Monday, June 25, 2007

Brad Feld is an Idiot

Brad Feld, as well as many developers of Facebook apps, seem to misunderstand how reality works. They think that simply creating an app on Facebook and getting a bunch of users is magically going to give them money. The thing they're missing is that they have to actually have a business plan that works in order for them to get money. Going out and signing up hundreds of thousands of users is great and all, but if you haven't thought about how you're going to make money off of them, then that's your own dumb fault. All that Facebook provides is a platform. It's not their job to get you users or money. This is akin to a software developer getting mad at Microsoft because they made a Windows application but no one bought it. If your product has no value, of course you're not going to get any money from it. You have to be able to see how you can monetize the benefit that Facebook provides. Getting a huge user base really quickly on Facebook is, relatively speaking, a simple thing. Once you get them, you have to use them to either generate revenue through a service you have, or via targeting advertising. If you have 200k users, and haven't made a single penny then one of two things is true. Either you don't have any sort of plan, and your lack of revenue is your fault, or your plan sucks and your lack of revenue is your fault. Either way, you need to reevaluate your approach and stop thinking that your problems are Facebook's fault.

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2 Comments:

Blogger bfeld said...

Ah - my reputation precedes me again. There are actually two Microsoft analogies - the ISV one that you use AND the system integrator (SI) one. I think in Facebook's case the SI one is a better / more relevant one because of the way the ecosystem works. In the SI world, the SI does work "on Microsoft's platform" and pulls through significant users / revenue for Microsoft as a result. As part of this, SI's resell Microsoft's software (in addition to selling services) and make between 20% and 50% margin on this.

Another analogy would be AdSense on blogs where Google has effectively created a massive revenue ecosystem for bloggers by paying them a percentage (unknown to the blogger - varies by blog) of the revenue.

But then again, I'm an idiot.

June 26, 2007 6:45 AM  
Blogger Jeremy said...

Brad, thanks for the comment. I can see what you're saying with your SI analogy, but I'm still not buying that the responsibilty for getting revenue doesn't fall on the developer. Using your AdSense analogy, I can say the same thing. I have AsSense ads on my blog, but I've yet to get any money. Is this Google's fault? No, not at all. The problem is that I haven't written enough compelling stuff to get the readership needed to start getting money. In the end, it is still the developer that needs to figure out how to monetize all those users.

How's that idiot thing working out for you anyway?

June 26, 2007 6:56 AM  

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