Tag Archives for Facebook

Will Rapportive change the Cambridge Cluster?

Image representing Rapportive as depicted in C...Image via CrunchBase

Great news that Rahul Vohra and his third venture, Rapportive, has gone viral with over 100,000 downloads.  Click here for the full story on Rapportive.  Briefly Rahul opted out of his PhD, helped start www.mo.jo, joined the start-ups at Redgate Software and toyed with a game based on a book and then came Rapportive.  Rahul left Cambridge to join Y Combinator and tap into the Silicon Valley scene.

Y Combinator invests an average of $17,000 in each start up – now over 280 companies – for around 10% of the equity.  Then Rapportive raised some $1 million from Silicon Valley angels.  I asked Rahul if he had given any of his early backers in Cambridge, UK, a chance to invest and he replied on Facebook “Rahul Vohra Philip: yup, there are investors from Cambridge. Neil Davidson, John Taysom, and one other who prefers to remain anonymous :)”.

Redgate appears to have a policy to go for growth and show that you can build a major technology company without offering equity to employees except a tightly controlled scheme.  If founder Neil Davidson sees Rahul grow fast, will this change his view?  Particularly if he sees them then grow new companies with their “winnings”.  As Redgate plays a major part in the Cambridge Cluster, including providing the chair of Cambridge Network, this could have a major impact on the Cambridge Cluster.

Silicon Valley keeps ringing the changes.  First companies were sold that made a profit, then the social network companies were sold which made no profits but had millions of users and now people are buying teams of geeks.  An example is Motorola buying 280 North for the geek team.  Up 280 is another success from the Y Combinator stable.  Up 280 raised less than Rapportive with a reported $250,000 in a 2008 angel round.  Interesting to try to guess at the final equity ownership.  The Equity Fingerprint was: two founders, then Y Combinator, an angel round and hopefully options for the team.

Guesstimates:

Round 1: Start -up:

Two founders – 50% each;

Round 2: Y Combinator arrives:

Two founders – 45% each, Y Combinator 10%

Rounds 3: Angels invest $250,000 and say 10% option pool:

Round 4: Two founders –  22.5% each, Y Combinator 5%, angels 40% and 10% option pool.

Guess that Y Combinator and angels would be paid out on completion with the founders and option pool vesting over a couple of years.  But a great deal for the geeks.  Congratulations.  Not as good as Xensource in Cambridge, UK, but not bad!

The world keeps spinning; will Rapportive make the Cambridge Cluster spin faster?  Will Rahul return to Cambridge with his winnings and tell us all about his business plan resource, become an angel and a serial entrepreneur?  How long will we have to wait?  The clock is ticking……..

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Remember ’87, ’97, ’07

mobile social networkingImage by Will Lion via Flickr

Friends Reunited is now valued as little as £20m to £40m compared to the price paid by ITV of £175m.  Perhaps it is time for the Founders to buy it back or else think that social networks have moved on and Facebook has won with 200million users.

It is why you need an outside investor onboard to keep you in touch with the market; it is so easy to keep a life-style or passive equity company chugging along but it is not the role of entrepreneurs.

I remember the words said in ’87, “We could work for another ten years and not be as well off”.  And not just us, all the staff with their options and all the investors.

So essential and so difficult to do; build a business and keep a watchful eye on the value you are creating.  Of course, it takes special people to be busy building a business and going through the tortuous route of due diligence and closing the biggest deal of their lives.

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Playfish leaps up The Cloud with VC power

LONDON - MAY 31: Party revellers enjoy the atm...Image by Getty Images via Daylife

The Scobleizer uses his Flip video to great effect in these two videos:

“Playfish’s CEO talking about how they are building games for Facebook, part I and part II.”

Playfish builds social games (20million monthly players) and was formed by people who had already built a games business in the old game world and now are building games on social network sites such as Facebook.  The videos show how the games uses the social network, how they get tens of thousands of feedback, how a game can quickly be upgraded (a hundred upgrades not possible on a DVD), how the have no servers and everthing is in The Cloud.

Another company building on Facebook’s platform and reacting to the demographic data already available.

Playfish has raised $20million from Accel and Index Ventures and has quickly developed a 24 hour development operation with offices in London (HQ), Beijing and Silicon Valley.  Of course the founders of Playfish had done it before and so would have got a good deal from the ever generous VCs.  The real lesson is to build a business and sell it and do it again and again.

Building a business in The Cloud with VC power seems a great way to swim, lots of air and lots of water drops to power the fish along. I wonder what business plan resource they used?

Form thePlayfish website:

“What are Social Games?

 

Social games are games designed to be played together with friends.

Traditional computer games focus on standalone game play on consoles, your PC or on your mobile. Games that do allow you to play together with others online normally require you to buy the game, go online and try and find like-minded new friends who are also playing the game. This is something that usually only the most dedicated gamers are prepared to do.

Our social games are different. We create games that let you play together with real-world friends and family using the infrastructure built by social networks. This is in some ways a return to the roots of games. You play with the same people you would play cards, board games or go bowling with in the real world. Sharing the game experience with friends makes it more compelling and fun.

At Playfish we believe social games are a big part of the future of the video games industry, and are working hard to be the leading company in this emerging sector.”

 

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Is Facebook getting ready to float?

Tagging: Maldives StyleImage by nattu via Flickr

The Equity Fingerprint of Facebook is a social network on its own and has just been increased by those nice people from ConnectU who claim to have come up with the idea in the first place.  However the “office boy” went on to fame and fortune (see my earlier post) with Facebook.  As part of a court settlement, the “office boy” has settled a lawsuit with his former Harvard college room-mates, Tyler and Cameron Winklevoss, receiving $20million in cash and 1,253,326 shares worth a further $11million based on the company’s own valuation.  Facebook was valued at $3.7bn, down from the$15bn when Microsoft bought in for $240million.  If Facebook floats at the higher valuation, the founders of ConnectU will do very, very well and not by half.

It reminds me of the Google float when paper was issued to thank people who had “helped” the company get going.

So many companies that go the Active Equity Company route do have to keep shuffling the equity to keep it rewarding the current people and, if all goes well, the ones who come out of the cupboard.

I remember when Reid “Glug” Hoffman of LinkedIn came to Cambridge and said that although websites looked similar, it is the attention to the small details that differentiate one from the crowd and Zuckerberg certainly has that skill.

Apart from all the history, do the ConnectU founders really deserve their cut?  Would their site have ever reached 150million users and more?  Their idea was great but could they execute?  How would you feel if you were the founder of ConnectU?  Or the “office boy”?  It would make a great case study.

Dave Morin, who runs Facebook’s app team, on friendfeed Tweets: “Today we gave our 175,000,000th user the power to share and be more open and connected through Facebook. Awesome.” One of the comments: “Congrats to Facebook on reaching 175 million users. Amazing growth. – Robert Scoble”.

So Facebook is going for the 200million mark (zuc……).

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Friends of Facebook founder

Mark Zuckerberg f8 Keynote - Dave MorinImage by b_d_solis via FlickrIn the Telegraph Magazine of 19 July 2008, there is an interesting article on Facebook founder, Mark Zuckerberg, detailing (again) how he has fallen out with college friends and others on the way to building Facebook.  It ends with a comment from Kara Swisher. a columnist on the Wall Street Journal “….The number of people he’s had problems with at a young age is remarkable- not in a good way.”.  I bet he would not have had the problems if he had not been so successful; in a variation of the old saying “Money keeps you in touch with your friends”.  As Reid “Glug” Hoffman said on his flying visit to Cambridge, it is easy to have the idea but so difficult to make it fly, something Facebook has certainly done.  Besides lots of different groups of people from pop stars to footballers who get very rich very quickly find life difficult, both family and professional so why should geeks by different.  ConnectU still only boasts 15,000 members at 200 colleges/universities.

The article gives some figueres of interest to Equity Fingerprint, the business plan resource, but omit any reference to an angel round in which Reid “Glug” Hoffman claimed to be an investor.  But now Facebook is registered in Delaware so it is difficult extract information unlike Companies House in the UK.  The details from the article show the normal chopping and changing of ownship in start-ups as people come and go and others do not stay close, very close to the action.

  1. Zuckerberg and his Harvard room-mate,  Saverin agree to invest$1,000 with ownership 2/3 to 1/3
  2. With the site taking off, ownership is now Z 65%; Saverin 30% and Moskovitz (around 13 April 2003?)
  3. Z moves to Silicon Valley and Saverin stays in New York (“That decision would prove ill-judged) – summer 2004
  4. Z meets Parker who co-founded Napster at age 20yrs
  5. Z attends meeting with Sequoia Capital in his pyjamas and turns down offer of investment
  6. In July 2004, Z claims that Savarin never matched an agreed investment of $20,000 in seed money and et al.  Z transfers all IP and membership interests to a new versin of the company in Delaware.  “The value of Savarin’s stock was unhinged from any further growth of Facebook, and Savarin was expunged as an employee”.
  7. Parker leaves
  8. In spring of 2005, a VC(who?) invested $12.7million in Facebook and users amounted to 5.5million
  9. Microsoft invest $240million, valuing Facebook at $15billion.

I think that the parties have made settlements recently.  When Google floated, lots of “friends” and “consultants” appeared out of the woodwork and were appeased with stock.

I do not the details but I do know that if you have a good idea, you quickly find friends who want a stake for no effort and no risk.  But it was never easy.

I wish that I had had a free ride with Facebook and Google!

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Scrabulous may soon have the letters changed – they have!

Hasbro/Mattel/EA boycottImage by k1v1n via FlickrScrabulous is an app on Facebok set up by two Indian brothers – no need to learn the rules if you have played Scrabble.  But with 600,000 daily users (addicts) and income rumoured at $25,000 per month, the owners of Scrabble are calling time.  So Mattell and Hasbro have written to Facebook asking for the app to be removed – so much easier than dealing with the two brothers I guess.

However we learned from Reid “Glug” Hoffman of LinkedIn on his flying visit to the Cambridge Cluster earlier this year that it is a rare skill to make a social network that connects or an app that appeals to so many users.  Perhaps Mattell and Hasbro would be better bringing the two brothers in house and getting all their other games up and working as apps.

But as an inventor, I am on the side of the big boys this time – Scrabulous could have made more effort to make a new game but then no one would have known the rules!

They have!  The brothers closed the site down and re-launched it with big changes such as circular shapes instead of square.  But the test must be – do we know the rules from playing Scrabble?  The legal beavers must be relishing the fees.   So much better to buy the brothers out as I say above.   One lesson is that you do not have think of Equity Fingerprint, the business plan resource, if you “borrow” someone else’s ideas as your start-up costs are slashed – a triple letter score!  At least Bill Gates and Paul Allan paid for DOS and the global rights.

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Facebook payment service

Facebook logoImage via WikipediaUsers of Facebook, the social networking site, will be able to transfer money directly to each other for the first time from Saturday. Moneybookers, a European online payments provider, is launching an application which will allow customers who have registered their bank details with the service to make charity donations, repay loans from friends or pay for services via Facebook, paying a maximum fee of 40p.

More…..

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Facebook API on any website and easy to create

Facebook announced 25 Jan 2008 a new JavaScript client library that will allow Facebook applications to be displayed on any website.

Wei Zhu from Facebook Developer site had explained its benefits:

Since this library does not require any server-side code on the server, users can now create a Facebook application that can be hosted on any web site that serves static HTML.

This is a good move of Facebook. With this support, user may build a quick and efficient way to connect with the other people or businesses to make their idea for a Facebook Platform application into a reality.  From this new move, users can create their API from any website by leveraging Facebook community relationships – which may encourage the API development and broader access to Facebook int the future.