Posts Tagged ‘facebook’

Hulu, Facebook and SplashCast: Being too early doesn’t pay the bills, but it beats a stick in the eye

September 23, 2011

SplashCast's SocialTV Product

At SplashCast, we pioneered a concept that we called “SocialTV” (I actually believe we coined the term for what it’s worth).

Well over two years ago, we created Facebook apps with social features focused on over 20 popular television shows. TechCrunch’s Erick Schonfeld covered the product: Online TV Social, It Is All About The Chatter.

Splashcast Media, which has created apps for about 20 different TV shows, two weeks ago introduced a new feature called Chatter into its embedded video players. For instance on Facebook it has apps for The Simpsons, The Office, Family Guy, and more. Once you install each app, you can watch episodes of the show, many of them streamed through Hulu. SplashCast tells me that it is getting about 7 million monthly video views from one million unique viewers across all of its apps, with Hulu videos being the fastest growing proportion of that. Read the rest of this entry »

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Third Party Platforms – Building on Thin Ice

April 13, 2010

Twitter announced that it will be launching its own application.  It’s a smart move for Twitter for a host of reasons.  Unfortunately, the move doesn’t bode well for the TweetDecks of the world (i.e., companies that have been building a business on the Twitter platform).

This story has repeated itself over and over again in a variety of ways and contexts.  For example, building a business on the Facebook platform is a scary proposition.  Facebook has repeatedly changed the rules for application developers, and will continue to do so.  iPhone/iPad application developers are likewise subject to the whims of The Apple.  Even if platform changes don’t drive you out of business, they certainly make it hard to plan (which ultimately impacts the value of a business). Read the rest of this entry »

The Demise of SplashCast – Many Lessons Learned

August 10, 2009
SplashCast old school logo

SplashCast has shut its doors. To say the least, I’m very disappointed. In no particular order, here are a few observations from my third (and least successful) startup effort.

1. Money. This is the first time that I’ve worked at a company that literally ran out of cash. My first startup raised close to $70MM (although failed for other reasons) and my second went public (NASDAQ: INET). I’m still sorting it out, but I’m not going to play the Portland Card. Our lack of funding was a result of numerous factors (yes, including our location). If I had to give a single reason, I would point to the economy. (See good discussion at the SiliconFlorist blog on SplashCast and funding in Portland.)

2. We were nimble. Although we were cash starved, we were able to try lots of things. We had several distinct chapters during our run. I’m very proud of our ability to experiment and adjust. (Kudos to the great team at SplashCast!)  While I don’t truly believe that we had found the Promised Land, I do believe that we would have been able to create a profitable business with more time.

3. We left no stone unturned. We pitched scores of venture capital firms from Boston to LA. When we later entered M&A mode, we directly pitched 63 potential buyers (I love stats). I can very confidently say that we did everything possible to extract value for our investors.

4. The music business is REALLY messed up. I would buy newspaper stocks before investing in music. We benefited in many ways by partnering with music labels, especially Sony/BMG. We generated traffic and attention, which helped us. If I had it to do over again, however, I would have moved beyond music applications much sooner. Advertisers don’t want music and consumers (generally) won’t pay for it. I have no idea how to make money in music (Note: Pandora has potential). I can confidently say that that the music chapter of my career is over…

5. Do not build a business focused solely on Facebook applications. The social networks, especially Facebook, have become customer relationship management platforms (i.e., a venue to manage brands versus build them). Applications have been demoted. Fan Pages (for now, at least) are the focus. We seriously struggled with generating and maintaining traffic to our applications (a universal issue with app developers). We were starting to work on a more holistic approach to how we packaged and marketed our TV applications, but ran out of time.

6. I’m guessing that watching TV on a computer will ultimately prove to be a niche.
For all of the hype about Hulu.com, its traffic has essentially been flat since February (after a huge marketing campaign). Watching TV online is convenient, but ultimately an inferior experience. It makes sense at work, at the airport or as a way to catch up on a missed show. However, it can’t compete with a “real” TV. I’m very interested in the following the efforts of Boxee and others working to combine elements of the Internet (e.g., recommendations) with the home television experience.

7. Branded applications were a short lived marketing fad. When the Facebook application platform opened up, brands rushed to create their own applications. We developed more than a few such applications for brands such as Nike and Red Bull. The bottom line, however, is that these applications aren’t viral. Marketers have to spend the lion’s share of their budget to achieve distribution. Related to point #5 above, marketers have quickly figured this out and have moved away from stand-alone branded applications. (Applications need to be part of a broader marketing program to work.)

8. Our failure to create a business around user generated content broke my heart. The original SplashCast product was designed to allow small scale web publishers to create their own TV channels online. This was the concept that got me excited. We developed a strong core (thousands) of users of this product. However, we could never scale it. We very quickly concluded that the market for more advanced user generated publication was very small. Furthermore, there was no meaningful way to generate revenue through either subscription fees or advertising. A little more pre-launch market validation would have been useful…

This all seems obvious now (e.g., relatively few users of Twitter actually contribute). It was a bit much to expect hundreds of thousands of users to create and curate online channels of multimedia content.

9. Portland is the wilderness. As stated in point #1, I’m not going to play the Portland Card when it comes to funding. That said, I would advise a Portland based startup to shy away from efforts dependent on the entertainment industry. Although we were successful in forming partnerships with some of the largest media companies in the world, I’m confident that we would have been far more successful if we were based in NYC or LA. I would advise a Portland startup to focus its efforts in areas that are more intuitively “Portland” (e.g., sports/outdoor, sustainability).

10. I’m still fired up. I very much believe that Portland can produce successful startups. They need to pick the appropriate markets and consider less traditional fundraising approaches (can you say “bootstrap”?).

Note (8/24/09): I enjoyed reading Scott Rafer’s open and honest blog post about shutting down Lookery.  The comparison to SplashCast is interesting given Lookery’s focus on generating revenue via advertising in Facebook applications.  He points out three major strategic errors: (1) reliance on a single platform (i.e., Facebook); (2) continuing to push forward in Facebook after changes disfavoring applications were made in summer 2008; and (3) building product before the market was ready for it (“early = wrong”).  SplashCast similarly relied far too heavily on Facebook’s application platform (a huge understatement) and launched numerous products before testing market readiness (both consumers and advertisers).  Regarding the sin of launching too quickly, the product driven culture of internet media is perhaps a bit arrogant in the sense that entrepreneurs, over and over again, believe that they can divine what consumers and advertisers want before actually asking them.  Hey, I’m quite certain that I know what others want 🙂

Note (12/21/09):

A couple of additional thoughts:

Focus on business model as much as product.  I’ve been talking to a lot of entrepreneurs lately, and most discussions focus on the product.  Simple point, but apparently not obvious.  Looking back, we suffered from a bit of this too.

On the topic of product, it must be simple.  When I look at the apparent audience success of Posterous.com versus what we were doing, I’m struck by the power of simplicity.  Our original user publishing product looked like an airplane cockpit (too many controls, options, etc.).  Not good.

Microsoft, Yahoo! and French Boredom

May 5, 2008

I can’t get into the SplashCast blog admin right now, so I’m posting my initial thoughts (speculation) regarding Microsoft walking away from Yahoo!.

This is a huge story. It’s the digital media story of the year.

Oh, and it’s not boring as charming French blogger Loic Lemeur asserts (with a few under his belt). 🙂

I’ve been hearing all kinds of convoluted theories about what is happening. My guess is that the simple answer is probably correct: Microsoft isn’t done. They realize that they represent the best option for Yahoo! and can wait them out.

As expected, YHOO is down big Monday morning. This is what Microsoft wants to see. It’s a big stock market “I told you so.” Microsoft let go of the rope and Yahoo! fell.

So my guess? Microsoft will jump right back in three to four months down the road and pick up a Jerry Yang-less Yahoo! up for a much lower price. That’s it.

That’s what I think.

It’s a lot more fun to speculate about other scenarios, however.

Microsoft needs traffic and advertisers. They are proven experts in software development. They haven’t been able to create the other two big pieces: massive traffic and advertiser relationships. There are some interesting non-Yahoo! traffic options for Microsoft.

The most obvious ones are the mega social networks: Facebook and MySpace (less interesting would be AOL/Bebo).

Yahoo! is last year’s hot restaurant. MySpace and Facebook represent the future (as far as anyone in this business can see the future). Traffic and engagement metrics point to the social networks as the place for advertisers to be.

Of course, it’s not as simple as saying Microsoft should pick up Facebook or MySpace. They would have to do some serious wrestling to pull the MySpace (or AOL/Bebo) away from Google. Perhaps it is possible, but it seems highly unlikely.

Facebook might be Microsoft’s next best option. Microsoft already owns a chunk of equity and owns the display advertising real estate on Facebook. So, why not play this out sooner versus later and purchase Facebook now?

There are several reasons why Microsoft might rather wait. First of all, the valuation will be crazy. However, that’s likely not enough to scare off Microsoft (especially if Facebook is viewed as one of the last great traffic sources).

Secondly, advertisers have not yet figured out a way to effectively generate revenue in the social networks. CPMs are very low. Banner ads have performed horribly there. That being said, there are other ways to generate advertising revenue (e.g., sponsored applications). This feels like a challenge that Microsoft might well be up for.

All that being said, my guess is that Microsoft will be standing by ready to scoop Yahoo! up off the playground asphalt on the cheap. If, however, Ballmer has seriously walked away from Yahoo! I’m guessing that Microsoft makes a play to acquire Facebook. If so, things will get even more interesting in terms of the ongoing effort to effectively generate revenue in the social networks.

Interesting times in digital media. Well, when hasn’t it been interesting in this business?