Posts Tagged ‘Dave McClure’

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Dave McClure is a business venture explorer who blogs about start-ups and invests money to help them succeed.

He wrote an open letter discussing the gap that Facebook and Twitter leave in the social fabric of the internet.

His discussion involves the problem of intimacy in social networks and describes what each of these social giants do right and wrong.

Many internet participants feel the same gap when it comes time to have personal discussions with tight-knit groups of family or friends on Facebook.

But there was one statement that really caught my attention in his rant… “Intimate relationships that might just monetize more powerfully with 3 close friends, than they do with 300 acquaintances.”

We spend billions of dollars to support our most intimate relationships. We don’t spend any money gathering the wall posts of thousands of Facebook “friends”. We share fun and personal connections with those we are really close with, not with an avatar who befriended us.

In a world of hopeful monetization networks, we know that the online party is the perfect place to spend time sharing the intimate feelings and support that only happens between true friends.

We at AlbinoPhant are letting the world know that they can share great relationships and fun gifts from any distance using internet-based social game rooms. White elephant gift parties can be hosted and played online, just like they are in the real living rooms and church basements around the country.

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PartyWeDo
The AlbinoPhant Creators
Your Party 2.0 Specialists

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After reviewing some of the business models employed by the social networks, we are struck with the lack of self-sufficient concepts being employed.

Many are falling back on advertising or virtual transactions because recession has made it difficult to sustain a business without a solid model.

Just two years ago there was a effort to find and define the various business models for an internet business.

How about white elephant gifts?

I have included a few links to some of the business models lists:

From Fred Wilson comes a long-tail list.

From professor Michael Rappa who wrote, “In the most basic sense, a business model is the method of doing business by which a company can sustain itself — that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain”. (We will discuss how the Value Chain is important to selling in a minute.)

Dave McClure spent some time discussing Facebook’s need to find a good business model in early 08 when he suggested, “All they gotta do is figure out how to Show Me The Money“.

The big social platforms like Facebook and Twitter have relied on rapid growth to buy time, as they figured out a monetization model that could sustain. In the end, they have mostly fallen back on advertising sales to pay the bills.

Selling advertising is great. But Google and thousands of other sites are reaching into the pocket of advertisers all at the same time.

Yes, advertising is an important part of the process of selling, but it is not finding a great deal of success in social networks.

Selling things (real things) has been a part of the business value chain for generations. Selling goods can be adapted to the large internet networks as well, but the sales offer must fit the audience.

As we study the list of business models, we feel that the sustainable models for social spaces will begin in Affiliate sales and then move into full-on E-commerce. We believe that unique white elephant gifts could support the functions of an online white elephant gift exchange party.

Nothing happens of real value until someone sell something. Amazon sells real stuff, so does Ebay, Microsoft and Apple. Sustainable models work off from the proven components of cost-of-goods, capture-cost, mark-up and efficient distribution.

The internet already has proven Affiliate sales commissions and E-commerce both succeed online… The Web 2.0 world will eventually evolve into a place where it is common to buy something real by using an application that adds extra value to the purchase and delivery process.

Sell something like white elephant gifts!

 

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PartyWeDo
The AlbinoPhant Creators
Your Party 2.0 Specialists

We are on the hunt for a technical partner or co-founder for the PartyWeDo network.  We have reached out to a few individuals that we have met during the AlbinoPhant development process. They have been very helpful in pointing us to several resources. 

We have also sought the advice of various internet based experts as we refine what we are offering. These experts suggest a well crafted Elevator Pitch as the basic introduction to our plans. We appreciate the suggestions from the guys at Venture Hacks, who have written much on this subject.

We also stumbled upon a post from Dave McClure on pitching the problem and not the solution.

I don’t use the language that Mr. McClure often chooses to make his points, but his post on problems makes a great deal of sense. 

Dave’s suggestion is that the “problem” that needs the clearest definition,  as opposed to a discussion concerning building a solution.

So… Dave McClure… Here is a problem:

You don’t live close to all the people that you love and want to share gifts with. This distance causes you to miss personal gift delivery opportunities. You feel guilty that you can’t be there to offer your support at birthday parties, weddings, baby births, graduations and holiday gatherings.   Sure, you know how to shop and ship, but UPS doesn’t deliver your love and personality with the package.  It is sad that you can’t be in several places at the same time, because you will miss some of the great parties that are planned by those you love.

You, me, and millions of other people face this same problem, because we live to far away to really show our love and support in person.

While I am thinking about problems Dave, here is another one…

Facebook, and other social platforms are very dependent on advertising as a business model.  This model really has nothing other than eye-ball volume to sell. These networks must rely on limited advertising budgets to fund their business; and there are many advertising choices.

NOW FOR SOLUTIONS:

1. Give distant friends and family the opportunity to join in the party and share their personality and presents from wherever they reside.
2. Partner with a vast number of eCommerce companies to sell the gifts for the party and earn commissions to fund a socially-center business.

Mr. McClure I would appreciate your thoughts on these problems.  (Oh yes, if you could recommend a technical co-founder I would appreciate the lead)

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PartyWeDo
The AlbinoPhant Creators
Your Party 2.0 Specialists

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There are two ways to look at an unpaved road into the forest…

1. The road is impassable and should be abandoned for another route.

2. The road needs some improvements before it can be truly useful.

Impassable roads, un-traversed mountains and un-crossable rivers are ether dead ends or hidden opportunities, depending upon your perspective.

A recently released study suggests that retailers are finding the road through the forest of social media a little rougher than first expected. This report was highlighted in some of the Facebook blogs as a potential roadblock to the success of retail in this space.

Some are suggesting that retailers should just stick to using Facebook as an advertising tool and abandon the construction of a retail sales conduit in this friend network…

It is hard to argue with the fact that over 90% of the major retailers have started down the social media road with fan pages, only to see very low response.

But retailers have always looked for a new route for product distribution, and have been known to pioneer some dramatic new crossings in the past. Just consider the transformations in retailing from the past… Remember the move from catalog shopping to the department store, or the corner store to the mall to Amazon.

The report highlights the low return from retailing in Facebook, which might have many considering this social road impassable for retail sales. We suggest that the road just needs some improvements before it will allow for a smooth transit-way for retail goods. The trail needs the right pavement applied to make social retailing a smoother process. It will be worth the effort in the long run.

The social networks roll on the wheels of conversation and any route through this forest of friends must facilitate and add to the banter, in order to be successful.

A quick look at Main Street in Disneyland gives us a hint as to how we could pave the retail road on Facebook and other social properties. This adventure park draws millions of visitors for a day of fantasy and fun. Many attended on special occasions, like birthdays, weddings and holidays. Most come as families. The Disneyland experience is very much a conversation creator, built on an atmosphere of fun for all ages.

Entering the park, visitors are greeted by the famous Main Street. But you will notice immediately that retailing has been integrated into the fun at every turn….

How did they interject selling into the magic? First, they knew that people would come on special occasions and that these occasions usually revolve around some type of gift giving. Second, they knew that if they sold gifts that would add to the conversation they would ease the sales process and breakdown many retail roadblocks. Think of how many people bring back the purchases of Disneyland and share them in conversation with others.

Wise retailers who want to traverse Facebook will find ways to build small mimics of an adventure park, where family and friends can come on special occasions and buy gifts for one another and enjoy a conversation.

The road into the social forest may be undeveloped today, but the time will come that Facebook will play host to many great adventures in retailing. Pioneering retailers are currently paving the roadway for the next great main street on social properties…

PartyWeDo NOTE: Just as I was about to hit Publish on this post, I got a notification of a comment that Dave McClure made on a plane trip to NYC: “ASSERTION #2: “The default startup business model for 2010 & beyond will be subscriptions and transactions (e-commerce, digital goods).” It seems that Mr. McClure also sees retail sales as a way to pave the road for social media monetization.

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PartyWeDo
The AlbinoPhant Creators
Your Party 2.0 Specialists