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5 Years Ago, the iPhone Changed Everything June 29, 2012

Posted by justincaldbeck in communication, culture, discovery, iphone.
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While it almost seems hard to believe, it was just five years ago today that the first iPhones were sold.  I remember the enormous amount of people lined up outside of Apple Stores eagerly waiting for their new device.  It was easy to understand the hype of the device, but what many did not predict would be the way it would shape our behaviors and give birth to an entire industry.

The iPhone itself is a game changer, few could deny that, but much like iTunes was the real power behind the iPod, the App Store has been the big game changer for our industry.

We didn’t all immediate realize the power of the App Store, in fact my partners wrote an interesting post in 2009 about how little revenue Apple was making from apps.  But today, we have seen companies emerge as App providers and other that have started as popular Apps and then expand to other platforms.  Rovio, makers of Angry Birds, Pulse*, Instagram, Uber and Foursquare are just a few examples of companies that have seen incredible success as mobile apps.

In addition, the iPhone has played a big role in reducing the friction for consumers to use products from businesses that were previously web-centric such as TaskRabbit*, LivingSocial* and GrubHub* as well as retailers like Gilt.  These companies not only built better customer engagement through the iPhone but also attracted new users who discovered the brand for the first time on a mobile device.

Despite all of these early successes, the market is still in its infancy in many ways.  While it may seem that everyone we know has an iPhone or Android device, Nielson recently reported that only about 50 percent of US consumers have a smartphone today.  As that number grows, the audience and demand for new applications and types of mobile solutions will grow too.

For my part, I feel fortunate to have the opportunity to watch the market emerge and evolve and help companies take advantage of this amazing platform.

*Lightspeed portfolio companies

If you found this post useful, follow us @lightspeedvp on Twitter.

Birthday greetings as a proxy for how communication is becoming more public 3.0 September 29, 2009

Posted by jeremyliew in communication, email, facebook, social networks, twitter.
2 comments

This is the third year that I’ve tracked my birthday greetings as they have moved from private channels to public channels, primarily facebook. As I noted previously, in 2007 and 2008;

Social networks have changed the dynamic – it isn’t enough to wish someone a happy birthday, but it is also important to be SEEN to wish someone a happy birthday. Equally, it is important to be SEEN to have a lot of people wish you a happy birthday too!

This year the shift continued but was much less pronounced, as the graph below shows:

birthday stats

It’s somewhat notable that despite the huge increase of Twitter usage there were no happy birthday tweets. The use case is off. The tweeter would be sending a birthday greeting to the wrong audience – to their followers, not to mine.

The other notable point is that there is an overall increase in the number of birthday greetings over 2007. This is consistent with the obvervation in a recent edition of the Economist’s Intelligent Life magazine, that we are all writers now:

Go back 20, 30 years and you will find all of us doing more talking than writing. We rued literacy levels and worried over whether all this phone-yakking and television-watching spelled the end of writing.

Few make that claim today. I would hazard that, with more than 200m people on Facebook and even more with home internet access, we are all writing more than we would have ten years ago. Those who would never write letters (too slow and anachronistic) or postcards (too twee) now send missives with abandon, from long thoughtful memos to brief and clever quips about evening plans. And if we subscribe to the theory that the most effective way to improve one’s writing is by practicing—by writing more, and ideally for an audience—then our writing skills must be getting better…

True, much of what is written online is quotidian, informational, ephemeral. But writing has always been so: traditional newspapers line bird-cages a day later; lab reports describe methodology in tedious detail; the founding fathers wrote what they ate for lunch. And the quality of many blogs is high, indistinguishable in eloquence and intellect from many traditionally published works.

Our new forms of writing—blogs, Facebook, Twitter—all have precedents, analogue analogues: a notebook, a postcard, a jotting on the back of an envelope. They are exceedingly accessible. That it is easier to cultivate a wide audience for tossed off thoughts has meant a superfluity of mundane musings, to be sure. But it has also generated a democracy of ideas and quite a few rising stars, whose work we might never have been exposed to were we limited to conventional publishing channels.

So thanks for the birthday wishes, and be thankful that we’re all writing more!

Birthday greetings as a proxy for how communication is becoming more public September 23, 2008

Posted by jeremyliew in communication, email, social networks.
3 comments

Last year I noted how the “performance” aspects of social networks was moving more birthday wishes from private communication channels (e.g. email) to public ones (e.g. Facebook wall posts). This year, the trend is even more pronounced if my own experience is any indication.

The number of wall posts went up dramatically. FB private messages also went up. Email as a mode of communication fell in absolute terms, and far more as a % of communications. The chart below summarizes the differences between 2007 (blue) and 2008 (purple). (Note that the free gift and Facebook gift were both attached to FB wall posts)

The proportion of “private” birthday wishes (email, FB messages, calls, cards and in person) fell from 52% to 41%. “Public” birthday wishes increased from 47% to 59%.

Social networks have changed the dynamic – it isn’t enough to wish someone a happy birthday, but it is also important to be SEEN to wish someone a happy birthday. Equally, it is important to be SEEN to have a lot of people wish you a happy birthday too!

How Kosmix employs enterprise 2.0; a guide for other startups July 22, 2008

Posted by jeremyliew in blogs, communication, email, enterprise 2.0, enterprise infrastructure, IM, management, start-up, startup, startups, wiki.
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Anand Rajaraman, co-founder of Lightspeed portfolio company Kosmix, posts about how to stop email overload and break silos using wikis, blogs, and IM.

We hit the email wall at my company Kosmix recently. When we were less than 30 people, managing by email worked reasonably well. The team was small enough that everyone knew what everyone else was doing. Frequent hallway conversations reinforced relationships. However, once we crossed the 30-person mark, we noticed problems creeping in. We started hearing complaints of email overload and too many meetings. And despite the email overload and too many meetings, people still felt that there was a communication problem and a lack of visibility across teams and projects. We were straining the limits of email as the sole communications mechanism.

We knew something had to be done. But what? Sri Subramaniam, our head of engineering, proposed a bold restructuring of our internal communications. He led an effort that resulted in us relying less on email and more on wikis, blogs, and instant messaging. Here’s how we use these technologies everyday in running our business.

* Blogs for Status Reports
* The Wiki for Persistent Information
* Instant Messaging for Spontaneous Discussions

The effects of the communication restructuring have been immediate and very visible. They include a lot less email and almost none on weekends; better communication among people; and 360 degree visibility for every member of the Kosmix team. After we instituted these changes, everyone on the team feels more productive, more knowledgeable about the company, has more spare time to spend on things outside of work.

Anand goes into detail as to how blogs, wikis and IM are used by all employees, and how this has streamlined the communications in the company. I highly recommend reading the whole thing.

Three ways that social networks are different from other forms of online communication February 4, 2008

Posted by jeremyliew in communication, email, performance, social games, social media, social networks.
9 comments

Social Networks are widely accepted to be the latest evolution of online communications, tracing a line back through instant messaging, webmail, chat rooms and bulletin boards. Now that we’ve had a little more time and perspective on how they are used, we’re starting to see a few differences between how social networks are used for online communication and previous forms of online communication. I can think of three primary differences:

Stages for Performance.

As danah boyd has noted before, the public nature of many social network communications leads to performance aspects to communication. Users are simultaneously communicating with not just the recipient, but anyone else who happens to stumble across the recipient’s profile. An example I gave in a previous post is a helpful illustration:

Suppose it’s your birthday, and I know it. If I send you an email wishing you “Happy Birthday” then you’re happy that I remembered. This communication is part of the social lubricant on which relationships are built.

But supposed that I post “Happy Birthday” to your Facebook Wall instead. Then not only do you know that I remembered, but ALL OF YOUR FRIENDS know that I remembered as well. They may find out from the feed, or by visiting your page, but they will know that I’m a good enough friend of yours that I know when is your birthday. That is the performance element of the communication.

Lighter Weight Communications

Historically, an important part of communicating with someone is having something to say. Emails are not sent blank, calls are not spent silently. But as the quantity of one’s relationships increases over Dunbar’s number, it becomes impossible to maintain the full overhead of communication with each person. Put simply, for some of your weaker ties, you just don’t have the time to think of something original to say to each one of them. But you still want to maintain some “heartbeat” to the relationship with an occasional ping.

People have found lots of solutions to this problem. One is the Holiday card, often with an annual update letter enclosed. Another is the non verbal communication often seen between coworkers in an office or competitors at a conference. Smiles, nods, back slaps, high fives as you pass each other in the corridor are enough to keep a relationship acknowledged without having to stop and talk each time. A third is the chain email. Whether forwarding inspirational passages, funny videos or jokes, chain emails let people keep in touch with their friends without having to spend a lot of time thinking about what to say.

These lightweight communications are native to social networks. Whether they be exchanging pokes on Facebook or pasting a glittering “thanks for the add” .jpg into a Myspace comment, “content free” communications abound. The meta message is clear though “I’m thinking of you”, and that is often enough of a ping to keep the connection open. Many of the Facebook and Bebo apps fulfill exactly this lightweight communication function, including Hug Me, Zombies and Scrabulous. Many of the social games on facebook wrap this lightweight communication around a casual game.

Context for communications

Facebook’s innovation in the feed is now being widely imitated by the other social networks, and with good reason. As I mentioned earlier, two of the challenges of having a large number of relationships are (i) keeping on top of them all and (ii) being able to communicate often enough to keep the relationships alive. The Feed dramatically simplifies this process, especially when combined with Facebook’s birthday notification and the full status updates list. All three features provide triggers for communications with friends, whether commenting on their pictures, posting witty comments to their wall about what they are doing or wishing them a happy birthday. Facebook and other social networks are helping prompt more communications between their users by helping to surface topics for communication.

Yahoo, Google, AOL and Microsoft are all rumored to be revamping their communications products; it will be interesting to see if how they start to incorporate some of these social network native features into their email and messaging products.

Three use cases for virtual goods January 28, 2008

Posted by jeremyliew in communication, mmorpg, self espression, social games, social gaming, social media, social networks, virtual goods, virtual worlds.
16 comments

Last week I estimated that Facebook is doing up to $15m in revenue per year from its digital gifts business. I noted that there are three use cases for digital goods. I thought that it might be useful to go into each of those use cases in more detail.

Digital Gifts

Facebook, HotorNot. Live Journal and Dogster are all examples of companies that have rolled out virtual gifts that members can send each other.

Virtual gifts are most effective in the context of communications, especially high volume communications environments where it can be difficult to get attention. By paying real money for a virtual gift, the sender of a message signals that they are more eager than most others to be heard. As James Hong has noted:

The utility gained from this is one of SIGNALING. What is it you are trying to signal? In the case of HOTorNOT’s virtual flowers, one is trying to signal extraordinary levels of interest. A user on the site can say “yes i’m interested” to every other person on the site because it costs nothing (but time) to click “yes” on people’s profiles. However, it is presumed that money IS a limited resource. By spending money in order to purchase a flower, becaues the # of flowers I can afford is finite, it signals to the recipient that S/he is very very EXTRA special. So we chose to price the flowers high…

So basically, because they’re so expensive and less people are willing to send them is what makes someone who RECEIVES them DIFFERENTIATED. The flowers have REAL value to the receipient [sic], and therefore real value to the sender who is gonna get props for sending them…

We found, last time we ran the numbers, that sending flowers increased the likelihood of a “double match” on our system by 4x.. meaning as a signal, they are well received and really work.

Dana Boyd also points out that gifting opens up the opportunity for reciprocation:

Gifts are part of status play. As such, there are critical elements about gift giving that must be taken into consideration. For example, it’s critical to know who gifted who first. You need to know this because it showcases consideration. Look closely at comments on MySpace and you’ll see that timing matters; there’s no timing on Facebook so you can’t see who gifted who first and who reciprocated. Upon receipt of a gift, one is often required to reciprocate. To handle being second, people up the ante in reciprocating. The second person gives something that is worth more than the first. This requires having the ability to offer more; offering two of something isn’t really the right answer – you want to offer something of more value.

This communications context for gifting underscores our finding that holiday themed facebook gifts sold 5x better than average facebook gifts. Holiday gifts come with a built in message. Getting a Santa Hat as a virtual gift is much easier to understand than getting a beach ball as a virtual gift.

Self Expression

Social network users love to personalize their profile pages, whether they be MySpace users, Bebo Users, Orkut users, yes, even Facebook users! Many web sites and virtual worlds have found that users are willing to pay to personalize their web representations, as evidenced by Gaia, Habbo Hotel, Meez, CyWorld, Second Life, Tencent and many more. These are businesses that in some cases are making tens, even hundreds of millions of dollars in revenue by selling virtual goods to personalize virtual avatars, apartments/hompies and the like. As Fred Stutzman notes:

In the SL and Cyworld model, the motivations are built on very sound logic. People like to buy stuff for themselves that makes them look cool. Since online identity is primarily about the representation of self, people will pay to differentiate themselves.

This is not so different from the real world, as evidenced by the continued growth of the luxury goods industries (including apparel, jewelry, luxury cars, watches etc).

Increased Functionality

The third common use case for digital goods is for users to buy increased functionality or power. This is ften within the context of a game. As Susan Wu noted on Techcrunch:

Each day, thousands of transactions take place via markets such as eBay for virtual swords, currency, or clothing across a multitude of virtual world environments. For people who purchase virtual items such as swords or armor, buying these items increases the overall satisfaction she receives from spending time in this virtual world / online community / online game. For example, struggling along as a level 20 character might give her 20 units of personal satisfaction per hour, whereas progressing as a level 20 character with a very powerful sword could confer 50 units per hour. In this case, she would be willing to pay the equivalent of whatever amount generates an incremental 30 units of personal satisfaction for the sword.

I’m an avid player of multiplayer online games. A couple of years ago, I spent 10 real dollars to buy 1 million gold in a game [yes, it was legal and part of a world where real money trade is not prohibited.] My friends mocked me and told me I was throwing money away, so I tried to explain it to them: 1 million gold would give me 20 hours of entertainment. If I were to go to the movies, 10 real dollars would buy me 2 hours of entertainment. Assuming that 1 hour of movie watching entertainment gives me the same personal satisfaction as 2 hours of game playing enjoyment, I would have been willing to pay $50 in exchange for that 1 million of virtual currency. In fact, I felt like I had gotten a bargain paying only $10!

Buying gold, or RMT as it is known in the gaming world, exists for just about all MMOGs, whether sanctioned by the game or not, and has spawned businesses such as IGE and Sparter.

Maintaining Scarcity

One key to the success of digital goods business models is to maintain the scarcity of the digital goods. Since digital goods are digital, they cost nothing to copy. Free copies of digital goods would reduce demand for paying for the same item. In a closed system, it is easier to maintain scarcity. The company controls the supply of all digital goods completely.

In an open system, the situation gets more complex. If users (or app developers) can create content that can be injected into the system (whether it be a website, a profile page, a virtual world or whatever) then this can readily blur the lines for self expression and virtual gift type digital goods. If it is easy, or even possible, for users to mimic digital goods, and if this creates confusion or uncertainty about which goods are “premium”, then digital goods can become devalued. To some extent, this has happened in Facebook, where free gifts applications have proliferated. This has probably dampened the sales of Facebook’s digital goods.

Myspace has never seen a digital goods model take off because the completely open profiles make it impossible to differentiate a paid digital good from a free copy. Both end up being a .swf file or an image, with no ability to differentiate. This may be one of the reasons that CareBadges (a MySpace widget bought by donating to a cause) had difficulty achieving real scale in MySpace.

Even in a closed system, if there is uncertainty about whether a digital good is free or not, this can inhibit the sale of digital goods. Demarcation lines between free and premium need to be clear, consistent, and obvious to even a new user to sustain the value of premium digital goods.

Increased functionality is one area where this demarcation is easy to maintain because this is typically an area that is within complete control of the website or virtual world.

As systems grow, the number of digital goods in circulation can rapidly grow as well. This can slow the demand for further digital goods purchases as longer tenured users decide that they have “enough” self expression or increased functionality. Good system designers will create “sinks” for digital goods to maintain a continued demand for digital goods from even long tenure users. These can include wear and tear on digital goods (Cyworld furniture gets worn as it is sold, HotOrNot flowers die over time), or risks of virtual goods being destroyed when they are upgraded (ZT Online).

I’d be interested to hear from social media and social game designers building digital goods business models to see if they have comments on this taxonomy or examples of successes and failures of digital goods models.

Lightweight self expression for the general public November 21, 2007

Posted by jeremyliew in blogging, communication, Consumer internet, product management, self espression.
2 comments

MIT Technology Review has two good articles about microblogging in the November/December issue. (Both are behind a free registration wall.) The puff piece on Evan Williams and Twitter notes some of his thoughts on micbroblogging:

The criticism doesn’t seem to bother Williams, in part because he’s heard it before. “Actually, listening to people talk about Twitter over the last few months, you hear that almost all the arguments against it are the exact same arguments that people had against Blogger,” he says. “‘Why would anyone want to do this?’ ‘It’s pointless.’ ‘It’s trivial.’ ‘It’s self-aggrandizing bullshit.’ ‘It’s not technically interesting.’ ‘There’s nothing to it.’ ‘How is this different from X, Y, and Z that’s existed for the past 10 years?'” Indeed, there were blogging tools available when Blogger was released, and others have emerged since–including TypePad from Six Apart, which offers more features. But none has the simple appeal of Blogger, and none is as easy to use. These were the reasons Blogger was such an important force in the blogging revolution.

There is an interesting idea at the heart of all this, and that is the idea of innovation through removing features. By focusing on a subset of core functionality, both Blogger and Twitter (and the other microblogging startups, as well as Facebook’s status) have made the user interaction much lighter weight. In my experience at AOL, Netscape and IAC, lightweight interactions generally work better with the general public.

Last year Gartner predicted that blogging would peak in 2007:

The analysts said that during the middle of next year the number of blogs will level out at about 100 million. The firm has said that 200 million people have already stopped writing their blogs… Gartner analyst Daryl Plummer said the reason for the levelling off in blogging was due to the fact that most people who would ever start a web blog had already done so. He said those who loved blogging were committed to keeping it up, while others had become bored and moved on.
“A lot of people have been in and out of this thing,” Mr Plummer said. “Everyone thinks they have something to say, until they’re put on stage and asked to say it.”

Microblogging removes some of the pressure to write substantive posts, making it a lighter interaction that is easier to keep up.

The public’s preference for lightweight self expression is part of what has made widget providers (such as Rock You, a Lightspeed company), profile layout sites (such as Free Code Source) and quiz sites (such as Quizilla) so successful.

Three ways that a conference lobby is like Facebook October 21, 2007

Posted by jeremyliew in communication, Consumer internet, performance, social networks, web 2.0.
6 comments

I spent three days last week at the Web 2.0 Summit, mostly in the lobby of the Palace hotel. The lobby served as the crossroads for the conference; all attendees passed through there and many never seemed to leave it! It was a great venue to catch up with friends and industry contacts among the attendees and lobbyconners.

It struck me that the conference lobby was like a social network in three ways:

Public Communication as Performance

At Web 2.0, if you wanted to have a private conversation, you would leave the lobby and find some place more private. In a social network, if you wanted to have a private conversation you would send a private message. But if you were OK with others seeing your conversation, you would stay in the lobby, or post a public message on the Wall/Comments. The Performance aspect of communication is seen both online and offline.

Serendipitous communication

In ordinary life, you communicate with far fewer people than you’d like to. You forget, you get busy, and you don’t reach out to people that you’d like to talk to more often. But in the lobby of a conference, you’re always accidentally running into people that you’d love to talk to but don’t usually see. This is one of the biggest benefits of conferences.

Similarly, social networks bring up opportunities to communicate with people that you may not have connected with in a while. Perhaps you see one of their comments posted on a friend’s MySpace page, or you get an update on them from the Facebook feed, and are prompted to ping them. I’ve been communicating more regularly with ex colleagues and extended family because of Facebook.

Lightweight Interactions

Over the course of two days at a conference you’ll see the same people a number of times. After you’ve talked, there is only so much you can say the next time, so your interactions tend to get lighter weight. You want to acknowledge each other but not necessarily get involved in a long conversation. So you smile, shake hands, clap shoulders, bump fists, wink, wave, or kiss cheeks (gender specific!) instead. It is the same rationale that leads you to text a friend instead of call.

Social networks provide similar lightweight opportunities for interaction. Facebook’s poke is the simplest example. Although Kara Swisher thinks that many Facebook apps are childish, I think they are providing an avenue for lightweight interactions between friends. Whether you’re buying someone a drink, biting them to turn them into a zombie, hugging, slapping or tickling them, the subtext of “I’m thinking of you” is there.

Conclusion

People building social media companies and other companies that require user interaction should bear these examples in mind. It is hard to create new mental models of behavior for users. As always, if there is an offline parallel for the online behavior you want from your users, you’re more likely to succeed. These three elements of social network behavior have clear offline parallels.

Communication, performance and birthdays September 23, 2007

Posted by jeremyliew in communication, email, performance, social media, social networks.
4 comments

It was my birthday on Friday ,and it was the first birthday I’ve celebrated as an active member of a social network.

I’ve posted in the past about the performance aspects of social network communication, and how this affects future email use. I’ve also posted about social design for social media companies, and how Facebook’s birthday reminder and wall work together to uphold the first two of the rules of social design:

Motorola Findings

It was interesting to see this all play out as a participant. For my birthday, I received in total:

  • 1 “happy birthday” phone call
  • 2 “happy birthday” cards
  • 20 “happy birthday” email
  • 3 “happy birthday” private messages on social networks
  • 26 “happy birthday” public messages (ie posted on profile) on social networks
  • Fully half of the messages were public. But within the context of the social network, almost 90% of the communications were public.

    Communications modes seem to be shifting very quickly, at least for those messages with a “performance” aspect.

    I’d be interested to hear similar stats from readers.