The story behind the story on all the hyper-growth

Why is it that Viddy, Socialcam, Pinterest, and others have suddenly accelerated their growth in such a short timeframe? The surface answer is, of course, the integration with Facebook’s open graph.

But that’s the symptom, not the cause.

The New Platform Wars: Facebook vs Apple vs Android

What’s really happening is that Facebook has woken up to the fact that it was not a major player in the latest platform wars, and it is coming back with a vengeance. The extent of its efforts, as I’ve gathered from conversations over the last month combined with the company’s public actions, have become crystal clear. It is sparing no expense or action to preserve its future as users’ default graph.

For context on what would cause Facebook to get aggressive, let’s rewind just a few months back and remember what growth was happening at that time. The headlines back in March were about “App Store Payola,” not about Facebook at all. Everyone knew  ….continued at Pando Daily

Hackathons, pitch days, and the value of practice

At Conduit, every once and a while we would have a Pitch Day. A pitch day, usually a Friday, was one where anyone on the team could pitch a new game that we would consider building in the future.

We continued this practice at Zynga and there were always small groups of the team that became obsessed with putting something great out there. Others, however, thought this was a useless exercise since despite the effort many of the ideas were unfeasible or of poor quality. To detractors it felt like a sloppy waste of time, and only exposed how not everyone on the team was an A player.

But I never saw it that way. While I was always open to the idea that an amazing game would be pitched or would inspire a feature for our current games, that was not my criteria for success.

For me the largest value was the exercise itself. For most of the team, they don’t get the chance to think about the whole product the way I would have to on a daily basis. Thinking about the long term vision and the near term goals simultaneously is not easy and most (including me) start out very bad at it. From our Pitch Days, to Dropbox’s Hack Week, to Google’s 20% time - they all empower folks to get practice at thinking holistically.

Fareed, who took over my former job as GM at Zynga Boston, made a spot-on analogy to professional athletes. No one expects a star basketball player to never practice, then show up on Saturday for the big game and play perfectly. These activities are an opportunity for the next generation of leaders to try their hand and practice. Success will show itself not just in the potential of a good idea to come up, but in the long term well rounded growth of your team.

In defense of hype

For a startup ecosystem that is all about optimism, it’s ridiculous how much petty backstabbing and general negativity there is when new stuff comes along.

To pick only one topic area, here is a random assortment of negativity on the general funding environment I’ve heard just in the last week:

• AngelList is overhyped. It’s adverse selection for people that either cant raise money elsewhere or are more concerned with their follower count by celebrity-valley types than actually building a business.
• YCombinator is overhyped and generates mostly trivial businesses (with the odd exception and those haven’t exited). Worse, it means everyone is too busy starting a company to be part of the frat instead of helping build a great company. 
• Super Angels / MicroVCs are overhyped and are going to cause the bust. They are simply pricing up the market past a realistic valuation, hurting a companies’ chance to raise their next round. And they won’t have the dry powder to support those same businesses because of their fund size. This will cause a collapse in the whole market.

I’m not even talking about the general skepticism of whatever company happens to be a “hot” company right now. From Highlight, to Pinterest, to Voxer, to Socialcam there’s all kinds of naysaying. 

I remember this same skepticism about Zynga (“I heard they make all their money on scammy offers!”), Twitter, and countless others. To be sure, some of this skepticism might actually be true. But in a world where we bank on the exceptional happening, it seems incredibly small minded to constantly assume the exceptional won’t happen.

Personally, when I feel the hype coming on I try and remember two things:

1. I am not a short seller.
It isn’t my job as an entrepreneur, and it’s not my job when investing, to pick the losers. So it’s not worth spending a lot of energy trying to prove that a particular company isn’t going to make it, most aren’t. Much more important is trying to figure out those rare few companies and few individuals that might break through, and the ripple effects if they succeed. I try and focus my effort spending time there. 

2. Hype is often necessary, it’s just not sufficient.
Just because an entrepreneur is starting to speak at a lot of conferences or is becoming a quasi celebrity doesn’t mean they are all hype. Yes, many of those people are hopelessly useless. But the ability to generate hype is not a bad thing, it’s really important to commanding thought leadership and shaping a market. Building something isn’t enough, if you want to grow really fast, and fight off competition, you often also have to make people believe in your future. 

It matters that Square is not just growing revenue-wise but commands thought leadership to potentially change payments. It matters that AngelList is materially effecting how some people are fundraising, and worth planning how that could possibly effect everything else. It matters that the YCombinator alumni could get large enough, and wealthy enough, to completely self fund each class internally and separate from the early stage ecosystem altogether. 

Combining those two ideals I’d rather focus on what could happen if the hype comes true, and spend my time planning for the few situations where I believe it will. 

“Silicon Valley’s math is getting fuzzy again.”

I will not be exposing on the bubble talk. But I will reblog when it’s something worth reading. And MG nails it (props to Josh K as well) in a post worth every entrepreneur reading.

parislemon:

In my last post, I linked to something that First Round Capital’s Josh Kopelman wrote in 2007. His post was prompted by — wait for it — a New York Times piece declaring that “Silicon Valley’s math is getting fuzzy again.” We were in a BUBBLE! Ahhhhh!!!!

Reading over that post now, it’s pretty awesome.

As Brad Stone and Matt Richtel reported in October of 2007:

Internet companies with funny names, little revenue and few customers are commanding high prices. And investors, having seemingly forgotten the pain of the first dot-com bust, are displaying symptoms of the disorder known as irrational exuberance.

No, that wasn’t written yesterday — but it sure reads like it was.

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