Master of 500 Hats

Subscriptions are the New BLACK. (+ why Facebook, Google, & Apple will own your wallet by 2015)

I'm on a redeye to NYC, supposed to be working on a presentation i'm giving in a few hours... but fuck it, i can't get this outta my head, so here we go.

(note: extremely raw, uneven, long, 1st draft publish & shoot; will revise l8r) 

ASSERTION #1: The default startup business model from 2000-2009 was based on growth (aka acquisition) and CPM- or CPC-advertising 

Over the past 10 years, we have seen a massive shift in advertising from CPM to CPC-based advertising.  This basically started happening when the 2000-2001 dotcom implosion blew the market cap of Yahoo to smithereens, and display advertising went into the shitter.  Altho CPM subsequently recovered, Google's IPO and the gradual emergence of CPC as a higher-quality advertising medium has been the dominant story of the first half of the last decade.  There's still a lot of page views and CPM advertising out there -- and YouTube & Facebook are making sure that doesn't change -- but as we VCs like to say:
    "at the end of the day, Yahoo is now Google's bitch".

Let me say that again with emphasis so you don't miss it. 

Google's ABSOLUTE FRIGGIN' SEARCH DOMINANCE has made CPC advertising the defacto monetization standard for the web.

Google is now making a ridiculous amount of samoleons: $2.5B free cash flow last qtr, or roughly $10B a year (a billion here, a biilion there, pretty soon that's cash-money, G...) -- and appears likely to continue doing so for the foreseeable future.  Although Microsoft, Apple, Ebay, & Amazon are all minting money too there's no question Google is an unassailable Internet JUGGERNAUT, at least in Search.

But what has all this Don't-Be-Evil-AdWords-Click-Happiness done to the internet & startup ecosystem?

It's made us a bunch of lazy, ad-happy, Web-Tards with crappy ROI. 

So crappy in fact, we should be ashamed to call ourselves entrepreneurs & venture "capitalists". Why, Schumpeter is probably rolling over in his grave at how little Creative Destruction we have rained down upon crotchety incumbents.  It's a goddamn travesty that some aspiring startup or greedy hedge fund hasn't pummelled Yahoo and eBay into a hostile takeover by now, and Microsoft has made itself almost irrelevant in the consumer internet space -- helloooo Mr. Ballmer? please tell me how you own hundreds of millions of users and more than half the browser market and you HAVE NO VISIBLE 3rd-party distribution or monetization strategy? -- Srsly, we have monkeys driving some of the biggest trains on the Internet at the moment.  

Lead, Follow, or Get Out of the Fucking Way.

And while there's been something of a Startup Renaissance going on since around 2004, all these little web 2.0 wannabees have spent an inordinate amount of our attention on ad-driven business models resulting in a big steaming 2-Founders-1-Cup of FAIL.  Everyone seems to have assumed that since Yahoo and Google were giants in internet advertising, therefore all internet startups should be using some form of CPM or CPC ad-monetization.

THIS IS A VERY LARGE LEMMING-LIKE ERROR IN LOGIC THAT MUST BE CORRECTED IMMEDIATELY. 

We have largely WASTED an entire web decade of time, energy & venture capital on extremely inefficient revenue models.  There have been a few interesting examples of startups acquired in the 00's for large amounts due to amazing growth (eGroups, MySpace, Skype, YouTube) or advertising potential (aQuantive, DoubleClick, AdMob, RightMedia).  However, mostly the decade has been an uninterrupted string of uninspiring business models and small-time acquisitions of Web 2.0 startups filled with rainbows & unicorns, rather than those based on simple, transactional revenue models.

ATTENTION u ASSHATs on Sand Hill Road & u HIPPY-DIPPY Startups in SOMA -- This Shit Stops NOW.

[fast forward to Twenty-Ten & the Soul of a New Machine: Subscriptions.]

ASSERTION #2: The default startup business model for 2010 & beyond will be subscriptions and transactions (e-commerce, digital goods).

Newsflash folks: The Internet does NOT want to be FREE... It wants to GET PAID on Fucking Friday, just like everybody else on the damn planet.

Yes there is a role for Freemium, but unless you missed the TPS report the FREE part is only a loss-leader for the MEE-YUM part -- it's a test-drive before you buy something. If your users are just kicking the tires then you need to kick them to the curb eventually (unless of course they are your viral bee-yotches, in which case it's ok to have a few invitation whores as freeriders).

Free is not Forever, unless you never want to be in control of your own fate.

Gradually we are discovering that the default revenue model on the internet should probably be the simplest one -- that is: basic transactions for physical or digital goods, and recurring transactions (aka subscriptions) for repeat usage.

Let me say that one more time so you don't miss it.

Get Dem Bitches to *PAY* You, G.

Ok, so there's only one problem with this.  It's called the Penny Gap.

Surprise, surprise... most people don't like to pay you squat unless they have no other choice.  And aside from the user's disinclination to pull out their wallet, there's also the problem of wallet friction itself -- payment conversion is shitty for many reasons other than just price.  Mainly it's because we can't remember our password.  I'll repeat that about a million times in this post so you don't forget.

WE. CAN'T. REMEMBER. PASSWORDS.

This is incredibly important, and i'll explain why in just a little bit... but now, let's talk a brief walk down Memory Lane past my old workplace, PayPal.

Password Friction: Where's the Login K-Y Jelly?

Here's one of the not-so-flattering secrets of the PayPal Mafia you've probably never heard: The far-and-away #1 customer service problem -- and cost -- at PayPal was something called "forgotten password recovery".  That's a nice way to say that people can't remember their fucking password. 

It's the biggest goddamn problem on the Internet, but at PayPal we made it even worse by tying a payment instrument to the process, and then locking out the payment instrument if they couldn't remember their password. What a Brilliant idea!  Let's see.... why don't we fuck over all of our n00b, first-use customers by forcing them to create an account they have no significant motivation to maintain yet, and then hope they don't give us a fake email address or fail to remember that password the next time they drop by... which might be 1, 3 or 6 months later.  Bingo, way to create the biggest HateStorm in Internet History: make it super simple for people to make their payment method unusable by simply forgetting their password.  Oh and i forgot to tell you we occasionally froze their account so they couldn't get access to their money.  That was a real winner too.

PayPal was one of the classic stories of viral growth, however in this instance we also experienced viral growth in customer service: at one point more than 2 in 3 employees worked in customer service.  And i'm guessing somewhere between 10-20% of first-time customers never used the service again, primarily because they forgot their password.

Look, no online service is perfect and there are often good reasons why account recovery shouldn't be too easy -- sometimes it's not YOU who wants to get access.  But Password Friction at PayPal led to an unfortunate series of events which caused some signicant percentage of our users to HATE us with a PASSION that is usually reserved for politicians and lawyers.  Since i was often on the front-lines running our PayPal Developer Network, i got to hear first-hand from Merchants and Developers about how this password friction caused problems with payment, and with user frustration.  I got to know the folks in customer service pretty well, and i used to do my best to resolve some of our users pain.

So why am i bringing up all this bullshit now?

Well because as we transition to a Startup Ecosystem driven by direct payment & subscription business models, i want to make it clear how IMPORTANT it is to make sure users don't forget their passwords.  If they forget their password, and/or can't recover it, then guess what MoFo -- YOU DON'T GET PAID.

Which means you don't get Laid, you don't get Acquired, and you sure as friggin' hell don't get to Go IPO.

So listen up & i'll share a little secret with you -- there is one very simple way to avoid forgotten passwords.  Basically, it's this:

Make a Frequent-Use Product.

That's it, you say? 

Yeah, that's it Sherlock.  Make a brain-dead simple, frequent-use product.  If users login a lot, then they don't forget their password.

Now think about that for a second...what services have users login a lot?
1) Social Networks
2) Email & IM
3) Games, Music, & Entertainment sites

Which leads me to my 3rd & final observation.

ASSERTION #3: In 2015 the default login & payment method(s) on the web will be Facebook Connect, Google Gmail, or Apple iTunes.

Now i'm not suggesting PayPal and Amazon are going to disappear overnight -- both probably have hundreds of millions of users (well, at least double-digit million *active* users anyway).  And in fact, they will likely still have dominant positions in the market.  But i will say this: if they rely *purely* on purchase behavior, they are fighting a losing battle against other services with more frequent usage, whose users will be more likely to remember their passwords.  Like a Darwinian evolutionary experiment, only the fittest passwords survive -- and in this case, the fittest passwords will be the ones used most often.  That is, the ones we use for core services like email, IM, games, music, videos.  And guess what?  Most of those services happen on social networks like Facebook, which currently has over 400M users and is growing like crazy internationally.

Well at this point i hope you've pieced it all together.  The key to success -- one might even say DOMINANCE -- in payment systems is to begin with the foundation of frequent-use products, so that users won't forget their passwords.  Whether intentional or not, Facebook has played this game to perfection.  Not too far behind is Apple with iTunes, iPhone, and other related frequent-use media & entertainment products, and an App Store that people use regularly.  And even Google has a shot here, with both Gmail and YouTube as two very large, frequent-use products, along with the upcoming Android platform.  Twitter is probably a dark-horse here, but if user #'s continue to improve they could also have a shot. And i'd also keep an eye on Skype too, which still has a lot of frequent users and value.

Bringing up the rear pathetically here are Yahoo, Microsoft, and AOL.  All 3 of these services have hundreds of millions of users (via email & IM alone, not to mention other services), and yet they haven't figured it out.  Yahoo had previously developed a payment product called PayDirect, but shut it down in 2004.  FAIL.  Microsoft had the right vision with HailStorm, but their UX was absolutely friggin' terrible (see Password Friction again), and they didn't stick with it.  AOL similarly has been shedding users for a decade, and never realized how valuable their original email user base could be.  It's unbelievable to me none of these Internet Giants has figured out what is going on.  They have neither acquired nor merged in a payment service (Amazon, eBay) nor have they acquired a large social network.  Unless MSFT develops Xbox into a widespread payment system, or acquires eBay (for PayPal), Amazon, or Facebook i just don't see them climbing back into the ring.  All of those deals would be very difficult and unlikely, even for MSFT.

So that's it folks, i'm spent.  This has been a complete ramble and i don't have time to edit this shit, so i'm leaving it as it is.  Sorry for all the swearing and uneven pace, but hopefully some of you will take away something useful.

Startups & VCs: Learn How to Design, Market, & Eat Your Own Consumer Internet Dogfood

Haven't really gotten on a rant in awhile... guess i've been doing a lot of travel lately, but now that i'm back in California for awhile, there's something i've been meaning to bring up that bothers me.  It's kind of a dirty little secret of the startup industry, but there are very few good product, design, and marketing people in tech.  And hardly any of them that are good seem to make it into the venture capital profession.

(case in point: how come there are no graphic designer VCs?)

Now i say this knowing full well that i'm certainly not a genius on any of the items above.  Anyone who has ever read my blog knows what a god-awful mess of turd droppings it is visually, and my font selection and layout are so bad that only a mother could love my pictures & posts. That said, i've spent at least 10-15 years doing coding, database dev & admin, basic front-end visual development (ages 15-30), and another 10-12 doing technology & consumer marketing (age 30-42), mostly using email, blog, search, & social strategies. Throughout both, i spent another 10-15 years managing projects, products, & teams, some of which might be called product management. I don't claim any formal visual design training, but i've done my fair share of mockups and learned the hard way what kind of UX doesn't work.

None of this means anything more than perhaps i'm competent in a few operational areas related to consumer internet startups, or at the very least hopefully i'm aware of & acknowledge my limitations.

However, over the past 5 years i've consulted with and/or invested in about ~50 startups. I've gotten to know a lot of entrepreneurs, and a fair amount of the venture capital and angel investors who are backing these companies, most of which are consumer internet startups.  And guess what? Probably more than half of the startups, and more than 90% of the investors have no goddamn clue what the hell they are doing re: user experience and online marketing. 

Let me say that again.

More than half of all startups, and easily 9 out of 10 investors HAVE NO F**KING CLUE regarding 1) user experience or 2) internet marketing.

Now many of you might say: aw c'mon dave, you're overstating that a bit don't you think? there are a lot of startups out there with a ton of engineering talent... and design & marketing aren't THAT important, are they?  And seriously: investors don't have to be experts in every field, they just have to know how to assess talent & manage money... i mean, you don't expect every football coach to be an ex-football player, right?

Well, actually yes i do.

Or at least, i expect them to be dedicated, lifelong students of their profession.

And to be honest, design and marketing aren't just EQUALLY important as engineering... designers, product managers & [technical, analytical] marketers are usually WAY MORE IMPORTANT than coders. (believe me, i say this with a lot of humility, since my primary area of academic training was software development & applied mathematics & engineering... we just ain't all that.)

What's become appallingly obvious to me, is that in the HEART of Silicon Valley, amongst the ELITE of the elite, we are mind-bottlingly [sic] STUPID about how we build startups... about how we staff startup teams... and about how we structure and select the professionals in the investor community who fund consumer internet startups.

Honestly folks:

we are SHAMANs.

     we are RAIN-dancers.

            we are damn wretched BLOOD-letters.

We are friggin' BF Skinner's pigeons, and we should be ashamed.

... so let's dig into this a bit more, shall we?

---

* Assertion #1:

Addictive User Experience (aka Design) & Scalable Distribution Methods (aka Marketing) are the most critical for success in consumer internet startups, not pure Engineering talent.

This seems counter-intuitive, right? 

We have this image of space-age whiz kids who are the stuff of legend for most technology startups -- The Woz, Bill Gates, Bill Joy, all those programmer types who could disassemble and re-assemble a transistor radio, a toaster oven, or a mainframe computer, and who grew up writing symphonies of code and wondrous applications before they even lost their virginity.  Well i was one of those... or at least i aspired to be. I got paid for writing code when i was only 15, but i was still only a 2nd-class geek compared to the true code jockeys who were writing programs before they even went to grade school.  Gates, Woz, Joy, Levchin, Zuck -- these guys were STUDs.  they were god-like, and for their businesses -- building computers or advanced software / OS -- that kind of horsepower MATTERS. 

And that kind of makes sense when you're building hard drives, or PC motherboards, or consumer electronic devices that require serious engineering talent... big-code cojones. Same perhaps for Google, or PayPal, or Facebook, or Mozilla.  If you're building search engines or web browsers or fraud systems or serious CAD software or the movies that Pixar puts together.

But seriously, do you need that much geek when designing most basic input-output forms for consumer internet software?  How much tech does it take to collect data & present data, when so much of the underlying infrastructure has been built into the OS & browser platform?   We stand on the shoulders of these giants, but do we actually require them in every startup?  well, it certainly doesn't hurt to have code jedis at the helm of your starship, but there are other areas that deserve at least equal attention... if you're building consumer internet sites & services.

Because while it's actually pretty easy to write a web 2.0 friendly front-end app or website these days, it's still MOTHERF**KING difficult to create visually-appealing interfaces, and beyond that to design them in ways that are compelling, engaging, drive calls-to-action, and are MEASURABLY beneficial to getting more customers using your products. figuring out game mechanics and activation, designing reinforcement schedules, visual imagery, copy writing, and landing page tests -- all of this is not trivial, and only recently are there starting to be good resources for learning how to do it well.

And if -- IF! -- you cross that hurtling Engineering chasm of Minimum Viable Product, and get to the promised land of appealing, useful Design, then you still have to chase the scalable, predictable, profitable channels of customer acquisition... otherwise known as MARKETING. and these days, most marketing isn't traditional PR & product placement, it's actually a very technically-intensive discipline filled with SEO, SEM, Social Platforms, email, widgets, social media, viral marketing, blogging, video, user-generated content, etc, etc, etc.  it's a traditional marketing person's worst nightmare... tens if not hundreds of potential marketing channels & campaigns with unknown costs, techniques, and payoff. 

Yet, these days marketing has become very MEASURABLE and very integrated with user experience & product development ... and for folks who know what they are doing, they can build amazing services with awesome native product marketing features that cost little or nothing to drive massive adoption.

In summary: i suggest to you that Engineering for consumer internet startups need only be competent, and that the real challenge is in finding designers & product managers who can build an awesome product experience, and marketers who can figure out effective scalable, integrated distribution strategies (whether organic or paid, whether technical or creative).

---

* Assertion #2:

If investors don't have operational backgrounds in design, development, or marketing from proven consumer internet companies, you probably don't want their money
(or it better be the best damn termsheet on the table)

this one is a bit more controversial than the earlier assertion. and i'm probably pissing off most of the other VCs and angel investors in the valley by saying so, except that i'm not really that worried because most of the folks i do deals with DO have backgrounds in these areas.

now if you already have money from clueless investors, or you know that you've got a good clean termsheet from someone who is just offering you a check to get rolling, maybe this isn't that big a a deal. but honestly, if you're taking money from investors, why not try and get the best experience you can along with the 20-40% equity you're giving up?  why not find people who actually have a shred of intelligence about consumer products and relevant skills, when you're going to be sitting in board meetings with them every month for the next 3-5 years of your godforsaken sleepless, work-like-a-dog excuse for a life listening to their mindless opinionated VC bullshit when they have no real clue? 

do you REALLY want to be taking product and marketing advice from someone who has spent most of their life without ever having designed a web page, coded a simple program, written a blog post or email, or hell even have a f**king facebook or twitter account they know how to use with any amount of intelligence whatsoever?

When you do background research on your investors, see if you can find them online.  Do they have recognizable web presence?  do they blog, do they tweet?  do they have a profile on LinkedIn, Facebook, Flickr, or YouTube?  do they rank first for their own name?  do they appear to have experience in the internet industry, or do they just have an MBA some big-name school, and no relevant operating roles?

Seriously, life is too short.  Your startup too important.  And your chances at the next Google, PayPal, or Mint are already tough enough. 

Hire people smarter than you. Find a decent designer who understands human psychology & sexuality, game mechanics, SEO, and conversion analytics.  Find someone in marketing who understands how to send an email, write a blog post, use search engines, social platforms, social media, and has done landing page A/B tests. Find investors who have a clue about the products and services they invest in, who use the products, and maybe even write/speak about them frequently.  Find people as advisors, mentors, and investors, who have the same operational experience you'd hope to hire into your startup.

If we all take this to heart, we might just build a few more useful consumer internet products.

SlideShare launches AdShare, LeadShare: Performance-based social media marketing is *here*.

Over the past 3 years i've been (in order) a user, fan, advisor, and investor in SlideShare.  I was first introduced to the product via a TechCrunch blog post, and i've been hooked ever since. 

Since October 2006 i've posted more than 60 presentations on SlideShare, had over 300,000 views and over 10,000 file downloads, embedded my presentations in numerous blog posts, and used the product for hundreds of talks and presentations at speaking events & conferences.  it's one of the single most useful web services for business i've come across, and because of that i sought out the founders several years back, offered to help them as an advisor, and subsequently became an angel investor in 2007.  In addition, Rashmi & Jon are close friends & some of my favorite people to hang out with :)

However, up until now SlideShare wasn't a service i could use to make money with directly.  While the website has grown from ~5M to over 20M users in the past year, and generates an incredible amount of traffic & visibility for my talks and presentations, i hadn't really thought about how i could use it to help my business other than via word of mouth.

This morning, that all changed.

SlideShare just released SlideShare for Business, & launched new services called AdShare & LeadShare for driving traffic & leads.

I am not exaggerating when i say these products have the potential to change business marketing as we know it, and are possibly the most notable advertising innovation since Google launched Adwords and AdSense.  They make social media marketing measurable & performance-based.

Let me say that again.

SlideShare has just released the most significant business-focused advertising and marketing technology innovation since Google launched keyword-based text advertising in 2001.

Up until now, there hasn't been a performance-driven way for people to drive on-demand traffic & leads using social media marketing for business purposes.  Now SlideShare makes it easy to use business presentations and related social media content to drive traffic (with AdShare), and collect customer leads (with LeadShare) using targeted, measurable, pay-for-performance methods.

Making social media marketing measurable & performance-based is no small thing.  This marks a dramatic shift in how to use professional presentation content to drive meaningful, predictable customer acquisition for their business.  Anyone can now upload their business presentations, generate targeted traffic, and start collecting qualified leads for their business.  That's nothing short of groundbreaking.

I encourage you to check out SlideShare for Business and give it a test drive.

Why Use AdShare

View more documents from Rashmi Sinha.

Why Use LeadShare

View more documents from Rashmi Sinha.

Startup Metrics for Pirates: FOWA/Miami (Feb 2009)

so i'm just re-arranging deck chairs here, i know... but there's at least 1 or 2 new slides. and a lot more funky colors, for those of you who enjoy my kidnapper-ransomnote fonts & unique style of raping the viewer's attention.  Also moved the embed of the original Startup Metrics for Pirates video (from Ignite Seattle / Summer 2007) after slide 23.

With no further ado, my talk from the Future of Web Apps (Miami, Feb 2009):

Startup Metrics for Pirates (FOWA/Miami, Feb 2009)

View more presentations from Dave McClure. (tags: revenue referral)

LinkedIn People Search: "It's People Alerts (via email), Stupid"

LinkedIn People Search - Email Alerts
Originally uploaded by davemc500hats

LinkedIn buried the lede on the recent launch of their new LinkedIn People Search feature set.

The new feature they probably should have highlighted more clearly is People Search Alerts via Email.

You can now save up to 3 searches for common keywords, job titles, company names, or other topic-specific searches, and get them emailed to your inbox on a weekly or monthly basis.

I do several of these types of searches via Google alerts for company- & product-specific searches on news & blogs. Now you can also do them for people as well on LinkedIn.

Yotify also allows you to do saved search notifications via email for products for sale & other classified listings.  Simply Hired does alerts for jobs.  Spock is another service that does comprehensive people search. (disclosure: i'm an investor in Simply Hired, and an advisor to Spock.  i'm a friend of the founder of Yotify, Ron Bouganim.  and i'm an informal advisor to LinkedIn, but not on this topic)

i haven't done a thorough review of these types of search & notification services, but there are many of them.  That said, their value is directly correlated to the quality of their search (crappy search with notification isn't that useful... however great, targeted search with notification is quite useful).

Some new & old startup blogs & presos i'm in love with

in no particular order, here are links to a few new books, blogs, & presentations i'm falling in love with lately (plus a few not-so-new-but-awesome old ones too).

• Startup Lessons Learned (blog, Eric Ries)
• Customer Development Methodology (preso, Steve Blank)
• Four Steps to the Epiphany (book, Steve Blank)
• LaserLike (blog, Mike Speiser)
• Revenue Metrics (preso, Andrew Chen)
• Futuristic Play (blog, Andrew Chen)
• Startup-Marketing (blog, Sean Ellis)
• Sit, Stay, Click!  Making Users Beg for More (preso, Ted Rheingold)
• Zappo's: Customer Service & Company Culture (video, Tony Hsieh)
• Designing & Optimizing the DNA of a Killer App (preso+sound, Dan Olsen)
• Putting the Fun in Functional (preso, Amy Jo Kim)
• Copywriting Tips for Online Marketing Success (blog, Brian Clark aka CopyBlogger)
• ProBlogger (blog, Darren Rowse)
• Reality Check (book, Guy Kawasaki)
• Groundswell (book, Charlene Li)
• The Altimeter (blog, Charlene Li)
• Almost as Good as Chocolate (Shripriya Mahesh)
• KISSmetrics (blog, KISSmetrics.com)
• Startup Founder Evolution (blog, Tony Wright)

apologies to all the amazing folks i'm forgetting about... i'm sure you are many and wonderful, and i'll remember just as soon as hit publish.  will try to add some more if i can.

Successful Developer Platforms Have 3 Things: Features, Users, Money.

[note: this post was originally a comment on TechCrunch post summarizing Max Levchin's panel on web platforms from the Web 2.0 Summit, with Facebook, MySpace, Google, & Microsoft.  i decided since my comment went past 3 paragraphs, i should probably expand it on my own blog...]

this is gross over-generalization/simplification, but platforms are successful if/when they have:
1) code libraries / feature abstraction -- so developers don't have to build everything
2) customer distribution -- so developers don't have to market everything
3) monetization -- so developers don't have to implement/collect payment

it's arguable there are many other platform issues & requirements -- security, scalability, standards, metrics, user authentication & support, etc.  however these 3 primary aspects are what make platforms tick.  sometimes platforms can be successful if only 1 or 2 of the items above are working, altho if you want a dominant platform it's helpful to have all 3.

Here are my incredibly unscientific and from-the-gut "Platform Bookmaker Odds" on Dominant Future Platforms:

Facebook (3:1) has arguably been the platform leader in the past year or so, at least in terms of innovation & inspiration.  They've done an excellent job with the first 2 points, but largely failed in terms of monetization to date.  And because their distribution incentives were creating a negative user experience backlash, they decided to dial back distribution & revise User Profiles in ways that dramatically limited the # of platform app winners (but there are still winners).  Also, until FB has payments in place, and has setup aligned monetization with their developer community, they are likely to be reluctant to really open the floodgates on distribution.  If/when they have payments rolled out, expect them to spin up distribution again, probably through 3rd-party news feed stories.  And people still underestimate how much power they can bring to bear if Facebook Connect starts working.  People were too hyped up on Facebook when they launched (maybe me too), but now they're too pessimistic.  Facebook will start kicking ass once they get Connect & Payments figured out... tho might be mid-2009 before that starts happening.  But the DNA of this company is all about Platforms & Developers... i'd be very surprised if they don't do very well over the long-run.

Microsoft (5:1) altho the platform Godfather historically, is far from having a functional web platform, primarily because they have not figured out a web distribution story for 3rd parties (nor a monetization story either, tho that's fixable quickly via acquisition or partnership).  while they have tremendous reach via Windows and the Web, they have not translated that into consumer internet platform distribution opportunities.  they also do not have a payments story (good reason to buy eBay/PayPal or Amazon, but don't hold your breath).  Still, given Microsoft's historical dominance & belief in platforms & developers, i'd expect them to get there eventually... but it may take years.  expect them to be a player, but i'd guess it may take a lot of acquisitions & luck for them to maintain the app dominance they had in the 90's.  They'll be around, but they're not leading the way right now. (update: Ballmer sez MSFT is planning to copy Apple's app store... not a bad idea.  again, like the GOOG, MSFT can KILL if they simply enable 3rd-party access to their amazing distribution & reach).

Google (2:1) certainly has the cojones & brainpower to do platforms, and they kick ass on features, but up until last year they were pretty piss-poor at developer evangelism.  However, you could argue Google's biggest "platform" is really just search (& indirectly SEO/SEM, and also analytics).   while they are a juggernaut in search, and their potential distribution is phenomenal, their initial platform efforts left a good bit to be desired.  But like Microsoft, Google certainly understands the benefits of a developer / platform strategy and there is good reason to be optimistic for the future.  OpenSocial has a long way to go, AppEngine is still fairly new, but Google is now headed in the right direction... and if Google ever *does* open up properties like YouTube and Gmail and the main search platform to developers, the sky's the limit.  Google has no lack of distribution, but again like MSFT it's mostly direct, not on behalf of 3rd-party developers.  Google also has Checkout for monetization when they get their shit together.  Expect them to put a lot of horsepower behind catching up to Facebook's surprising early platform leadership, and steamrolling ahead to a dominant position.  They're playing a bit of catchup, but they are certainly the odds-on favorite horse to win the long-term race.

MySpace (7:1) does seem to be following cautiously in Facebook's footsteps, and given their existing footprint in music & entertainment (not to mention their already significant spam issues with user communication), it seems appropriate for them to move slowly.  But they have shown progress over time, and if/when they implement payments they will likely attract a good deal of developer attention (and in fact, since FB dialed down distribution, MySpace has already drawn some of that audience in).  While i expect MySpace to primarily focus on their successful entertainment verticals in Music, Movies, Television, and perhaps an emerging presence in Games, they will likely do quite well due to their excellent distribution & monetization opportunities in those areas.  While everyone thinks Facebook is pulling ahead of MySpace, in fact MySpace is a much safer vertical play in entertainment.  They may only be successful in selected areas, but they will likely do quite well there.

not present on Max's panel / not mentioned in TC article or my analysis above: Amazon (2:1), Apple (3:1), SalesForce (4:1), YouTube (4:1), Yahoo (4:1), Mozilla (7:1), LinkedIn (10:1), Wordpress / Automattic (10:1), Twitter (10:1), FriendFeed (12:1), multiple other blogging platforms / social networks (15:1) Typepad, Blogger, Hi5, Bebo, Friendster, Orkut, other international players.  I'm sure i'm forgetting a lot here, but this piece wasn't meant to be completely comprehensive.

A few brief thumbnails on the other main contenders:

Amazon is the defacto platform leader in 3rd-party infrastructure.  They have yet to tie this back into the consumer Amazon platform in interesting ways -- largely AWS is completely disparate from Amazon.com -- but if they ever do, then watch out.  Amazon has been the quiet leader in personalization & e-commerce for the past 10 years.  If they decide to platform-ize that expertise, they will absolutely continue to be a very valuable company.  Only question is -- why in the hell haven't they been bought out by Google or Microsoft ?!?  They'd be SO much more valuable in either of those 2 larger players empires.  Answer?  Jeff Bezos isn't done having fun yet.  If he ever tires of that job, and decides to put the company up on the block, expect the mother of all battles by MSFT & GOOG to acquire that jewel.

Apple is kicking ass, but remains to be seen if they can parlay initial success in music & mobile into larger app platform success.  They don't have a terrific platform history, but the last 5-7 years they've done a great job on distribution, and recently on features & monetization.  Assuming they don't decide to screw the developer community into oblivion at some point -- always possible with a mercenary like Jobs -- then Apple will likely remain a force in consumer communication & entertainment platforms.

I'm not an expert on SalesForce, but they seem to be the leading player for hosted business platforms.  I'll refrain from much analysis since i don't follow them closely.  Yahoo continues to choke on both feet planted firmly next to its own tonsils, but they still do some great work on platforms & developer communities.  If only they can show a little business leadership & stability, they'll be around.  YouTube is a surprise here, and i list them separate from Google because they really are such a separately dominant player in video.  And like Facebook, the DNA of YouTube is all about developers.  They haven't really needed to do much since they are so far ahead of everyone else (in video), but i'm bullish they will figure out the monetization and as they do make it available to all of their developer community.  Mozilla has platform potential, if only due to an amazing ability to grab browser market share from MSFT.  LinkedIn has been a relatively plodding platform, but due to their audience specialization & demographics, they will be highly attractive to developers if they ever decide to open up more significantly (& revenue potential there is off the charts).  Of all the blogging platforms, Wordpress / Automattic is the most exciting & interesting... more to be revealed there, particularly if they continue on their recent micro-acquisition strategy.  Twitter is rocking these days, and i expect Ev & Biz & team to roll out some cool platforms stuff in 2009.  FriendFeed has so much potential it's not even funny, but i'd be surprised if they don't get swallowed back up by the GOOG before long.  Several other social networks have also embraced platform strategies, and may have modest success within selected geographies & demographics.

my apologies for any significant oversights or inaccuracies on the above.  and the "odds-on" stuff is really more for entertainment than serious discussion -- most all of these companies will be successful to some extent, tho they have widely-varying attention to platform issues. i'll try to make a few updates to this piece as my more-informed readers upbraid & correct me in the comments.

for more discussion of Platform dynamics, see Max Levchin's excellent masterpiece here (max: if you're reading this, please write more often!) : Developer Incentives in Social Networking Platforms

Andrew Chen also has many terrific articles on platform dynamics too numerous too count... i simply recommend you read as many articles on his blog as you can: http://andrewchenblog.com 

for praise / criticism of Facebook platform, and a few others on business models for social networks, integrating email & e-commerce platforms with social networking, etc see my previous posts here:

• Facebook's Problem isn't Privacy, It's Monetization
• Web 3.0 isn't the Semantic Web, it's Hailstorm 2.0
• Business Models for Social Networks: Monetizing Social Capital & the Long Tail of Cool
• Memo to GOOG, MSFT, YHOO, AOL: How to Turn 500M email logins into Facebook Platform (& a crapload of revenue)

Resumes are for *Shit*. The 4 Things You Really Need: LinkedIn, Blog, Keywords, Social Media.

Robert just penned a pretty good post on how to tune up your resume for the "economic slowdown".  He gets it mostly right (write?) -- do your best to stand out, write a regular blog -- however, i think he's a bit long-winded on his recommendations and overlooks some fundamentals (which he actually does practice, but doesn't mention so much).

So as i commented on Guy Kawasaki's blog almost 2 years ago, i'll summarize again why Resumes are for Shit, and why all you need are 4 basic things to get a kick-ass job (or whatever u want really -- still have to write that post later on why money-sex-power-drugs-guns are pretty much commutable):

1) get a LinkedIn profile, and pimp it out -- HARD. 

a simple LinkedIn profile is nice, but it's not what i'm talking about.  you better work, sister (sashay, chante!) -- get your connections into LinkedIn, fill out a work history with different positions you've held & expertise gained, get recommendations from people & partners who you worked with (not just your boss), answer questions on topics that matter in your line of work, etc.  most importantly, reference companies, products, skills, and other keywords that are important to you & others (see below).

note that other social networking profiles don't substitute for LinkedIn.  there was a time when i thought Facebook might eventually subsume LinkedIn, but i was clearly wr... wr... WRONG (ok there, i said it).  both LinkedIn & Facebook -- and for that matter, MySpace as well -- have broadly established & well-entrenched userbase that likely prefer one of those 3 primary SNS platforms.  but still most people who call themselves "professionals" should maintain a LinkedIn profile, even if it's not their primary hangout.  LinkedIn is *THE* place that most recruiting (or any) professionals use for people search, and LinkedIn search results generally rank at the top for many Google name searches.  note: if you have a common name like John Smith, even more reason to create popular content attached to your name to distinguish you from other John Smith's who rank for basketball, accounting, or other types of specialized content.

fyi, Guy was initially a bit of a Luddite re: my suggestion to use LinkedIn + Blog as alternatives to a traditional resume, however he came around later and penned one of the single most useful posts about LinkedIn i've ever read (tip: an old friend may have helped change his mind on that one).  if you haven't checked it out, i strongly encourage you to do so.  Guy doesn't really need LinkedIn, but his suggestions are top notch.

2) write a regular blog, and 3) ABSOLUTELY DOMINATE selected keywords (the ones that matter to you or others). 

surprisingly, this doesn't take as much work as you'd think. 

if you write regularly, passionately, & intelligently about topics people care about (ie: search for), use appropriate keywords in headlines & titles, you'll start to rank for that content rather quickly.  in fact, i've accidentally blogged about topics / keywords i don't really care about, but ended up ranking for anyway.

let me explain.

NEWSFLASH: there are a lot of people out there who blog.  a few of these crazy people blog regularly.  a few of those few know how to use keywords in headlines, and how link text & basic SEO fundamentals work.  a very small further few write well and are fun & interesting to read.  however, there are very very VERY few people who blog regularly, interestingly, & specifically with respect to the keywords they care about.  if you are one of these people, you can rather easily become king of your (perhaps small but focused) hill, by using regular & interesting blog posts that score well and rank for search keywords of note.  it also helps if you include or embed photos or other media (see #4).

you can of course use other search-friendly sites & services as distribution for your content & keywords, but blogs (& blog headlines) are pretty well optimized for search so it's probably the easiest place to start... tho twitter & friendfeed & a few other notable services work well to amplify & distribute original signal from your blog or other social platforms.  i'll describe some of these below.

4) create notable online social media (video, pictures, presentations, etc) relevant to your line of work and link [to] them / embed them on your blog, your LinkedIn profile, and other online sites.

this one is actually overlooked by a number of very thoughtful (but not very colorful) bloggers.  i once wrote a post about Facebook licensing their platform to Bebo in response to Google launching OpenSocial.  the copy was pretty much empty blather except for the somewhat insane graphic at right that i created using powerpoint, and then uploaded to Flickr (and also to SlideShare), then embedded in the post.  i probably spent about 5 minutes writing the post, but i killed most of an afternoon (3-4 hours) putting together one silly image to satisfy my own freakish psychotic social network addiction.  the photo later got picked up by several other bloggers, and when i checked just now the Flickr photo had over  6000 views.  the SlideShare presentation (just one slide) has about 5600 views.  and the photo comes up on the first page of google image search results for the term "social graph".  whaddya know: my crazy-ass graphic is DOMINATING the social graph term!  and i bet my post gets more awareness than any ten other high-and-mighty bloggers who wrote some in-depth intellectual analysis (yeah i know i do that shit too).

the simple thing is --

we are visual creatures. 

we dream in color. 

people love images, and they watch a lot more TV than they read.  you've heard "a picture says a thousand words"?  well as far as blogs are concerned, it's damn well true.  i'd even go so far as to say there is such a thing as keyword visual arbitrage -- essentially, that there are high-volume search terms with low-volume associated images or video, that you can draft off and use to discover & attract new audience. this may seem like link-baiting, but actually it's just satisfying market demand for visual imagery around key terms that people have expressed an interest in.

in fact, i'm often criticized by several folks who say that my trademark "ransom note kidnapper" font style choices -- bold, underlined, enlarged, or many-colored fonts -- clearly let people know i am both childish and insane.  and some folks may be right that it is incredibly annoying and odd, but it is a visual brand choice i've made (whether consciously or not ;)  whatever your perspective, i've developed my own special (olympics?) audience.  the choice of using "AARRR!" as an acronym for my "Startup Metrics for Pirates" is pretty much the auditory complement to the visual point above.

if you don't care to be quite as lunatic as i, you can simply use embed code and links to bring your popular social media from other sites & services into your blog or social profiles.  i'm particularly fond of Flickr (graphics), YouTube (video), and SlideShare (powerpoint), as these services are also destination sites in themselves, and drive their own unique traffic to content you distribute on those sites. many people who do embed rich content also overlook this fact -- that the same content redistributed on multiple platforms can draw incremental users & attention, and that some of these platforms may be better at driving relevant traffic than your own blog or text-based sites/services. 

in short, the rich media you associate with your blog and certain keywords also DEFINE WHO YOU ARE and WHAT YOU MAKE / USE / ENJOY.  if you can cleverly associate social media -- literally, media to share with other people -- with your persona, and with specific tags & keywords, then you can merge these things into one. 

in summary: you become a notable social object by associating rich media & keyword text with the person you are on blogs and social network profiles.

in closing, i include below examples of the graphic, video, and powerpoint content associated with "Startup Metrics" that i typically embed on my blog & social profiles:

Startup Metrics for Pirates: AARRR! (Startonomics SF 2008)

View SlideShare presentation or Upload your own. (tags: dealmaker media revenue)

Startonomics SF 2008: Yeah, We Rocked Your Face.

Summary of Startonomics SF 2008:

We Came, We Measured, We Conquered. 

  [mike drop to tha floor...]

all presentations & videos available via SlideShare and UStream, also on the Startonomics Blog.  additional coverage on CNet / Webware and Mashable, and other smart blogs. presos below via new SlideShare presentation pack widget:

| Get your Presentation Pack

look for us to hit the LA area sometime in January; other locations in 2009.  to hear about future Startonomics events, follow the Startonomics twitter acct @ STNX. much props to our speakers, sponsors, & supporters... and especially to Debbie Landa & the team at Dealmaker Media for kicking so much hiney.

STARTonomics is NEXT Thurs 10/2 in SF (seats going fast, register now b4 we sell out...)

Hope you folks are registered for STARTonomics next Thursday 10/2 in SF... if not, hurry up & register now, FOOL!  we've had a rush of signups in the last few days, so get in now before we sell out.

here's a preview of our speakers & sessions for next week:

Startonomics: Simple, Actionable Metrics for Startup Success

View SlideShare presentation or Upload your own. (tags: dealmaker.media 500.hats)

Time	Session	Who
9:00 - 9:30	Welcome to Startonomics & Startup Metrics for Pirates (AARRR!) Overview of conference agenda + Intro to Startonomics: how to create simple, actionable metrics to help startups make better decisions in product development & marketing.	Dave McClure 500 Hats LLC
9:30 - 10:00	Product Development 101: Designing & Optimizing the DNA of a Killer App What does it take to plan, research, and develop a great web 2.0 application?  Learn tips & best practices for setting the right process, goals, and metrics for your startup.	Dan Olsen YourVersion
10:00 - 10:30	Scalability for Startups: How to Grow Up without Blowing Up How do startups balance performance and scalability vs. fast iteration and cost efficiency? Learn how to scale your startup without blowing up, or overdoing it.	Frank Mashraqi Give Real
10:30 - 11:00	Break
11:00 - 11:30	Putting the Fun in Functional: New Trends in Applying Game Design to Web 2.0 Startups Find out how traditional game design mechanics can be used to make a website more compelling & engaging.	Amy Jo Kim Shuffle Brain
11:30 - 12:00	Marrying Design & Development: a Match made in Heaven, not Hell Learn about the basic fundamentals of web design, and find out how developers and designers can work together to create great websites and applications.	Jeff Veen Small Batch, Inc. Erika Hall Mule Design Studio
12:00 - 12:30	Sit! Stay! Click!  How to Create a Website that Makes Users Beg for More The best startups engage their users as fans for life.  Find out how to get users to fall in love with your website, and keep them coming back for more.	Ted Rheingold Dogster, Inc.
12:30 - 1:30	Lunch
1:30 - 2:00	Creating & Implementing a Web 2.0 Marketing Plan How to design and implement an online marketing plan for acquiring users from multiple marketing channels, how to prioritize & mix channels based on stage of startup growth.	Sean Ellis Startup Marketing
2:00 - 2:30	Searching for Users: SEO as an Engine for Customer Acquisition Learn SEO strategies and techniques for acquiring startup users & customers from search engines, links, & blogging.	Stephan Spencer Netconcepts
2:30 - 3:00	Social Media & Word-of-Mouth Marketing for Startups Digg, Delicious, Twitter.  Word of mouth has never been sexier.  Learn how to use social media & social bookmarking to spread the word to your mother.	Muhammad Saleem ACS
3:00 - 3:30	Arch Viral: Creating Social Apps for Social Platforms Facebook & MySpace are the largest social networks on the planet.  Find out how to create a social application for these platforms that's so viral it's an epidemic.	Lance Tokuda RockYou
3:30 - 4:00	Break
4:00 - 4:30	Revenue: The Internet Wants to Be Free, but You Need to Get Paid Learn how to generate revenue using a variety of business models & strategies including advertising, digital goods, subscriptions, lead generation, & e-commerce.	Andrew Chen Futuristic Play
4:30 - 5:00	Customer Service is the New Marketing Want more customers?  No problem... just deliver great customer service.  Find out how to make satisfaction  your most valuable viral marketing campaign.	Thor Muller Get Satisfaction
5:00 - 5:30	Funding Wisdom: What I Wish I Knew Then Forget the school of hard knocks - this is your chance to hear what 3 successful startup executives learned about the funding process, including timing considerations, types of funding, term sheets and working with investors.	Saar Gur Charles River Ventures Peter Pham BillShrink Manish Chandra Kaboodle Garrett Camp StumbleUpon
6:00 - 9:00	After Party Reception hosted by MySpace.com