JanRezab / Blog

Founder & Executive Chairman of Socialbakers.com


Monthly Archives: June 2013

If I were Facebook, what would I add to Instagram? Video and monetization!

Published: June 19, 2013

Of course, its trending the internet this week, that Facebook is about to launch video kind of support to Instagram. Now, that comes as amazing news, as Facebook is clearly trying to engage a younger audience with Instagram, and test new things with its billion dollar acquisition. It makes perfect sense.

So if I were Facebook, what would I do? What would I add?

We have all seen VINE, the 6 second video service from Twitter, that has become extremely popular in the last 3 months, and its getting huge attention from brands, as you can see from our study at Socialbakers. Vines are more interactive, they allow for more engagement, and they are generally more fun. Vines will be the thing that will put animated gifs “out of business”.

The problem with Instagram is monetization – how do I monetize just pictures? Overlay them with promoted pictures / promoted contextual posts? Thats something that might prove challenging. With Vine, its easier to add a sponsored Vine to the newsfeed of the app, and it feels almost natural for the users that its going to be like that.

Naturally, Facebook will want to take on YouTube and Vine with more dynamic features, that will engage audiences for significantly longer than Instagram does, with richer content. Its only natural.

So what would I do if I were Facebook tomorrow?

  • Announce a video service in Instagram, with the range of 6 – 60 seconds of possible uploads, with great filters and some “cool” features
  • I would announce an awesome connection of that video into Facebook and Facebook mobile, so it feels super natural on all platforms
  • I would announce how I plan to monetize this ahead of times, but start monetization at the end of the year – I can afford that
  • Create an interface and feed that is completely natural, filters either videos or photos depending on my preference, and allows to import friends easier than ever before

And if you connect #hashtags and other things Facebook has done recently, you might just see the answer.

I guess we will all wait and see for tomorrow. For now, I see it as a great way for Facebook to create more a engaging audience, and be able to finally get into the videos game, as the traditional Facebook videos don’t really cut into that area, and Instagram Videos might just be the edge that Facebook needs to get in the video-game.

P.S.:Few thoughts on monetizing Vine: I think Twitter sees the monetization possibilities of Vine, and I think its really a potential gold mine for engagement with them. Vine is growing like crazy, so it would only make sense for them to add good monetization possibilities – like feed ads.

UPDATE: Facebook launched 15 second “vines”, I mean, short videos into Instagram. I think its truly an amazing format and a great inspiration from VINE, that could even move forward in the future – Facebook videos = YouTube, Instagram Videos = Vines. From our perspective in advertising, this could be used that when a lot of advertisers start using Instagram vs. Vine, this could be great. Instagram videos is not very different from Vines, other than the longer length. I think its a great step for Instagram, showing that its always not key to be the first one with the innovation, but the biggest one. Instagram with its 100M+ active users will turn 15s videos into a sensation, I am sure of it.

UPDATE May 2014: And they did turn it into a sensation, not allowing Vine to grow too fast, creating their own platform. Well done, Facebook. Great reaction.

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Why the patent system must permanently change, costing tech. companies billions

Published: June 19, 2013

Today, I still get extremely surprised as a person that companies can patent. People patent hardware, hardware design, software, software design (!), and many other things What in the some areas of business should be “abuse of dominant position”, here its benefiting often big companies, and locking in entire industries and decreasing the amount of innovation. The worst example here is mobile, where each company is suing each other, Apple sues everyone and everyone sues Apple, and its probably not all the cases out there.

mobilepatents

But I find bigger stupidity in software related patents: Multi-touch, swiping screen to unlock, google search layout, and many other things. I think in software, everything that was invented is already invented, which means everything in software is looking at a different / new use-case of the same things. I find it horrible that companies can use patents to lock their position around a particular visualisation or software algorithm. And now, without knowing a lot about it, I hear that the American Patent system has come to a new system, where it doesn’t favor the first inventor, but the ones who first signs up the patent. This allows more space for patent trolls, even though they don’t develop or never developed anything.

And President Obama is not making this easier, read these two articles: New Patent Law, End of Entrepreneurship (Forbes), and Patent Trolls sues Buzzfeed – over VIDEO ADS.

And patent trolls and selling patent packages, thats are the biggest cancer of innovation. Thats something I would make it illegal. Why should it be legal to buy out patents? I get it, that originally this was designed that there would be “inventors” and “doers”. This is not the case anymore in software. Show me one software company, that was super successful on building something on an idea by someone else. Thats crazy if we look at the new tech. world today. Imagine someone would have a patent for: “Making pictures from mobile handsets and posting them online to a social network”.

Probably the most fantastic thing I ever received was an Cease and Desist letter back 8 years ago back when I had a mobile games company, that someone has a patent for Sudoku in Europe, and from now on, I should pay him royalties. I sent back a letter from our lawyers, that Sudoku is a concept that is quite older than his patent registration – at that time, of course, this was possible, and still is in Europe. I am sure they fooled some people, and some people actually paid. The problem is, that the way the new U.S. patent law is designed to my understanding is (note: obviously not a lawyer), that not the original first one who used, but the first one who filed a patent gets it. Now that is pretty stupid for software, because I think it will even allow bullish behavior and more trolling.

My favorite article: Patent Trolls Cost companies $ 29 billion (PCWorld, study by Boston University School of Law) in 2011. Thats outrageous, but even more so if you compare that there were $ 247 billion invested in R&D!!! That means if we compare patent lawsuits and innovation, we get to a around 10% in costs are patent trolls, and we are talking about huge companies. What about small companies, that possibly couldn’t defend themselves!

So why on earth are we making patent laws more stupid? I would really LOVE a response, dear governments. Too bad most governments are not #sociallydevoted.

So this is why the patent system should change, and I hope people will realize this soon. And Android vs. iOS vs. others is just the beginning, I predict we will soon even move to much more online related stuff, and then, we might run into an innovation problem.


5 key reasons why Facebook hashtags are a brilliant move against Twitter

Published: June 17, 2013

Facebook has launched hashtags, and thats something that was perhaps not very expected of them before they announced it. The brilliant part of that of course is that it piggybacks on top of Twitter and its “hashtags everywhere” thing. You can’t patent the “#” number sign (thank God!), so we can expect Facebook to use them in any way they want. If I were Twitter, it would obviously make me furious.

Here are the reasons why its so brilliant?

  • Advertisers already using it! 48% of all super bowl ads used hashtags, perfect piggybacking
  • It will allow companies to create cross-platform solutions and measurement – say if you had a Twitter competition, now you can do a Twitter & Facebook hashtag competition, no difference!
  • It will allow Facebook to penetrate markets with hashtags were Twitter is not even scaled properly, this is quite brutal for Twitter, as people might think Twitter is copying it as they will already use it on Facebook for a while before they even sign up for Twitter.
  • Twitter has gotten itself into real-time monitoring of TV ads, and its piggybacking on top of the TV Ads market, Facebook can easily do this, and do it even better
  • It allows to put better structure to Facebook and allow better search-ability of things

What are the necessary steps for Facebook to succeed with hashtags?

  • Promote the awareness that Facebook supports hashtags
  • Make sure you have an API – allowing the developer community to tap into hashtags, trending topics, etc. – this is something critical for the success of the service
  • Promoting developers to make applications on top of the API

Really, I see this as a brilliant move from Facebook, of course, I hope its not another short-lived project like Facebook Poke (coming from a person who thinks agile innovation is the key to success), but is something Facebook is devoted to following through and finishing. That would start with an API, so first, companies will be able to start doing campaigns for both.

#hashtag


Prague beats Berlin with its tech scene, could challenge London in the future!

Published: June 16, 2013

Yeah, I agree the article title is bold, but I think that is the confidence that Prague should have about where it is right now, and where its going.

Comparing Berlin vs. Prague

Berlin has got SoundCloud, 6Wunderkinder, Wooga, and a few others. Although Berlin companies are great, the hype around Berlin as a city is perhaps even bigger. I think it started with the Jamba brothers, I mean, Samwer  brother copycats. Jamba was quite a big exit for them (although wrote-off by both its buyers Verisign and Fox Mobile. I was in the same business at the time, and selling ringtone subscriptions to small children on their or their parents phones for a few dollars a week is on the edge of good ethics (rip-off), or sometimes the law). One thing some Berlin tech companies have in common is, they are not run by German founders – thats not the case in Prague. What Berlin will quickly run into is a shortage of developer talent. Prague has a huge developer talent, with a potential to tap into towns around it and also Slovakia much easier than Berlin can. What is also great in Prague, lots of these developers still work at “boring” big companies, outsourcing companies, that could quickly move to start international start-ups.

I would remind that Czech Republic, together with only Russia is one of the only markets in the world, where Google is not the dominant player, its Seznam.cz, who despite losing its market share in search is still the #1 online company in terms of revenue ($130MM revenue, 31% of that profit/EBITDA). There is a huge pool of developers both in Seznam, and other internet companies still focusing on the local market. When these companies are going to turn their focus to creating international companies, we will see something huge happen. 

But lets not talk about the future, lets talk about the present international companies that Prague has:

  • Security companies: (note: 2 of top 10 biggest security companies in the world) AVG (NYSE: AVG, market cap: $1B), Avast (similar size to AVG) – AVG and AVAST in combination have a huge market share (btw: ESET is a Slovakian company), that makes for “Czechoslovakian” firms have 37,1% of global antivirus marketshare (see report below). We also had Cognitive Security, acquired by Cisco for an undisclosed sum
  • Gaming companies: Geewa (one of the TOP5 real-time social multiplayer gaming companies in the world), Madfinger Games (best 3D first person games on iOS),
  • SaaS companies: Socialbakers, Good Data, Zoom International, and many other smaller
  • In valuation only of these top companies, we are talking about several billion dollars worth of the TOP 10 companies.

I would thus make the bold statement, that it is my opinion that Prague’s tech companies are currently worth more than the top ones in Berlin. This is really not an analysis, this is my opinion of looking at the top companies and comparing them together. Berlin is quite hyped up (and maybe, its deserved, we are to see that), but Prague is not get the attention it really deserves.

Antivirus-vendor-market-share

Startup accelerators

Czech is really growing its startup accelerator scene: Startupyard (Global Accelerator Network), Node5, Starcube, also Wayra (starting in June). The benefit of these start-up accelerators is they are creating really good communities, and they are trying to attract global professionals to help out.

Few facts on Prague and Czech Republic you might not have known:

  • Skype has one of its developer centers in Prague, housing back-end, web apps, SkypeOut, SkypeIn, Callforwarding, and a few other things.
  • Do you know Red Hat (the Linux OS)? They have 700 guys in Czech Republic.
  • Huge companies host its development and product centers: IBM, Siemens, outsourcing companies Cleverlance, Ness Technologies, DHL
  • From the mentioned companies, AVAST and Zoom International are self-funded, still a very typical practice in Czech Republic, as the investors don’t have the trust of the local founders, and local founders need to be better educated about the process of funding.

Challenges for Prague

Prague has some great challenges ahead of itself. The availability of funding isn’t the best, the capital available locally is typically very “equity exhaustive” for the founders, not motivating founders to actually go for any capital. The other thing is, that of course making sure the tech talent isn’t sucked up by the big companies, but developers are motivated to join or start companies on their own. I think that Prague could really do with more good leaders of companies, leaders with both vision, and spirit to join people together and create huge projects.

If you are not from Prague, come and see it, we will be happy to give you a tour of our offices, and connect you with the right people – drop me a note on Twitter: @janrezab.

Small note: I am aware AVG has its development in Brno, and many innovations are coming also from Pilsen (Socialbakers including), but ultimately we all HQ in Prague.

Update: Nice article on Techcrunch written by Ciaran O’Leary (@ciaranoleary) from Earlybird on Berlin and its brewing scene. Berlin is going on this with volume, so Praguers – try harder! :)