Advising someone not to launch a startup in any industry because that industry is broken is an oxymoron.
People should be launching a startup to disrupt that industry, not running away from it! Does social media equals ads-only revenue? Why a social app must be all about being also a media vehicle?
Ok, maybe all founders are adressing the wrong pains, are not trying to disrupt anything, just jumping on the bandwagon. And that would be a good point to make. But as I see it, the whole post is about promoting his book, not a point (the book may have a point, not the post).
If You’re Thinking of Launching a Social Media Startup, Please Don’t
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Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#22Earlier quoted context omitted.
I think if you were selling widgets online (I assume you aren't), then the story would be much different. You can't know what behavior your customer took after seeing a print ad, but I know exactly how much traffic I get from our Facebook page, and how much of that converts for us. Unfortunately since FB has started charging to promote posts, we get almost nothing from them, even though our likes grow, so we are all…
Why is this a problem with Facebook's model? It just sounds like you were priced out of Facebook network.
I'm not anti-Facebook. It's a better, more accountable, place to spend money than in a print ad. But, there was a bait and switch where they encouraged businesses to pay to connect to users, then they devalued all those connections by requiring payment for each communication.
The negative for them is that they are becoming more dependent on a smaller number of large businesses. It may work for them, but it is riskier to have a less diversified pool of customers.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#23I think this is both true and false. True for the social media startups that do not capture user intent in any meaningful way, but false for those that do.
It's very hard to make money off of people posting pictures of cats on a general forum (e.g. Reddit), but maybe not as hard to make money off of people looking specifically for pictures of cats (e.g. CHEEZburger). The latter captures user intent much more powerfully than the former, and the value to advertisers is thus much higher.
My startup (https://www.zupstream.com) is focused around making it easier to discover and organize real-world activities with your friends. We believe that targeted advertising can work in this case, since users are specifically looking for things to do, and then making plans with friends to actually do them. If someone creates an activity asking, "Anyone up for dinner tonight?", presenting an ad for local restaurants right then will be much more effective than displaying an unrelated banner ad.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#24I agree that the space is crowded. And there are other issues raising the barrier to entry: user fatigue and national/supra-national legislation (like the EU anti-cookie thing etc.) which may dampen your enthusiasm in case you thought about creating yet another social thinggy. Even on the almighty social network I can not just feel (that I could since a long time) but also see people complaining. No latter than today…
> Non-techies friends btw.
Non-techies friends FTW, but only if they're good enough friends to tell you how it is, even if it risks hurting your feelings.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#25The reason why social media is valuable as an ad platform is because it actually is more measurable and more effective than straight-up Proctor & Gamble-style brand advertising that you see in magazines and on TV every single day. It's not for everyone, and yes, some people don't get an ROI on what they do. But that's not social media's fault -- that is the advertiser's. My wife works in online marketing for women's…
I sure would love to see examples of some of her more successful Bebe or Modcloth facebook / twitter / social ads. Or hear about how many iterations it took them to to get to a successful system.
Fab.com built their initial user base almost exclusively through Facebook ads and Facebook shares. They are still one of facebook's biggest advertisers, and even use demographic and interest data from their Facebook users to determine when and where to run tv ads.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#26>>>>As I documented in the book, social media is a total loss leader for large corporations, too. They’re more or less there out of obligation I can back this up with some information. I currently work for a large corporation who has invested a ton of money into social media (facebook, twitter, instagram). Even after several years, there is a huge war being fought between "new media" types in our company and the "old…
I don't know why, but the CTO's question sounds so wrong. And my view is that you cannot get the right answers if you do not know what to ask and, especially in this case, what to measure. Intuitively, reading this question I felt like I would answer "Great, we have circulated 5000 memos, how many more widgets does that sell?" It is wrong in so many ways. Not all memos/likes are created equal (unless you make them so by ignoring them.) Not every activity is a sales/front-line activity. I do performance management for a living, and people routinely get the performance measurement part wrong in so many ways. But especially for social media I think we are still at the lowest level of performance understanding and concepts' articulation.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#27I think this is both true and false. True for the social media startups that do not capture user intent in any meaningful way, but false for those that do. It's very hard to make money off of people posting pictures of cats on a general forum (e.g. Reddit), but maybe not as hard to make money off of people looking specifically for pictures of cats (e.g. CHEEZburger). The latter captures user intent much more powerful…
Maybe I'm just boring, but I don't see the TAM being that big for something like zupstream. The people who use it must have friends in the same locale, who are free tonight, who want to do something tonight, and have the money to do something tonight.
I think the challenge with social is that you need people who have the spending power of 25-30-somethings, combined with the social lives of tweens.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#28I agree that the space is crowded. And there are other issues raising the barrier to entry: user fatigue and national/supra-national legislation (like the EU anti-cookie thing etc.) which may dampen your enthusiasm in case you thought about creating yet another social thinggy. Even on the almighty social network I can not just feel (that I could since a long time) but also see people complaining. No latter than today…
> I'd say the problem for mainstream users is that some apps are too targeted: it may be both effective (and the most cost effective way to advertize and reach your audience), it's also creepy to many users.
This was Target's realization, was it not? They were doing super-specific targeting and analytics, like sending coupons for pregnant women (to the ire of a teenage woman's dad,) and later switched to "hiding" the coupons in irrelevant coupons so the pack looked more generic.
Personally, I'd much rather receive the focused coupons. I'm not going to stop a company from learning about me unless I go paranoid, so I might as well receive insight as to what it thinks it knows.
Five minutes ago I thought that Amazon, Netflix, and Pandora simply couldn't nail my tastes, but perhaps they're in some long game of not creeping me out and knowing that I'll return _some_day_.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#29I think this is both true and false. True for the social media startups that do not capture user intent in any meaningful way, but false for those that do. It's very hard to make money off of people posting pictures of cats on a general forum (e.g. Reddit), but maybe not as hard to make money off of people looking specifically for pictures of cats (e.g. CHEEZburger). The latter captures user intent much more powerful…
Maybe I'm just boring, but I don't see the TAM being that big for something like zupstream. The people who use it must have friends in the same locale, who are free tonight, who want to do something tonight, and have the money to do something tonight. I think the challenge with social is that you need people who have the spending power of 25-30-somethings, combined with the social lives of tweens.
Definitely true if the only use case is for spontaneous activities. We're targeting the stuff that falls in-between spur of the moment activities and major planned events. These are the things that make up the bulk of most people's social lives (at least, for those of us no longer in our tweens)... things like getting a group of friends together for dinner, a movie, or whatever.
These are the activities that most people tend to fall back on email, texting, and phone calls to coordinate, which becomes a pain when more than two people are involved.
Instead of "Anyone up for dinner tonight?", imagine broadcasting to your friends "Let's do dinner this weekend". For me, there's rarely a destination determined up front. There's usually a bunch of back and forth with everyone before a place is agreed upon. It's during this period that targeted advertising could work really well, because something as simple as a "Get a free appetizer with your meal" offer could easily sway the decision towards a particular restaurant.
Re: If You’re Thinking of Launching a Social Media Startup, Please Don’t
#30People were saying this about search engines in the late 90's when the market was highly saturated. Until Google came along.