Posts from Twitter

I guess this should be a Feature Friday post but I write my posts based on what I am thinking about first thing in the morning and this is what I am thinking about right now.

I just went to Twitter like I always do first thing in the morning and this is what I saw in my timeline:

Right at the top of my timeline, Twitter is telling me that my friend Mark is active again on his Mediaeater handle. And they follow that with the suggestion that I tweet at him. This is the first time I've seen this kind of messaging from Twitter. And I like it.

If you go back to my 30/10/10 post, you will see that most web services and mobile apps only get 30% of their registered users to use the app at least once a month. The other 70% have largely gone away. But it doesn't mean they are gone for good. Getting them back should be a primary goal of any consumer web or mobile company.

Twitter has been working on this problem for years. I recall getting a presentation from their growth team at least three years ago that detailed how they were working on this problem. And they are still working on this problem. Most likely they will always be working on this problem.

You can email or spam in some other way your inactive users and that might work. But what you do once they come back is way more important. You have to figure out how to make the experience better than it was when they used it previously. Some of that will likely be that the product is much better because your and your team have improved it a lot. But some of that should be an engaging experience that somehow they did not get before.

When we get our various portfolio companies together, I like to ask them if they can identify one or two metrics that separates their successful and engaged users from their unsuccessful and inactive users. Most of the time the metric has something to do with engagement (they left a comment, they got a reply to a comment, they got a like on their photo, they had people follow them, etc, etc). Engaging with real humans, not just the machine, is the key in social systems. And most systems are social in some way.

Your inactive users are important cohort to focus on. There must have been something that got them to sign up for your service in the first place. So focus on getting them back, retaining them, and most importantly, engaging them.

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The Gotham Gal and I went out with friends last night. As can happen, we got talking shop towards the end of the night. And specifically we were debating the significance of Snapchat. The debate was about whether the feature that makes Snapchat special (you know your photos won't end up on Facebook) is the basis for a standalone app and business. My view, having lived through this debate with Twitter and Foursquare, is that mobile apps are features in the mobile OS and that Snapchat can and likely will own this feature in the leading mobile operating systems even though institutionalized copycats (ie Facebook who copies everything) can and will copy it. The irony that Facebook has copied a feature that is specifically designed to avoid Facebook is precious in and of itself.

But I digress. The thing I want to talk about here is the emergence of privacy as the defining feature of the next breakaway app on the social internet. What does this mean for where we are and where we are going? Is open social out and closed private in?

At times like this, I like to talk to my kids and their friends. Here is a typical college aged woman I know. She uses Twitter, Instagram, Cinemagram, Foursquare, iMessage, and Snapchat. And Facebook too. She uses each of them for what they are good for. Each of them is on her home screen – one click and she is sharing something with someone. Each app offers a different graph – that she has curated specifically for that app – and each app offers a different type of engagement. If it is something silly that she wants to share with a friend but would be mortified if it ended up on Facebook, its Snapchat. If it is something she wants out there broadly, it is Twitter. If it is something she wants to share with a wide group of curated friends, it's Instagram. She has a private Instagram account so she controls who follows her there. She is a sophisticated user of social media. She was on Facebook in middle school and has grown up with this stuff. She knows how to use social media and she adopts whatever is useful to her. Snapchat is useful to her. Privacy is an important feature at times and she is happy to have an app with that as the central value proposition.

So that is my way of saying that I think privacy is an important feature and kudos to Snapchat for figuring that out. Further they invented a mode of engagement (the photos self destruct) that is new and novel. And the result is they are on the home screeen of millions of mobile phones and that number is growing by the day.

I expect we'll see a rash of copycats and other approaches to leveraging privacy as the central value proposition in the coming months. I am not sure that is the right thing to learn from this though. I think the right thing is to think about what other features are missing in the mobile OS and figure out the right mode of engagement to implement that feature. That is what Twitter did with status, Foursquare did with location, Instagram did with photo sharing, and Snapchat did with privacy. That got each of them on the home screen. Figure out what the next thing is.

AVC regular Dan Ramsden posted a thougtful essay on GigaOM yesterday. After I read it, I sent Dan an email and I said "do you think big beats little in this phase we are in?" Dan replied that he did and asked me what I thought.

I think David beats Goliath all day long if you are focused on the right sectors. Clay Christensen has shaped my thinking on this. You just need to look for sectors where the incumbents can't and won't adapt to new emerging models and where the innovators look like and are being derided as "toys".

I told Dan that Arduino, 3D printers, Kickstarter, and Bitcoin are four "toys" that I think will radically reshape some big industries in this decade. Of course it may not be Arduino as we know it. Or it may not be Bitcoin as we know it. I will avoid commenting on Kickstarter since we are investors there.

The leaders in 3D printing today may not be the leaders in 3D printing tomorrow. All you have to do is look at the big guys suing the little guys to know that there is a lot of innovation and change afoot in 3D printing right now.

I have said this before. The more I hear people laughing at, deriding, and dismissing something the more I think it is likely to be a big deal. I remember when the common refrain about Twitter was that nobody wants to know what someone had for lunch. Well maybe they do. And maybe Bitcoin will be accepted in Starbucks someday. And maybe your phone will be made from Arduino components and the cover will be 3D printed. And maybe the movie you are going to see in the theater today will have been funded on Kickstarter.

Maybe is a powerful word. If maybe represents something big and powerful then it is worth chasing that maybe. And it is worth funding it too.

I've thought this for a long time but never really articulated it publicly until the Q&A session at ad:tech last week.

There are a ton of social services that sit on top of the world of e-commerce and allow users to curate items they like and may want to buy in the future. These experiences can be highly social. And there are services that allow for transacting and payment inside of large social platforms like Facebook, Twitter, Instagram, and Pinterest. They bring commerce to social platforms. This entire category of services is called Social Commerce.

I have not been particularly bullish on these services because I think social commerce is most naturally e-commerce with a well implemented social layer built natively into the commerce platform. When you look at conversion rates in e-commerce broadly what you see again and again is that the more friction and overhead there is between discovery and transaction, the lower the conversion rate. Something as simple as logging into a commerce platform to complete a transaction can lower converstion rates by an order of magnitude.

Conversion rates are critical. They tell you what systems perform best for the end user. When a system converts north of 5% of users visits to a transaction, it is working extremely well for the end user. When a system converts 0.1% of user visits to a transaction, it doesn't work as well for the end user.

When a retailer or e-commerce service implements a highly social layer into their service with hooks into the major social platforms, the conversion rates can be significant. I have seen this first hand. This is an indication that users enjoy and benefit from social commerce when it is built into a native e-commerce service.

When users start in a social system that is divorced from the e-commerce platform, I believe the conversion rates are significantly lower, often by an order of magnitude or more. This, to me, suggests that the overhead of multiple systems reduces the effectiveness of the experience for users and is suboptimal.

So this is the thinking that led me to say what I said on stage at ad:tech this past week. I've felt this way for a long time and I am glad that I got the question and had an opportunity to address this issue publicly. I am eager to hear the discussion of this issue in the comments.

I was at a USV event last week in SF and I bumped into Sung Hu Kim, a product manager at Twitter who handles mobile stuff. We got to talking about things I'd love the Twitter Android product to do. I mentioned that my daugther tweets a fair bit but I often miss them because I follow 735 people, many of them prolific tweeters. I do have a family list but I only get around to checking it every few days and I often miss opportunities to @reply to Emily.

Sung pointed me to the mobile notifications settings and we turned on notifications for Emily on my Android. Game changer! Now I get a notification every time she tweets and I can immediately favorite it, retweet it, or reply to it. I turned on notifications for about ten others including of course my wife.

Here's how to you do it (I assume this works on Twitter for iPhone too but I don't know for sure).

1) Navigate to someone's profile. You can do that by clicking on their avatar in a tweet. Here is my friend Bijan's profile on my phone.

2) Do you see that little image of a head under the block that says "tweets" on the middle left? You click that. And you get this dialog box.

Click on "turn on notifications". That's all you have to do.

3) Then you get notifications at the top of your home screen whenever someone you've added to mobile notifications tweets. Those notifications look like this (look at the very top of the home screen):

For those that are curious, that is Gilligan on my home screen. My friend Josh Harris painted that Gilligan and the original hangs in my office at USV. The Gotham Gal also has a Gilligan in her office. For those that know Josh and his obsessions, it has great meaning. It represents the crazy web 1.0 era in NYC in my mind. It is one of my favorite art pieces we own.

4) When you pull down the notifications tray on Android, you actually can see part of the tweet. And you can click on it to go to the tweet. Here's a notification of a tweet from Bijan (who I've added to my mobile notifications as well).

I have had this feature active on my phone for the past week and it has significantly increased my usage of twitter as I am now seeing in real time the tweets from the folks I care most about. I love it.

One of the great things about the web is the ability for people located all around the world to be having a public conversation in real time in a single place. We see that in action here at AVC with the Disqus comment system. But it also exists on Twitter, Quora, Stack Overflow, Reddit, Hacker News, and a host of other places on the web. This kind of open public discourse is quite important and leads to greater understanding and ideally a progressive society that moves forward as new ideas and new ways of thinking propagate.

As the web is increasingly moving to mobile, there are opportunities and challenges. The opportunity is simple. Folks don’t need to be in front of a computer to be able to participate in a real-time discussion. The challenges are harder. Who here has tried to comment on AVC from a mobile phone or tablet? It’s not as easy. And what would a mobile app look like for commenting?

Those who solve these challenges will be the leaders in real-time discussions in the coming years. Because taking our conversations with us in our pockets will be critical.

I say all of this because of an experience I had yesterday. I had to take my son to take a test yesterday afternoon. As I left our home, I saw a tweet from Dave McClure responding to my post yesterday:

yo @fredwilson @msuster ur missing main point on notes — big reason they’re used over priced rounds isnt valuation, rather synchronization

— Dave McClure (@davemcclure) September 8, 2012

I responded to his tweet and then took my son to his test. A half hour later, after I dropped off my son, I checked Twitter and there was a lively discussion brewing. I responded to a few tweets and started driving home.

Every twenty blocks or so I would pull over, check twitter, reply to a few more tweets, and then start driving again. By the time I got home a half hour later, there was a full blown Twitter discussion.

Mark Ury did us all a favor and Storified the discussion for posterity. Mark Suster also contributed a curated version of the discussion on his blog.

What’s the takeaway from this story, other than investors get pretty emotional about things like convertible notes, priced equity, discounts, and signaling?

Mine is that I could have never participated in that discussion in real time had it not been for the Twitter client on my Android phone. But it was simple, in some ways simpler than doing it on the web, in Twitter’s mobile client.

So it’s high time for all those companies out there that are in the business of hosting and facilitating live real-time public conversations to do what Twitter has done and make your products work well in mobile. If you don’t, others will.

We had a good chat hanging around Zander's desk yesterday about this line from Matthew Ingram's post on his love/hate relationship with Twitter:

Lastly, I hate that Twitter’s metamorphosis seems to reinforce the idea that being an open network — one that allows the easy distribution of content across different platforms, the way that blogging and email networks do –isn’t possible, or at least can’t become a worthwhile business.

I asked Zander what he thought about that line and he told me he hadn't thought long and hard enough about it to have a fully formed opinion but it was certainly important to our investment thesis and we ought to have an opinion on it.

I do have an opinion on it.

I do not think open conflicts with making money and further I think there are ways to make more money by being open rather than closed, but it takes imagination and a well designed relationship between your product/service and the rest of the Internet.

I also think it is better to open up slowly, cautiously, and carefully rather than start out wide open and then close up every time an existential threat appears on the horizon.

I recall when Etsy first put out an API. It was a read only API. Then they made it read/write. Over time they have added a lot of features that have made it possible for third parties to add value to Etsy and Etsy's sellers and buyers. But they have always protected the essential things that make Etsy's business and marketplace work and hang together as a sustainable entity.

Contrast that with Twitter which started out completely open which allowed anyone to build a third party client, grab a huge percentage of Twitter users, and then threaten to take them away from Twitter. That's not a sustainable relationship between your product/service and the rest of the Internet.

So I do believe that there are many ways to be open, to become more open, and to do so in ways that enrich the overall Internet and your company too. I am quite fond of O'Reilly Doctrine:

Create more value than you capture

And I think doing so means being open, becoming more open over time, but always in ways that allow you and your company to remain a sustainable business that can cover its costs and then some and remain viable and value enhancing for the long haul.

One of my favorite bloggers and thinkers about social media, Anil Dash, has a blog post up on Medium titled You Can’t Start the Revolution from the Country Club. Go read it because he's talking about some important stuff.

In his post Anil observes that in many of the most interesting new social media services, there is a sense of exclusivity built into the experience. A velvet rope as it were. And in many cases, this is being done to produce signal instead of noise, to make the consumption experience easier, and to produce "quality content." Anil calls bullshit on that. And so do I.

I have learned the power of inclusivity from writing this blog and watching this community evolve. Everyone is welcome here. Everyone can comment. Nobody's comments get nuked unless they are spam or hate. And I have a very high standard for hate. The community can and does police this place. And that allows anyone to come in here and be a regular. And that is what has created the magic.

If you look at some of the best communities on the web, like reddit for example, they all follow this approach. It makes for a noisy and messy experience. But it works and it scales.

This is my basic argument for free as a business model. Once you insert money into the equation, you are excluding important voices. Once you insert exclusivity into the quality model, you are excluding important voices.

Some of these "country clubs" as Anil calls them may succeed. But they don't inspire me. They don't invite me (in the behavior sense of that word). I'll hang out in public if you don't mind. It suits me.

Google Analytics has a relatively new feature that allows you to look at your "social sources" of traffic. According to Google, about 27% of the vists to AVC in the past month came from social sources. For those who are curious about the rest of the traffic, 30% is direct, 15% is search (much of which is really direct traffic), and of the rest, about half is from social sources.

Here are the top social networks that drive traffic to AVC:

Twitter and Hacker News have been the mainstays of the social traffic to AVC for a long time. Last year, StumbleUpon was driving a ton of traffic to AVC, but that waned early this year and it is much less of a factor today.

Facebook, Techmeme, and Disqus are the other big social drivers of traffic. 

And the traffic that Disqus drives is markedly different than all of the other social sources. These folks hang around longer, read more pages, and engage more.

If you have a blog or some other form of online media and have a Google Analytics tag on your pages, I suggest you take a look at your social sources. I think you'll find it interesting.