@andrewchen

Subscribe · Featured · Recent · The Cold Start Problem 📘

For-profit app developers versus For-attention app developers

Max Levchin recently launched his blog – which I’m sure will be excellent – with an article called, "How to successfully launch a social networking development platform." It’s absolutely worth reading, so go click here and read it.

If you’re lazy, here’s the quick summary:

  1. Create a feeling of technological openness.
  2. Treat developers equally, but leverage the best ones by letting them closer in.
  3. Plan and manage a community, and introduce a community manager early
  4. Shift the support/documentation load onto the early developers.
  5. Respond very quickly to platform issues, and take the early scaling problems seriously.
  6. Emphasize the money-making nature of the platform.
  7. Make your campus a place that developers very much want to visit.
  8. Pre- and over-communicate policy changes and make major changes with at least the perception of open debate.
  9. Make the #1 measurable goal of your PR team the amount of coverage that successful (or just interesting) developers get.
  10. Hold frequent developer events and invite leading developers to speak at those.

Looking at this list, it strikes me that there are really two different types of developers, the for-profit type and the for-attention type. Different tools (listed above) appeal to the different groups.

For-profit developers
These days, there are many companies in the Bay Area that are building app companies, completely without destination sites. Many of these have gotten angel funding – I personally know of at least a dozen and a half. And a few have even gotten venture funding.

For these companies, particularly the ones with venture funding, there are significant issues to overcome:

  • How do you generate significant revenues? ($50MM+/year)
  • Is Facebook ultimately friend or foe?
  • How can I beat my other for-profit competitors?
  • Does more PR in this space generate higher valuations or advertiser interest for me?
  • etc.

So as an archetype, you can think of these teams as highly experienced serial entrepreneurs with lots of money, offices in SF, staff of dozens, millions of app installs, etc. Kinda like Max ;-)

Thus, the list that Max writes include some of these issues – openness to make dependent companies feel good, money-making nature to appeal to revenues, etc.

For-attention developers

But compare this to the other group, who are the for-attention developers – or as you might call them, enthusiasts. These folks have vastly different concerns:

  • Do people like my app?
  • Am I meeting interesting people via my app?
  • Do I have enough money to pay the server bills?
  • etc.

This group is interesting because I think they are the ones actually hanging out on the Facebook Developer Forums ;-)

I was also able to meet a bunch of them at the recent CommunityNext conference on platforms, where we had dozens of Facebook teams present. They seem to be very small teams – like 1 or 2 – who end up working on a cool Facebook project because they think it’s interesting. In these cases, they’re almost as interested in the technology as an art, rather than being successful. Thus, the process of app creation is almost as fulfilling as being successful itself – that’s why I’m finding many hackers trying out new apps all the time.

For this group, I’d argue that fame/status/respect are more important than money. While it’s fun to think they can make a buck, the more important part is that they have X million users using their Pokewallgift application, and it makes them feel good. Building a $50MM revenue stream or the strategic implications of Facebook’s moves are less important than to the folks who are really trying to build businesses.

Viral channels and scoreboards?
One thing I found curiously missing from Max’s list was viral channels – obviously it’s very easy to build social websites without easy ways for apps to spread themselves. In fact, the OpenSocial spec has a newsfeed, but no invitation and messaging system, both of which can be critical for growth. After all, what’s the point of building on someone else’s platform if you don’t also have access to their audience for growth?

Also, as I’ve commented to friend before, being able to generate a "score" of millions of users is critical, even if those millions of users don’t actually equate to huge revenue. IMHO, one of the biggest mistakes MySpace has made in this has been not publishing a scoreboard with how many millions of users have whatever layout site, music widget, virtual pet, slideshow, etc. I know for a fact there are internet companies with millions of widgets on MySpace, but the press can’t report on them, and people don’t talk about them.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of AH Capital Management, L.L.C. (“a16z”) or its respective affiliates. AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell -- or a solicitation of an offer to buy -- any securities, and may not be used or relied upon in evaluating the merits of any investment.

The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any charts provided here are for informational purposes only, and should not be relied upon when making any investment decision. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, I have not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. The content speaks only as of the date indicated.

Under no circumstances should any posts or other information provided on this website -- or on associated content distribution outlets -- be construed as an offer soliciting the purchase or sale of any security or interest in any pooled investment vehicle sponsored, discussed, or mentioned by a16z personnel. Nor should it be construed as an offer to provide investment advisory services; an offer to invest in an a16z-managed pooled investment vehicle will be made separately and only by means of the confidential offering documents of the specific pooled investment vehicles -- which should be read in their entirety, and only to those who, among other requirements, meet certain qualifications under federal securities laws. Such investors, defined as accredited investors and qualified purchasers, are generally deemed capable of evaluating the merits and risks of prospective investments and financial matters. There can be no assurances that a16z’s investment objectives will be achieved or investment strategies will be successful. Any investment in a vehicle managed by a16z involves a high degree of risk including the risk that the entire amount invested is lost. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by a16z is available at https://a16z.com/investments/. Excluded from this list are investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets. Past results of Andreessen Horowitz’s investments, pooled investment vehicles, or investment strategies are not necessarily indicative of future results. Please see https://a16z.com/disclosures for additional important information.