Category Archives: Essays

“The Social Network” and a Personal Reflection on the Past Decade

Punk Prophet Billionaire

It is hard to describe what I felt watching The Social Network. I knew going in that much of the account it presented of Facebook’s founding was fictional. Certain things, however, hit too close to home not to make me at least a bit sentimental and a bit embarrassed as well. Why should I feel anything? It was a just a movie, right?

I sometimes pride myself with being one of the first people ever to have been friends with a personal computer for their entire conscious life; although this experience is a commonplace among today’s children. And so, I often wonder — how does my experience compare to that of Mark Zuckerberg and other Internet pioneers? How different of a person am I?

I watched The Social Network in the middle of a packed New York City audience — and each time a familiar experience was depicted on screen I felt self-conscious, or something like it — as in, how could this audience, seeing this, genuinely understand the excitement over Mark Zuckerberg’s achievement? I felt it acutely because it tasted so much like my own formative years — and I realized how much I would probably like Mark if he were even 50% like the caricature painted in the movie.

Mark Zuckerberg

Me

Mark had an overnight success with Facemash.com at Harvard (20K hits in the first day, according to the movie). He was forced to shut it down by Harvard. The summer 1999, between my junior and senior year at the University of Maine, I launched RateMyFace.com (the precursor to HotorNot – referenced in The Social Network), generating over 100K hits in the first weekend.  I shut it down because it was too popular and I had to graduate. I later launched RateMyFaceOff.com (Summer 2000) – which was exactly the same concept as FaceMash – and for the same reasons cited by the Zuckerberg character in the film.
Course Match – an application Mark developed to help identify who else was in your class at Harvard RateMyProfessors/RateMyTeachers – In 2001, I developed a ratings platform which millions of students have used to date – revolutionizing how students choose their courses and still among the most popular education websites ever created.
Conceived of Facebook (November 2004) Conceived of IMConnected (Nov 2001)
Plenty of crazy people trying to leech away his creation Plenty of crazy people trying to leech away my creations
The Social Network portrayed Mark as someone who walked quickly and/or jogged around campus, so as not to waste time getting from here to there. Not sure if this was the actual Mark’s habit. This sounds minor – but it was one of the most curious parts of the movie for me. I used to be laughed at by my friends for doing the same thing at UMaine. I hated wasting time between locations and hated wasting time getting where I wanted to be.
Worked with Peter Thiel, the main angel investor of Facebook I only once met Peter Thiel at a lecture here in New York and consider him a business hero of mine. Peter invested in an early and inferior competitor to PeekYou, Wink.com, and more recently in a legitimate competitor, Rapleaf (a similar data company with a different approach). I’ve wanted to work with Peter for years, certain he’d appreciate my take on the future of the Internet.
Net worth: X billions, liquid Net worth: X millions, but almost entirely tied up in the net worth of PeekYou and RateMyTeachers.

 

Did I waste 2002-2003, when I was sitting on business plans, some of which were foundational blueprints for Social Networking? I still am unsure of the answer. My fit-all excuse is that the Internet economy had crashed and investment dollars were scant, to put it mildly – and everyone I presented IMConnected to asked the same question, to which I did not have a good answer: How will it make money? Had I known then what I learned over the following years, I’m certain I could have gotten it off the ground for less start-up capital than I thought I needed but I was afraid to enter into the project without sufficient resources for scaling up immediately (I’d been through that with RateMyFace before and didn’t want to experience a failure to scale again). When Friendster launched in 2003 (as well as AuctionDrop – a copycat of another business plan I spent a lot of time developing) – I was starting to feel sorry for myself (the worst possible thing for an entrepreneur to do).

The lesson learned was that great ideas are often obvious – and even if they weren’t, someone else will probably think of them eventually and set about their execution. I had a two-year head start on Social Networking (I called it “affinitology”), but failed to execute. Despite knowing full well how important an innovation it was, there was always an excuse to put it off until tomorrow (when I would have the resources to “build it properly”).

IMConnected - November 2001

In 2004, after Friendster had essentially failed to scale (my own biggest nightmare come true) and had come and gone from popular public consciouness, MySpace and LinkedIn were ascendant, and Facebook was on the rise (and, I assumed, destined to overtake MySpace by virtue of its well-structured architecture) – I began to obsess over the opportunity lost, but I also wondered about the fate of a site like Friendster, which had all the promise in the world, only to see its opportunity slip away overnight. I wanted to create something eternal – something that would change the way people think about the Internet forever. It was too late for that something to be IMConnected – but I knew I had it in me to think of something else, potentially better, and with the ability to make it happen. I also knew that when it hit me, I wasn’t going to waste a day. I thought about this at least every week for the next couple of years. It was an ongoing obsession and I enjoyed the thought process.

A couple of years later in April 2006, I woke up in a semi-conscious state of mind, with the crystal-clear concept of re-indexing the web around people almost fully formed in my head – perceiving right away that if I could identify the actual individual behind any given URL, I could create a database that would not only be relevant 100 years from now, but might rank as the most important web database since Google’s. I vowed not to waste a day — and three months later, I had a prototype of the database ready to go. … After much deliberation, I named it PeekYou.

Today the company is growing by leaps and bounds – month-over-month increases in revenue throughout the past year – we’re hiring great new people, and the markets we are entering into fit as a glove within the original vision. The sometimes ridiculous challenges I’ve faced in building this company are eventually worth writing separate stories about – but we’ll see how things stand a year from now. I’m thankfully surrounded with good people who share my vision for this database and we’re in that period of rapid growth all bootstrapped start-ups dream about.

The Social Network induced me to reflect back on the past decade. Here are some final thoughts on what I believe I’ve done right and what I’ve done wrong.

Some big mistakes I’ve made:

  1. Underestimating the urgency of executing my ideas.
  2. Feeling sorry for myself, for whatever reason.
  3. Assuming that everyone who says nice things has my best interests in mind.
  4. Not focusing on building and utilizing my personal network and goodwill – turning down opportunities and lifelines out of stubbornness or fear of failure:
    1. Example: In 2004, Mark Pincus, CEO of Zynga (formerly founder of SupportSoft and Tribe), offered me an apprenticeship to learn the ropes of entrepreneurship under him. I thought Mark was awesome, I thought Tribe.net was an interesting approach to social networking, and I thought I could run RateMyTeachers on the side. In the end, I was afraid to move to San Francisco with no money in my pocket. I’ll always regret this – and now I wonder if Mark even remembers me.
    2. Accepting deals I knew were fundamentally flawed, hoping against hope that things would work out in my behalf because my own goodness would eventually win the day for me.

Best things I ever did:

  1. Retained a lawyer to review my contracts and to negotiate sticking points on my behalf
  2. Sought to create something eternal – I directed my ambition on building something long-lasting instead of placing too much focus on the immediate
  3. The day I conceived of re-indexing the web around people, I did not waste a day in developing a business plan and prototype.
  4. Marrying Kejda – for the first time in my life I was responsible to someone I love as much as myself. I was forced to defend my decisions to someone more intelligent than me. This didn’t stop me from making mistakes – but I have made many fewer mistakes because of her.

AltSearchEngines Essay Competition

I recently won first place on an AltSearchEngines essay competition. Charles Knight asked readers of his new blog to contribute ideas on how alternative search engines can increase their collective market share. Here is my entry.

—-

Google and Yahoo currently have a stranglehold (75%) on the search market for one simple reason – for the past six or seven years they have offered users the most relevant search results. Through long-term success these two have achieved mindshare, thus significant path dependencies exist within their core user base. MSN, AOL, and Ask, own the next 20% of market share. This means that 95 out of every 100 Internet searches are owned by five companies (actually four companies, if you consider that AOL now displays Google results). This exercise asks us to consider the remaining 5% of alternative search engines as being one general entity and we are tasked with increasing the Alt’s market share to 7% or beyond.

Nearly every alt engine has its own unique quirks, positive or negative, and a considerable number of these engines do indeed offer quality of output that rivals most any search result from the major 95% market share holders. Yet most Internet users have never heard of nearly any of them. Before making direct suggestions on how to compete by creating a better search experience, it is more important to consider the products that already exist in the alt search market, and understand what drives the 95% of search users to the big five engines.

Consider the three second-tier search engines, MSN, AOL, and Ask.com. MSN has the benefit of being Internet Explorer’s default homepage (used by more than 70% of Internet users), and they’ve spent many millions working on their search technology to catch up to Google, but it clearly isn’t there yet in terms of quality. AOL has the benefit being the country’s largest ISP, therefore able to place its homepage in front of millions of people every day – but they do not offer links to Google’s advanced tools (which require a Google login). Ask.com is a well-funded company with a simple domain name that continues to spend millions of dollars driving traffic, and though their search results have improved over the years, the results are still not yet generally considered superior to Google or Yahoo. The obvious question is why would 20% of the market utilize inferior search services? The answer is likely that less sophisticated users make up a greater percentage of this 20% than Google’s and Yahoo’s user base.

For more evidence of this, cross-reference Quantcast.com’s demographic information. It indicates that Google and Yahoo attract a larger percentage of users in the 18-34 age group (the most Internet-savvy age group), generally coming from higher income households.

http://www.quantcast.com/google.com
http://www.quantcast.com/yahoo.com
http://www.quantcast.com/aol.com
http://www.quantcast.com/msn.com
http://www.quantcast.com/ask.com

There are two reasons why the quickest path to increasing market share is to focus marketing and education efforts on the demographics which make up 20% owned by the second-tier search engines. First, these users are likely newer to the Internet, and more open to trying new ways of surfing. Second, it is easier to demonstrate higher quality search results from an alt-engine over the second-tier engines, rather than Google and Yahoo, whose users are affected by stronger path-dependencies.

To attract this new audience, marketing materials must focus on how your alt-engine makes life easier and improves the online search experience; how it provides quicker and more accurate information, thus creating a more comfortable online experience.

Much can be learned from Ask.com’s growth over the page five years. Previous to their disastrous 2007 marketing campaign (“The Algorithm Killed Jeeves”), emphasizing simplicity and user-friendliness was precisely their approach. Ask created effective television commercials that in effect spoke the following message: “Go to Ask.com – type in any question in the world – and we’ll give you the answer.”

Remember, before your alt-engine acquires a Yahoo-sized market share, it has to first get an Ask.com and MSN sized percentage. Grab the users at the margin first – and then go for the big time.

-Michael Hussey CEO, PeekYou.com

RateMyTeachers, Teacher Unions and the UK

Do not believe the excuses put forward by the teacher unions — demanding that internet censors protect teachers from cyber-bullying? RateMyTeachers is at the forefront of protecting teachers online by promoting the best and the most effective among them. Since our inception, RateMyTeachers has instituted rating rules to protect teachers from bullying. Any rating that crosses these rules is removed without question. A moderating force of over 5,000 individuals is constantly on the look-out for any ratings that do not meet these standards. Every rating is reviewed before it is posted live on the website.

See for yourself: http://www.ratemyteachers.com/info.php?type=RateRules

A tyrant demanding absolute control is the first to censor whatever threatens its power. Teacher unions recognize the threat websites like RateMyTeachers pose to their monopoly and use “cyber-bullying” as an excuse to enact censorship. The fact is, not all teachers are created equal and RateMyTeachers is making this plainly obvious to anyone with an interest in the education system (parents, students, administrators, taxpayers). Despite any rhetoric to the contrary, teacher unions by their very nature view every teacher as a cog in a great education machine.

Teacher contracts are negotiated so that every teacher, good or bad, is treated the same. Teachers who opt out of paying union dues are punished even though they are required by law to accept the union negotiated contracts. Tenure tracks ensure that horrible teachers will waste students’ time and taxpayers’ money; and in some cases, a bad teacher can seriously harm the education and mental development of a child. Pointing out to the public which teachers are creating an environment for learning (as most teachers are successfully doing) and which teachers are failing in that mission (a small minority), leads people to question a system that restricts choices.

The point issue, which the press always ignores, is that any pressure to allow school or teacher choice threatens the teacher union’s power. For a tyrant, choice is to be avoided at all costs — and censorship is always on the table when losing power is at stake.

The United Kingdom stands at cross-roads. By allowing its citizens to access websites and servers outside of the country’s borders, the UK has unwittingly granted incredible new freedoms to its citizenry, the implications of which were not foreseen. This freedom threatens many of the institutions that prop up the State apparatus; hence rumblings of this kind are not at all surprising. The choice at hand is between protecting citizens’ rights to access information freely and looking to China for inspiration in controlling people and the information they may consume. Sadly, considering the recent rhetoric ringing through the highest levels of the UK government, I would not be shocked to see the UK look east for inspiration.

The Meaning of the New Economy

Published as an addendum to a business plan written for an online entertainment concept

The new economy is by no means a fundamental shift in the capabilities of capitalism. However, what excites many people is that we now have at our disposal technology that empowers individuals light years beyond even a few years ago. In order to fulfill the promise, we must utilize the fullest efficiency provided to us by such technologies. Too many potentially profitable models turned sour after entrepreneurs used venture investments to hire large staffs in an effort to amass as many talented minds as possible. By lacking the understanding of an individual’s new found empowerment, unknowing managers wasted untold dollars by hiring more employees than were necessary to succeed. The overlap of the job and employee-capability was a huge problem leading to innumerable wasted resources and man-hours. The new economy is really about a fundamental shift in how the division of labor is applied with individual-empowering technology.

Because through the use of today’s technology a single industrious person can now accomplish tasks that used to take many people’s simultaneous labor, unprecedented amounts of wealth may be generated by individuals practicing a profitable idea. Execution matters; individuals matter.

Every day, fewer individuals will be needed to execute projects on a given scale. Of course, this is the history of capitalism. Rather than focusing management on repetition and labor uniformity throughout the production process, the individual laborer is now enabled to accept many more responsibilities because the labor time required to complete a given task has decreased in many instances infinitesimally, although always to varying degrees. To dedicate an individual of talent to one specific and menial task is not only a waste of resources: it creates overlapping skill sets when this individual may have successfully completed many such tasks on their own. This problem, so common to the dot-com bust, causes wasted capital outlays as a result of too much employee down-time; it also offers cause for the employee to become distracted from the goals of the company.

Thus, the new economy continues to increase our capabilities of specialization, and individuals are capable of eliminating many previously necessary man hours. However, because the vast amount of wealth production possible today via new technology is hard to fathom by many, management decisions lacking the vision of how much an individual can accomplish in relatively so little time, have limited the labor pool’s production possibilities.