Facebook is okay with hurting their developers

Update: Only two weeks later, all of the user decline figures are far worse than I had originally stated (e.g., Band Page is down to 4M users from 31M!)

Facebook just seriously injured their own app developer ecosystem, and they’re poised to finish it off. And they did it on purpose.

Recently, Facebook announced that they would remove the default landing tab for Facebook Pages. They did this while simultaneously introducing Timeline for Pages. Most people probably aren’t going to miss those “like gate” pages where users were asked to like the brand’s page. The move makes sense for Facebook as it forces brands to spend money on the new Facebook ad units that have embedded likes (see below). Brands are understandably upset: getting likes means spending money.

The effects were immediate to one audience. The real doom-and-gloom story is around app developers. Facebook made this announcement at the start of this month. Since then, some of Facebook’s biggest apps have taken a nose dive on traffic. How big? A good example of this is Band Page, which gave artists cool, interactive fan pages with embedded music/videos, rather than the boring old wall. Facebook announced these changes roughly at the start of March. As you can see below, Band Page lost roughly 1/4 of their users (6 MILLION!) in a period of 15 days (yes, the chart is a little weird to read).

And this will only continue as more pages transition to the new format (10 more days until it’s mandatory).

The “default landing tab” was how many, many apps got their traffic on Facebook. The default tab was the first thing new users saw when they visited a brand’s page. This was a way for the page to “message” themselves to new potential customers, and it was very popular for brands to spend money on these apps.

Unfortunately, that party is over.

Check out this comparison on how else the new change hurt an app like Band Page. Here’s a “before” of Taylor Swift’s page, which has yet to convert to the new format:

Notice how it lets you play the music straight from the page and links to their iTunes store (links like this are not allowed on Timelines, btw)? Notice how it “lives” in Taylor Swift’s page as part of a seamless experience? See how you can see a quick list of all the apps the page has?

Let’s compare…

Snoop Dogg recently updated his page to use Timeline.

Wait. Where’s the link to Band Page? Oh, I found it under that little “2” to the right of his “Snoopermarket” (that’s cute) section…

Check out the installed Band Page app look and feel:

What? Where am I? Where’s his page? That white space you see is exactly as it appears. The app is sitting alone off in its own area.

It might as well live on Snoop’s own website, and I imagine this is exactly the direction many brands will take as this becomes the norm for Facebook apps.

How much does all this hurt these apps? Check out the biggest losers in the weekly app ranking charts:

It is the same story with every major app: stagnated growth in early March followed by a continuous and very steep decline as the month continued. All that jazz about the Ticker and Open Graph hasn’t been enough to stop this decline. I fear what will happen April 1.

Page apps are getting destroyed! This explains the recent shift for Wildfire (reference) and Buddymedia (reference) to becoming Facebook Ad aggregators. These two companies built an empire by being the go-to solution for Page apps and now they’re running away. At least Facebook notified these guys.

Facebook is out to kill page apps, albiet slowly and only after suffocating the ecosystem so the loudest and most deep-pocketed players move to greener pastures (see above two examples). Developers beware. Profile apps suffered a similar slow strangulation followed by a sudden death. When profile apps were killed, we got just over 60 days notice (announced as a footnote Aug 19, 2010 and officially removed Nov 3, 2010).

IPO-Facebook needs to make money, and if there’s companies eating their lunch, don’t expect them to sit back anymore.

After all, Timeline is all about hurting Twitter. Let’s see, it:

  • Decreases the ability of “doing stuff” via apps (e.g., self-maintaining content)
  • Makes it more embarrassing for a brand to not actively post updates since their page starts off as a wasteland. Thus, it…
  • Increases the importance of providing frequent updates and engaging your fans
  • Makes it easier to see who’s interacting with a page

Page apps became a casualty because they discouraged page owners from using Facebook like Twitter. Previously, brands could hide crappy walls by having cool apps and a nice splash page with a “Coupon for a like” message. Those days are gone. And Facebook did it on purpose. It’s probably for the best, but as a developer, it still hurts to think about all the blood, sweat, and tears that went into building those amazing Page Apps.

Three Analogies for Pitching Your Startup Right

Below are three analogies on how to prepare and pitch your startup better.

TLDR: Don’t focus on being right. Don’t rush the sale. Find believers.

I recently got my startup funded. It was an extremely, extremely challenging exercise. Today’s post is short; I’ll save the funding journey for another time. Today, I wanted to talk about pitching. I’m going to focus on three big, often overlooked issues.

1. Friend-speak: “That’s an awesome idea!” => “Good luck, bro.”

Friends tell you what’s wrong with your idea, but they often say it nicely. Listen to your friends carefully, and recognize that “That’s a cool idea, but what about blah-blah?” is a veiled criticism of your idea. Listen and understand their concerns. A good pitch patches up these holes before they’re even asked.  Often, when an idea is criticized, it’s natural to want to be defensive. It’s important to take criticism as something to solve for, not something to “be right” about. Ok here’s the analogy:

You’re a pirate. You’re practice fighting with your buddy pirates when they accidentally shoot a hole through your hull. But you’re smart so you win the argument with them that there is in fact NOT a hole there (Uhhhh). You decide to go out and challenge some Brits to a battle to the death without first addressing the damage your buddies left on your idea — er, I mean — ship. Oops!

2. You need more time to sell

I haven’t pitched that many people specifically to get money (a lot of pitches were over partnerships), but when I felt rushed there wasn’t a second meeting. When you are trying to convince somebody to give you — a nobody — enough money to buy a few cars (or a house), they need time to digest things. Here’s the analogy:

Your startup is like a restaurant. First you lure in a customer to try out your food. Once inside, you serve your customer what they are going to eat. It’s a game changing meal, so they’re naturally skeptical. They start to nibble on it. Maybe it’s good. Maybe it’s not. But you’re in a hurry so you jam the food down their throat, ask for money, and remind them to leave a good review on Yelp. They throw up and get major indigestion.

Like with any good meal, make sure you have a full hour to pitch. Your pitch should be 30 minutes max. Leave 30 minutes for questions (which will be sprinkled throughout your presentation).

3. The Crazy Idea Train needs passengers

You’re the conductor of the Crazy Idea Train. You built it, actually. It’s a little rocky, but it’s speeding along! But there’s no passengers. Your friends say they’ll get on the train later. Strangers say you need to pay them money for them to get on board (it looks really ghetto and unstable, after all). And nobody really knows where it’s headed. Maybe it’s going to Billion Dollar Land; maybe its going to Unemployment Mountain. You think it’s the former. But it looks like most people believe it’s the latter.

I’ve thought about this a lot, and I’ve decided that this is actually super duper important not just from an investor’s point of view, but from a founder’s point of view. If you can’t convince one person to join your Crazy Idea Train, then is it really a good idea? Finding a co-founder is social validation that your Crazy Idea has legs. Without this, investors are left to imagine the worst.

I’ve also heard cases of people unsuccessfully looking for co-founders. Again, this to me is a sign of a crappy idea or worse. There’s a lot of reasons why somebody would be unable to find a co-founder, and most of them are bad signs. Are you arrogant and un-friendly? Do you seem untrustworthy? Do others have no confidence in your ability? Are you a terrible leader? Are you all talk? Are you no fun to be around? Do you kill kittens for entertainment? Maybe. Maybe not.

Your number one job as a founder is to sell the company to future investors, acquirers, and employees. If you suck at this, that’s a death sentence. Start with selling to a co-founder.

Summing it up

Don’t focus on being right. Don’t rush the sale. Find believers.

Bonus pro-tip: make sure your lawyer doesn’t put your cell phone number in the SEC filings. Yeah, that happened.