All the usual caveats about Google Trends data apply, but there's clear symbolism in the fact that WhatsApp passed Skype in Google Trends in the last month or so. Mobile beats the old.
Suppose that in 5 years or so I send you a Yelp review of a restaurant, from my phone to yours. What will that mean?
- First, I might well use something like Airdrop, or touch my phone to yours to pass it across, or tell Now to give it to you, or indeed Now might decide to give it to you without my even explicitly asking. Or the review might be invoked by a Bluetooth LE beacon as you hold your phone next to the menu on display by the door
- But for the sake of simplicity, suppose I send it to you using an internet messaging app - either one built into the OS or a third-party one - Facebook, Whatsapp or more probably one that doesn't exist yet but by then has 15 engineers and 1bn MAUs.
- It seems pretty unlikely that you'll see a dumb URL string on your screen. Rather, you'll get something rich and interactive, within the message.
- And you'll be able to go into that experience and tap the number to call the restaurant, or make a live booking, or swipe through photos.
- And if you tap 'book', it'll pass them a $10 booking fee in bitcoin, authorised with a fingerprint swipe.
- Now suppose you decide to save this item, as an icon on your home screen, or some other yet-to-be created place.
Now, what were you using? An app? a widget? Native code? What programming language? Did you install an app or surf the web? I'd suggest that none of those questions would really mean anything, at least not as we think of them right now. The programming language matters much less than the user flow. And some of this example sounds 'webby', but Google is the first to advance interaction models that are not remotely webby (such as Now).
This is a pretty simple illustration (an expansion of the super-hot card metaphor) of a broader point I've made before: on the desktop internet, the web was by far the dominant model and that didn't actually change very much for well over a decade (before that, the interfaces of Windows and Mac were also very stable for a long time). But on mobile, not only are other models just as important as the web, but they're not remotely stable, settled or mature. The platform war may be over but that doesn't mean things are settling down.
So I have very little idea what precisely I would mean if, in 5 years, I were to say 'I installed an app on my smartphone'. Further, I'm pretty sure that if it's an Apple smartphone it will run an iteration of iOS but I'm rather less sure what Google will have done with Android and Chrome by then. And of course I might be running a fork of Android from Amazon or, perhaps, Microsoft.
This is the key reason why the new social messaging apps are so interesting - not because they have users and inventory now, but because they can be vectors for some of this sort of behaviour - a third acquisition, discovery and distribution channel besides Facebook and Google.
This may also have implications for any discussion about what it means for Apple that its ecosystem will have a minority of mobile users. We need to think about what it means to call a ecosystem that might have 800m-900m live devices 'minority', but we also need to think about what 'ecosystem' might mean. What, if any, 'winner takes all' dynamics operate in this environment? One reason the Mac didn't die was because the web changed what it mean to be a computer ecosystem: the mobile ecosystem has lots of changes to come too.
430m active users and 18bn messages sent per day, which is pretty close to global SMS volumes (20bn or thereabouts, and maybe lower). All with just 25 engineers.
"No ads, no games, no gimmicks". Interesting that by far the biggest mobile social app is the least complex, and of course the most focused. No canvas, no platform, no ecosystem, barely any API - and massive growth.
The interaction model for the desktop internet was pretty much settled 15 years ago. It turned out that the answer was a web browser. Stand-alone apps such as Pointcast were a mostly blind alley, and while apps persisted for email and IM, and for very specific things like music, the words ‘web’ and ‘internet’ became effectively synonymous to anyone non-technical. Over time we added Ajax and better search and better social, but everything really happened inside the browser.
In mobile this is quite different: nothing is settled. We have the web and apps and of course app stores, and then we have many complications - voice, in-app payments, web apps, hybrid apps, widgets, push notifications, social messaging apps, Google Now and Siri. Then there’s the hardware layer - images, barcodes, NFC, bluetooth, location, motion sensors etc. Innovative and disruptive new interaction models can very often find a route to market, far more easily than they could on the desktop internet. Sometimes, they scale to a hundred million users in a year to two. And we have more and more waves of innovation coming, with things like local wireless from Apple and deep linking to within apps from Android, and a very fast-evolving social messaging space, and more things in 2014 and beyond.
So, we can actually have a pretty limited idea of what the dominant interaction models will be in 5 years.
(There is a dream, of course, that all these nasty choices and options will go away and we can go back to the nice, simple, limited web, but that doesn’t seem very likely just yet.)
One of the big changes here is the removal of monopolies. If the web is not the only interaction model then web search loses power as a discovery and acquisition channel. And in parallel Facebook’s desktop monopoly on social has not transferred to mobile and it seemly unlikely that it ever will (I wrote about the reasons for this here). So both of the key channels on the desktop are smaller and less crucial, and also work significantly differently, and are pretty poor at driving some key types of engagement, now that you’re not just looking for a click on a link. This changes lots of things, and creates lots of new opportunities.
The puzzle for Google is how it brings its vast, decade-old machine learning project to bear on this new complexity of data and behaviour. The obvious problem is that data and behaviour within apps are effectively dark matter that it can’t track (hence the deep-linking initiative in Android). But this is balanced by much richer data collection. Your Android phone feeds it with data all the time - where you are, what you look at, where you go after you search and what you did the day before. The challenge is finding the right ways to collate and present that data - Google Now is one example but probably not the only one. The search box and the page of results is just one possible interface to that machine-learning project - what does Google look like after the search box?
Social faces a different set of challenges. It seems to me that on mobile Facebook will never have the near monopoly that it briefly enjoyed on the desktop - smartphones remove most of the frictional barriers that keep you on one social network. But mobile social more broadly is a vast opportunity. With web search no longer the dominant channel, social, on a far more social device than the PC, has an open door to push at. Tencent announced that the first 5 games that it launched with Wechat integration, starting in August, have had 576m registered users. Mobile social is an engagement, interaction and distribution channel, and it appears to be much richer, and probably much bigger, than social was on the desktop.
If this is the end to near-monopolies in acquisition and discovery, it’s also interesting to think about it as the end to monocultures. If the interaction model shifts away from web search, that change makes different models and different types of behaviour possible. In turn, one might ask - what models and companies and behaviours were precluded by Google on the web? What good ideas didn’t work because of the way Google did search and the way Facebook did social? How did that monoculture shape things, and how does that change now?
A short spot talking about whether Instagram really makes that much difference to Facebook's strategic poition.
Instagram is looking like a great acquisition. It had 30m users when Facebook bought it in April 2012, and has now passed 150m, just 18m later.
(The change in colour signifies the acquisition.)
This reminds everyone, naturally, of YouTube - again, a product that has become far more popular since acquisition in late 2006 (this chart shows the only consistent data that seems to have been released).
There's a difference here, though. Youtube is the dominant online video sharing platform but Instagram is not, remotely, the dominant photo sharing platform on mobile.
Facebook's latest disclosure is that 55m photos are shared a day on Instagram, and another 350m on Facebook itself. But 350m a day are also shared on Snapchat, and 400m on Whatsapp. And we don't know the numbers for Line, or WeChat, or the next half-dozen services to be launched that we haven't seen yet. Meanwhile Instagram has 150m monthly active users but Whatsapp has 350m and there are close to a dozen others with more than Instagram.
So as it turns out, Facebook did not solve the unbundling problem by buying Instagram - even in photos. It bought just one of many mobile social products, and not even the biggest.
All of these new services are driven by the fact that smartphones have characteristics that remove most of the defensive barriers that Facebook has on the desktop:
- The smartphone address book is a ready-made social graph that all apps can tap into
- The photo library is open to all apps
- Push notifications remove the need to check multiple sites
- Home screen icons are easier to switch between than different websites
The fluidity with which you can move between these apps seems to be breeding very fluid use cases. The original analysis was that these were unbundling Facebook in a semi-coherent way - most obviously, Instagram was taking photos, a core Facebook use case, and moving them to a different, specialised app. But it doesn't seem to be as clearly defined as that.
People aren’t using Instagram for photos, WhatsApp for text, Line for stickers... they’re using everything for everything. Instagram to tell people you're running late, WhatsApp to share holiday photos, Snapchat to make plans for the evening and so on. WhatsApp and Instagram are not in different categories - they're direct competitors for time and attention. Instagram, Snapchat, Line and all of the others are all poking away at different social behaviours and different options in the same communication space.
This shouldn't really be a surprise: we already have three social apps on our phones - voice, SMS and email, and we don't stick to a rigid set of use cases for each one. These new apps just add more options into the spectrum. That, of course, points strongly against consolidation into a single winner.
So buying Instagram certainly looks like a good trade - it would be worth a lot more if it was selling today. But as a strategic move, it's looking increasingly irrelevant. Is FB going to buy Whatsapp, Snapchat, Line, Kakao and the next ten that emerge as well? Sure, some of those will disappear, but it doesn't look like FB will crush the competitors the way it did on the desktop. On mobile, FB will be just one of many.
Just maybe, Facebook might have been better off rethinking the core product instead of buying what turned out to be just one of a swarm of alternative services.
This, of course, prompts comparison with another (in)famous acquisition - Flickr's purchase by Yahoo. There was a period when AOL and Yahoo went around buying up lots of cool new web services as their portal model came under threat. They then generally mismanaged them, but that wasn't really the point. No matter how well they ran these acquisitions, they couldn't buy every great website that there was. Neither can Facebook.
(Update - I got the exact photo sharing numbers transposed when I wrote this - updated with links)
I've been giving versions of this deck in London and San Francisco, and I though it worth sharing here. It's the basis of a (roughly) hour-long client presentation, with Q&A.
A version I gave in the summer got about 350k views - after 3 weeks this one has had 200k views - curious to see where it tops out.
Pretty much everyone has the same common experience when they first use Twitter: bafflement. You go, you sign up, you load the account and... what?
Of course, as we know from Nick Bilton's account of the early days of Twitter, this was pretty much how the people making it felt. They knew there was something here - probably - but what? Everyone had a different vision and the company twisted and turned for years (indeed, perhaps if it had been better managed it might not have worked).
As it turned out, the blank screen was really a blank canvas. You make your own Twitter. You can build a feed (and follower set) around fashion and makeup, or politics and journalism, or mobile tech (as I have). It's your mirror.
This means that that blank screen is perhaps better thought of as an empty development environment - Hypercard, perhaps, or (a metaphor that comes easier to me) an empty spreadsheet.
It can be lots of different things, but it's nothing until you start building.
This free-form character is quite different from other social networks. Very broadly, these divide into two categories: networks of people you know personally and networks of people interested in the same thing: Facebook or Yelp. Twitter is neither of these.
This leads to rather different dynamics for a new user - the 'on-boarding experience'. If you log into Facebook for the first time you don't have to create anything - your friends are already there. You just have to add them. Even more, on mobile social platforms such Whatsapp even this barrier isn't there: the app uses the phone address book to add people automatically, the photo library is shared, push notifications let you know when there's new stuff, and so all of the friction of a desktop social network falls away. The experience comes to you.
Equally, on a network of strangers such as Yelp, there's already lots of content from those strangers (restaurants, hotels or whatever), so again, there's no intimidating blank canvas.
On Twitter, though, you do need actually to go out and build something. Hence the stories about abandonment rates: people hear about it, create an account, write a few baffled tweets and get no further. What am I supposed to do with this?
However, once you're over that hump, Twitter might be much stickier than conventional social networks for actual friends (the Yelp model is rather different). There's not much to keep you on Whatsapp over Kik beyond the nightclub effect - that's where your friends are. But once you've build up a twitter feed around your interests, and a global network of people you've never actually met that you talk to, that's hard to replicate elsewhere.
This varies by use case, of course - if you only follow companies and celebrities that's easier to replicate elsewhere than if you've hunted out interesting and low-profile tech execs or makeup artists or experimental musicians, and of course are followed by the same.
One of the key challenges for Twitter to carry on growing, and become a truly mass-market platform, is to create things that help people over this hump - which also means mitigating an essential characteristic of the product. The contradiction is that the more that Twitter solves the on-boarding problem, the less sticky it may be. The less manual it is, the easier it is to make something similar.
Filters for twitter
The interesting superset of this 'freeform' question, to me, is what else can be done with all of this data. You made the spreadsheet, so to speak, and 200m people filled it up, and now what do you do? There are two things that occur to me.
First, there's the concept behind Twitter Music, which appears to have failed to gain traction but I think remains valuable. A app that acts as a filter to Twitter, pulling in all of a certain type of content, with structured data and content-specific tools. Music was one idea but any structured content might apply. The underlying problem, perhaps, is that before the death of RSS I was pretty sure that I was following 90% of the blogs that I would be interested in - but I'm equally sure I'm only following 10% at most of the people I would be interested in on Twitter. How can you manage the flow? I can't read everything, but a transient feed of tweets from people I find by hand (or even with a recommendation engine) is only one solution. Music? Video? What other forms can be systematised in this way? (There are already third parties trying to do 'buzz analytics'.)
The second is the contrast with LinkedIn. It seems to me that LinkedIn has (obviously) very rich data about each individual, but very poor data about the links between them. I'm connected to that person, yes, but do I really know them? If I want an introduction, does the intermediate contact know either me or the person I want an intro to, or is it a weak-weak connection? Products like Endorsements and Intro are clearly attempts to change this by gathering better, non-binary data about relationships between individuals, but it's not clear how well they'll work.
Conversely, Twitter has very strong data about connections between people, but very weak information about who they are. My Twitter bio is fairly informative, but many aren't, and all lack the richness of a LinkedIn profile. In fact, the only really properly structured data in Twitter is the character of relationships.
Hence, LinkedIn can tell me if X works at Yco and what they do there, and that someone I vaguely know has an indeterminate connection to them. Twitter knows that I'm followed by X, and he clicks all my links and retweets half what I say - but there's no way for me to see that and Twitter doesn't necessarily know he's at Yco at all. How to solve that?
This Google Trends chart provides a neat shorthand illustration of the rise and fall of five different social networks. All of these had strong lock-in effects. All of them thought that there were barriers to switching away. All thought that people would not want to abandon their history of photos, interactions, tags. But when it came to it, people just walked away from all of that accumulated history and adopted a new platform.
I've been wondering how broadly applicable this message is. How much value do ordinary people place on their email history, for example? At least half of the subscribers to my newsletter are using Gmail, and in the tech world we tend to think of such things as extremely sticky. But real people walk away from services that they're supposedly locked into with disconcerting ease. And when a corporate person (as opposed to a VC or entrepreneur) leaves a job they leave their email behind too. When I left NBC Universal at the end of 2008, I left behind my Exchange mailboxes, including, say, my 'Launching Hulu in Europe' folder. I can't really say that I need it now. It has a certain historical interest but no professional value.
Meanwhile a lot of my professional interactions are on Twitter, which are ephemeral and unsearchable even after a day or two. (There's a start-up idea in here, somewhere.)
I wrote a post on the unbundling of services recently in which I suggested that a key issue for Facebook is that the smartphone phone book and photo library are resources that any app can tap into, where a competing desktop social site had to recreate them from scratch. This, obviously, makes it easier for smartphone apps to unbundle segments of the Facebook experience - text messaging, photo sharing, games etc. It also enables new experiences, such as Snapchat. All these apps sit on top of these smartphone resources in the same way that Facebook apps sat on top of Facebook. And most people use more than one and many use three or four in parallel, both with different people and the same person.
So the underlying relationship has far more value than any record of the messages exchanged. People switch between apps and dump them and their archives on a whim, or even in a deliberate detox (it seems to me this is part of the point of Path - it's Facebook, but with only your real friends). The value is in the contact list on the smartphone - the social services and the conversations and things shared themselves are ephemeral.
LinkedIn has a similar issue. Once you've accumulated a few hundred LinkedIn connections, every time you look at the news feed you see people you have no recollection of ever meeting. They're people you met, once or twice, a few years ago, and it seemed worth connecting to them, but now they're just names. That is, many LinkedIn connections are like the business cards you find in a drawer and struggle to place. You file them away safely for another year or two, and then, the next time you find them, you shrug and throw them away, not because the information is out of date but because the relationship that's referenced is long gone. How many LinkedIn 'connections' are equally worthless? Rather like the tags and shared photos on Facebook, you care about them at a moment in time, and then, when you really think about it, you're happy to abandon them. Maybe, like Path and Facebook, there should be a LinkedIn clone that's just for the people you actually know.
Snapchat is the purest expression of this view. Any interaction, whether professional or purely social, is a conversation that fades over time if it isn't continued. After a certain point the archive of that interaction has no value (except perhaps to your company's lawyers). And the division is between the relationship itself versus the many different media though which you might contact a conversation - phone calls, SMS, coffee, Instagram, beer, twitter, Snapchat, WhatsApp, Facebook. And both the relationship and the messages have half-lives. An app that reminds you that you met this person has strictly limited value - if you can't remember them, are they really in your network?
Lots of companies have big user bases and big accumulations of user data. And they think that this gives them a lock-in. But maybe the only stickiness comes from the mere presence of users - more like a nightclub than a bank. If your friends move, you'll move in a second, and the dynamics of smartphones mean there are no barriers at all to moving. Owning the address book, and perhaps the photos, are the only real levers of control, and it's very hard to dislodge the underlying platform owners from that.
That of course begs the question - what is the irreducible, underlying, unchanging point of identity? Is there one? An email address? A PSTN number? A Facebook/twitter account? Or is it ultimately a personal, real-world connection?
One of the recurring themes of the consumer internet is the cycle from aggregation to disaggregation - bundling to unbundling. There is a lot of value in services that pull everything together in one place, but over time that value starts to recede, the lock-ins keeping people there weaken and the appeal of having separate, specialised products grows. And then, after a while, the appeal of aggregation starts to grow again. We saw this in the past with AOL, and now with Facebook on mobile.
A big part of the dynamic of Facebook unbundling is the different mechanics of apps versus the desktop web. Any smartphone app can use the phone book and PSTN numbering system to access a ready-made social graph, removing a lot of the friction Facebook benefits from on the web. A core Facebook use case is photo sharing, and a smartphone's built-in photo library offers much more fluid ways to share photos across multiple services. In effect, the phone book and photo library are reservoirs that any app can tap into, where on the desktop, creating that resource is a major pain and a major moat for Facebook. Meanwhile, push notifications to apps mean you don't have to check different web sites for updates. And it seems that pressing 'Home' and jumping to another app to share something else in another way with someone else is much easier than loading a different web page.
We can also see this unbundling happening to Craigslist, or at least that’s what many people hope. Once a charming reminder of the web’s uncommercial roots, Craigslist is now, to many, a fat complacent monopolist with a nasty litigious streak, whose founder claims no responsibility for the company he owns. It appears to have taken over the newspapers’ business while taking on all of their attitudes. There are a swarm of services, often mobile first or mobile only, trying to peel off parts of the Craigslist offer, or do things Craigslist should have been doing. AirBnB is only the most obvious. Chris Dixon has a good note about this here, and Andrew Parker produced this great graphic back in 2010.
LinkedIn is another interesting example of a product waiting to be unbundled, and it looks especially vulnerable because of the consistently poor execution of so many core features.
To give just one example of this, a few weeks ago an old colleague of mine took an important new job at Microsoft. I found out because he posted a photo of his badge to Facebook and I saw it, by chance, on my fortnightly visit. But when I went to LinkedIn I saw this, filling the top half of my news feed.
I spent 10 minutes searching without seeing his new job listed anywhere other than his profile itself, and indeed I couldn't actually find a way for LinkedIn to tell me about it - there is no view of 'job changes in my network', though that would seem like something that would have been implemented at launch. However, it's eager to tell me Deepak Chopra’s ten tips for how successful people wipe their arses.
To re-iterate the point - LinkedIn has my entire career history. It knows I've spent 14 years in mobile, tech and finance. And this is the news it recommends me.
Of course, the amount of effort going into a mediocre Huffpo clone wouldn’t matter if the core functionality of the site worked, but it doesn’t. There’s no way to see which of your contacts have changed jobs. No way to post a message to your network that your boss won’t see. The entire user experience is a mess of overlapping technologies, black UX aimed at upselling paid services and outright poor work. Pretty much any basic task to do with managing or engaging with your network is harder and more painful than it should be. It's even hard for LinkedIn, it seems: it knows I don't have an MBA (I TOLD THEM!) but recommends I join an MBA alumni group because I did my BA at the same university.
But how does LinkedIn get unbundled? What's the mechanic? The dynamics of smartphones discussed above make it easier to unbundle Facebook. Craigslist's main strength is volume of traffic, and if you can gain an edge in a particular segment you can overcome that. But neither of those dynamics quite apply to LinkedIn.
The core of LinkedIn is that it's the universal CV database. You need to have your CV there for people to find it, to look you up - in some circles not being on LinkedIn is almost a professional failing. For specific verticals (programming, design) this isn't the case, but for white collar professionals it is. For some people an online presence per se (your blog, twitter etc) is a de facto CV and is how you build your reputation (and Klout is poking away at this), but most careers are not built in public, and most people cannot blog about their job, even if they had the time and inclination.
So it seems to me that the low-hanging fruit is the stuff that LinkedIn just isn't doing while it pursues the Huffpo dream. Connection and meeting management (Evernote Hello). Introductions (Emissary.io). Pre-meeting stalking (Refresh). Bit by bit a graphic just like the one for Craigslist gets built up.
The puzzle is at what point that matters to LinkedIn. The core business is about selling CVs to recruiters. So long as it remains the CV registrar, does it matter if the users only visit the site once a month, or once every six months? Indeed, if all of these apps use LinkedIn as a data source, arguably they actually reinforce its position.
Perhaps the answer is that tech history is full of dead companies that had mediocre product but great lock-ins. Eventually, the lock-in always goes away - we have Blackberry this week to remind us of that. LinkedIn has a great lock-in and product that's mediocre for the users who enter their CVs, but pretty good for the recruiters who pay the bills. How will that play out?