LaunchBox Blog

Tim O'Shaughnessy, co-founder of Hungry Machine, led a discussion with the LaunchBox08 startups detailing strategies for developing social network applications. Tim gave insider tips to the group while chronicling the story behind his successful "Visual Bookshelf" Facebook application.

Choose a social space that you believe in. When choosing a social platform for your application, it is important to remember what the network is providing. For example, Facebook might have the most valuable base of users from a domestic standpoint, but it is probably also the most saturated with applications. Conversely, the Orkut network only consists of around 10% English-speaking users, which could present a challenge for US-based advertising revenue. From a user-acquisition standpoint, Tim notes that a network like Friendster (which is not a part of OpenSocial) might be valuable because fewer developers have gravitated to it, and thus there is less competition.

Pay attention to the important metrics. Daily active users, a common form of measurement, can sometimes be less reliable than conventional wisdom holds. The true metrics that make a business run will vary from business to business, and Tim finds that monthly uniques and time spent on each visit are the most helpful to him. Tim also recommends that developers spend a great deal of time conducting "A/B testing" and have at least one variable being measured at any given point in time.

Forecasting the future. Tim predicts that a great area of growth in Facebook applications will come from the onset of virtual goods, particularly when Facebook launches its "card-on-file" feature that will enable users to make purchases from their credit cards with one click. This will create a particularly compelling opportunity for developers to leverage the convenience of this new feature to drive sales within Facebook.

Haroon Mokhtarzada, founder of Freewebs / Webs.com, stopped by the LaunchBox offices earlier this week to share his experiences and lessons learned with the LaunchBox08 teams. The successful Maryland-based web entrepreneur took a brief detour, completing a law degree at Harvard Law School while growing Freewebs into the massive website creation platform that has today served over 20 million users. Through sharing the story of his own personal journey, Haroon offered several main pieces of advice for young entrepreneurs:

1. "Launch early and quickly," Haroon advised the 8 LaunchBox startup teams. He emphasized the concept of conducting a "minimum-valid test" - just enough work product to see whether an idea is going to work or not. There is great value in receiving feedback at a very early stage, and in particular, user feedback is tremendously helpful in order to prioritize the addition of new features.

2. "Have a general analytic framework." One of the worst mistakes you can make as a new startup is to experience a sudden change in growth without understanding why. A great starting point to evaluate new concepts is to conduct an "A/B test" - using analytic tools like Website Optimizer and Google Analytics, it is possible to simultaneously test two different concepts or variations against each other.

3. "Your job as a leader is to inspire people to work towards that vision - and to make everything else look really small." There is always a challenge when working with a growing staff that has imperfect information, and so it is critical to get other people to believe in and want what is best for the product.

4. "Go longer on drive and intelligence, and shorter on experience." Haroon cautioned the LaunchBox teams about the potential risk of settling on satisfactory hires. The criteria should be simple: hire incredibly smart people who can get along with others, and who don't have an ego.

After providing insight into the beginning stages of entrepreneurship, an invigorating discussion followed and set the stage for the development of the innovative new ideas that will come to fruition at LaunchBox08.

We have kicked of the LaunchBox08 business accelerator program in Washington, D.C. Eight promising early stage companies have received an investment from LaunchBox after being selected out of a highly competitive application process. These companies will benefit from advice and mentoring from the LaunchBox founders and advisors, as well as collaboration with the other entrepreneurs as they work to refine and test their product offerings and develop business plans. Many of the companies share a common focus in social media, and the portfolio includes start-ups in the mobile, gaming, digital media, advertising, and communication sectors.

Earlier this week Haroon Mokhtarzada, Founder and CEO of Webs.com, and Tim O'Shaughnessy, Founder of Hungry Machine and LivingSocial, each shared their insights and advice with the LaunchBox08 entrepreneurs.

The companies will present at pitch days on August 6, 2008 in Reston, VA and on August 7, 2008 in Palo Alto, CA. If you are interested in attending pitch day, please send us an e-mail.

Labels: Kick Off, LaunchBox08, Pitch Days