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Why Color Is More Than “Yet Another Photo-Sharing App” March 28, 2011

Posted by David Card in Uncategorized.
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Much of last week’s buzz surrounding the launch of Color was justifiably skeptical. The startup, after all, raised $41 million to enter a crowded space without a business model or customers, and many wonder whether the world really needs another mobile photo-sharing app. But two components of Color’s vision — implicit networks (connections created without user effort) and place/time tagging — extend far beyond photo-sharing, and make the company worth watching as a potential indicator of social media and data-mining trends.

The Color app for iPhones and Android lets users share photos in real time with other nearby photo-snappers. The sharing network is determined by proximity rather than by a user explicitly specifying who his friends are. Users are anonymous and all content is public.

Early reviews are pretty negative. Om writes that Color is attracting more attention from pundits than users because the app may not deliver obvious fun or utility. Matthew Ingram wonders if the big funding bet is on Color’s all-star team — which includes Bill Nguyen (Lala), Peter Pham (BillShrink) and former LinkedIn chief scientist DJ Patil — rather than its product or ideas.

But some of those ideas matter.

Implicit Networks

Angel investor and Hunch co-founder Chris Dixon says he’s intrigued by Color because it is pushing the envelope on implicit social graphs. Color’s implicit networks aren’t specified by users, but rather are based on underlying contexts like geography or shared interests. I’ve written before about context-based social networks, and how Facebook Groups is struggling to deliver them. Peter Yared, a VP at WebTrends, writes that Facebook is also experimenting with implicit neworks of friends.

If Color builds on its implict network concept it could deliver instant groups of friends for different occasions or interests, and expose recommendations based on common tastes. Marketers could target advertising or offers within a Color network to real-time groups around an event or location, or aimed by shared interests.

Place and Time Data

Search pundit John Battelle goes a little overboard on how Color could push augmented reality. But he’s right about the importance of geo-tagged data. In a presentation last week at GigaOM’s Structure Big Data 2011 conference, IBM Distinguished Engineer Jeff Jonas showed how adding place and time to data objects can power big data analysis, predicting a person’s likelihood of being at a give location with astounding accuracy, and assisting in identity management. Again, if Color is a leader in gathering this data, it could build out a powerful — yet still privacy-protected — targeted advertising network.

Business Model to Come?

Color chief Nguyen says the company is really about data-mining rather than photo-sharing. He says combining place and time data with implicit networks can help services or marketers parse the difference between entertainment and work activities. That information will affect the elasticity of Color’s networks — how broadly it expands or contracts its sharing range — and power its algorithms for ranking photos and, presumably, other content or advertising elements.

Nguyen also talks about a future news API that could spawn a curated news app for journalists. He describes a pretty dumb restaurant service that would help waitstaff know customers’ first names and interests. Before he sold Lala to Apple, reportedly for $85 million, Nguyen took the service through at least three different business models. Lala started as a CD trading service, morphed to a digital music locker, and then offered Web songs with perpetual streaming rights for ten cents each. With its talent and cash hoard, there’s no doubt Color will evolve as well.

Question of the week

Is Color more than just another photo-sharing app?
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How Online Startups can Build Audiences on the Cheap March 14, 2011

Posted by David Card in Uncategorized.
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Last week, prominent investors declared in blog posts that two marketing tactics favored by many startups — search engine optimization and viral promotion via Facebook — were no longer viable. The real truth is that both remain effective but neither is free, and never was. So let’s examine how a startup making consumer apps or online services can get that much-coveted first million or two users as cheaply as possible.

Investor and Hunch co-founder Chris Dixon said he hasn’t seen any startups build a business through SEO since 2008. He reasons that Google’s ranking algorithm favors older sites with lots of links links. That is fostering an arms race between Google and the “black-hat” optimizers that build link farms and the content farms that create highly optimized but lightweight content.

Building off Dixon’s argument, Bessemer Venture Partners’ Sarah Tavel said she thought Facebook could still act as a startup’s primary free marketing channel, but that its efficacy had been severely diminished. Facebook is over-crowded with apps, she thinks, and is exerting more control over the viral amplification social gaming companies like Zynga used so effectively.

SEO, Facebook Never Free, Still Effective

SEO never was free. Big companies spend thousands of dollars on optimization tools (e.g., BrightEdge, Covario, SEOmoz, Yield Software) and search specialist agencies like iCrossing and 360i. These tools and services help companies with tagging and linking, and making their content and apps more discoverable and indexable by search engines. But more importantly, SEO still works.

Search guru Danny Sullivan advises multiple marketing tactics, and says he sees SEO working for plenty of companies. His own relatively new content site gets 20 percent to 40 percent of its traffic from search. Q&A sites like Quora and Stack Overflow have grown primarily through search and word of mouth. In this interview, Stack CEO Joel Spolsky concedes his sites’ user interface is so bad he depends on Google as his front end. SEO should remain a major marketing tactic for any startup.

Likewise, while it’s true that Facebook has clamped down on free promotions — game status updates only appear in other gamers’ feeds — the biggest Facebook success story wasn’t built on free viral tactics. Social commerce giant Groupon’s president Rob Solomon told me in an interview that Groupon didn’t do much SEO. It bought some paid listings and display ads from Google, but most of its marketing budget went for Facebook advertising. Groupon only did TV ads after it got to 50 million users.

At the same time, Inside Facebook wonders if Facebook might relax some of its viral restrictions, now that its games-driven Credits virtual currency business is starting to mature. It has already opened up Credits promotions. Along with SEO, most consumer startups should continue to use Facebook, but expect to spend some marketing dollars there.

Other Tactics for Audience Building

Getting that first million users that advertisers demand isn’t going to come for free, but it doesn’t have to be that expensive. Build marketing programs around the following:

  • Multichannel campaigns: Most ad inventory is still cheap at sub-50-cent CPMs. Facebook is building out free analytics tools to help plan marketing across offers, ads, Likes and Comments.
  • Flexible SEO: Google’s “panda” algorithm (upgrade affected more sites than usual. Here is some advice on how to react to the changes.
  • Lead generation: It’s a little sketchy, but you can still buy Facebook friends and Likes from companies like GetMorePopular.com and uSocial.
  • Other social networks: MySpace inventory is even cheaper than Facebook’s, and it still has 40 million users. Connect.me signed up 40,000 followers via Twitter without a product.

Question of the week

How can a consumer startup build an audience?