Author Archives: Ben Parr

Facebook’s Monster IPO: 10 Interesting Stats

Posted on February 1, 2012 by Ben Parr| 2 Comments

Facebook has filed for IPO. It will likely be the largest IPO in Internet history.

Here are some quick things I’m noticing in the company’s SEC filing:

  1. Zynga accounts for 12% of Facebook’s revenue. Facebook needs Zynga just as much as Zynga needs Facebook.
  2. Zuckerberg owns a WHOPPING 533,801,850 shares — that’s 28.2% of the company. And because he controls 30.6% of the voting shares via proxy, he has full control over decisions.
  3. The next biggest shareholders: Accel Partners (11.4%), co-founder Dustin Moskovitz (7.6%), DST (5.4%) and Peter Thiel (2.5%).
  4. Sheryl Sandberg only owns 1.9 million shares. That’s barely a blip on the radar. Peter Thiel owns 22x that amount.
  5. Facebook has 2.7 BILLION likes and comments every single day. That is nearly a trillion interactions per year.
  6. 845 million monthly active users, 483 million of them are daily active users. Those numbers are up 38% and 48% from the year before respectively.
  7. $3.7 billion in revenue last year. In 2009, it was “just” $777 million in revenue.
  8. Facebook has $3.8 billion in cash on hand. That’s a big chunk of change
  9. 83% of Facebook’s revenue came from advertising. In 2010, that number was 90%
  10. Zuckerberg has a salary of $500k, while COO Sheryl Sandberg and CFO David Ebersman take in $300k.

I’ll add more as I find them.

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Posted in Business

Today Is D-Day for Facebook, and Nobody Can Stop Talking About It

Posted on February 1, 2012 by Ben Parr| 1 Comment

Facebook will reportedly file for IPO later today, and it has the entire tech world buzzing. It will be the only thing people will talk about when Facebook finally files its papers with the SEC.

Don’t believe me? Here’s just a sampling of my Twitter feed from the last 30 minutes:






Clearly people are excited — it’s the first time anybody outside of Zuckerberg’s inner circle has gotten a good, hard look at Facebook’s business. The social network is going to deliver some powerhouse numbers, including its revenue, employee count and current user base. It will also tell you exactly how much of Facebook Mark Zuckerberg currently owns, as well as reveal anybody else that owns more than 5% of the company.

Of course, Facebook may not file for IPO today. It may not even file this week. That will make for a lot of sad techies.

But I’m going to be just like everyone else — I have my SEC notifications turned on. When the IPO paperwork hits, I’m going to pick that thing apart and provide my analysis on one of the most important IPOs in American history.

So stay tuned — it looks like today is Facebook D-Day.

Image courtesy of Flickr, Rishi Bando

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Posted in Business, Social Media

The Cal campus at sunset

Posted on January 31, 2012 by Ben Parr| Leave a comment
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Taken at Valley Life Sciences Building

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Posted in Uncategorized

Likes, Retweets, Comments & the Rise of the Validation Society

Posted on January 24, 2012 by Ben Parr| 9 Comments


Not too long ago, my co-founder and I were deep in investor prep and product design (announcements coming soon) when we started talking about the emotional appeal and “stickiness” of our product. When you’re building a consumer-oriented product, creating an emotional connection with the user is central to success.

We were fascinated by the fantastic Plancast post-mortem by founder Mark Hendrickson. While the entire thing is worth a read, this is the paragraph that stuck out to me:

“Most social networks feed primarily on vanity, in that they allow people to share and tailor online content that makes them look good. They can help people communicate to others that they’ve attended impressive schools, built amazing careers, attended cool parties, dated attractive people, thought deep thoughts, or reared cute kids. The top-level goal for most people is to convince others they are the individuals they want to be, whether that includes being happy, attractive, smart, fun or anything else.”

Hendrickson nails it. Social networks cater to our emotional desire need for validation. It’s why, as my follows argue, that we strive to get As on our report cards, go to church or value trophies so highly.

I argue that modern society’s emphasis on validation has skyrocketed though, thanks to the rise of social media. We have entered the Age of the Validation Society.

Why do post photos on Facebook? Why do you tweet? Why do you check out your Klout score, even though you claim you never check it? The answer is simple: we get an emotional high every time somebody likes, retweets or comments on the things we post.


We always want another hit. Validation is the crack, Internet is the crack pipe and Facebook & Twitter are the dealers. Yes, I just compared Facebook and Twitter to drug dealers.

You can argue that you post on Facebook to keep your family up-to-date about your life. You can argue that you tweet to build up your personal brand. But in the end, you’re just like every other person on a planet: you love it when people start sharing one of your blog posts like mad, and you’re disappointed when nobody comments on that witty thing you just posted to your friends.

Whether the rise of the Validation Society is a good thing… I don’t know. But it’s real, and great consumer products need to keep this trend in mind. It’s something my co-founder and I are going to have to nail if we’re going to succeed as startup founders.

Additional thought: One of my followers raised a good point: validation is more valued in America than it is in most other cultures. Or perhaps it’s a different type of validation. I’d be curious to hear why the Japanese love Twitter so much, or why Facebook is HUGE in Indonesia.

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Posted in My musings

Surprise! RIM’s Stock Price Plummets

Posted on January 23, 2012 by Ben Parr| Leave a comment

Ouch.

This is what happens when you delude yourself into thinking things are fine. RIM needs an outsider, not an insider, to fix things.

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Posted in Business, Tech

Legend of Zelda: Ocarina of Time + Minecraft = Awesome [Video]

Posted on January 23, 2012 by Ben Parr| 1 Comment

A group of people decided that they wanted to recreate Legend of Zelda: Ocarina of Time in Minecraft. It’s called Hyrulecraft, and the results are simply spectacular.

They redid everything: Hyrule, dungeons, all the little towns… everything but Gannon himself. They’re working on adding NPCs, quests and game mechanics, though.

Excuse me, I’m going to fire up Minecraft now. If you want to try it out, it’s sever 64.79.106.218.

Image courtesy of Hyrulecraft

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Posted in My musings

Tagged

RIM Is Still Delusional About Its Bleak Future

Posted on January 23, 2012 by Ben Parr| 2 Comments

RIM announced on Sunday that its longtime co-CEOs are stepping down. It decided to make the announcement during the Giants-49ers game, which I’m sure they knew would dominate Twitter and the news media.

While the move was absolutely necessary if the company was to turn things around, its announcement gives me absolutely no confidence that its new CEO, former co-COO Thorsten Heins, can right the ship.

Here are a few quotes from the company’s press release that give me pause. All of the quotes are from Heins:

“Mike and Jim took a bold step 18 months ago when RIM purchased QNX to shepherd the transformation of the BlackBerry platform for the next decade. We are more confident than ever that was the right path. It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today.”

I can buy that buying QNX was a bold move, but RIM has failed to integrate QNX into its phones in any compelling way. Also, I’m calling bullshit on his statement that RIM’s freefall in the markets is simply because its former co-CEOs were “unwilling to sacrifice long-term value for short-term gain.” Under their leadership, the company has dropped from $50+ per share to less than $20 in the span of a year.

“We have a strong balance sheet with approximately $1.5 billion in cash at the end of the last quarter and negligible debt. We reported revenue of $5.2 billion in our last quarter, up 24% from the prior quarter, and a 35% year-to-year increase in the BlackBerry subscriber base, which is now over 75 million.”

RIM neglects to mention that revenue dropped by 5% from the previous year, where it earned $5.5 billion in Oct-Dec 2010. Profits dropped 71% due to poor sales of the BlackBerry Playbook.

“BlackBerry 7 has been well received. We are very excited about PlayBook 2.0 and BlackBerry 10. The reception of our products at this year’s Consumer Electronics Show was encouraging.”

The Motorola Xoom was well received at CES as well, and look at how that turned out.

“RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position.”

What leadership position? Apple and Google took that away from RIM years ago.

“As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result.”

Hopefully they have learned some tough lessons, but I’m still not convinced.

“Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new Chief Marketing Officer to work closely with our product and sales teams to deliver the most compelling products and services.”

Getting a new CMO is fine, but there isn’t a CMO on the planet that can successfully market a vastly inferior product in a market as competitive as smartphones.

Look, I know I’m being really, really hard on RIM, but they deserve it. They got their ass kicked by Apple and Google and they’ve been doing a terrible job of playing catch-up ever since. It failed to invest in apps, and as a result it just doesn’t have the developer ecosystem it needs to survive in today’s market.

There will be no Rocky-esque comeback for RIM. Instead, after a few more years of struggling and failing to regain relevance, the once-great technology giant will likely find itself in the hands of an acquirer like Amazon.

Image courtesy of IntoMobile

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Posted in Tech

Y Combinator’s Short-sighted and Irresponsible Declaration of War Against Hollywood

Posted on January 21, 2012 by Ben Parr| 54 Comments

Y Combinator, one of the most influential investment funds in Silicon Valley, declared war on Hollywood on Friday.

I wish they had really thought through the unintended consequences of their call to arms, because lots of innocent people are about to get hurt.

Y Combinator is essentially asking for entrepreneurs to take on the Hollywood establishment. In return, Y Combinator will fund them. Hollywood tried to mortally wound the web through SOPA and PIPA, but we repelled them, but YC believes (rightly so) that Hollywood will try again to harm the web, so it has decided to take the fight to Hollywood.

I have a lot of problems with this line of thought (you tried to hurt me, so I’m going to hurt you), but let me summarize the ways that I believe this will backfire:

  • The heart of Hollywood is in its aspiring stars, not its execs. I have had the privilege to meet hundreds of amazing aspiring actors, actresses and musicians through the production companies I advise. Their dream — their only dream — is to be on that stage and entertain millions. Proposing to destroy Hollywood will also destroy the livelihoods and the dreams of these entertainers and the crews, writers and creatives that support them. That is irresponsible.
  • War is rarely the solution. Yes, Hollywood attacked us, but there better solutions that retaliation. Some execs in Hollywood are indeed trying to kill the web, but I have also met a new generation of rising execs that understand that embracing digital is the future. Attacking them will hurt the progress that has been made with products like Hulu and Vevo.
  • Entertainment and art are relative. “It would be great if what people did instead of watching shows was exercise more and spend more time with their friends and families,” YC says in its declaration. This isn’t a bad philosophy, but it also ignores artistic masterpieces like Schindler’s List and Planet Earth that have entertained, informed and inspired millions of people.

I get that YC is angry at Hollywood. We all are. But declaring war isn’t the solution — it will only make things worse. Sorry to be so harsh on you YC, but the consequences are potentially severe if we keep fighting.

Instead, I call on leaders from Silicon Valley and Hollywood to come together to try to find common ground before it is too late. We can find a way to respect copyrights and make performance art flourish online while protecting the integrity and openness of the web.

Let’s take a step back, get our emotions into check and find some common ground. If you want to work with me to find common ground, I’m only an email away.

~ Ben

Image courtesy of Flickr, TLVshac. Photo taken on the set of The Devil Wears Prada

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Posted in Uncategorized

SOPA Is Dead!

Posted on January 20, 2012 by Ben Parr| 6 Comments

From Mashable:

Lamar Smith, the chief sponsor of SOPA, said on Friday that he is pulling the bill “until there is wider agreement on a solution.”

“I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy,” Smith (R-Texas) said. “It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.”

Congrats, everyone. Now it’s time for the hard job of crafting new legislation that stops piracy while protecting the integrity and freedom of the Internet.

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Posted in My musings

A Breakdown of the First Battle of the Great Megaupload War of 2012

Posted on January 20, 2012 by Ben Parr| 13 Comments

Shit hit the fan on Thursday; the U.S. government took down Megaupload, one of the largest file-sharing sites in the world. Here’s a quick recap of the key events in this crazy story:

  • Megaupload is one of top 100 most-visited websites on the web for years, mostly because it was an easy and relatively “safe” way to download and transfer pirated content. Yes, people hosted legal stuff there, but the vast majority of it was pirated.
  • On December 9, a bizarre video was released with A-listers seemingly endorsing Megaupload. P Diddy, Will.i.am, Alicia Keys, Snoop Dogg, Kanye West were among the stars featured.
  • Universal and the RIAA were NOT happy with this, so they asked YouTube to take it down due to copyright infringement,. They succeeded, though Megaupload continued to host the video (YouTube eventually brought it back as well). Megaupload essentially gave the music industry the middle finger.
  • Everything exploded yesterday, though. The FBI led a coordinated strike against Megaupload that involved 20 search warrants in eight countries. The result was the shutdown of Megaupload.com and the seizure of more than $50 million in assets.
  • Megaupload’s staff was also arrested and denied bail in New Zealand. This includes founder and majority owner Kim Schmitz — aka Kim Dotcom. Yes, that’s what he goes by.
  • Here are some pictures of the New Zealand government confiscating the Megaupload team’s very fancy cars.
  • Oh, and it was revealed that Swizz Beatz is the company’s acting CEO. Yes, the guy who’s married to Alicia Keys. This was likely an attempt by Kim Dotcom to reduce the heat on himself.
  • GigaOm has a fantastic summary of the indictment itself, if you want to learn more.
  • There was an important part of the Internet that didn’t like how this raid went down though: Anonymous. The shadowy hacker group launched its largest attack ever merely minutes after the raids became public. They attacked “the White House, the FBI, the Department of Justice, multiple record label sites, the MPAA, and RIAA, and the U.S. Copyright Office” all at once. Anonymous considered the destruction of Megaupload an act of war, and they responded with an all-out counterstrike.

If you think today is the worst of the retaliation, then you’re deluding yourself: Anonymous is nowhere near done. The IRC chatrooms where Anonymous plans its attacks are still active. I suspect that it will continue to lash out as more details of the Megaupload takedown come to light.

Questions remain: will Megaupload’s leaders be extradited to the U.S.? Where are pirates going to store files now? What is Anonymous’s next move?

The fireworks are just beginning, so find the nearest bunker, because yesterday was just the first of many battles in the Great Megaupload War of 2012.

Image courtesy of Flickr, Bryan Burke. FYI, nobody was harmed in this photo.

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Posted in Business, Tech