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October 3, 2007

Seven Steps to Graphing Your Facebook Strategy

Dave McClure

100 comments »

This guest post is written by Dave McClure: startup advisor, angel investor, PayPal alumnus, and Master of 500 Hats. Dave is organizing next week’s Graphing Social Patterns conference on Facebook, covering many of the topics and companies mentioned below. He’s also a rookie instructor for a new Stanford class on Facebook apps, and an unapologetic Facebook Fanboy and social networking addict. Sections on virtual currency and ad networks contributed by Susan Wu, Charles River Ventures and Sundeep Ahuja, AppFuel.

For nostalgic hippies in the SF bay area, this was the 40th anniversary of 1967’s famous Summer of Love. But for every Silicon Valley developer, entrepreneur, and VC who has a pulse it’s been the Summer of Facebook.

While it’s easy to put aside geeky exuberance over the latest insanely great technology, it’s impossible to ignore the growing size and scope of Facebook, and the impact it’s having on internet startups and traditional businesses alike. Over half of Facebook’s 43 million users visit every day, spend an average of 20 minutes on the site, and view over 54 billion total page views per month.

In a few short months Facebook has quickly become one of the most impressive user acquisition channels on the web, rivaling SEO & SEM strategies for priority with new startups. Over 60 Facebook applications have more than 1 million total users, and over 40 have at least 100,000 daily users.

With the groundbreaking launch of the Facebook Platform this past spring, and the subsequent runaway growth of Facebook Apps adopted by millions of users this summer, the question on everyone’s lips (including Google and Microsoft) has been: “So what’s your Facebook strategy?”. If you’re still scrambling to figure out yours, read on.

Seven Steps to Graphing Social Patterns on Facebook

Personally I’ve become addicted to Facebook, and in particular with the Facebook Platform and the News Feed. I’ve spent hours upon hours experimenting with new ways it provides to connect and communicate, and recently began teaching a class at Stanford with Professor BJ Fogg on how to build Facebook apps. In this article i’ll explain how to use Facebook to make a big impact on your business, and why it’s substantially different than any other social network that’s come before.

Here are seven major aspects of Facebook you can use to increase the visibility of your startup, business, product or service:

1. Set Up Your Graph: Profiles & Privacy
2. Make Connections: Networks, Groups & Events
3. The Need for Feed: Your [Shared] Social Activity Stream
4. Share Your Content: Share & People-Tag Your Stories & Media
5. App to the Future: The Facebook Platform, APIs, & Applications
6. Pay to Play: Ad Networks, Sponsored Stories, & Paid Distribution
7. Show Me The Bunny: Gifts, Points, & Virtual Currency

I’ll explore each of these items in more detail after the jump. For developers and marketers interested in learning more, we’ll be covering these topics in depth next week in San Jose at Graphing Social Patterns, a conference on the business and technology of Facebook and social networking.

I. Set Up Your Graph: Profiles & Privacy

It all begins with your Facebook profile, your privacy settings, and a few friends. Your profile is the virtual depiction of YOU on Facebook — depending on how you customize your Facebook privacy settings, you can display as much or as little of yourself as you care to the entire world, just to your friends, or to no one at all. This includes your notes, photos, videos, your one-liner profile status, your relationship status, your location & contact information, the messages left on your wall, etc. See an example below — currently I expose most info to everyone in my network, however I only share my phone and IM info with my friends:


1privacy.jpg
Your profile also includes visual representations of your apps. Up until a few months ago, Facebook profiles stood in stark, locked-down contrast to the technicolor, anything-goes world of MySpace profiles. But with the introduction of Facebook apps, you now have the ability to make just as much of a mess of your profile on Facebook as on MySpace (ok, well almost). At least with Facebook you have a structured mess — each app has its own clearly defined profile real estate. What’s really going on under the covers is that Facebook has aggregated a wide variety of data into one simple page that’s [usually] easy to digest & manipulate. In fact, several Facebook profile features appear to be simplified versions of other internet services (FB note = blog, FB status update = twitter, FB share = del.icio.us, etc). That’s really helpful for n00bs like Ted Stevens and me. Finally, the list of friends you collect on Facebook defines your relationship with the rest of the community. Your social graph is the collection of nodes and connections representing all your friends, along with relationship attributes that define them. Each of these data elements are the inputs Facebook uses to grok, matrix, and distribute the river of information called the Feed (more on this later).

II. Make Connections: Networks, Groups & Events

In addition to your personally-defined set of social graph connections, you also have a set of connections defined by your participation in Networks, Groups, and Events. A Network is a group of people that are part of a common workplace, geographical location, or a school. This is a formal affiliation as defined or approved by Facebook, and typically you need to have an email address to participate (except for geographical groups). A Group is a collection of people similar to a Network, except it’s user-defined and members can be selected, invited, or simply join to participate. An Event is a time- and or location-specific occurance, that also may have a collection of associated individuals who have RSVP’d to attend (or not). [note: there may also be a new 'Friend Groups' container coming soon from Facebook... watch this space].


2connections.jpg
All three of these Facebook ‘container’ apps for collections of people have associated URLs, content, mailing lists, calendars, walls, discussion boards, and other types of neatly integrated functionality. While they may not have all the bells and whistles available with other tools like YahooGroups or Eventbrite or a Wordpress blog, for most basic purposes they work pretty well. Furthermore, since they’re already integrated with Facebook, everyone can become a user without much friction or hassle.Once you join a network, group, or event, your social graph expands to connect with all the members therein. Your ability to connect, contact, and be contacted is now extended through the community participating in these collections. You can easily message or post to members of these communities, and you also have visibility into their Feed… as do they with you. While other social networks such as Orkut and Tribe (and YahooGroups) have provided similar functionality in the past, the simplicity and ease with which these sub-communities can be established within Facebook are what make it such a powerful tool for communication.

III. The Need for Feed: Your [Shared] Social Activity Stream

Of all the feature innovations Facebook has introduced, News Feed (& Mini-Feed) is for me perhaps the most impressive — because it’s a very simple yet elegant way to share information. A year ago when these features were first introduced, most of the noise that ensued was due to the initial user revolt that occurred with the display of what users presumed was (previously) private information. However, after the storm subsided and people began to learn to control their privacy settings, they’ve discovered News Feed is a pretty cool way to stay updated on what your friends are doing. It contains information on new photos, new videos, wall comments, events people are attending, links they’ve posted, gifts they’ve given… in short, it’s a personal newspaper on all the social activities you and your friends are part of. Simply put: it’s the collective stream of our shared social activity.


3feed.jpg
As you add information, make comments, submit content, or perform other activities in the Facebook environment, these actions are recorded in your Mini-Feed, and are contributed to the overall Feed for the community represented by your social graph. Note if you wish to control information being submitted to the feed, check your Mini-Feed for what news items have been submitted… you can delete or hide certain stories to limit external News Feed visibility.Why is the Feed so amazing? Because it isn’t really the technology that’s novel… rather it’s the change in human behavior brought about by the Feed that is so new and interesting. These days it’s common for me to login to Facebook just to see the updates on News Feed activity. When technology changes behavior, that’s when you know you’ve made a real breakthrough.

IV. Share Your Content: Share & People-Tag Your Stories & Media

Once the News Feed construct is established, it’s interesting to consider how you can use it to distribute stories and content and media. By using the Post a Link or Share button (either inside Facebook, or on the Facebook toolbar for Firefox, or from the Share button for Internet Explorer), it’s easy to post something either as a message to specific users, or to no one in particular via the Feed. Facebook then uses a proprietary News Feed Optimization (NFO) algorithm to determine when and to whom those news items are shown, similar in concept to how Google interprets and prioritizes Search Engine Optimization (SEO) for search content and links.One way in particular to make sure content is made visible to others is to ‘people-tag’ various types of content, by referencing individuals within your social network in notes, photos, and videos. This likely increases the prioritization of feed content for the individuals tagged, and also initiates a message to them that they’ve been tagged. Although these actions can certainly be abused in a spam-like way, it can also be a fun and interesting way to get people’s attention.


4share_tag.jpg
Lastly, one thing I love about the post a link feature is the way Facebook automagically recognizes when I post a link or reference a URL, and then picks up that URL and searches for any embedded images to display, letting me scroll to select the one I think is the best picture / most relevant. This is a very simple feature, but provides such great utility in making link content more interesting / more visible.

V. App to the Future: The Facebook Platform, APIs, & Applications

Certainly no Facebook conversation would be complete without a discussion of the Facebook Platform and the APIs & apps that bring them together. With the launch of Platform in May, Facebook has arguably delivered the most exciting and innovative application development environment on the web today. As mentioned above, there are already hundreds of startups building Facebook apps, and a few larger brand name companies as well, with thousands of apps shipped live in just a few short months. While not every app has been a home run, there are certainly several examples of early success from companies such as Slide.com, RockYou, SocialMedia, iLike, Flixster, HotOrNot, Renkoo, and others. These companies acquired millions of users by creating and marketing Facebook apps that spread virally through the Facebook user community via invites, notifications, the profile & the feed. And while some of these success stories took advantage of lenient initial standards for app invites and install requests, even after Facebook stiffened the rules new apps have continued to launch that demonstrate explosive growth and large user adoption.


5app_anatomy.jpg
Facebook Platform Anatomy diagram courtesy of Yee LeeHowever, the environment in which these apps live is maturing and changing rapidly. Facebook has already made a significant change in how it measures apps, moving from an initial set of metrics that focused on the total # of app users, to more recently emphasizing active daily user #’s that prioritize user engagement over total reach (an excellent move in my opinion). In addition to changes in measurement, there have been notable changes to Facebook APIs that have resulted in some amount of grumbling from developers who have worked hard on code that has been quickly deprecated. Most of these changes have been made for the benefit of users, in order to reduce overly spammy apps that attempt to generate massive app invites, notifications, and messages, or trick users into taking actions they may not have intended. While these changes may result in a safer and more vibrant ecosystem with lots of new features, the downside has been an occasionally unpredictable and sometimes unstable playing field with rules that have changed on a weekly basis.

Still most app developers seem to believe the opportunities outweigh the risks, and while it appears new social platforms and social APIs are coming soon from Google, LinkedIn, MySpace, & others, Facebook continues to dominate the focus and conversation of most developers and their efforts. At the moment it is Facebook’s game to lose. This is quite an astonishing accomplishment given the relative newcomer status of Facebook compared to other internet titans Google, Microsoft, and Yahoo, all of whom have large developer followings and platform offerings. At the moment, none except Facebook have captured lightning in a bottle by combining a rich web development environment with a social networking platform to produce socially-aware apps and objects. But you can bet the entire IntraWeb now recognizes the potential of social applications and the social graph, and they are all gunning for Facebook with competitive platforms and APIs as fast as they can.

VI. Pay to Play: Ad Networks, Sponsored Stories, & Paid Distribution

(this section contributed by Sundeep Ahuja, AppFuel)

As developers compete to access the social graph via apps, advertising networks compete to access the pocketbooks of those same developers. At the moment most of these ad networks’ initial adoption appears to be coming primarily from new apps who want distribution and are willing to pay for it, rather than traditional ‘off-Facebook’ brand businesses. That said, the promise of larger advertising dollars on Facebook remains a huge brass ring for both emerging ad networks on Facebook as well as Facebook itself.

There are three main categories of ad networks operating on Facebook:

* app factories that cross-promote applications
* cross-promotion networks allowing publishers to pay to promote apps (or get paid to promote other apps)
* companies enabling off-Facebook advertisers to reach Facebook users

The first category of networks are the application factories that cross-promote their own apps, with RockYou, Slide, and Social Media being the biggest. The second category are cross-promotion networks giving publishers a way to promote their applications while getting paid to promote other applications; these include Cubics, fbExchange, and (again) Social Media. Yet a third category of networks is offering an alternative to off-Facebook advertisers that want access to Facebook users, but don’t want to use Facebook’s own advertising solutions. A few of the cross-promotion networks do this, as do Lookery and VideoEgg (primarily a video network).

In bringing off-Facebook dollars to the platform these networks are up against a rather formidable competitor: Facebook itself. It’s no secret that Facebook intends to iterate its advertising offering in a big way, and MySpace recently made headlines for doing the same. It’s anyone’s guess how Facebook will choose to deal with third-party ad networks, though most of them say they’re willing to risk the competition due to the size of the opportunity in front of them.


6sponsored.jpg
Finally, third-party advertisers can also target Facebook users through Facebook itself, and via their partnership with Microsoft. For starters there’s Microsoft Digital Advertising Solutions, which has some interesting Facebook demographic stats. There are also Flyers, Sponsored Groups, and Sponsored Listings in the Facebook Marketplace. However, the most powerful mechanism is Sponsored Stories, which show up in users’ News Feeds. Facebook introduced a whole new advertising paradigm by inserting stories into the originally-controversial newsfeed, and will likely be iterating on the potential for this feature in the future. In fact, don’t be surprised if Facebook’s ‘AdWords’ equivalent — a self-service Sponsored Stories interface — is coming next. The adoption and monetization of this future service is probably where a significant amount of Facebook’s future revenue will come from… or not.

As a second approach to Facebook, some notable brands are building their own apps hoping to use the platform for engagement rather than impressions. Though success to date has been varied, the premise is powerful; just as big brands have spent the last decade catching up with startups by building their own websites and e-commerce services, and more recently working on SEM & SEO techniques, they are now investigating how to develop Facebook applications to reach their target customers. It’s still early, but by combining rich user profiles and a social application platform, Facebook is setting up an incredible advertising opportunity.

VII. Show Me The Bunny: Gifts, Points, & Virtual Currency

(this section contributed by Susan Wu, Charles River Ventures)

Not too long ago, I wrote a TechCrunch article on virtual goods and their potential to become the next big business model. Since then, there have been innumerable experiments with virtual currency apps on Facebook, but most of them are still missing the big picture: used effectively, virtual currency can greatly enhance user engagement.

A robust virtual economy is a good sign that you have a highly engaged user base. Virtual goods are pretty much meaningless without context; there is direct correlation between the engagement level a user feels with your product and their willingness to purchase virtual goods. Thus, if you help your users feel more like citizens rather than just bystanders, they are much more likely to participate in your virtual economy.

Yet the converse is also true: a well implemented virtual currency system can greatly increase user engagement and foster valuable types of social interaction. By “valuable” I mean social interaction that catalyzes network effects and results in residual value from your user base. Virtual currency isn’t just a zero-marginal-cost way of extracting more money from your users — it’s also a primary means of exposing your community’s core values and encouraging behavioral patterns that increase the value of your app. Much the same way that a leaderboard has a way of focusing users attention towards certain metrics (ex: Digg below left is essentially a community driven by leaderboards), virtual currency can be used as an efficient way of signaling a community’s implicit and explicit shared values. Then you, as the community traffic cop, can put down the right Yield, One Way, and Exit signs in the right places to generate the most optimal community traffic flow.


7vgifts.jpg
There are 3 major types of virtual goods: decorative, functional, and behavioral. Decorative goods are those primarily geared towards self expression. Functional goods are those that meaningfully alter your user experience. For example, a suit of armor in World of Warcraft that confers a special advantage to you would be a functional virtual good. Behavioral virtual goods are graphical icons that capture some sort of social interaction. This is the type that is most prevalent on Facebook today. Virtual gifts are the best known example of this category of virtual good.

Two of the top 10 Facebook apps, X Me and SuperPoke!, are essentially just interaction tools. In the X Me screenshot above right, each of the icons – whether it be Love, Punch, or Kiss – is an encapsulation of a specific social interaction. Though it may not be purposeful, these types of casual apps are training users to understand how to interact with virtual goods. I can easily see how these apps become platforms that launch broader virtual currency systems. For example, expanding this app to allow users to attach custom graphics to their custom actions would create a new, rare class of virtual objects.


TechCrunch readers interested in learning more about Facebook should check out Dave’s upcoming Graphing Social Patterns conference. If you’ve read this far, you deserve a treat — TechCrunch readers can receive a 25% discount by registering by midnight Wednesday Oct. 3 using this link: http://graphingsocial.eventbrite.com/?discount=crunch

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This entry was posted on Wednesday, October 3rd, 2007 at 10:10 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. TechcrunchBook

    October 3rd, 2007 at 10:15 am

    Biggest waste of 7 minutes? The answer is “Yes”

  2. brfe

    October 3rd, 2007 at 10:17 am

    WTF is this? I don’t have the patience or interest to read whatever it is.

  3. MikeW

    October 3rd, 2007 at 10:34 am

    What is facebook?

  4. phenom

    October 3rd, 2007 at 10:38 am

    waste of time….may be good for noobs.
    http://vidsonly.blogspot.com

  5. mathew johnson

    October 3rd, 2007 at 10:38 am

    “what’s your facebook strategy?” sounds a lot like “what’s your china strategy?”

    funny first 3 comments!

  6. dave mcclure

    October 3rd, 2007 at 10:46 am

    c’mon you haters… gimme something meaty i can sink my teeth into.

    “mcclure’s an obvious facebook shill & wannabe… he’s just looking for any opportunity to crawl up Zuck’s shorts”

    “what a tool. i could name 3 methods of SEO that would make more of a difference than wasting time on facebook”

    “can’t believe this FB primer drivel gets on TechCrunch, and my fantastic new blog bookmark social networking startup for mobile users in bulgaria can’t get the time of day”

    all i can say is you guys are weaker than snot on a googleplex solar panel roof… at least owen thomas can rip me a new one with some attitude.

    bring it.

  7. Alex

    October 3rd, 2007 at 10:48 am

    I liked the long form post.

  8. Carmelo Lisciotto

    October 3rd, 2007 at 10:53 am

    Sorry. Simply not impressed with facebook.

    Carmelo Lisciotto

  9. brfe

    October 3rd, 2007 at 10:55 am

    Dave,

    This is a blog you douche nozzle. People don’t have the time to read a novel. Shorten this crap up. Sink your teeth into my juicy turd.

    P.S. - Nice box glasses and dirty sanchez poop mustache you tool.

  10. MGZ

    October 3rd, 2007 at 11:01 am

    Hi Dave,

    Can you summarize the value in developing a Facebook-specific application, versus a more open web app that anyone can use?

    The problem I have is I have a ton of ideas, but just can’t work up any excitement in rolling them directly into Facebook. I can see providing integration down the road for Facebook, but I don’t get these startups that are developing Facebook-only apps.

    Also, how will Facebook compete with Google, once Google rolls out its plans to provide (as I understand it) APIs into “everything”? If I’m trying to develop for the widest possible audience, Google’s plans seem more intriguing to me, especially as they’ve got the most eyeballs.

    MGZ

  11. dave mcclure

    October 3rd, 2007 at 11:09 am

    Google may have the most search eyeballs, but until they collect social profile data from Gmail, Orkut, YouTube and other services that have deeper profile data, their ability to implement a socially-aware data platform is more limited. iGoogle is an interesting property for them, but still growing not so well-adopted among overall Google userbase.

    not saying they won’t be a formidable competitive alternative — i’m sure they’ll have an interesting offering — but right now Gmail is arguably 4th in market share after Yahoo, Hotmail, & AOL. Orkut is big in Brazil & India, but not in the US.

    Not clear if Google will be able to access social profile data from YouTube or other partner properties like MySpace or AOL, but if so then they’d be an interesting alternative.

    otherwise, Google has LOTS more eyeballs, but not as qualified in social profile data as Facebook or MySpace or other services with deep profiles.

    that said, Google users do exhibit search intent, whereas social network users exhibit browse intent typically… so possible a Google user is more valuable based on behavior… but a Facebook or MySpace user is more deeply profiled.

    in any case, the big opportunity on Google is SEO & SEM.

    the big opportunity on Facebook & other social networking sites is deep demographic profiling, and lots of repeat visit behavior / sticky usage.

  12. crazycanister

    October 3rd, 2007 at 11:15 am

    Facebook and Myspace, are for the kiddies now. Wheres real networking that helps with older genrerations. Thoughts?

  13. Mark Hendrickson

    October 3rd, 2007 at 11:16 am

    I’m inclined to delete comment #9, but then again, you did tell them to bring it, Dave. =)

  14. Adi

    October 3rd, 2007 at 11:17 am

    Interesitng, how for ‘proper’ businesses, the emphasis is on ‘customers’ or more specifically, ‘Paying customers’, and now for these social networking (so called businesses), the emphasis is on ‘Users’. Have you heard anyone say to a bakery owner, ‘How cool would it be if I could eat a slice of peperoni while simultaneously grabbing a cup of coke. for free.. How COOL would be!!’. Imagine the response of bakery owner!

  15. Dji

    October 3rd, 2007 at 11:22 am

    Each time I read a post about Fbook on TC it looks like a pure SEO exercise.
    Everything is here: occurrences, context, title, H1, links,…

  16. Ryan Merket

    October 3rd, 2007 at 11:29 am

    Facebook 101. Better man than I, I don’t have time to teach people how to use Facebook — I’m busy coding for it ;)

  17. Tyler Toone

    October 3rd, 2007 at 11:30 am

    Dave - although the blog may be a bit long I agree with several points you make here, but how long do you think the Facebook hay-day will last? At what point do so many apps seem to dwarf the social experience?

    Also, with the virtual currency section…do you think or foresee Facebook implementing their own virtual currency?

    Thanks
    ~Tyler

  18. Mark Hendrickson

    October 3rd, 2007 at 11:37 am

    Dji, I think you just criticized us for blogging and using HTML. Kudos to that.

  19. dave mcclure

    October 3rd, 2007 at 11:41 am

    @tyler: i’d say there’s plenty of hay to go around for quite awhile. and the apps *are* the experience… see my point #3 on the Feed.

    re: virtual currency, i’ll defer to Susan Wu. altho FB Gifts is kind of there already.

    but i’d say it won’t be ‘virtual’ currency… it will be *real* currency.

    @brfe: that’s more like it. and i resemble that dirty sanchez remark. ew.

    @mark: i got both barrels. i’m covered.

  20. Nick O'Neill

    October 3rd, 2007 at 11:42 am

    I understand the concept of the social graph. As such I feel like Item #5 is really the only important thing in here. Aside from that this is a guide on how to set up your Facebook profile.

    Not that it’s a bad thing to publish a guide on setting up your Facebook profile. Why is editing your privacy settings called “Setting up your graph?” I understand how setting up your graph will be useful once facebook launches their group features but in the meantime I don’t think privacy settings qualifies as “graph configuration.”

    Either way, I hope to see you at the conference next week!

  21. marcT

    October 3rd, 2007 at 11:48 am

    fb… is it possible not to cover fb for a week? how much do they pay you to make these viral marketing sh.

  22. Fake Mark Zuckerberg

    October 3rd, 2007 at 11:54 am

    We did it again everyone :) We mad another headline in techcrunch- F you Steve Ballmer!

  23. dave mcclure

    October 3rd, 2007 at 11:58 am

    @nick: i was trying to start with fundamentals in step #1, and explain how profile privacy (or openness) defines your visibility into your network, and thereby your feed as well.

    while i agree with you #5 is the biggest piece, i think there are many elements of good app features that mimic the user experience of manual actions in steps #1-4… thus i was trying to explain how users interact first, and then set that as the framework for app interactions.

    for example: the people-tagging & sharing in #4 is an example of the kind of behavior that apps can exhibit in the feed, and they work similarly.

    anyway, it may be that for some folks this is obvious… but i think understanding feed behavior from manual user actions provides a lot of insight into how good app design & behavior can work as well.

    and in any case, see you at the conf next week :)

  24. barefootmeg

    October 3rd, 2007 at 12:16 pm

    What I keep hearing in discussions on Facebook is how to twist it to your own ends financially. I have yet to hear anyone say, “Facebook has enabled me to hook up with people in a way I couldn’t before.” Isn’t Facebook a Social site? Why is that the component that no one seems to care about? If the only reason to be on Facebook is to make money off the other chumps on Facebook who are only there to make money themselves, well that’s not going to last long.

    All Facebook has done for me lately is gotten me bitten by both a zombie and a vampire.

  25. SuperCrunch

    October 3rd, 2007 at 12:20 pm

    Does anyone have statistics about the success rate of ads placed on Facebook? I recall reading an article a few months ago stating the click-through rate was extremely low. If that is the case how can advertisers continue to justify spending money placing Facebook ads regardless of whether they are tailored to an individual’s content?

    Like Adi alluded to above, is advertisting enough to render these social networks profitable for years to come?

    With regards to selling virtual gives at a zero bottom line–well, that blows my mind someone would spend their hard-earned money on “merchandise” like that.

    As Steve Jobs says, “People want to be shaped, molded—-but if you ask any one of them, they’ll deny it.”

  26. Techcrunch worth $100mm

    October 3rd, 2007 at 12:23 pm

    Ok Dave, can you now write a post on all this $100mm techcrunch talk around the web? :-)

  27. dave mcclure

    October 3rd, 2007 at 12:36 pm

    i believe i just added at least $3M to Blodget’s valuation.

    mike: where’s my check?

    ;)

  28. Pran Kurup

    October 3rd, 2007 at 12:38 pm

    I think this is one of the better posts on Techcrunch! Informative and detailed unlike many other posts I seen here. Btw, I found the Notes feature in Facebook pretty buggy!

  29. Amrit Hallan - HowToPlaza

    October 3rd, 2007 at 12:42 pm

    Quite a comprehensive lesson on how to formulate a Facebook strategy. The more I read about social media and networking website the more I feel I’m missing something big by not leveraging them. But I guess I’m too lazy and anti-social :-).

  30. Dji

    October 3rd, 2007 at 12:47 pm

    Mark, i wasn’t criticizing believe me. I’m a daily reader.

    Just read again the last posts about Fbook: TC is really pushing it.

  31. moham polik

    October 3rd, 2007 at 12:54 pm

    Nice long post Dave - interesting that both long posts have to do with Charles River Ventures (which is also a sponsor of tc40 and this graphic conference) and Susan Wu - seems that one received the same level of feedback as this one.

    Dave - you learn well with all those hot crunkbase links - good job.

  32. Stephen Lev

    October 3rd, 2007 at 12:56 pm

    Wow… biggest load of tripe ever posted on TC. It reads like it was posted by insane PR person from FB. Sad. Congrats!

  33. Unjustified Motorsports

    October 3rd, 2007 at 12:58 pm

    good ideas

  34. Nigel Rowe

    October 3rd, 2007 at 1:03 pm

    Hey those of you who don’t want meaty articles of substance can jack over to truemors or suchlike. There you can get the “gist” without having to stretch the old brain muscle. Actually Google serves this purpose well, you can just read their page description for any topic, who needs TC anyway?

  35. Michael Linton

    October 3rd, 2007 at 1:13 pm

    Dave - you wrote - “re: virtual currency, i’ll defer to Susan Wu. altho FB Gifts is kind of there already.”

    Susan Wu wrote - “innumerable experiments with virtual currency apps on Facebook, but most of them are still missing the big picture: used effectively, virtual currency can greatly enhance user engagement.”

    The big picture is bigger than she sees. Used effectively virtual currency IS money - but not as we know it, Jim.

    Dave sez “but i’d say it won’t be ‘virtual’ currency… it will be *real* currency.”

    Good start Dave, but we need to think beyond the “it” box. There will be thousands of virtual cc (community currencies) on Facebook alone.

  36. Nick

    October 3rd, 2007 at 1:13 pm

    Dave rocks! Great idea to have him post on TC. To SEOers: search is not the only app worth on the net. Time to open your minds a bit, consider additional strategies. More search strategy dollars are going to be spent on app/social network strategies. I hope you learn to adapt and are there to get a piece.

  37. Vikas Gupta

    October 3rd, 2007 at 1:17 pm

    Nice post.. relevant to current times. We’ve posted our learnings from paid distribution and fine tuning the conversion rates — love it or hate it, FB platform is definitely shaking things up.

  38. terry semmisk

    October 3rd, 2007 at 1:18 pm

    i tried facebook and it’s a myspace ripoff with little real value. what zuckerberg has done is convince developers to do facebook work for free by building applications for facebook… what a bunch of suckers! facebook is this year’s friendster… gone in 12 months due to the weak functions it has and zuckerberg’s huge ego — he will wish he took yahoo’s $1 billion very soon

  39. Doeboy

    October 3rd, 2007 at 1:46 pm

    Techcrunch’s gigantic crush on facebook is almost sickening.

    I hate to break it to you TC, but now that Facebook has finally opened itself up to ‘everyone’ its only a matter of time before the hackers start invading and start ruining the site like Myspace. When this happens, the flow of tears from Techcrunch employees will be a bigger risk to our oceans rising than the melting glaciers

  40. chris

    October 3rd, 2007 at 1:52 pm

    What the $%^& is this? This does not belong on Techcrunch.

  41. macdet

    October 3rd, 2007 at 1:55 pm

    YES, i`ll doit!

  42. Aaron

    October 3rd, 2007 at 1:57 pm

    Terry Semmisk: I think you are missing what makes opening up the platform work. Zuckerberg wants Facebook to be the next Windows - a social operating system with programs you can install and a user base large enough that the activity adds value and sucks in more users - maybe we can call it gravity or the snowball effect or whatever. So yes, it’s adding value to Facebook, just the way writing programs for Windows only goes to add value to Windows - but think of all the developers who have been made rich because of it. That’s the attraction - the question is not if it’s a lot of smoke and mirrors, but rather will they drop the ball?

    As a primer this was a good article, though I can’t help but wonder why actions one can perform as a user have been lumped together with actions for developers. And I won’t accept ‘the line is blurred’ as an answer, because that’s like saying that ‘anyone who can play Doom can make levels for Doom,’ which is not true.

    For more in depth analysis of what developers can do, I will now plug two articles by a friend and one by myself. The two are by the author of the facebook Mafia game, which has been very successful.

    http://startupism.com/2007/07/.....t-matters/
    http://startupism.com/2007/08/.....hat-works/
    http://startupism.com/2007/08/.....ood-thing/

  43. John C

    October 3rd, 2007 at 2:09 pm

    Weak shit.

    No internet entrepreneur with this sort of thinking about Facebook will ever succeed. It’s just to nerdy.

    Nobody over the age of 23 will ever create a successful Facebook Application because they just don’t know how it affects peoples lives. If you just watch any high schooler use Facebook (and note just how long and “important” it is to stay up to date with their Facebooking) you’ll see what sort of things need to be created for Facebook.

    The core of Facebook Applications need to focused on the high school crowd as opposed to the college and adult demographics. That’s just how it is and they’ll always log in because it’s become that much of a habit. All of there high school memories are focused right there on one page, and if you add another layer to their memories through a Facebook application they’ll eat it up like cake.

    I guarantee it.

  44. What a load of...

    October 3rd, 2007 at 2:11 pm

    …utter bullsh*t.

    Why do you publish this kind of crap on TechCrunch.

  45. Sam Donaldson

    October 3rd, 2007 at 2:23 pm

    i wouldn’t delete a comment…i’d delete the entire post. what useless information.

  46. the 501st hat

    October 3rd, 2007 at 2:26 pm

    though d. mcclure may call himself “master of 500 hats,” he obscures the fact that each of them has “DUNCE” spelled out oh-so-clearly on the front. (see here, or here, or really anywhere.)

    but seriously, folks, just looking at this article made me vomit in my mouth a little bit.

  47. agnes chen

    October 3rd, 2007 at 2:28 pm

    Interesting article, Dave. Informative and very spot on!

  48. John C. McClore

    October 3rd, 2007 at 2:33 pm

    I’ve often wondered how much further along human civilization would be if television would never have been invented.

    Likewise, I wonder how many collective hours are wasted everyday on Facebook.

    Facebook is useful in that it allows me to stay in touch with friends, view their pictures, and invite them to events. Beyond this it’s just fluff used to waste time by undriven people who have too much time on their hands.

    I wonder how many hours a day successful people like Steve Jobs, Warren Buffet, Tom Brady, Mark Cuban, Bill Gates, Michael Jordan, Justin Timberlake, various business-persons, physicians, etc. are on Facebook?

  49. joe suh

    October 3rd, 2007 at 2:35 pm

    Great post Dave… do you think Myspace or LinkedIn’s future platform can compete?

    Myspace seems too anonymous and chaotic for apps to leverage their social data meaningfully. LinkedIn doesn’t have an anonymity issue, but its culture doesn’t seem to be one of engagement and regular participation.

    Google, as you noted in your comment, lacks the deep profiling. So is Facebook untouchable at this point?

  50. Fake Dave McClure

    October 3rd, 2007 at 2:49 pm

    Zuckerberg, so hot right now. Facebook does matter. Lots of people, like me, use it at all waking hours. w00t!

  51. dave mcclure

    October 3rd, 2007 at 2:56 pm

    @joe: i think all 3 will be worth taking a look at, and in the long-run i’m pretty sure Google will have an interesting opportunity there, if only because they’re sharp & will keep trying.

    re: LinkedIn, it might be a smaller base, but i bet the per-user value is substantially higher than anything out there. the engagement issue is the bigger question, as i would guess perhaps only 20% of LinkedIn’s 14M+ users are regulars. but still, very valuable audience if they really build a platform that’s usable.

    re: MySpace, i’m skeptical… they have a very large audience, but the monetization is likely even tougher than Facebook. and right now, i don’t see MySpace with any Feed-like behavior happening, but maybe that’s because i’m not a regular user.

    another interesting option would be whether Google ever tried to apply their platform to other partner data from MySpace or AOL. altho the immediate opportunity for Google is more likely iGoogle, Gmail, & YouTube.

    in summary: Facebook’s game to lose, but they still have to prove they can monetize. LinkedIn looks valuable, but on a smaller base. Google has the chops to win over the long-run, but lots of work to build out a social platform. MySpace has volume, but no Feed metaphor and they don’t appear to be technology leaders.

  52. techcrunchreader

    October 3rd, 2007 at 2:59 pm

    Dave, your post could have been a useful article… on the Facebook Getting Started section, not on Techcrunch. Or it could have been just a link..:
    http://www.facebook.com/sitetour/index.php

    I read Techcrunch everyday, did I miss that Facebook acquired Techcrunch or something? Is this a new feed section for FB?

    Facebook is a huge success, congrats to Mark Z and his team, but there are tons of new start ups out there, Techcrunch you should talk about them. That’s what made Techcrunch different in the beginning, refocus on that. If I want some info on FB on a every day basis, I’ll read their blog.

  53. Hongliu Li

    October 3rd, 2007 at 3:21 pm

    Hm, Facebook is really get attensions from many peoples. For example, after I add MyGrowUp.com as its application, MyGrowUp.com get a lot of registers from Facebook users.

  54. foxtwo

    October 3rd, 2007 at 3:41 pm

    what is this? a facebook tutorial? there’s no strategy, it’s for the folks who dont know how to use a computer. a waste of time

  55. Nemrut

    October 3rd, 2007 at 3:57 pm

    Dave, just out of curiousity, what is the value proposition for developers to create new FB apps if FB simply re-creates them(ie, the most popular ones) in-house?

    It seemed like a great idea at first to open the FB platform, but all i hear about are the great apps created on a shoe string being ‘appropriated’ by the in-house FB team.

  56. Rodney Rumford

    October 3rd, 2007 at 4:09 pm

    Dave,
    Great article and insights. I really hope that people read all the details that you have outlined.

    I am looking forward to the graphing social event.

    Your Fellow Facebook Fanboy!

    Rodney Rumford

  57. Robert Metcalf

    October 3rd, 2007 at 4:31 pm

    Dave - Great strategic overview of FB. I always have the time to read a well-though out examination of the FB platform. I am, like most readers here, pressed for time and I’d never be able to spend the time condensing all of this knowledge into a relatively quick read (given the amount of background material that went into it).

    For those n00bs that bypass and ignore FB and the evolution it has brought to the Internet, all I can say is… I bet you’re too busy playing Halo 3 to recognize groundbreaking material when you see it.

  58. Steve Ballmer

    October 3rd, 2007 at 4:48 pm

    Last step:
    Buy 10% of company and make sure they are never serious competitors!

  59. james dean

    October 3rd, 2007 at 4:50 pm

    Sounds like a fantastic conference.

    http://answers.nobosh.com

  60. Don P.

    October 3rd, 2007 at 4:57 pm

    why did this ’securing your facebook strategy’ post read like Facebook for Dummies? i hope techcrunch’s editorial quality average can recover.

  61. simon

    October 3rd, 2007 at 5:07 pm

    Facebook will crush all of these BS apps, and show that they are not monetizable. Stanford class on Facebook apps, Oy….

  62. Chris (citypixel.com)

    October 3rd, 2007 at 5:38 pm

    Barefootmeg, you rock. I got a star for… no reason, but it cost a friend $1.

    Kinda funny, but a few years ago it was all friendster, then it was all myspace, now facebook is ‘hot’. I liked the Ballmer story, and he’s totally correct.

    I think facebook will have better legs due to the apps allowing vampires to bite us all, but it’ll get old.

    Here’s to the next hot social network that causes me to close all my other accounts, migrate my pics, reconnect with a bunch of friends, convince others to join me, join another group with 1000 people in the US with the same name as me, and then repeat with the next hot company :-)

  63. nalanga

    October 3rd, 2007 at 5:57 pm

    Dave -

    Have you personally built an app that has leveraged your 7 principles and made it successful. Hindsight is always 20/20.

    Given these 7 principles, I challenge you to come up with an app that’s a success - over 5 million users and lets say, 30% engagement.

    Nalanga

  64. jon

    October 3rd, 2007 at 6:06 pm

    I second #63’s comment. Dave, show us your badge.

    A couple of successful facebook developers I know never had a 7 point strategy. They just build what they thought was fun or useful. Did you think Mark Z had a strategy sitting in his dorm writing PHP in his underwear?

  65. Jimbo

    October 3rd, 2007 at 6:21 pm

    If you are over the age of 21 and you’re still using facebook on a daily basis, please move on with your life. Take part in more community service projects, attend a baseball game with your kid, read a book, visit an old friend…it’s embarrassing, if not creepy seeing 30, 40 year old men on facebook.

  66. Stone

    October 3rd, 2007 at 6:38 pm

    I don’t get the hype. I’ve been in the Internet space for more than 10 years and admit to not understanding the enthusiasm over Facebook. It’s a community site. It’s overhyped and somewhat weird to see all the praise. Am I wrong?

  67. Jesse

    October 3rd, 2007 at 7:11 pm

    Here’s more info on what a graph is: http://fishtrain.com/2007/08/2.....ial-graph/

  68. Agnes Chen

    October 3rd, 2007 at 7:37 pm

    That extra je ne sais quoi - FB does have it.

    Stone, you should try it. And Chris, I am not partial to being turned into a zombie myself. ;-)

    Dave is spot on. There is not much in the way of innovation on Myspace. As a formerly regular Mysp user, I can say that I prefer the various avenues of engaging other FB users to Mysp’s sweet visual graphics options [typically a biggie for me].

    From my month-long stint on FB, I can see how the site can be a powerful platform for networking when utilized with smarts. I initially hated the forum, considering apps with teddy-in-leather and vampires to be slightly on the juvenile side. but you know, you needn’t add them…

  69. Eliza Amos

    October 3rd, 2007 at 8:01 pm

    Hey Jimbo, how old are you? I’m 32 … a not-so technically inclined writer who futzes around with Facebook for the same reason I, say, learned InDesign after mastering Quark. Because I HAVE to. It’s a communication tool, pure and simple. Don’t regard the tool as a secret clubhouse where the old grandmas can’t come to play. That’s infantile.

    I still don’t know what to make of Facebook.

  70. wil

    October 3rd, 2007 at 8:37 pm

    @48 John C. McClore

    “I’ve often wondered how much further along human civilization would be if television would never have been invented.

    Likewise, I wonder how many collective hours are wasted everyday on Facebook.

    Facebook is useful in that it allows me to stay in touch with friends, view their pictures, and invite them to events. Beyond this it’s just fluff used to waste time by undriven people who have too much time on their hands.

    I wonder how many hours a day successful people like Steve Jobs, Warren Buffet, Tom Brady, Mark Cuban, Bill Gates, Michael Jordan, Justin Timberlake, various business-persons, physicians, etc. are on Facebook?”

    dude you’re a retard, life’s just not about working long-ass hours and making money, life’s primarily about enjoyment once you’ve settled the basic needs for survival

    if you call that a waste of time, why not you just work, eat and sleep for the rest of your life without any leisure nor entertainment, that’s what i would call a pointless waste of time on earth

    by the way the people you mentioned like michael jordan and justin timberlake, they succeed primarily because of the people who find it enjoying to watch them perform, without such desire to entertain themselves, this world would be utterly boring and the people you mentioned won’t be successful at all

  71. Bo Cocky

    October 3rd, 2007 at 10:58 pm

    jeez, there’s a class at Stanford on how to build Facebook apps? Really? I’m definitely not paying the coin it requires to send my kid to Stanford only to have him sit through weekly nonsense like this taught by Dirty Sanchez McClure.

  72. Hugh Toppe

    October 3rd, 2007 at 11:37 pm

    I have never seen so many gratuitous, puerile, insults devoid of substance, hurled at what is an undeniably lengthy but otherwise informative and useful blog post.

    Where do these people come from? Must be an infestation of hormone-intoxicated middle-schoolers from MySpace.

    C’mon people, let me give you some tips on civilized behavior. Listen up, maggots, before your Mommy calls you to dinner from your dank and dark basements:

    1. Read the blog post before hurling invectives.

    2. For maximum effectiveness, the insult must have something to do with what the person actually wrote.

    3. Comments on the author’s appearnce in his photo don’t count, because this just shows the world you were too lazy or stupid to read before commenting.

    4. Use vocabulary that is beyond a fourth grade level. Yes, I know you are only in sixth grade, but surely something must have sunk in during the past two years, in between rolling up spitballs to throw at your basement buddies.

    5. Don’t try to turn up the volume on your speakers. There is no soundtrack on this page. That stuff is over here –> http://www.myspace.com

  73. Hugh Toppe

    October 3rd, 2007 at 11:46 pm

    PS: In case anyone comments that I am in a glass house throwing stones by throwing around words like “maggot”, I can assure you that my insults are not gratuitous. Instead they are very carefully considered, and are directly related to the content I am responding to.

  74. phild

    October 3rd, 2007 at 11:55 pm

    Icq was enough.

  75. Bernard Herdens

    October 4th, 2007 at 3:13 am

    it is networking sites such as Facebook that make people indolent and unproductive; rather move your ass and be an asset to this world…

  76. Don Lafferty

    October 4th, 2007 at 6:40 am

    Wow!

    Ignorance, fear, arrogance and ADHD have all come to call.

    Have faith, there are lots of people, especially over the age of 35, who could use a primer on Facebook and online social networking in general.

    The networking benefit alone is worth the brainpower required to jump in and be counted.

    Don

  77. Aaron

    October 4th, 2007 at 7:53 am

    phild, I disagree. We should all go back to IRC :D

  78. Adam Healey

    October 4th, 2007 at 8:13 am

    When I saw the headline, I was hoping more for a discussion targeting app developers on strategies for leveraging the fb platform, not a tutorial on how to use the app. I know how fb works; what I don’t know and what I’d like to know is;

    a) will fb ever make the leap from social platform to commerce platform
    b) which fb apps are most and least successful to date, why, and how will this change
    c) what is Google planning to launch in the first week of November and how will this change the game
    d) what demographic/psychographic information is available on the 40plus million fb users, and how is that changing/growing

    Now THAT would be a great post.

  79. Edgeman

    October 4th, 2007 at 11:49 am

    Aaron:
    What do you mean “go back to”? A very large amount of people never left.

    As for the rest of it, I read the first few sections of the article but stopped after I got uninterested. It was much too much to read about a site that I don’t use and never will use.
    And for the record, no I am not some MySpace fan boy, I don’t use that site either (Though I think I might have an account on it that I logged into maybe twice, a few years ago… nobody’s perfect.)

  80. Chad Devore

    October 4th, 2007 at 1:09 pm

    I liked it. Thanks for the hints.

  81. Mark America

    October 4th, 2007 at 2:33 pm

    barefootmeg: “Isn’t Facebook a Social site? Why is that the component that no one seems to care about?”

    I’ve used Facebook to 1) get a subleaser, 2) form real-world political organizations, 3) find lodging while traveling, 4) get a job, 5) organize parties, 6) organize fundraisers, 7) win contests, 8) send birthday wishes, 9) find long-lost friends, 10) keep in touch with people around the world, met in real life or just on Facebook.

    What this DOES, if it does anything at all, is flatten the world, so that I can see my personal network spread across it. If I want to go somewhere, I just see who I know in that network, write on their wall, and reserve myself a spot on their couch.

    And in a way, it’s sort of flatted time, also, because nobody has to be left behind anymore, and nobody ever goes away. A friend of mine who died a year ago still has a profile up.

  82. Bill Liffer

    October 4th, 2007 at 4:24 pm

    You are all missing the most important benefit of Facebook: It gets you laid.

    This was the program’s original mission, and I can testify that it works wonderfully, and keeps on working, over the past 18 months.

    It might even work for some of the rude juveniles who have commented in this thread. Because no matter how much of an a*****e you are, somewhere in the world there is a member of the opposite sex that is equally an a*****e. And I sincerely hope the brain-dead rude boys in this thread find their mate and leave the rest of us alone.

  83. mark

    October 4th, 2007 at 4:39 pm

    Facebook aims to do what the ENTIRE Internet already does, under one .COM roof..
    this is fine, as long as you can keep everyone coming back.

    Google, on the other hand, penetrates the ENTIRE Internet .. They get themselves invited, vampirically, into the lives under many-a-roof

    One is omni-present, the other monolithic.. Both are fascinating

  84. Christine

    October 4th, 2007 at 5:46 pm

    There shouldn’t be a Facebook “strategy.” It’s a social site. Talk to people. It’s not rocket science.

  85. venki

    October 4th, 2007 at 6:47 pm

    While this post itself is disgrace to TechCrunch, the comments by readers bring the sanity back to life ..phew :)

  86. Leonard

    October 4th, 2007 at 10:25 pm

    85 comments, somebody hit a nerve. Nice work Dave.

  87. LilaTov Cocktail

    October 5th, 2007 at 10:38 am

    I’m with Agnes in comment #68 and mark in #83
    There is something truly fascinating about Facebook and the FB phenomenon. Even its shortcomings are telling when you think in terms of what human beings crave in online social interaction, what kinds of social lubrication make it easier for people to make or stay in contact with one another.

    I have no idea if it can really be turned into a tool for commerce, but one thing’s clear: Facebook is evolving rapidly, and has already extended far beyond the initial high school application.

    And I can’t think of a bigger waste of time than posting comments that say, “just looking at this article made me vomit in my mouth a little bit,” or “Sink your teeth into my juicy turd.” Your time would definitely be better spent if you were wasting it on Facebook, practicing your social skills perhaps.

  88. Larry Chiang

    October 5th, 2007 at 8:49 pm

    For the record, I include Dave McClure in my slide bibliography cuz his ideas are cash money
    http://www.duck9.com/iMedia

    learn to steal material and get mentored by kissing butt http://foundread.com/2007/09/0.....t-mentored

  89. Greg

    October 6th, 2007 at 6:43 am

    The next step will be using the Facebook platform in real world (non-internet) applications, which our startup is working to create. You will be surprised to see how it works.

  90. kat black

    October 6th, 2007 at 8:11 pm

    @ Hugh: *golf clap* Beautifully articulated. And so true.
    @ LilaTov and Bill: I don’t think any amount of Facebooking would get those boys laid.

    I found this article to be a good introduction for businesses who are running late for the Facebook boat and still think it’s ‘just a social thing’, so thanks :)

    PS While I’m no fan of facial hair for practical reasons (faceburn!) I think the stubble looks good on you, Dave. They’re just jealous cos they can’t grow any yet.

  91. Jen M

    October 11th, 2007 at 8:38 am

    i agree with #78. Let’s face it, anything “social” will end up being invaded by “commercial” interests. That’s the way the world has worked since we quit just hunting & gathering. I just want to know the best way to use fb to help people find my business.

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