“Nobody goes there anymore. It’s too crowded.” – Yogi Berra
In 2007 I was involved with one of the first mobile social companies, Xumii. This is before the iPhone, before Android, and in the days where the only apps that mattered were games on feature phones. Xumii was solving the problem of many sources of information coming at you – how best to see what is most important to you, from the people you care most about (those in your phone addressbook). We aggregated the feeds from across many social networks, including news feeds and photos, and gave mobile users a great service, of high utility, on limited screens with limited data plans. The iPhone only made this story better, but as Xumii began to scale, Facebook began consolidating the social network space. MySpace, Bebo, Orkut and the rest fell against the onslaught.
The great consolidation was underway. VCs were skeptical of the aggregation model. Isn’t everyone on Facebook!! … was their mantra. We sold Xumii to the largest European mobile software vendor, Myriad Group, and Xumii now powers operators in Vodafone, Telefonica and the Orange Group. Xumii now accounts for more than half the market cap of Myriad and is seen as its growth engine.
A funny thing is happening on the way to the future: the social world is re-fragmenting. The Facebook IPO, its seminal achievement, may mark the top of its dominance of social.
The obvious examples of re-fragmentation are Twitter, Tumblr and Google+, large communities in their own right, but the re-fragmentation is also visible in a new slew of emerging social companies such as Pinterest, Path and Instagram. Especially Pinterest, now #3 in engagement (see chart).
At Bullpen, we are seeing many others that are rising quickly but remain under-the-radar. Engagio is aggregating your comments, likes and social commentary, and may become a more important inbox than your email inbox. Honest.ly (and now some newer companies) is creating an uber-profile with endorsements – LinkedIn without the faint taint of asking for endorsements. Pixable is aggregating photos across Facebook and Twitter (and eventually Instagram, Path et al.), and is using machine learning to highlight the most interesting, both from your friends and from a broader universe of Pixable users – an incorporation of the Pinterest model.
Xumii saw its longer-term value as creating a social address book, tying all the disparate threads of your social life together while remaining above any one. We are seeing that trend too, in new companies like Cobook or Everyme. In fact, as Fred Wilson has argued, we might see the platform apps like camera and addressbook become replaced by networked apps like Instagram and these new social address books, especially when they add value on top, as with Engagio.
Bullpen has a lot of resident experience with social. Paul Martino was a founder (with Mark Pincus) of Tribe Networks, one of the first few social networks. When I was at VantagePoint, we were in MySpace during its great growth period, before it sold to News Corp. And of course I had hands-on experience in mobile social with Xumii. Our advisors have a ton of social experience, including the former CEO of Xumii, who has continued in the mobile social space with her latest endeavors, and others with deep work experience at LinkedIn, Tribe, Facebook and Zynga.
We have seen this story before: when all the VCs and bloggers and pundits think the game is over, a new game is just beginning. The Internet has a remarkable way of running around any gatekeepers. Google won big in search, and has continued to grow – but has been losing share in search every since. Not to direct competitors like Bing, but to sites like Yelp who satisfy the need in a different way. Similarly, Facebook has won big in social, and we don’t expect it to lose to a new Facebook – but watch it get picked apart by new ways of solving the same need. Especially in mobile. Read the Facebook S-1; one of its biggest risks is in mobile. The next billion Internet users will come in via mobile, not the PC.
Bottom line: one of our investment theses is the re-fragmentation of social, and we are actively investing in this space.