Funding Facebook Apps panel: Valuation & Metrics – Matt Marshall VentureBeat (moderator), Lee Lorenzen Altura Ventures, George Zachary CRV, Luke Nosek The Founders Fund, Jeff Clavier SoftTechVC
introduced as “money burning a hole in their pockets”
when asked do you want nuts and bolds or higher level discussion of strategy and platform, audience was wildly in favor of the second.
Now for the fashion show.
I feel an obligation to reveal that I was tired and bored and over-sugared, and this is at least 50% fake
lee: we do only facebook aps
george, ho hum, funding again
Luke, we love facebook, they are already making us rich
Jeff: I am french and we don’t do facebook aps, why am I here, you silly people?
i am tired. I need about 40 downward dogs to unbend for typing in these chairs. Jeff actually said they invest on folks who have facebook aps as part of the strategy, not entire. and I have never seen him without sunglasses on his head.
Lee sounds like he’s going to pass out from fear every time he speaks. He was all kinds of smart sunday, but i think it took him an hour to recover from stage fright, and there were only about 20 of then. Now he’s pimping adonomics, which is certainly worth pimping.
George reminds me vaguely of Jeff Weiner for reasons I can’t put my finer on. I had a looooong coffee one day in which we geeked out wildly and widely. I really like him, even if CRV didn’t fund us. 🙂
matt marshall, meanwhile, is moderating with a grace and style that could easily have made him a diplomat. he makes you at ease, and then you spill your guts… journalist gold!.
George: I tend to think facebook will be the winner, and the portals are struggling because people don’t wake up every morning and say I want to see media, they wake up and want to see friends.
Matt: but myspace is still bigger, and will be opening, and orkut is
George: I’m not a facebook investor and I wish I was. Facebook has the best user experience. There are moments of genius in the UI. I think any SN designed by committee will not work out.
Jeff: theez eez something something eet eez something something. I really have no business making fun of French accents,my husbands family will string me up. apparently he said “One of the first that transitioned into the older demographics”
Lee: Google will have a difficult time in moving users out of facebook.
Luke: tee hee hee I’m rich! I’m rich! or maybe something more like “We are very careful about not becoming something like Microsoft, where trust with developers is lacking”
Lee: if you take the first no, and say you can’t get VC funded, you aren’t much of an entrepreneur, you wimp. go home and hug your mommy, silly baby!
Matt: you say you just like infrastructure plays, not aps, and you syndicate with other investors.
Jeff: when you have a fund my size, you do 30+ deals a year at 250K. but look at the next size, it’s a 1M 1.5M, so as a solo I can move very very fast, i can’t bring all the value, but I can syndicate wiht a few funds I like working with very efficiently. On the no application rule, but it doesn’t mean I’ll never do it. never say never.
Matt: what little guys did you invest in, any why bother with such small fry?
George: social media we seed funded with Jeff, they started with aps and moved up to developer network. we cna’t quantify. it’s hard to quantify breakout markets, it’s all gut feel.
Matt: you are close with slide. why slide owns so much of the space?
Luke: the slide CEo saw the graph as separate, and was ready to think about it as a platform, and they ran with it very quickly. when they first went viral on myspace it was a big fight to keep it going but with facebook it was almost too fast. massive growth from the myspace work (it echoes the advice to experimentation early and understand the space)
Lee, all warmed up now: points out rockyou and slide own half the social graph, tremendous power in a couple spaces. microsoft is trying to keep facebook a googlefree zone. (popfly?) these lessons in platform changes is that when there is a platform change it’s a chance to get back in the game. rockyou must be a 1/2B company because of the way they own the social graph, if MS was willing to do 15M for % of facebook. Apple caught up with a platform change and would they now open up itunes, so folks don’t have to buy an ipod?
Matt: google?
Luke: they’ve been a great search company/ad network, but it’s a one trick pony. gmail is still at the back of the pack. They could use gmail to build a social graph, if they went that way. but we’re blown away by facebook, when they make a mistake they correct it, I’d be very comfortable betting on an ap company that made facebook their primary focus. it’s hard to make a better product at this point. It’s clear social is more important than search, search just isn’t that sticky. There is no lock in. those was will be very interesting when they play out.
Lee: the one play google might do to hurt facebook would be college oriented edu only, to get disgruntled facebook users, and they could pay college students to switch.
Luke: but you’d have to pay people. that’s how locked in people are.
Lee: the new groups tool should placate disgruntled facebook users who have found their mom on it.
Matt: rockyou has a combo ap/advertising play. how’s that? are ppl afraid of UGC?
George: yeah, CPMs are low because it’s a new category. ppl are afraid of using their jobs, putting an ad against something people woudn’t find tasteful.
just to jump on the google thing, I don’t think they’ll be a serious threat. Google is tech centric, not consumer centric. They’ll spend a lot of money/time to monetize social networks.
Matt: who could challenge?
George. no one. Myspace is bigger, but they are owned by a media company, and they don’t get it. I don’t think they’ll beat facebook.
Luke; I think myspace will slowly go away. newscorp is just not innovative.
Lee: think about the genius of this move, google when they wanted the best programmers they put out the math problem and offered nice food (to keep talent out of microsoft’s hands?) Facebook has 300 ppl and they are committed to what they are doing, no salary overhead…
jason calcanis: Saying myspace is going away is ridiculous. How could you say it?
Luke: I could say it very very slowly.
jasonC: facebook hasn’t made any money yet! you say it’s going to be as big as google? are you drunk?
_I am quoting accurately now!!!!_
Lee suggests facebook could challenge google on search, jason replies that he just said if google can’t learn facebook’s business, how could facebook learn google’s
wow, i went form making stuff up out of boredom to transcribing the real thing. I can’t wait for the next panel….. at least it won’t be boring.