@andrewchen

Adventures in Twitteronia
I’ve been using Twitter a lot more often recently, especially after hooking up Google Reader shares to it, and exploring what makes the product so compelling. So first off, if you aren’t following me on Twitter, please do so here: http://twitter.com/andrew_chen.

Now on to a quick observation on public and private spaces in Twitter’s product design.

Public versus private spaces
One of the most important concepts in product design for social apps is public versus private spaces. I have previous written about this topic, relating the topic to the Dunbar Number and awful quality of YouTube comments.

Ultimately, the tradeoff is the following:

• Private spaces are better for scaling across different demographics long-term, since it keeps different audiences segmented from each other. The downside is that you need to conquer the critical mass problem over-and-over again
• Public spaces are better for getting to critical mass once, and generating fun. But the downside is that if you randomly get a bunch of Portuguese-speaking members, then your entire site might become known as “that Brazilian social network.”

Ideally, you’d like to do all private spaces, but the downside is that it’s very hard to get momentum going. But if you win, then you win big, since it’s likely your product will be adopted by a very horizontal audience.

Twitter’s public/private space design
The design of Twitter makes it clear how you can fit together components of public and private spaces to make an engaging product.

The entire Twitter social graph is public, since I can go around moving from one profile to the other (although arguably they discourage this by making the pics really small). This makes it so that I can just go around following people like BarackObama and THE_REAL_SHAQ and newsycombinator and other “public” media feeds. This means arguably that they only need to get enough interesting public feeds together (probably in the dozens?) to become useful.

Yet at the same time, by following lots of people, I’m able to create a private space of only people that I’m interested in – and no one has the ability to “butt into” my feed without me opting in to follow them. This means that maybe my homepage is pretty empty until I start to follow enough people for it to change often enough that I’m constantly checking it. That’s a critical mass issue that they’ll need to solve using suggested friends and addressbook importing.

You’ll notice that a lot of successful social applications share this design, which combines:

• Central homepage with info “pushed” to me by my connections
• List of people I’m following or Friend list or Addressbook
• Searchable (but maybe not browsable?) central directory of possible friends/contacts/connections

In a way, applications like email, Skype, social networks, Twitter, and others all share common components of this design. I think that ultimately this is a great communication-centric design pattern that can be reused in any social product.

How to find girls on Twitter
OK, and finally the section we’ve all been waiting for

Twitter doesn’t allow you to search by age and gender, nor do they collect that information. As a result, they are able to avoid, to some degree, the pickup scene nature of many social networks. For my followers, I would say that certainly 80-90% are dudes. But what if you’re looking for women on Twitter?

The easiest way I can find is to search conversations for topics or language that might be more likely to come from that demographic.

For example, try these:

• http://search.twitter.com/search?q=%22gossip+girl%22
• http://search.twitter.com/search?q=cutee

I’m sure there is actually a fun game of finding lots of niche demographics, like librarians or rednecks or college frat guys or whatever on Twitter, just by guessing what they might say in a tweet.

And I will leave that as an exercise to the reader

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The Silicon Valley machine is still going, for now
Here in Palo Alto, the Silicon Valley machine is still going strong – entrepreneurs are still starting companies, angels and VCs are still investing, and engineers are still coding. In the last 3 months, I’ve had half a dozen friends get their companies financed, which is great. Certainly things are more difficult, but deals are still happening, and there’s still a lot of companies growing.

But I’ll say that I’m still quote worried, because of my belief that the worst has yet to come. There is a large group of 2004-2007 self-described Web 2.0 companies which haven’t hit bottom yet, and I’d like to discuss this possibility in this post. I hope this blog will spawn off useful discussions for entrepreneurs thinking about where we are in the boom-bust cycle.

So first, some thoughts about Web 2.0 and how that category has played out:

Web 2.0 isn’t cool anymore
In the 2004-2007 era, many companies in the “Web 2.0″ space received a tremendous amount of funding. You can debate what the term means, but generally I would classify them as companies having some of the following qualities:

• Consumer internet destinations (or widgets!)
• User generated content and activities
• Advertising-based revenue models
• Appealed strongly to the early adopter audience

Yet ultimately, it turned out that most of these startups didn’t work out as real businesses. The reasons hinged primarily on the difficulties of monetizing user-generated content based on ads that I’ve written about. As a result, to be a VC-backable business, you either need to be a top 50 internet property (good luck on that!) or have a well-defined monetization backend that probably wasn’t advertising.

My guess is that the # of companies describing themselves as Web 2.0 has dramatically decreased over the last year, as these business model problems have been rapidly discovered and popularized.

And yet, now the difficulty of course, is that there are dozens of Web 2.0 startups funded in the 2004-2007 timeframe that have a meaningful amount of cost, and not enough revenue. It’s these startups that I’m worried about.

Venture financings as a lagging indicator for the economy
The problem is, VC financings tend to be a lagging indicator for the economy. We haven’t seen the established startups who are trying to raise Series B or C rounds get turned down by the market. The reason is that it’s too early, and these companies failures will lag the downturn in the economy by a year or possibly more.

Lots of smart companies and entrepreneurs did a great job of getting their financings done last year before the economy really fell apart. As a result, these lucky ones have cash in the bank right now and can continue iterating on their model to hopefully figure things out. But if they haven’t figured things out and the economy is still bad, then ruh-roh, that’s no good. But we’re unlikely to see the effects of these sick companies with dysfunctional business models until later this year.

Who are these startups that might be in trouble? Let’s discuss:

Characteristics of startups in danger
I’m not going to call anyone out But I think that there are several startups out there which are now in the precarious position of either finding their model ASAP, or collapsing.

These companies might include the following characteristics:

• Started in 2004-2007, and self-described as Web 2.0 startups
• Have grown to lots of headcount, let’s say >40 people, which can burn through a $5M Series A in under a year
• Substantial traffic, let’s say >5 million uniques per month, which drives up the cost structure
• Ad-based business models, which rely on big sales teams calling up agencies (whose pockets are now reduced, if not closed)
• Low-context advertising inventory, with low CPM in sectors like communication and entertainment
• Mature internet sectors, where the upside is now established, and acquirers are less likely to pay up as a result
• Not a leader in their category, where they may be #5 or higher, and investors may be unlikely to keep supporting their growth
• Media content hosting, where they allow users to upload, host, and stream content without charging a dime, which also drives down the cost structure

I will leave it as an exercise to the reader to pick out companies that might fit the bill.

The point is, I think this cycle is going to get a lot worse, and a downslide will likely be caused by one or a number of 2004-2007 vintage classically Web 2.0 companies hitting the skids. I am hoping that the slope down will be gentle.

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I wanted to pass this along – I will be moderating a panel at the conference, agenda and conference details below.

Click here for a 10% off of registration for readers of this blog.

More detail:

Conference description

Flash Gaming Summit is a one day conference dedicated to fostering the growth and success of the Flash games community. The conference will bring together leaders in the Flash game space to share industry insights and strategies for monetization, distribution and successful game development. The Mochis, an Flash games award show, will take place at the conference to recognize the best games of 2008.  Flash Gaming Summit sponsors include Adobe, Kongregate and Nonoba and is organized by Mochi Media.

Agenda

Time	Session
8:45	Doors Open – Registration & Breakfast
9:45	Opening Keynote
10:00	Session 1 – Designing and Building Successful Multiplayer Games    Flash game developers are increasingly building more immersive and engaging multiplayer experiences for their users. What makes a multiplayer game successful? Our panel will share their experiences and best practices on designing successful multiplayer games that engage gamers and keep them coming back. Moderator: Ranah Edelin, Raptr Chris Benjaminsen, Nonoba Daniel James, Three Rings Jim Greer, Kongregate Paul Preece, Casual Collective
11:00	Session 2 – Getting Eyeballs – Marketing and Distributing Flash Games    How important is it (or not) to get distributed on game portals? Where are the game plays coming from? Hear from a panel of portals and game developers on the best strategies and tactics to market, distribute and publicize your game to reach gamers. Moderator: Jeremy Liew, Lightspeed Venture Partners Chris Hughes, FlashGameLicense.com John Cooney, Armor Games Richard Fields, MindJolt Games Matt Spall, Gimme5games
12:00	Lunch
1:30	Session 3 – The Future of Flash    Hear from Adobe about the latest developments in Flash 10, CS4, AIR, Flex, Catalyst and more. Adobe Evangelist Ryan Stewart will discuss and answer questions about how these improvements will impact the game development community. Ryan Stewart, Adobe
2:30	Session 4 – Monetization and Business Models for Flash Games    There are multiple models emerging in the industry for monetizing games. How should developers choose which business models to pursue? Our expert panel will share their experiences and thoughts on various business models and their potential. Moderator: Andrew Chen, Futuristic Play Adam Caplan, Super Rewards Kate Connally, AddictingGames Jameson Hsu, Mochi Media Kenny Rosenblatt, Arkadium Games
3:30	The Mochis Flash Game Awards    Recognize the best Flash games of 2008 with The Mochis Award Show!
4:30	Session 5 – What Makes a Flash Game a Hit?    Game developers share insights on how to design and build hit, popular games that appeal to a mass audience. Panelists will discuss topics including game design, game testing/tuning, the effectiveness of creating sequels, and success metrics on succeeding in games. Moderator: Brian Robbins, Fuel Industries Edmund McMillen, creator of Coil (IGF Finalist) Joel Breton, AddictingGames Sean Cooper, SeanTCooper.com Stephen Harris, Ninja Kiwi
5:30 – 6:00	Session 6 – Social Game Design 101: How To Make Flash Games That Social Networkers Want to Play    What are the key elements to designing successful Flash games for reaching gamers on social networks? This talk includes a deep dive into game design and viral mechanisms that you must use to succeed on social networks such as Facebook and MySpace. Bret Terrill, Zynga Games
6:00	Join us for drinks at the Official Flash Gaming Summit After Party: License to Play