I couldn't help but notice the following ad on Facebook today. My friend Khalid recently signed up to be a fan of Veritas GMAT Prep, and is now being featured in a Facebook ad.
Wednesday, April 16, 2008
Facebook Social Advertising
I couldn't help but notice the following ad on Facebook today. My friend Khalid recently signed up to be a fan of Veritas GMAT Prep, and is now being featured in a Facebook ad.
Wednesday, April 9, 2008
Last Lecture Series: Joel Peterson
Today at Stanford we started the Last Lecture series, where the most popular professors give a one hour lecture to the departing second years. Joel Peterson, who taught my Managing Growing Enterprises class, gave an excellent presentation today (see here for a video of Joel presenting at the E-Conference this winter). Here are the notes I took from the lecture.
One of Joel's lessons to live by is to always ask yourself: What is winning for you? For this lecture, he decided to ask himself: What is winning in life? The answer... happiness. But how do you define happiness? He says that happiness can be attained in 3 different ways: Pleasure, Joy and Peace. If you were to graph these, Pleasure would be on the farthest left and give you the least happiness. Pleasure is about meeting your needs now, but is not fulfilling. One of life's problems is that many people stay at this level. Next is Joy; all of us would agree that joy is something that has more meaning than pleasure alone. And finally, there is peace. Peace is something that is self-actualized, and is most difficult to achieve. Money and fame will not give you peace (and at best probably will only give you short-term pleasure). The key to peace and happiness? Strive for a person to be, a person to love, and a work to do.
A Person to Be
How do you discover who you are? Joel suggests:
1. Read; at least a book a week. Not TV, not movies, but reading. Read on planes, read if you can't sleep. Reading allows you to see the world through others eyes.
2. Memorize quotes, and notice which ones you actually remember. You'll learn a lot about yourself.
3. Write down your goals. Operationalize them, and let other people know. Make them memorable. For example, Joel will never forget one of his student's goals to "run a marathon at age 35 faster than at age 25." People will always be reminding you of these types of goals, which will help you accomplish them.
4. Write your own obituary. Or a six word story about yourself. Example: "For sale: baby shoes, never worn" by Ernest Hemingway.
Finally, to learn what your core values are, look at where you spend your most valuable resources: time, money and mindshare. The difference between these and what you believe are your core values is in fact a lack of integrity.
A Person to Love
Being in business is just as noble an endeavor as becoming a doctor or researcher, because running things is very hard to do well.
To be successful in business you need 6 qualities:
1. Hardworking
2. Smart
3. See beyond what is obvious
4. Build great teams--resist the temptation to be a pleaser, you will eventually be abandoned or betrayed
5. Communication
6. Be trustworthy--help others achieve their dreams
One of Joel's lessons to live by is to always ask yourself: What is winning for you? For this lecture, he decided to ask himself: What is winning in life? The answer... happiness. But how do you define happiness? He says that happiness can be attained in 3 different ways: Pleasure, Joy and Peace. If you were to graph these, Pleasure would be on the farthest left and give you the least happiness. Pleasure is about meeting your needs now, but is not fulfilling. One of life's problems is that many people stay at this level. Next is Joy; all of us would agree that joy is something that has more meaning than pleasure alone. And finally, there is peace. Peace is something that is self-actualized, and is most difficult to achieve. Money and fame will not give you peace (and at best probably will only give you short-term pleasure). The key to peace and happiness? Strive for a person to be, a person to love, and a work to do.
A Person to Be
How do you discover who you are? Joel suggests:
1. Read; at least a book a week. Not TV, not movies, but reading. Read on planes, read if you can't sleep. Reading allows you to see the world through others eyes.
2. Memorize quotes, and notice which ones you actually remember. You'll learn a lot about yourself.
3. Write down your goals. Operationalize them, and let other people know. Make them memorable. For example, Joel will never forget one of his student's goals to "run a marathon at age 35 faster than at age 25." People will always be reminding you of these types of goals, which will help you accomplish them.
4. Write your own obituary. Or a six word story about yourself. Example: "For sale: baby shoes, never worn" by Ernest Hemingway.
Finally, to learn what your core values are, look at where you spend your most valuable resources: time, money and mindshare. The difference between these and what you believe are your core values is in fact a lack of integrity.
A Person to Love
- Loving another is hard work. Marriage is about making a commitment
- We love what we sacrifice for.
- Learn to listen. Ask good questions, and follow up with more questions. Joel would ask his children "Tell me about you." Be willing to accept silence and eventually people will open up.
- To truly love someone is to be able to freely exchange feedback. Thank people who give you negative feedback; this is the hardest to give.
- Laugh--you are not the center of the universe
Being in business is just as noble an endeavor as becoming a doctor or researcher, because running things is very hard to do well.
To be successful in business you need 6 qualities:
1. Hardworking
2. Smart
3. See beyond what is obvious
4. Build great teams--resist the temptation to be a pleaser, you will eventually be abandoned or betrayed
5. Communication
6. Be trustworthy--help others achieve their dreams
Not the most pleasant portrayal of my friend Ash
My friend Ash was just quoted in a Newsweek article on "How to Get Rich Being Green" (see article here). The article starts off as "Ash Upadhyaya is no tree hugger," and then goes on to protray him as a money grubbing MBA student who drives a gas guzzling Porsche. While I had to remind Ash that he does drive a Boxster, anyone who doesn't know him would think he was a complete ass hole from this article. In our Managing Growing Enterprises class we spent a day on how to talk to the media, and this serves as a real world example of how difficult it is to give an interview; the writers will get the angle that they want.
Tuesday, April 8, 2008
NY Times Article about Yahoo!'s Display Ad Exchange
Yahoo! has begun to publicly talk about the display ad exchange that I heard about while interning there this past summer. They are calling it AMP, though the article doesn't mention when it will be launched. I wrote in an earlier blog post that this advertising project will basically determine the future of Yahoo!, and it is probably a major reason why the board has been reluctant to accept Microsoft's offer.
Monday, April 7, 2008
Facebook Monetization Talk
Two GSB alums, Tim Kendall '06 and Megan Marks '07, met with us today to discuss monetization strategies at Facebook, as well as give general advice around joining startups. Tim has been with the company since it was an 80 person startup (now Facebook employees around 600 people).
First I would like to briefly discuss some advice he gave the group surrounding startups. The first is the importance of engineers; while it may not seem that important who the first engineer is that you work with to develop your site, if that person stays on then they (along with the founder) will drive the culture of the company. So don't make that decision to quickly.
Second, think about joining startups that are in the 50-100 employee stage with $50 MM in revenue. According to Andy Rachleff (who is a lecturer at the GSB), these companies have mitigated a significant amount of risk yet are still growing quickly enough that there is a lot of upside in joining them.
Now on to the Facebook specific conversation. Tim identified three areas that need to go right for Facebook to be "the franchise company of this decade." They are:
1. increase user base (currently around 70 m)
2. develop a better product
3. figure out how to make money
Not a ton of insight at the macro level here, but he did dig deeper into all of these areas. For the first, he discussed how growing internationally has been a huge focus, and that the app platform has actually made it very easy for the company to internationalize because the apps are being created by the local developers. Additionally, Megan mentioned that it has been easier to acquire older demographics outside the US because the Facebook brand is not associated with being a college website.
As for the second point, clearly the app platform was developed in part to address this issue as well, though some people argued that it might hinder the product given the clutter and confusion surrounding the multitude of applications out there. Additionally, Tim talked about how reducing latency is a major goal for Facebook, and that they have observed a huge increase in engagement for only very small (millisecond) improvements in latency. Finally, one area where there has been a lot of innovation that I was unaware about is the algorithm behind the News feed. It actually looks at your social map and interactions between your friends to predict what info you are most interested in receiving. Therefore, even as you add more friends, your news feed shouldn't change significantly over time. I am wondering how long it takes for the algorithm to learn, however, given that I am still receiving a lot of info about friends of mine that are only acquaintances at best outside of Facebook.
For the third point we talked about the growth of advertising revenue over the past 3 years; $10 MM in 2005, $50 MM in 2006, and $150 MM in 2007. This growth hasn't even come close to user growth, however, so there is still a lot of room for improvement (which goes without saying if they truly are valued at $15 billion!). So what are some of the creative ways that Facebook is starting to grow revenues? The most obvious is taking advantage of the social graph--a great predictor of the products and services you are interested in is your friends. A couple examples that Tim mentioned (one actual and one hypothetical) is from the Wall Street Journal and Amazon. Supposedly, you can actually go to the Wall Street journal and click on a link that says Most Read Articles and see what articles have been ready the most by your friends (in aggregate). A similar example could be a Barack Obama page on Amazon, where you are able to read only the reviews that your friends or network have written. Clearly there are a lot of privacy issues surrounding these ideas, but the monetization potential really can't be argued with.
Another monetization problem Facebook currently is suffering from is the revenue share with third party applications. Currently, third party apps drive a very large proportion of total pageviews throughout of the site. Yet, Facebook can only show ads on a very small portion of the app's page (the canvas area is reserved solely for the use of the app). Tim mentioned a very large BMW campaign that was launched last week by Federated Media (a third party app advertising agency), Microsoft (who has an agreement with Facebook to provide ads on the site), and Graffiti (popular third party app). The problem: Facebook saw exactly $0 in revenue from the campaign. What does Facebook do about this? Clearly it is a conflict of interest given that third party apps allow Facebook to accomplish 2 of the 3 goals mentioned above, yet hinder goal number 3. While we came up with some minor suggestions (sell more targeted ads for BMW, for example), we couldn't come up with a great answer in the short time we had today.
First I would like to briefly discuss some advice he gave the group surrounding startups. The first is the importance of engineers; while it may not seem that important who the first engineer is that you work with to develop your site, if that person stays on then they (along with the founder) will drive the culture of the company. So don't make that decision to quickly.
Second, think about joining startups that are in the 50-100 employee stage with $50 MM in revenue. According to Andy Rachleff (who is a lecturer at the GSB), these companies have mitigated a significant amount of risk yet are still growing quickly enough that there is a lot of upside in joining them.
Now on to the Facebook specific conversation. Tim identified three areas that need to go right for Facebook to be "the franchise company of this decade." They are:
1. increase user base (currently around 70 m)
2. develop a better product
3. figure out how to make money
Not a ton of insight at the macro level here, but he did dig deeper into all of these areas. For the first, he discussed how growing internationally has been a huge focus, and that the app platform has actually made it very easy for the company to internationalize because the apps are being created by the local developers. Additionally, Megan mentioned that it has been easier to acquire older demographics outside the US because the Facebook brand is not associated with being a college website.
As for the second point, clearly the app platform was developed in part to address this issue as well, though some people argued that it might hinder the product given the clutter and confusion surrounding the multitude of applications out there. Additionally, Tim talked about how reducing latency is a major goal for Facebook, and that they have observed a huge increase in engagement for only very small (millisecond) improvements in latency. Finally, one area where there has been a lot of innovation that I was unaware about is the algorithm behind the News feed. It actually looks at your social map and interactions between your friends to predict what info you are most interested in receiving. Therefore, even as you add more friends, your news feed shouldn't change significantly over time. I am wondering how long it takes for the algorithm to learn, however, given that I am still receiving a lot of info about friends of mine that are only acquaintances at best outside of Facebook.
For the third point we talked about the growth of advertising revenue over the past 3 years; $10 MM in 2005, $50 MM in 2006, and $150 MM in 2007. This growth hasn't even come close to user growth, however, so there is still a lot of room for improvement (which goes without saying if they truly are valued at $15 billion!). So what are some of the creative ways that Facebook is starting to grow revenues? The most obvious is taking advantage of the social graph--a great predictor of the products and services you are interested in is your friends. A couple examples that Tim mentioned (one actual and one hypothetical) is from the Wall Street Journal and Amazon. Supposedly, you can actually go to the Wall Street journal and click on a link that says Most Read Articles and see what articles have been ready the most by your friends (in aggregate). A similar example could be a Barack Obama page on Amazon, where you are able to read only the reviews that your friends or network have written. Clearly there are a lot of privacy issues surrounding these ideas, but the monetization potential really can't be argued with.
Another monetization problem Facebook currently is suffering from is the revenue share with third party applications. Currently, third party apps drive a very large proportion of total pageviews throughout of the site. Yet, Facebook can only show ads on a very small portion of the app's page (the canvas area is reserved solely for the use of the app). Tim mentioned a very large BMW campaign that was launched last week by Federated Media (a third party app advertising agency), Microsoft (who has an agreement with Facebook to provide ads on the site), and Graffiti (popular third party app). The problem: Facebook saw exactly $0 in revenue from the campaign. What does Facebook do about this? Clearly it is a conflict of interest given that third party apps allow Facebook to accomplish 2 of the 3 goals mentioned above, yet hinder goal number 3. While we came up with some minor suggestions (sell more targeted ads for BMW, for example), we couldn't come up with a great answer in the short time we had today.
Tuesday, April 1, 2008
Leaving Stockholm
We're a few hours from leaving Stockholm... sad. But I'm definitely looking forward to not living out of a suitcase and being back in PA. Our last day in Sweden was fun, we visited Ericsson, Koenigsegg (see picture above of me and the fastest car in the world... yours for only $2.2 million!!), EQT and the confederation of Swedish Industries.
I'll be sure to post more pics and notes when I get back to the States.
Sunday, March 30, 2008
Weekend in Sweden
Just finished up a great weekend in Stockholm with a dinner at the Opera House--finally got some authentic Swedish meatballs. Also finally tried some herring; they love this stuff out here, but its a little to much for me. Today we recovered from a night out at The Village, the "hippest" club in Stockholm according to my Swedish friend. Surprisingly, drinks were not that much more expensive than at every other bar we've gone to (but still in the $15 range). I was also one of the youngest people there (and recognizably so given that everyone I talked to asked me what my age was). I think we showed the Swedish 30 year olds how we like to party though!
So after a couple hours of sleep we left for a river cruise of Stockholm and then went to an awesome museum that holds an authentic 17th century battle ship. It is impressive how large the ship was... I had never really thought about that until seeing one up close. The ship has a great story behind it as well--it sank 20 minutes into its maiden voyage! The king of Sweden ordered that the ship have 2 levels of cannons, which placed too much weight on the top half of the ship and basically it just fell over into the Baltic Sea. We were told that Sweden spent 2% of its GNP to build it too. Talk about an embarrassing moment for Sweden!
Tomorrow is the last day of the study trip, and then i fly back to the U.S. on Tuesday. Then off to class on Wednesday to begin my last quarter at the GSB--I cannot believe how quickly it has gone by!
So after a couple hours of sleep we left for a river cruise of Stockholm and then went to an awesome museum that holds an authentic 17th century battle ship. It is impressive how large the ship was... I had never really thought about that until seeing one up close. The ship has a great story behind it as well--it sank 20 minutes into its maiden voyage! The king of Sweden ordered that the ship have 2 levels of cannons, which placed too much weight on the top half of the ship and basically it just fell over into the Baltic Sea. We were told that Sweden spent 2% of its GNP to build it too. Talk about an embarrassing moment for Sweden!
Tomorrow is the last day of the study trip, and then i fly back to the U.S. on Tuesday. Then off to class on Wednesday to begin my last quarter at the GSB--I cannot believe how quickly it has gone by!
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