SocialStartups.com

(This post is a longer take on the things mentioned here and here.)

Pre-condition #1: Identity

Facebook, with the release of social plugins, has officially announced that they believe they are the Internet's digital identity system*. How so? Their new social plugins — Like buttons, Personalized widgets, site-wide toolbars — all assume that you are logged into Facebook all the time. No one has ever made an assumption like that before, and it dramatically changes the game. Also, it's scary because it's probably true.

[Update: My old boss Ted reminds me that Amazon Associates widgets also assume you are logged in, to show you personalized ads. IMO, it's more pernicious now because Facebook is approaching 500M users. If you exist on the Internet, you are probably on Facebook.]

Pre-condition #2: Traffic

Everyone wants traffic, and nobody has more of it than Facebook. So when Facebook announced "If you install our bug into your system, we'll send you traffic", publishers celebrated. Of course CNN wants their links in Facebook Newsfeeds. More traffic = more pageviews = higher CPMs to charge advertisers. Thanks to 20th century capitalism, everyone is chasing short-term metrics. Classic tragedy of the commons.

Scary Result #1: Ad network domination

Given pre-condition #2 (traffic), Facebook Like buttons are going to be everywhere. All of the top sites will have them, and most of the medium-sized sites will too. Who wouldn't want more traffic in exchange for adding one simple line of code, so simple anyone could do it? 

What does this mean? Facebook is going to have a window into every important website on the internet. You went to Victoria Secret? Facebook knows (see Pre-condition #1). You then went to Gawker? Facebook can show you ads for Victoria Secret products on Gawker because it knows you were just there. It's called ad re-targeting, and it's the most effective innovation online ads have seen in a while. And no one will be able to do it better than Facebook.

Scary Result #2: We know what you buy

There's been lots of talk about Facebook Credits – a Facebook created currency that allows you to buy real or virtual goods using your credit card, PayPal, etc. What if you could get a real Facebook credit card? Facebook would then be able to attain the Holy Grail of Brick & Mortar retailing – tying together what you are buying with your digital identity (again, pre-condition #1). Right now, millions (billions?) of dollars are spent by small businesses, trying to get you in the door – Happy Hour specials, Buy One Get One Free, Yellow Pages ads. But if you come in and buy something, they have no idea who you are, and therefore have no way to encourage you to come back**. 

A Facebook credit card is different. They know exactly who you are when you buy that special pair of Louboutins. And they can use that information to show you better ads or product recommendations. Remember, Amazon and Netflix give you great recommendations because they have more data, not better algorithms. And because Facebook sees financial benefits from these alternative streams, the Facebook credit card can have better rewards / lower rates than anything else, and they have the scale to do it. No wonder Blippy raised $11.2M at a $46.2M valuation.

Scary Result #3: We know where you are

f8 attendees had RFID chips implanted in their badges. To check-in, you simply swipe your badge against a kiosk. What if your Facebook credit card had an RFID chip in it? This should scare the shit out of Foursquare, Gowalla, and Bump. Imagine I walk into a cafe and the owner says, press your card against this pad to check-in; 10th check-in gets you a free coffee. No more fumbling for your iphone, waiting for the GPS / cell tower triangulation, and looking like an idiot. You don't even have to take the card out of your wallet – wave your whole wallet over the reader and you're in. Or, just buy something.

And don't think Facebook doesn't have the scale or cash or ambition to create a Point of Sale system; that'll just close the loop even tighter.

Why this scares the shit out of me

Facebook is filled with really, really, really smart people. And they've shown an incredible ability to innovate at large scale, with an ambition that is unmatched. So what happens when we give up our privacy in exchange for 5% off? What happens when Facebook knows more about the economy's transactions than Visa? What happens when Facebook is watching you closer than Google?

Data is everything in the 21st century. Who ever has more data wins the Internet, and I don't trust Facebook with that kind of scale and power.

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*You might remember the single sign-on wars of years past: Microsoft Passport, YahooID, OpenID, then later Facebook Connect / Twitter Connect / OAuth.

**The closest thing are loyalty punch cards you get at cafes or pencil & paper mailing list signups.

In the last 2 years, a few different sites have implemented some very successful social designs. I’ll lay out 5 social design patterns here and then follow up with case studies in subsequent posts. These apply to sites with user-generated content where the content is the primary object.

Public Timeline

I’m starting with the public timeline because, while it’s not the sexiest thing on this list, it’s critical for new users as a solution to the cold start problem. The public timeline is the first place new users will look for new content. It’s also how they will determine if they wish to join your community – the size, the tone, the cultural-norms, and the freshness of your community is easily communicated via the public timeline. And, of course, it’s also where new users can find other interesting users, which leads me to my next pattern.

Asymmetrical Follow

This has been written about before, so I won’t say much. Asymmetrical follow means I can follow the updates of a user without their permission. They, in turn, could follow me back but it’s not required. This allows for the kind of preferential attachment characteristic of scale-free networks, and it’s scale-free networks that are primed for viral propagation. When the goal is content distribution powered by network effects, it just doesn’t matter if you actually know the person or not. All that matters is if the person if a reliable source for interesting content. This is why social networks have failed to become anything more than social networks. Remember this graph from Brad Horowitz?

Only 1% of a community are content creators

Most people’s social networks aren’t large enough to contain more than a handful of super-star content creators. I believe the average Facebook account has 300 users. 1% of that is 3 – not enough to be a valuable source of content. If you think Dunbar’s number is a more accurate group size – which I do not with regard to online communities – then you’re only left with 1 or 2 people (1% of 150 = 1.5). Yes, you can argue that Facebook has done very well for itself living off of soap-opera like content – who is dating whom, who got drunk at what party, what was she wearing?!?) but there are natural limits to that growth. Their commenting feature will help drive page views, but there isn’t a whole lot of new value being created there.

Newsfeed

Nothing shocking about this. Now that your users have gone out and followed their friends and other interesting users, their homepage should now be the newsfeed that aggregates all of that content into one place. But it’s not sufficient just to include the stream of content. You need to also show who contributed that content (and, in the case of re-blogging, the other hands it passed through). Why? Because that’s how you can evaluate the people you are following (and, with re-blogging, discover new people to follow).

Re-blogging

I’m a huge re-blogging fan. It’s the engine that drives the content diffusion through the network. The concept is simple: if someone I’m following shares something interesting, I can easily push that same interesting piece of content out to everyone who is following me while providing proper attribution. Someone who follows me can do the same, and again, and again. This is really powerful, as the people who follow me are most likely not the same as the people I follow. Re-blogging provides a transport device for great interesting content to travel through connected components of the network (which are generally much larger than your immediate social network).

Social Proof

While judging the content someone shares is a decent proxy for evaluating whether or not to follow that person, social proof can help. Show how many followers the person has. Better yet, calculate their influence (like PageRank does for websites). Or, show how many favorites their posts have accrued or re-blogs their posts have had. It’s a quick and easy way for users to ascertain the reputation of a user in the context of your site.

Bonus: APIs and RSS

I promised five, but here’s an extra. Use APIs and RSS to amplify your power. Provide APIs so that others can build tools that extend your reach. Publish RSS feeds so that users can incorporate your interesting content into their existing routines. Make use of other companies’ APIs to publish your content out to them (like publishing to Twitter). It’s very difficult to create new habits, but it’s much easier to go where your users already are (Facebook, Twitter, Google Reader in my case).

Like I said at the start, I’ll be back soon with some commentary on how well (or not) various sites are implementing these ideas. Off the top of my head, I’m thinking about Blip.fm, bit.ly, and Soup.io. I’d love to talk about Etsy, but I feel like it wouldn’t be appropriate.

Thanks to a Facebook Application called Friend Wheel, I can generate the visualization pictured above of my 549 Facebook friends (and still growing). It’s kinda fun to look at; my friends are listing around the edges of the circle, and a line connects to people who are also friends of each other on facebook.  The reds, oranges, and yellows are high school friends. The deep blues are Amazon.com friends. The greens and aquas and most of the rest are college friends.

I had dinner with my friend Steve McNally last night, who is roommates with my other friend Jake Tuck. Lisa asked me which one was I closer to. My response was that I had more history with Jake (we were housemates all through college, whereas Steve only lived in my house for half of college) but was probably closer to Steve since we shared a passion for baseball. Tough call, since Jake is a musician (as I am). Then Lisa asked me if they were friends with Will Paul. I said no, because Will is a hometown friend while Jake and Steve were college friends. So that got me into thinking about how to visual social networks and how inadequate two dimensions is.

Let’s try three dimensions. For the x- and y-axis, imagine an ideaspace – this is a plane that maps out the various interests people have, the hobbies they participate in, the fields they work in. So you have one circle for the friends you go to jazz concerts with, one circle for your photowalking friends, one for your baseball friends. The size of the circle is the number of mutual friends you have who share that interest. At the center, (0,0), is you. The circles in the plane are arranged such that the interests that are most passionate to you are closest to the center. Does this make sense? Two dimensional graph containing overlapping circles of various sizes, with the ones closest to center being of the most interest to you. Got it? Good.

Now for the third dimension, which is time. Over time, you will naturally transition environments. High school, college, work, living abroad, joining the local book club, marrying your spouse and meeting her friends and family, moving to the suburbs to raise a family, etc. Each of these events expands your social network and can form dense clumps. The third dimension in our visualization allows for the stacking of these clumps. It is more uncommon for connections to span the clumps, but it can happen and can be enlightening. I think seeing such a visualization would tell a lot about a person – what their interests are, who their friends are, and how have they changed over time. What’s your social network look like in three dimensions?

Web Warrior – Forbes.com

This article reminded me that the Facebook vs. MySpace vs. Google platform wars may be a little premature. The biggest platform, outside the OS, is the browser. Everyone uses it, and through the browser, everyone accesses all other sites. Your browser stores your account information, commonly submitted form fields like email address, street address, credit card numbers. There are already a multitude of extensions.

This article reminds me that Google is working on a Google-branded Firefox browser. My guess is that this ties right in with Google’s claim to release a platform that is more open than Facebook’s. What if they centered it around the browser?

Here’s how this would work. Google knows my social network from Gmail, GTalk, and Orkut (if I use Orkut). Google knows all of my login credentials for all sites on the internet because every time I log into a new site, Google asks me if I’d like to save that information with them so that I don’t have to be bothered with logging in to Amazon, Netflix, eBay, etc. Google has access to my areas of expertise by applying semantic analysis (like what Twine does) to my emails (Gmail), documents/spreadsheets/presentations (Google office suite), and local files (Google Desktop). Google knows my financial portfolio (Google Finance). Google knows what areas I’m interested in (Google Reader, iGoogle, and my browsing history).

Mozilla could do this too – Combining Thunderbird (email) and Sunbird (Calendar) with Firefox  would get you a social network, areas of interest, and login credentials. Various extensions have been created for RSS aggregation, messaging, bookmarking, etc. I think it would be a hell of a bold bet, but an interesting one.

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Tags: facebook, google, firefox, platform

Facebook Wish List: Five Apps I’d Actually Like to See

Sorry, but I think there is a serious disconnect between what Mark “Rizzn” Hopkins wants and what most Facebook users would want.

A podcast client? How many people know what a podcast is?

A Top 40 list? We know now that most adds are from the Profile box. So again, most users won’t care what’s in the app directory.

A PR Connection Tool? Right, because everyone needs to initiate a little PR.

IRC and FTP clients? How many people still use those? Way back when, Facebook launched a P2P media sharing client named Wirehog, which was a total disaster. I’m not convinced an FTP client would do better.

I admit I actually have no understand of his 5th wish list idea, so I won’t comment. I think he’s trying to describe Ning.

My top 5 wish list

1. A personalized version of Google News, taken from the shared items posted from your Friends.

2. Tagging of friends. This is something suspected is in the works. I want to be able to send messages or invites only to certain friends.

3. OpenID for all facebook users. Every facebook user should be able to easily link their Facebook account with their Amazon or eBay or Paypal or Skype accounts. E-Commerce has a large role to play in Facebook, and lining up who you are in facebook to who are you in Skype is crucial.

4. Stronger integration with local Neighborhoods. So yes, there are a few Neighborhood apps, but Facebook would be well served by growing the connectedness of a geographic community. Want to throw a party for the neighborhood? Find playmates for your kids? Tell your neighbors to look for your lost cat? The internet can help counteract what Robert Putnam describes in Bowling Alone.

5. A real email client. Sure, there is Facebook messaging, but what Facebook really should do is build Gmail right into Facebook. They could easily tack on features found in Xobni and Twine, and you’d get a heck of an email application.

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Tags: facebook