CNN is reporting that Facebook has acquired Gowalla, the Foursquare competitor that transformed itself into a storytelling app several months ago. The team will start working on Timeline, the soon-to-be-launched update to Facebook Profiles.
The acquisition makes perfect sense in my mind. Facebook Timeline is about telling the story of your life. Gowalla is a mobile app focused on telling the story of your travels. Integration of Gowalla’s technology into the Facebook mobile app will make it possible to better chronicle your life story via mobile.
My guess is that Facebook didn’t have to pay a high price for Gowalla. The company failed as a direct competitor to Foursquare and, from what I can tell, its user growth was stagnant.
Still, Gowalla is a beautiful app with good technology. Congrats to Josh Williams and his team on the acquisition.
Posted in Uncategorized
One of the things I’ve found myself carrying around these days is a sketchpad.
The reason is simple: I have a lot of ideas, for both the companies I advise and for my own startup ideas. I’m a visual person when it comes to developing products, so I’ve always found a sketchpad to be immensely useful for drawing out the product and user engagement flows for my ideas.
When ideas get more structured, I bust out OmniGraffle, one of my favorite apps for Mac and iPad. Most product people already know about OmniGrafflie: it’s a great way to build visual product roadmaps and mockups. If you aren’t using it, I highly suggest it.
The point I’m trying to make isn’t that you should carry a sketchpad around with you. My point is that you need to have a way to immediately record and expand the ideas in your head. You can write out a story, record a voice note, start a Wiki, call your co-founder, or mock something up in photoshop. Use the medium that suits how your mind works.
In my case, I use sketchpads and whiteboards. They are my canvas. Make sure you find yours.
Posted in Entrepreneurship, My musings
The $400 million Google-Admeld deal has closed, giving Google even greater power and reach in the display ad business.
From the Google Blog:
“In June, we announced that we are acquiring Admeld, a New York-based company that helps large publishers (also known as the “sell-side” by people, like me, who live and breathe display advertising) maximize their revenues from online advertising. We’re pleased that the U.S. Department of Justice has today cleared this deal. We’ll close the acquisition in the coming days and then start the real work—building improved products and services that help our publisher partners to make more informed decisions across all their ad space, and to grow their revenues.”
Essentially, Google now controls one of the major systems advertisers use to choose where to place their ads. Expect the search giant to link AdMeld’s technology to DoubleClick, making Google an even bigger force in web advertising. With competition like AOL and Yahoo, it won’t be long until Google dominates display advertising, too.
Posted in Business
If you want to build a multi-billion dollar business, you can’t just build a product: you need to build a platform.
That was my major takeaway from the news that Spotify is launching an app platform. It’s in its infancy (thus why journalists are rightfully bashing it), but it’s the start of a transformation for Spotify.
In my opinion, the major inflection point for Facebook — the moment it transformed from a million dollar business into a billion dollar one — was May 2007, when it launched the Facebook Platform. When it opened up its APIs to developers, it created an ecosystem that drove up Facebook’s value. The next year, Facebook hit 100 million users and the engagement skyrocketed from there.
That’s why Facebook is the king of identity, and that’s why it will IPO for north of $100 billion next year.
I make the same argument for mobile, specifically Apple and the iPhone. When Apple opened itself up as an app platform with the launch of the iPhone 3G, the mobile economy boomed and so did iPhone 3G sales. Twitter, Salesforce, Amazon Web Services and others have gained tremendous growth by positioning themselves as platforms.
The platform is king, and Spotify knows it. That’s why it’s launching a platform.
Image courtesy of Flickr, Andreas Blixt
Posted in Business, Entrepreneurship, Tech
Women are still paid far less than men on average. Women make approximately 0.77 cents to every dollar a man makes, according to Time Magazine.
There are a lot of contributing factors to this problem, but one that a lot of people don’t focus on is how most women are losing out during the salary negotiation.
I ran across an extraordinarily interesting thread on Reddit today. The thread is by a person who performs the salary negotiations for a large multinational technology company.
“I regularly hire women for 65% to 75% of what males make,” the anonymous Redditor says. “I am sick of it.”
More from the thread:
“Our process, despite the pay gap, is identical for men and women. We start with phone interviews, and move into a personal and technical interview. Once a candidate passes both of those, we start salary negotiations. This is where the women seem to come in last.
The reason they don’t keep up, from where I sit, is simple. Often, a woman will enter the salary negotiation phase and I’ll tell them a number will be sent to them in a couple days. Usually we start around $45k for an entry level position. 50% to 60% of the women I interview simply take this offer. It’s insane, I already know I can get authorization for more if you simply refuse. Inversely, almost 90% of the men I interview immediately ask for more upon getting the offer.”
This problem continues to the counteroffer. Men will simply put out a higher number, while many women in this person’s experience don’t even put out a number, so the negotiator continues to lowball it.
You may say that this type of salary negotiation is unfair, but this is how markets work — two sides haggling over perceived value. The fundamental issue here is how women perceive and carry themselves during these negotiations and how often they ask for a raise.
This is an issue that Facebook COO Sheryl Sandberg, a woman I deeply admire, has continually noticed. “Women systematically underestimate their own abilities,” Sandberg told an audience during her famous TED Women talk. 57% of men negotiate a higher salary for their first job out of college, while only 7% of women do the same.
Fighting this issue is not just about laws and regulations, but awareness and mindset. Tell that young college senior niece or daughter of yours that she is worth more and that she should be confident in demanding more. If a company doesn’t accept her terms, it’s their loss and not hers.
I’ve embedded Sheryl’s TED talk for good measure. Let me know what you think of the male-female salary gap issue in the comments.
Image courtesy of Flickr, GS+
Posted in Entrepreneurship, Innovation, My musings
The Wall Street Journal reports that Facebook’s IPO will drop between April and June of 2012. The company could potentially raise $10 billion with a valuation north of $100 billion, depending on market conditions.
The IPO time frame shouldn’t surprise anybody, though. I reported back in January that Facebook’s IPO would most likely drop in May 2012. The reason is simple: SEC rules will require Facebook to reveal its financial information to the public in May 2012. If you have to report earnings, you might as well IPO and raise $10 billion in the process.
Just like Zynga, Facebook is going to have a retention problem once it IPOs. A lot of employees are vesting, and they are going to be very tempted to jump ship and do their own thing. Or buy a beach house in Hawaii and lay around in the sun for a couple of years.
I think, in a perfect world, Zuckerberg wouldn’t IPO. He’d rather have full control of the company while keeping its finances secret. But proposed changes to SEC regulations that would give him that option won’t be implemented by then.
Besides, there’s a lot you can do with $10 billion. I suggest a giant slingshot that fires water balloons at Google’s campus in Mountain View. I’m pretty sure Facebook employees would be in favor of such an awesome weapon of war.
Posted in Business, Social Media
As some of you may know, I’m an advisor to Tracks.by, a startup founded by my longtime friends Matt Schlicht and Mazy Kazerooni. They’re building an awesome social platform for artists to launch their content and reach millions of fans.
One of the biggest artists using their platform is Lil Wayne (you can see Tracks.by live on Lil Wayne’s Facebook page). And yesterday, they took him out skating at a skate park in Silicon Valley.
To say I’m jealous is an understatement. Their pictures with them are simply badass.
Tracks.by has quietly become one of the top 200 apps on the Facebook platform. It has more than 1.6 million monthly active users after launching in private beta a month and a half ago.
Posted in Entrepreneurship, My musings
Groupon, which at one point traded for more than $26 a share, has dropped to $15.24 and continues to drop in after-hours trading. That’s nearly 25% down from its $20 IPO strike price.
At $26, Groupon was worth around $18 billion. At $20, it was worth $12.7 billion. And at $15.24, it’s worth just $9.72 billion.
This is a freefall that’s feeding upon itself. It’s going to stop at some point… the question is at what price.
I never thought I’d say this: I’m starting to think that Groupon should have taken Google’s $6 billion acquisition offer. I’m going to wait for Groupon trading to normalize though before I call that one.
Posted in Business
The New York Times published a great article this weekend on the “tough culture” within Zynga, the creator of FarmVille, CityVille and dozens of other social games. I’m not surprised by the report — more than a few employees have told me that Zynga isn’t exactly the easiest or happiest place to work.
From Evelyn Rusli’s NYT piece:
“Led by the hard-charging Mr. Pincus, the company operates like a federation of city-states, with autonomous teams for each game, like FarmVille and CityVille. At times, it can be a messy and ruthless war. Employees log long hours, managers relentlessly track progress, and the weak links are demoted or let go.
But that culture, which has been at the root of Zynga’s success, could become a serious liability, warn several former senior employees who agreed to speak on the condition of anonymity because of fear of reprisals.
As the discord increases, the situation may jeopardize the company’s ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119 million on acquisitions in the last two years.”
Zynga has a relentless culture that is, like Google, focused on data. The numbers need to be up for you to keep your job. The result is an IPO that could be worth north of $20 billion.
However, that same culture is clearly at its breaking point. Without big changes, Zynga could experience an exodus that could seriously damage the bottom line. I’ve been told things are getting better though, and that the culture isn’t as unforgiving as it once was.
To understand the culture at Zynga, you need to understand its unquestioned leader, Mark Pincus.
He’s a unique character to Silicon Valley. He’s a business guy, not an engineer. He got a degree in Economics from UPenn and an MBA from Harvard. He worked in finance for many years.
The result: Pincus lives and breathes numbers and data — it is his comfort zone. It’s no wonder Zynga is so data-driven.
By his own admission, he also didn’t fit in with a lot of these places. “I found that I couldn’t be successful in anyone else’s company,” Pincus told a group of entrepreneurs at the 2009 Y Combinator Startup School. “So I got kicked out of some of the best companies in America.”
(by the way, I’ve embedded the video of that talk above. If you really want to understand Pincus, watch it.)
The man follows his own vision, and it rubs a lot of people the wrong way. He’s also incredibly intense about it. It’s made Zynga relentless in its quest to be #1, but its rank-and-file have definitely paid a high price for it.
Why is Zynga so data-obsessed? Why is it so intense that countless employees are simply burning out?
The answer should be obvious: it all stems from Mark Pincus and his personality. His intensity and obsession with data are fundamental to his nature, and thus they are fundamental to Zynga. Those traits made Zynga into a multi-billion dollar company.
However, I think Pincus is finally realizing that his level of intensity and his style of leadership aren’t something most people can sustain for long periods of time. That’s why Zynga’s doing more to ease workloads and make its employees happier.
Zynga is in a period of transition. It’s about to turn into a public company, and it will no longer be able to use the promise of pre-IPO stock to retain talent. It will have use other weapons, such as perks and keeping employees happy, to stay on top.
Zynga’s culture will have to adapt if the company expects to continue growing.
