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Secret Weapon Revisited

May 4, 2012

The Facebook Roadshow hype machine is just kicking into gear and there’s some interesting stuff indeed.  While wealth creation and giddiness is off the charts (even stodgy Investment Banks are losing it),  the spotlight is shining on a Facebook phenomenon we have been discussing recently: the amazing opportunities that Facebook’s Open Graph present to Consumer-side New Market Entrepreneurs.

Yesterday Mark Zuckerberg stated:   “We are going to reach this point where almost every app you use is going to be integrated with Facebook in some way.”

Hype?  Perhaps.

But look at these outlandish stats for recent consumer app startups that have filled up with FB’s Open Graph rocket fuel:


If you are a consumer play offering content, coming up with new ways for your users to share with friends in a social setting like Facebook is a must.  And from the stats above (and new ones every day), such practices are clearly turning into increased engagement and adoption.   As we said last month, the Open Graph is clearly a massive success, causing apps like Viddy, SocialCam and Instagram to skyrocket in both content engagement as well as user numbers.   For those unfamiliar with how this plays out, when connected to the Open Graph (and appropriate permissions granted) your users activities get published to the newsfeed and ticker.   As we mentioned in last month’s post, most Facebook users will recognize this phenomenon via first mover Open Graph partners like Spotify and the Washington post.

Will we tire as Facebook users of seeing an endless series of updates about our friends’ articles read, books completed, songs heard, videos watched?  Time will tell.  For sure we quickly tired of mafia wars and farmville BS.   But for now, Open Graph connectedness  for unique, value-added, interesting and remarkable experiences seems like the closest thing to assured traction for Consumer-focused New Market Entrepreneurs as has ever existed.

In the same way that Google+ is trying to become a seamless social layer within all of Google’s products, Facebook is becoming the social layer for everything else. This type of social glue is something that’s been lacking for mobile apps that often sit siloed on your device with no way of talking other apps or the world around you.  As Facebook becomes woven into the fabric of every popular app that sees success on iOS and Android platforms, it’s making itself more irreplaceable.  Read more.

As with any good thing, there are the risks well-described here, which compares the Open Graph to being on steroids.

The best example of this kind of accelerated growth is Pinterest, which went from scrapbooking app for midwestern moms to the “fastest growing startup of all time,” with everyone, including President Obama, joining up to share their favorite recipes and dog photos. The big surge in growth coincided precisely with the debut of Pinterest on Timeline / Open Graph.

Pinterest experienced healthy but not staggering growth through 2011. But the service was one of the first apps to get access to Facebook’s Timeline and Open Graph. It helps to have a co-founder who worked at Facebook, and an investor like Marc Andreessen who sits on Facebook’s board.

The service leapt from 6 million monthly active users on Facebook to a peak of around 14 million. And then, in just the last thirty days, it has plummeted, falling to around 8 million. Zuckerberg giveth, and he taketh away. As to the exact cause of this rapid change, it seems that after the social network disabled auto-posting, Pinterest activity on Facebook plummeted. Its daily active user count has been cut in half, from a high around 2.2 million to 1.1 million today.

This quote summarizes the situation perfectly:  “The thing about Facebook is, they can deliver you this amazing growth,” says Stokes. “But at some point, they always change things up, and then you’ve got to sink or swim on your own.”  If you are building great product and Facebook changes up, you will keep the users Facebook helped you win.  If your product sucks, you are in trouble.


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