Happiness and social media success

Happy New Year, everyone. Since he-who-shall-remain-nameless still hasn't finished setting up the new Wordpress blogs (partly because, apparently, he is unfamiliar with Disqus, which Cheryl was able to set up on her own blog in a few minutes), I'll keep posting here for a little while longer. One of the nice things about Disqus, incidentally, is that it makes it easy to follow your favorite commenters as well as bloggers. For example, you can follow my comments on Disqus-powered blogs by clicking here: http://disqus.com/daveinhackensack/. The last few comments that come up at that link (in reverse chronological order) I made a little while ago in the comment thread of this post by Fred Wilson¹, The Happiness Project - A New Year's Resolution.

You can click on that link to Fred's blog post for the whole exchange, but I'll summarize and excerpt it here, as it relates to a topic I've blogged about before (e.g., here). After recommending Gretchen Rubin's book "The Happiness Project", Fred wrote about her use of social media to promote it,

I'd like to end with a few words on Gretchen's adoption of blogging and social media during her happiness project. In the second month of her twelve month program, she decides to start a blog. It becomes the Happiness Project blog. She figures out how to set up a TypePad account, she decides to blog six days a week religiously, and she starts using Facebook and Twitter. That's how I met Gretchen. Her husband, who is featured prominently in the book and who I've known for a dedade, emailed me last summer and said "my wife Gretchen is getting totally into this social media stuff and I wonder if you might give her some advice". We met for lunch and I gave her a bunch of advice, but was impressed at how much she had already figured out on her own.

[...]

So let's all buy her book , get a bit happier, and show that social media can put an author at the top of Amazon's bestseller list.

In response, I wrote (in part),

Social media success in this case would have something to do with having the access and support of prominent bloggers such as you and your wife. This reminds me of a discussion I had with Andy Swan in a comment thread on this blog a month ago, in your post about "The Fall and Rise of Media". Back then I noted,

There are still velvet ropes; it's just that top tier bloggers (including multimedia stars such as Breitbart or Godin) have their own velvet ropes now. The average person starting a blog today doesn't have much more voice than he did when his broadcasting options were limited to writing letters to the editor of newspapers, calling into talk radio, or going on public access TV.

Gretchen Rubin got past the velvet ropes of your blog (and signed on the Gotham Gal [Fred's wife, who blogs under that pseudonym] as a legitimate affiliate) in part apparently because you've known* her husband for ten years. Not exactly social media success ex nihilo.

*Edited as per Fred's correction.

Fred retorted that he wasn't exactly friends with Mr. Rubin; he had just known him for ten years. And that Gretchen Rubin's social media success would have happened without his help. Perhaps so, but then Cheryl shared some background with me on who Gretchen Rubin was. As I noted in Fred's comment thread,

BTW, Hackensack Gal informs me Gretchen Rubin appears on Slate (owned by social media start-up The Washington Post Co.), is a former prominent attorney (including a stint as Supreme Court clerk for Justice O'Connor), and daughter-in-law of former Goldman Sachs chief, former U.S. Treasury Secretary, and former Citigroup consigliere Robert Rubin. Again, there's nothing wrong with any of that, but it supports my initial impression that this wasn't an example of social media success ex nihilo

¹Fred's not just a user of Disqus but an investor in it, via his Union Square Ventures.

10 things you need to stop tweeting about

Hat tip to the Fourth Checkraise for this:

Ill-equipped to act, with insufficient tact

This didn't last long. On the advice of one of my developers I deviated from the personalized tweeting and sent the same reply to 20 or so folks on Twitter yesterday. I searched for people tweeting about short selling and then suggested they might want to check out shortscreen for other short ideas. In fairness to my developer, he didn't suggest to do that, exactly: he suggested to tweet a handful of folks at once. In any case, my Twitter account has been suspended, which frankly surprised me.

Judging from 100% of the tweets I received from 30 individuals over my few days-long Twitter career, my tweets were better targeted and more relevant than pretty much any of them. For example, unlike the fellow who managed to send me -- someone hasn't golfed in maybe four years and has a set of Costco clubs gathering dust somewhere -- 20 links to golf tips in two days, I only contacted actual short sellers about a site geared to short selling. That's not to suggest that all of the tweets I received in the last few days were commercial in nature: some were just inane bits of trivia, e.g., the one from a woman in the Southwest who mentioned that she had moved that day and asked if anyone else liked moving.

I appealed for clemency to the powers that tweet, noting that after reading the TOS I understood my mistake. The form for contacting Twitter about stuff like this includes a field asking "how do you feel"¹. I entered "chastened". But I am of two minds about this. On the one hand, the ratio of visits to Shortscreen from Twitter to my tweets was pretty high -- about 50%. On the other hand, the whole Twitter enterprise seems like a pointless time suck. So I leave it to the folks at Twitter to decide if my tweeting days are over. If they are, so be it.


¹This question reminded me a little of that test the reincarnated Spock takes at his parents' house on Vulcan in Star Trek IV. He gets a series of questions, one of which goes like this, if memory serves, "Adjust the sine wave of the magnetic envelope so that anti-gravitons can enter and anti-protons cannot". And then he is stumped by the last question, "How do you feel?".

Insomnia and social media

Couldn't sleep last night, so I signed onto Twitter. Yeah, I remember what I said about it here, but my developers suggested I use it to help get the word out about shortscreen.com. So I searched for phrases related to short-selling, and then looked up the profile or blog of the senders for the individual's name and other details. Then I sent them a personalized tweet inviting them to check out the site.

The funny thing about Twitter is that this sort of unsolicited contact gets an entirely different reception than it would if it were e-mail. People start to "follow" you, (i.e., sign on to receive your tweets; apparently, you have to immediately follow them back, otherwise they may feel hurt and un-follow you). I guess everyone wants to have a large number of followers and pretend those folks are actually reading their tweets.

Blogging like it's 1999

One of the reasons I like reading venture capitalist Fred Wilson's blog is that it reminds me of 1999. Remember when the economy was booming, unemployment was at ~4%, the stock market was hitting new highs, and Internet businesses were focused more on gaining users than generating revenues? That last part, at least, is still the case with some of the ventures Fred writes about, and it makes me a little nostalgic for the good old days. Here was Fred blogging about one of his portfolio companies, Foursquare yesterday:

I was having breakfast at Pastis with a friend today. The "mayor" of that restaurant, Mark Ghuneim, walks in and goes to the bar to order his morning coffee to go. I said to my friend, "watch this, he's going to pull out his phone and then look up and and try to locate me in this restaurant". My friend, who is not on foursquare, says to me "how do you know?" I said "trust me". Sure enough, Mark starts looking around the restaurant and spots us and comes over and has a ten minute conversation about web music stuff (and foursquare).

When I checked in this morning at Pastis, I added a shout that said "getting a demo of a hot new web music service". The CEO of Targetspot, Eyal Goldwerger, saw that on his phone and jumped in a subway to come down and see the demo too. Sadly, we had left by the time he got there.

But both anecdotes are examples of why foursquare has such potential. It seems like such a simple and whimsical service. You just checkin to places via your phone. But the data that it creates and the way it is published out to your social graph is powerful. I expect we'll see a lot more of this sort of thing as the user base on foursquare hits six figures and hopefully seven figures in the coming months.

A commenter of his named Greg responded:

I don't think Foursquare is going to grow. Fred, your position is unique -- you're a micro-celebrity, people want to see you because they want to grovel for your money. The average person, though, has only 10-20 friends, and random people aren't checking to see them at all hours of the day. Checking in, then, quickly becomes a lonely and pointless experience; the virtual badges get old fast, there are no great anecdotes of people visiting you, and the deals businesses offer for mayors are sparse and easily gamed.

Foursquare is a case-study in the tech industry hype-machine. Because it's useful for micro-celebrities, you have exactly those people hyping it up: MG Siegler, yourself, etc.

Greg makes a similar point to the one I speculated about in this post, Social Media: the new Public Access TV?.

37 Signals Satirizes Freeconomics

37 Signals founder Jason Fried's take on the current wave of venture capital interest in Internet-based companies that aren't making money, "PRESS RELEASE: 37SIGNALS VALUATION TOPS $100 BILLION AFTER BOLD VC INVESTMENT". Excerpts:

CHICAGO—September 24, 2009—37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.

Founder Jason Fried informed his employees about the new deal at a recent company-wide meeting. The financing round was led by Yardstick Capital and Institutionalized Venture Partners.

In order to increase the value of the company, 37signals has decided to stop generating revenues. “When it comes to valuation, making money is a real obstacle. Our profitability has been a real drag on our valuation,” said Mr. Fried. “Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money.

[...]

A $100 billion value for 37signals is “not outlandish,” says Aanandamayee Bhatnagar, a finance professor and valuation guru at Grenada State’s Schnook School of Business. Bhatnagar points to a leaked, confidential corporate strategy plan that projects 37signals will attract twelve billion users by the end of 2013.

How will the company overcome the fact that there are only 6.8 billion people alive today? “Why limit users to people?” said Bhatnagar.

In order to determine the valuation of companies, Bhatnagar typically applies the following formula: [(Twitter followers x Facebook fans) + (# of employees x 1000)] x (RSS subscribers + daily page views) + (monthly burn rate x Google’s stock price)2 and then doubles if it they use Ruby on Rails^[1] or if the CEO has run a business into the ground before.

I wonder if Fred Wilson, venture capitalist investor in Twitter, among other Internet businesses, will respond to this on his blog. If so, it should lead to a spirited discussion in the comments.

^[1]Ruby on Rails, the web framework my developers use, was created by one of the partners in 37 Signals. My web developers mentioned this to me when I asked them if they had read the book Getting Real by 37 Signals, which I had first heard about from this video blog post from Tim Ferriss's site.

Another Take on Social Media

Via the Un-Marketing Blog:



David Silver agrees with the point about product sales being driven by recommender communities versus advertising, but I imagine if he saw this video he'd reiterate that all the big numbers for the general-purpose social media sites haven't translated into profits.

Social Media: The New Public Access TV?

This analogy came to mind earlier this week when reading a post on Fred Wilson's blog about Virginia Heffernan's article in the Sunday New York Times about users leaving Facebook, The Medium - Facebook Exodus. Wilson, a venture capitalist investor in social media (e.g., Twitter), disagreed with Heffernan's column, and noted that the number of subscribers to both Facebook and Twitter are still rising. In the comment thread of Fred's post, I wrote something along these lines:

I don't get the enthusiasm about Facebook or Twitter either. Is the drop off rate analogous to that of blogging? I.e., anyone can start, and lots of folks do, and the prospect of connecting and sharing your thoughts with countless people over the Internet is enticing. And then most people find out that no one is listening to them.

It seems that active (i.e., roughly daily) blogging is becoming mostly the province of a relative handful of professional bloggers or bloggers who (like Fred) see a value in blogging related to their business. Might the same be happening with Facebook and Twitter?

Public Access television, too, gave regular folks a chance to broadcast their content. For a small handful of them, it led to bigger and better things (I can only think of two, both one, which happens to be food-related, off the top of my head -- Rachel Ray² and Isa Chandra Moskowitz¹, of the Post Punk Kitchen -- but I wouldn't be surprised if there are a few others). But for everyone else, the deafening silence mocking them from the aether caused them to drop off.

I'm reading a book now (The Social Network Business Plan) by an angel investor in social media named David Silver, who has a take on this that seems to be orthogonal to those of Wilson and Heffernan. Silver is enthusiastic about social media, but not about general purpose sites such as Facebook and Twitter. He writes,

You can forget about the sustainability of MySpace, Facebook, and other general-purpose online social networks. They aren't sustainable businesses. Their business model, based on advertising, is not demonstrably economically justifiable. Very few of their members look at the ads, and billions of dollars are being wasted trying to reach them. These social networks will continue to attract younger people who, ironically, lack spending power.

Silver's thesis, in a nutshell, is that the real revenue opportunities are in communities geared toward a particular product, service, or interest. E.g., a community that rates airlines on service, reliability, cleanliness of their planes, etc. Airlines might pay for access to anonymized conversations from this forum, to use as a means of quality control.

¹I don't know if Rachel Ray's public access shows are available online, but ICM's are. Here is the first episode of her Brooklyn-based public access show with her pal Terry Romero (HT: Cheryl). ICM has since moved out to Portland, OR, where she has become something of a local celeb there, appearing on the local morning show. She's also published a few vegan cookbooks.



²My crack research staff informs me that Rachel Ray's first shows were on a local TV station, not public access.

USEG News

Shares of U.S. Energy Corp. (NASDAQ: USEG) rose about 32% today on about 13x average volume on the news that the company had entered into a drilling participation agreement with Brigham Exploration (NASDAQ: BEXP) in the Bakken oil field. From the release:

"We are delighted to be teaming up with one of the best and most technologically advanced operators in the Bakken oil field," stated Mark Larsen, President of U.S. Energy. "Brigham has proven itself to be one of the premier companies in the Williston Basin through the advancement of their multi-stage frac completions and their consistent improvement of production rates. We look forward to a long term relationship with Brigham and developing low cost reserves well into the future," he added.

"Our patient search for a sound investment in oil and gas has now come to light with today's announcement," stated Keith Larsen, CEO of U.S. Energy Corp. "At a time when natural gas appears to be poised for an extended period of low prices our main focus has been to expand our oil production and reserves. This agreement does just that by providing us with the potential to rapidly expand our oil production and increase our reserves by participating with an experienced operator that has a track record of lowering its finding and development costs. Furthermore, I am confident that our drilling schedule for the balance of 2009 will allow us to reach our corporate production goal of 7,000 MCFED or approximately 1,200 BOED by year end," he added.

This is a pretty large commitment by USEG -- according to the press release, USEG's "expenditures are anticipated to approximate $17.6 million for the first six initial well program." That's a little less than half of USEG's remaining cash and Treasuries, going by the company's most recent balance sheet. Judging by the relative performance of USEG and BEXP today though, without drilling down further, I'd assume this deal is on pretty favorable terms to USEG. Which would make sense, since it appears that BEXP had a more acute need for the cash than USEG had for the participation deal. I'd venture that some BEXP shareholders bought into USEG today.

I got a voice mail about this today from Reggie Larsen at USEG, but we didn't get a chacne to speak. If he and I connect tomorrow, I'll update this post accordingly. Investor relations via social media: just like in those trendy marketing books.