Graphing Social Patterns - Recap

Jefferson Memorial - Washington DC

I got back today around 5 PM from Washington DC. There was a 3 mile backup on the turnpike because of an accident.

DC was very hot and humid. Back in New York, the weather wasn't much cooler either.

Now that I am back, I wanted to take a few moments to recap my experience and thank the incredible people whose hard work made this conference so much fun.

Dave McClure - The awesome host who made it all possible

Graphing Social Patterns East was a lot of fun, definitely invaluable and one of the best ones in terms of networking opportunities and content if you are interested in penetrating or capitalizing social networks. Dave McClure (the very awesome host), the speakers and the O'reilly conference team did an outstanding job overall to make this conference an unforgettable one.

I have already blogged about few of the sessions. My intention was to take notes from every session but I failed to keep up. At times the conversation became so interesting especially during the panels that I wanted to listen in carefully than having to type everything. In my upcoming posts, I will try to find the slides and other blog posts for you. Here are quick links to my summaries:

• Geek Metrics: Using App Analytics to Drive Distribution, Engagement and Monetization
• Open Social: Open for Business
• Social + Mobile = Sociable (Social Networks for SMS, IM and Mobile Devices
• Widget Strategies and Social Platforms
• Facebook Business and Marketing Solutions
• Viral Marketing and Advertising Strategies for Social Networks
• Developing and Promoting Social Network Applications (Rules of Thumb)
• Social Networks for Business and Marketing Managers

The video clips Dave had painstakingly gathered fit right in with the presentations that followed them and were a lot of fun. Dave has posted the links to videos from both day 1 and day 2.

Sebastien de Halleux - COO of PlayFish

On Sunday night, as I was about to head to my room, I saw two gentlemen sitting at the bar. As I approached closer, I had to ask, "Are you Dave McClure? You look just like your photo on your blog." To which he made a very friendly reply, "Yes." I ended up sitting with Dave and Sebastien de Halleux of Playfish for a couple of drinks. Very quickly I was impressed by the insights Dave has regarding just about everything. Sebastien's company is growing very fast on Facebook and one of their games, Bowling Buddies, is in fact addicting. I highly recommend checking it out.

Chris Bissell - Chief Software Architect of MySpace

For the first time, I got to meet the MySpace team. Dave introduced them the night before the conference. Really cool and original folks who are not only at the top of their game but also very helpful in lending advice. I had great chats with Allen Hurff (SVP Engineering), Chris Bissell (Chief Software Architect) and Max Newbould (Platform Lead and Product Owner). I was pleasantly surprised by their personalities as I had wrongfully thought that being owned by News Corp., MySpace team would be a lot corporate. But that wasn't the case. Quickly after meeting the team, I was having engaging conversations with them.

Max Newbould - Platform Lead and Product Owner for MySpace

Another thing that pleasantly surprised me was that how much effort MySpace is putting in creating relationships with developers. They have created a dedicated channel on IRC just for developers and are hosting DevDemo days to interact on a more personal basis with developers. In addition, Allen put his friendfeed and twitter streams along with his MySpace and email addresses to give developers multiple ways to connect with him. Watch OpenSocial MySpace Application Demo by Chris Bissell. Immediately after the conference, Max took off to give MySpace presentation in various countries.


Ro Choy of RockYou presented an informative session on viral growth and how users use social networks. His presentation was full of examples on differentiating viral from anti-viral with countless tips on building viral engagement. For anyone wanting to explore marketing opportunities with social applications, this session alone was worth the price paid for conference ticket.

I also met Sachin Rekhi of imeem. Sachin had an incredible story about how he left his very promising job, formed a company, worked very hard to secure licensing contracts, got engaged and sold his company all within a year. A true entrepreneur at heart, Sachin was offering great advice to anyone interested in music startups. He warned about the complexities in negotiating music licensing deals. Sachin used to work at Microsoft creating Visual Studio. He had to go to great lengths to create an Open Social container at imeem since his team wasn't ready to use Shindig. Today, anyone can start creating their application utilizing imeem's Open Social container. Be warned that Sachin is more interested in quality than quantity when it comes to applications. As I learned more about imeem at the conference, I couldn't help but think that Sachin and his team have build an incredible product despite the licensing hurdles they had to face. Thanks, Sachin for great conversations and for building imeem.
Adam Ludwig of Give Real is an entrepreneur working on another disruptive idea. I have known Adam for sometime now and it was a great pleasure to catch up with him at the conference. Adam generously invited me and Michelle for a wonderful lunch at the roof top of Hyatt. Thanks Adam!
Adam Ludwig chatting with Benjamin Joffe
After hearing the thoughts of Benjamin Joffe (Plus Eight Star), I wanted to engage in discussion about mobile social networking and monetization with him. Benjamin had unmatched insight into how to monetize social networks and factors behind the success of mobile social networking in Asian markets. His presentation was one of my favorite ones.

At lunch one day, I sat on a table with Chris Sandoval (Director of New Business Initiatives, Enterprise Hosting at NTT). Chris had a great offer for startups to show how dedicated his company is to acquire business. IIRC, Chris' company hosts Twitter. He told us a joke that went something like: if you throw a stone in US, it would hit a lawyer. if you throw a stone in Japan, it would hit someone who works for NTT.

Scott Slack (founder of a100voices) was also at the lunch table. He is working on a very interesting project as well that focuses on social networking and locality to create content. Check out a100voices.org for more details.

Also sitting with me on the table was Durjoy (Ace) Bhattacharjya (VP, Interactive Marketing, Digital Media of Core Performance). Ace's company trains top athletes and they recently signed a deal with Sheraton to provide a custom program to integrate their services with health clubs at Sheraton.

As I stepped out to smoke a cig. (bad me!), I met Sonu Kansal (CTO of Associated Content). Sonu runs a large infrastructure to support the operations of Associated Content which now has an incredible amount of content. We talked about various scalability and high availability challenges among other things.

On another smoke break, I ran into Peter Foley (CTO of Artez Interactive). Peter's company offers online fund raising solutions to non profit organizations including Canadian Breast Cancer Foundation, Children's Miracle Network and National Ovarian Cancer Foundation. We talked on a variety of things ranging from utilizing social networks to technical challenges. Thanks Peter for a great conversation!

Adam Nash - Senior Director of Products, LinkedIn

Adam Nash (Senior Director of LinkedIn) gave a high level overview of his company that was very interesting. Of all the social networks LinkedIn is the one I use the most. LinkedIn is working on opening their platform to developers so we can expect to see some great applications. Adam, did you get my LinkedIn invitation? :)

Michael Lazerow - Buddy Media

Michael Lazerow of Buddy Media is really good at his job too. His presentations and insights were eye opening. His company has been working on disruptive applications. Unfortunately, although I wanted to, I didn't get to chat with him one on one. I can't wait to run into him next time.

I really enjoyed meeting, probably the funniest guy at the conference, Mo Kakwan (of MoBouy) as well. His sense of humor was incredible making everyone laugh and smile. I could see that everyone enjoyed Mo's company very much.

As the presentations ended on the last day, I sat in the lobby with a few friends including Mo. There I had some great conversations with Siqi Chen (CEO of Serious Business). Siqi had to catch a flight so we cut our conversation short. He is a very smart entrepreneur with a great personality who created the Friends for Sale application that is getting rave reviews and has a very impressive number of daily active users (IIRC a million plus). Siqi understands social graphs and social interactions on social networking sites and plans to create more engaging games that are built around these interactions. Read Siqi's blog post on Startupism.com, "How to Not Suck at Facebook Apps."

Also sitting with us in the lobby was Brendan King (CEO of MyFrontSteps). Brendan is a real estate veteran and an entrepreneur working on creating exciting solutions for the real estate market.

While we were sitting, Marc Porcelli (Chief Marketing Officer of SinglesNet) joined us. Marc's company is a leading provider of online dating services and he was interested in buying more impressions for his site. It's impressive how much Marc's company is dominating the online dating market. He provided many usability gems as to why his company is perceived better by online daters than eHarmony or Match.com.

In the session, Geek Metrics, Hiten Shah (CEO of KissMetrics), Albert Lai (Kontangent), Ian Swanson (Sometrics, Inc.) and Roy Pereira (Refresh Analytics) provided intuition on the metrics for applications and widgets. Dave moderated the session and herded the panel to highly unique selling proposition of each of the analytics provider. Later, I had interesting conversations with Albert Lai who is an established serial entrepreneur having sold several companies.

Oh, I almost forgot about Mark Sendo (CEO of Urturn). A very approachable, friendly and smart guy, Mark has a background in Macroeconomics and his new company is creating a promising virtual currency for social networks. Urturn has been covered by TechCrunch and several respected sites.

At the dinner on the last day of conference, Dave introduced me to his long time friend Justin Won (President of JayDub Enterprises, LLC). As I conversed with Justin, who used to be involved with databases years ago, I couldn't help but be impressed by his understanding of what a proper scalable solution would comprise of. Very quickly we covered bottlenecks of most infrastructure related issues. I really loved Justin's quote that "DBAs are a different breed than programmers."

David Recordon (Open Platforms Technical Lead for Six Apart) was also present at the dinner. He had quite a bit of industry knowledge including the challenges that some of the popular websites are facing (no, I won't name the sites). Thanks for your insights David.

I am also thankful to Ahson Wardak (founder & CEO of ShareMeme), John Maver (founder of Thought Labs), Chris Saad (Founder and Chairperson of Data Portability Project), Jared Goralnick (Productivity Evangelist at AwayFind), Keith Schacht (Founder & CEO of 42 Friends) and Erik Giberti (AF-Design) for great conversations and insights that they all generously shared with me.

I am sure I missed out some of the names (sorry for my bad memory!). My apologies and a big thanks to everyone with whom I conversed but didn't list here.

Now, I am definitely looking to the next conference.

RockYou! raises $35 million

Following Slide, RockYou! has raised an impressive $35 million in Series C funding led by DCM venture capital firm. RockYou! is now claiming that their reach is bigger than Slide.

Slide:

RockYou!:

Social Networks for Business and Marketing Managers

I am sitting in the session "Intro to Social Networks for Business and Marketing Managers" by Ro Choy of Rock You! Folowing are my notes from the session.

Five years ago, people considered Google to be the entry point for the Internet. Now you are talking about social media and social network being the absolute entry point. Where does a teenager go first on the Internet?

What's most relevant for a teenager? Everything related to their social network.

Gone are days of SEO to position your business. Today the question is, what do I do to position my presence online within social networks.

There is an attendee from the State Department interested in reaching globally through social networks.

Another attendee from Microsoft wants to understand how to incorporate feedback mechanisms.

What are social networks used for?
Content posted on social network: "What do you do with your social networking profile?" - Active Internet Universe

• 55.1% upload photos
• 21.9% upload videos
• 74.0% message friends and communicate
• 30.8% write a blog
• 18.3% dating
• 23.3% install applications
• 9.8% promote a band
• 33.6% favorite/currently listened to music
• 3.2% do other activities
  

What are the differences between services?

• Facebook is a communication/collaboration tool which is highly structured and highly functional. Facebook is known for its primarily college-age, well educated high-income demographic although currently Facebook has many diverse demographics today. Historically it was known as an "elite" network for universities.
• MySpace is more famous for self expression. It is less structured and more customizable. You'll see millions and millions of different looking pages. MySpace has a younger, more diverse demographic. The younger you are the more time you have and therefore you can spend time on customizing your page. You can keep scrolling down for hours on some pages. Try 50 cent's page. Historically MySpace was famous for being a haven for music artists.
• LinkedIn is like a proxy for business cards. LinkedIn is used to keep business contacts in touch with each other.
  

How is Facebook used?
Four most important areas of Facebook:

• Profiles:
• used to create a profile
• communicate with friends
• share media
• install applications
• browse
• other!
• Pages
• Groups
• Events
  

Each of the above revolve around trying to communicate.

New Media today is about communication and about finding interests. Information collected by social networks like Facebook is a gold mine for advertisers.

There are 45 million people using RockYou's tools on Facebook today.

Among younger generation, email is old medium. 90% mail in his Yahoo! mail is spam whereas 0% of messages on his wall are spam. I find this hard to believe as Wall's on Facebook do generate quite a bit of spam, even though that spam is sometimes being created by your friends :).

You can make a lot of money at Facebook. Anything that works on the Internet, works on Facebook within applications.

Facebook email is probably used more by Facebook users than their own personal email account.

No one likes to read in social environments. Reading is 'death of viral.'

MySpace overtime has adopted a lot of Facebook's features. Background is really important on myspace. It took Ro a week to 'make his profile look really bad.'

Career-oriented and older demographic are the primary users of LinkedIn, which has now adopted Open Social. LinkedIn offers a somewhat different experience and allows you to make business connections, get recommended by associates and to post one's resume.

Viral marketing is key to success. He's showing a graph depicting explosive growth in Rock You's usage.

Key Takeaways for Viral Growth:
- New User focus: Without it, viral isn't possible.
- Simplicity
- Novelty
- Universal Applicability

When you communicate with new users, focus on actionable items because it's the action that's viral. Don't make your users fill out a form.

Anti-viral is thinking. Deliver something with immediate value proposition.

Simplicity is also co-related to virality. Things that take 10 seconds are more viral than things that take 30 seconds. Things that take 1.5 minutes aren't viral at all.

In the viral space, people who know viral get big really quickly. To win virally, you must be novel. There are a lot of free gifting applications. Even small ideas that make an existing application novel can hit big, but there must be something novel about about it.

Games can be very specific or very broad. Casual games do really well on social networks.

RockYou's competitors are experts in viral marketing who look for immediate exposure. Don't market until there's a base established for viral methods.

Good viral methodologies generate 2 new installs per user. Even viral rate of 1.001 is healthy.

Building Viral Engagement: (chart of circles with inner to outer most: user -> direct friends -> indirect friends -> interested parties)
1. New users => build clean flows
-- New users are absolutely key to viral engagement (vs returning user).
-- focus on linear, one-action flows to maximize activation for new users
-- forget registration.
2. Direct friends => deliver clear value proposition
-- provide clear value proposition to new user for inviting friend network (Likeness)
- ensure invitation is first/second step new user flow to maximize viral value of user (superlatives vs superatives)
3. Indirect friends => focus on messaging
-- focus on on messaging to invite/notification receivers to drive more friends invites
-- deliver increasing AND simply understood value to app w/ ever friend invited (Zombies)
4. Interested Parties => allow universal use
-- enable simple tols (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My questions).
-- Old school discussion boards are awesome
-- If you depend on creativity for something viral, you're dead.
-- for e.g. for movie review, have pre-created choices for users (I love this, thumbs up OR I hate this, thumbs down)
--- Click rate for this kind of engagement is really high.

Remember, activities drive awareness. Facebook will reduce an application's ability if your emails don't get clicked on. Your bandwidth on platform will decrease.

Marketing opportunities with social applications
How do you market something successfully in social space? Successful marketing for social media should focus on social applications.

1. Application content integration
-- Integrating brand or product as part of user experience (e.g. Indiana Jones character)
-- Example: likeness quiz, virtual gifts, greeting cards, virtual actions etc.
-- build applications that take into account existing user behavior.
2. Sponsorships or branding of applications
-- app takeover or skinning w/ possible promotion
-- Example: Skin application w/ sweepstakes or cntest
3. Custom social application building and distribution
-- Build a social app for advertiser and/or distribute it through social network specific ad networks
-- Example: build, viraal tune, launch and seed an app recruiting users from RockYou's leading ad network jumpstarting viral spread of app.
4. Rich Media.

For Sweeney Todd campaign, there was a 0.01% CTR for banner alone but when they did integration with application the CTR jumped to 0.65% (65x better).

RockYou created a SuperWall card for Step Brothers and provided that as an example for application integration. They featured two custom designed greeting cards on SuperWall. Greeting Cards were placed in top placement, pre-selected and expanded upon roll-over. The card appeared in user's profile. The results were 8M impressions on application pages. 6M cards sent and immeasurable viral impressions through newsfeed events and in-profile prominenece. These were traditional CPM based campaigns.

Women tend to be more active in sharing content.

Application Sponsorship:
RockYou worked with Sony and Resident Evil to create skins or brand applications. ResidentEvil campaign was expecting 10K registrations for contest but they achieved a million registrations for the contest.

CTR rate:
Social networks: 0.13%
Web 0.20%
Avg RY ad: 0.28%
Best RY campaign: 30%!!!!

Some rules of thumb from Context Optional for developing and promoting applications for social networks.

Application development and Promotion:
- 3rd party ad networks on Facebook can radically accelerate Facebook application adoption
-- RockYou
-- SocialMedia
-- Lookery

- From RockYou's experiecne, advertisers can generate between 1000 to 20,000 installs a day
- CPI can be as much as $0.60.
- Consider potential throughput of the ad network
- quality of ads => requires constant tuning to maintain high CTR
- Ad copy => make it actionable and presonally identifiable
- viral tuning => work with a team that knows engagement / growth
- successful applications require ongoing investment.

Stylefeeder:
Largest fashion/shopping application on Facebook with over 1 million installs. They are getting multi-dollar CPMs. Their goal is to drive traffic to existing website.

Rich Media on Social Applications can provide 2x interaction rate and 2x activity rate (e.g. campaign for Ruins movie)

Monetization:
Online advertising is growing but social advertising is growing 3x faster. CAGR in global online media advertising is expected to reach $61 billion by 2010.

Context is the key to social application monetization:
Search is not viral and has high context and low virality. With social networks you have low context and high virality. With social applications, you can get high context and high virality: Apps add context to social networks and social apps are viral.

1. Application cross-promotion:
- CPI = $0.30 - $0.50
- selected customers: Acuvue, IAC, Microsoft, NBC, ESPN, Coca Cola, Expedia

2. Agency sourced branded advertising
- CPM = $2.00 to $10. (their avg CPM from brand agencies is $5)
- customers: Sony, AT&T, Warner Brothers

3. Direct response and lead generation
- CPA

4. Virtual Goods, Micro-transactions and subscription

Agency sourced branded advertising campaigns can range from $30K to $150K spend.

The session has ended. We ran over about 10 minutes but it was worth it.

Animoto - Kick Ass Slide Show Producer Experiencing Explosive Growth

Animoto is experiencing You Tube and Facebook style growth. The difference is that Animoto actually has a proper business model!

Move over, Slide and Rock You! here comes Animoto with a totally kick ass slide show experience. They take your photos, your music and do magic to create slide shows that "feel" the music.

To sign up and save $5, click on the graphic above with code: oxqeiaug

Animoto, which is currently experiencing explosive growth and went from 25,000 users to 250,000 users in just three days, runs on Amazon EC2 and uses S3 for storage.

A demo of Animoto produced slide show is below:

At Startup School 2008, Jeff Bezos, Amazon CEO, talked about Animoto. The video of his talk follows:


According to Right Scale, which Animoto uses for handling their EC2 instances, mentions that Animoto has been adding 40 EC2 instances per minute during their peak time.

“The upshot is that there are a lot of moving parts! Each one of the subsystems consists of many servers and everything needs to scale-up as the load increases. What Animoto CTO Stevie Clifton did really well is to connect all the operations using queues, many of them in SQS. One queue contains work items that list photo URLs to fetch from other sites, such as Facebook, Flickr, etc., and that is processed by one array of worker instances. Another queue has the list of render jobs and each work item in there points to the set of photos sitting at the ready in S3 and at the music files also on S3. All of these queues are held in Amazon SQS and the arrays of worker instances are managed by RightScale. This allows the monitoring part of our service to detect when the queue gets too large and more instances need to be launched. What’s nice about using queues is that it decouples the various parts of the site, so if the renderers get backlogged the queue simply builds up and users have to wait a little longer for their video to be produced. Waiting is not good, but dropping requests on the floor is much worse!”

Right Scale blog also touches on some of the important lessons learned from Animoto's growth:

“First of all, when you scale 10x and then 10x again to run on thousands of servers every little problem turns into a large one. That insignificant error rate of 0.1% gets multiplied by 1000x per second and you end up with an error a second, and actually, the error rate typically increases in itself too because of the added load on the system. So suddenly it’s not something you can ignore anymore. An example for this was having exponential backoff for uploads to S3 when using curl, but forgetting that the 5th retry exceeds the S3 connection timeout. Normally, this happens only once in a blue moon, but when tens of uploader instances are banging hard on one S3 bucket the S3 error rate goes up a bit and suddenly uploads are failing left and right. Once we changed this to a constant retry timeout it all went smooth again.”

References:
Animoto's Facebook scale-up by Right Scale Blog
Animoto Scaling through Viral Growth by Amazon Web Services Blog