjoy using your web application for one reason or another. Now, if you implemented a project that really helps the user and monetizes, you could drive this traffic toward that project. Many useful products don’t spread virally at all. Consider Adobe Photoshop. Services on average spread more virally than products (because you can usually somehow involve your friends) but here’s the thing:
If you took an existing viral and sticky project and promoted a monetizing project, you’d have a sustainable money making machine.
Keep in mind, however, that there is a limit to this. Those 200,000 visitors are most likely mostly returning visitors, so you might have at most 1-5 million TOTAL visitors. That means you’re not going to be making a billion dollars from making a one-shot-wonder like a software program and selling it to your users. However, you should keep the momentum going. Each one of your products and services should continue the good experience for the user and provide opportunities for you to later introduce something new to your users.
Of course, the best projects achieve all three — viral, sticky and monetize — starting from their very conception. That way people start coming, staying and spending money from the very beginning. If I was a VC, I’d strongly look for the actual mechanisms that would achieve 1, 2, and 3, and make sure they are all viable and have a good chance of working. These are the main factors these days, that can make or break your product. (Sure, there are completely different ways to market, such as SEO and Google Adwords, but I am talking about startups, exponential growth and major possibilities.)
If you apply this “successful combination” analysis to previous products, you can see its power in determining how things play out. For example, Whimit - Russians Online (and still is) was a social networking site that launched way before facebook.
Viralality comparison: One of the major problems was, it was limited to Russians. So, the initial growth in the Russian communities was explosive. But because of this limitation, it didn’t become much more viral than that. At some point, it had around 3 million members. It lost most of its visitors to facebook because people had lots of non-russian friends, and started to get pulled away to this new site. TheFacebook, on the other hand, started in Harvard and got half of the student population using it within a month. It’s kind of funny that it started as just a follow up to a hotornot clone. The hotornot clone was done first, but what people really always wanted to do was connect with each other and share pictures and express themselves. Especially students! (They already had yearbooks, so it was an easy concept to understand.) I believe facebook would have taken off just as much if it had started at NYU or Berkeley. (See myyearbook.com) Of course, it helped that it had an enterprising founder and smart guys taking it to the next levels.
Stickiness comparison: And in thefacebook.com, for the first time, they had a site that did all these things, and rapidly improved and gave them more and more features. Whimit didn’t. It was pretty static and — although it had unique features, like polls — it didn’thave many privacy controls, searching, events, discussion forums, modularity… facebook was just built smarter and eventually offered a better user experience. This is another reason why whimit lost to facebook. Facebook was way more sticky.
Monetization: Okay, whimit had already lost. But it didn’t help that users’ profiles were spammed with promoters advertising clubs. Facebook keeps a tight lid on spam, and its advertisements started with low-key “flyers” in the bottom left of a page. Anyone could post a flyer, and it was pretty democratic. I think facebook could make way more revenue than it currently does, but this already generates at least ten million dollars a month in revenue, thanks to their 40+ million users.
The number of your friends on a site also contributes very mcuh to its stickiness. If more of your friends are doing actions on a particular site, you feel your drive for social interaction being satisfied better through that site.
How To Be Viral?
Here’s the short answer:
- Help your users invite their friends through viral channels - email, AIM, word of mouth, print media, facebook invites.
- Give them a compelling reason to spread word about your product. This can be done artificially — by giving them some kind of contrived points they can spend in your app, or intrinsically — because they would benefit from the network effect of having more of their friends using the app. Both are good and there is no clear line where “intrinsic benefit” and “contrived benefit” begin and end.
The problem, though is no matter how good your application is, it will have an extremely hard time growing virally through channels which are clogged/ignored by users. This can be seen currently in the facebook application platform. Because applications many hijacked the crowd mentality and some abused things outright (such as forcing invites), the invite channel got comlpetely spammed, and many people lost faith in applications that even their friends recommended. No matter how good and sticky your application is, if it sends an invite to a user with a lot of friends (and those are the ones you want to reach most), it might wind up 537th out of 839 invites. What are the chances anyone will care?
Facebook could have avoided this by letting the users control the exponential factor of growth for applications. users could rate an application on its about page, and if the rating was unfavorable, the maximum number of daily invites would be lowered for it; and if everyone loved the app, it should be able to spread by even 100 invites a day. This simple system would have kept the invites channel full of mostly relevant stuff, proportional to how many other users liked this app.
As it is, facebook implemented a stopgap measure based on how many people reject your invitations. Guess what! The people most qualified to decide whether an application is great or not are the people who have used it. Their ratings should affect the maximum rate of growth of the app, not the responses of the poor friends who are still being deluged by invites.
Another thing that would have been great is to have a button that says “ignore future invites from this application”, with an option to unblock the app later. Facebook may have that — I’m not entirely sure — but it’s not prominent. Instead, they have a big button that lets you delete all your invites. Hardly helpful for restoring faith in that viral channel.
In short — at this time, the invite channel on facebook is clogged, so you should be using other means to spread your social apps.
Architecture
Finally, let’s realize that not all web apps much reside solely on facebook. Instead, let’s leave our options open, and grow our own businesses. The web used to be just web sites. You can think of them as standalone programs. You could embed widgets into any website, but the widget didn’t really have much personalized information, since it didn’t really know who you were very well. Nowadays, social networks like facebook, and other websites that log in their users, have enabled you to write applications on top of them that actually know a lot about the person and even their friends. So the new web architecture is becoming something like this:
BACKEND + INTERFACES
Interfaces include your web site, facebook apps, myspace apps, and widgets embeddable in websites like blogs. Interfaces can be personalizable or generic. On a site where you know who the logged-in user is, you can display information from your service relevant to them (such as what their friends are saying). On a site where you don’t know who the logged-in user is, you can display the most recent information, to tantalize them into clicking a link to your site, or remaining in the widget and logging in through there.
In short, build all your backends to be independent of facebook. That means, don’t store the user id as just “facebook uid”. This goes for all other objects. Anticipate you may have users coming from elsewhere, and build accordingly!
Posted on March 28th, 2008 by admin
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