Archive for Social Media from United Kingdom

Companies must go where their customers are

by on July 22, 2009 at 10:19 pm

Traveling GeeksCompanies are using social media to “be where their customers are.” In this panel, sponsored by Omobono and East of England International, up in Cambridge on Friday, Susan Bratton talks about this important change of orientation which more and more companies are putting into practice.

Earlier, in London, some of us had similar conversations with companies who are implementing social media strategies to be in closer touch with their customers. One of the companies I spoke with, in a conversation held under Chatham House Rule (meaning “not for attribution” or “off the record” in US press terminology), the head of customer support told me he had opened a Twitter account, reviews around 500 tweets a day, and helps between 10 and 50 dissatisfied customers resolve problems they’d been having with his company. This apparently takes him only a small amount of time (an hour or two, from what he said) and generates a huge amount of goodwill at very low cost, for his company.

I’ve been advising my clients for at least the past year to not worry about “attracting eyeballs to their web site” but instead to focus on making there presence felt “wherever the customer lives online.” In the case of my customers this means setting up Facebook fan pages and Twitter accounts, and then using those to engage in genuine conversations with customers – not one-way marketing-speak.

Oops, almost forgot – listen to what Susan has to say about all of this!

She calls it Social Influence Marketing and it has three core components: 1) Social Listening; 2) Participation; 3) “Appvertising” (Give-to-get).

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Toward the era of (printed?) sentient things…

by on July 22, 2009 at 9:06 pm

When I wrote Smart Mobs in 2001 and launched the smartmobs.com blog with the book in 2002, I made a number of forecasts about the convergence of the mobile phone, the personal computer, and the Internet. Some of these forecasts, particularly in regard to the use of mobile communications to organize political demonstrations, were accurate. Some of them haven’t happened yet. Some of them might not happen at all. I looked back at Smartmobs Revisited when I spoke at Mobile Monday Amsterdam in June, 2009. And I recently blogged about some reasons why the mobile Web hasn’t developed as rapidly as the tethered web did. Another 2001-2 forecast that has not come to pass by 2009 was what I called “the era of sentient things:”

Different lines of research and development that have progressed slowly for decades are accelerating now because sufficient computation and communication capabilities recently became affordable. These projects originated in different fields but are converging on the same boundary between artificial and natural worlds. The vectors of this research include:

* Information in places: media linked to location.
* Smart rooms: environments that sense inhabitants and respond to them.
* Digital cities: adding information capabilities to urban places.
* Sentient objects: adding information and communication to physical objects.
* Tangible bits: manipulating the virtual world by manipulating physical objects.
* Wearable computers: sensing, computing, communicating gear worn as clothing.

Information and communication technologies are invading the physical world, a trend that hasn’t even begun to climb the hockey stick growth curve. Shards of sentient silicon will be inside boxtops and dashboards, pens, street corners, bus stops, money, most things that are manufactured or built, within the next ten years. These technologies are “sentient” not because embedded chips can reason, but because they can sense, receive, store, and transmit information. Some of these cheap chips sense where they are: the cost of a global positioning system chip capable of tracking its location via satellite to accuracy of ten to fifteen meters is around $15 and dropping.

Watch smart mobs emerge when millions of people use location-aware mobile communication devices in computation-pervaded environments. Things we hold in our hands are already speaking to things in the world. Using our telephones as remote controls is only the beginning. At the same time that the environment is growing more sentient, the device in your hand is evolving from portable to wearable. A new media sphere is emerging from this process, one that could become at least as influential, lucrative, and ubiquitous as previous media spheres opened by print, telegraphy, telephony, radio, television, and the wired Internet.

But…not yet. However, I’ve seen a couple of recent indicators that this forecast might have been more premature than totally off the mark. First, one of the most reliable early indicators I turn to all the time, one of the few RSS feeds that I rarely miss scanning at least once a day, ReadWriteWeb, recently noted that IBM might be getting into the act:

In the Web world, you know that a trend has major traction when IBM is all over it. Like any large Internet company, Big Blue is careful about which trends it latches onto. It was a good couple of years before they were spotted at the Web 2.0 conference, for example. However in the case of Internet of Things, IBM is proving itself to be an unusually early adopter.

I recently spoke to Andy Stanford-Clark, a Master Inventor and Distinguished Engineer at IBM. Yesterday we wrote about how Stanford-Clark has hooked his house up to Twitter. Today we delve more into what his employer, IBM, is doing with the Internet of Things.

IBM is involved in some very interesting projects at the intersection of two big trends we’ve been tracking in 2009: The Real-time Web and Internet of Things. They have a website devoted to this topic, called A Smarter Planet. As the name implies, it focuses on environmental matters such as energy and food systems. Sensors, RFID tags and real-time messaging software are major parts of IBM’s smarter planet strategy. The catchcry for the site – Instrumented, Interconnected, and Intelligent – is about outfitting the world with sensors and hooking them to the Internet to apply the ’smarts.’

My spider-sense might not have tingled as strongly at this tidbit about IBM if I had not met Dr. Kate Stone in Cambridge, UK, a few weeks ago. Although the Travelling Geeks had seen dozens of remarkable startups in London and in Cambridge, the hint of what-might-be-news came when Dr. Stone approached me after a series of pitches and told me about Novalia, a company that is combining current printing techniques, electroconductive ink, and ultra-thin control units to make paper an interactive medium, capable of sensing visual, auditory, or touch inputs, connecting to the Web, displaying audiovisual information. At least in theory. I didn’t see any prototypes. But if you put together the clues from Novalia’s website with the more concrete news from IBM, it seems like the era of sentient things might still be ahead of us – and maybe not too far:

Control module
We have developed and supply a ‘printed electronics control module’; this self contained unit consists of a power source, integrated circuit (I/O control and interaction flow), and sound transducer.

Integration
The module is very simple to integrate with the printed item, in fact it’s almost as easy as putting a stamp on an envelope (but for now it’s not quite as thin).

Senses
The integration of the module and the conductive inks enables the printed item and the user to communicate through the senses of touch, sightand sound.

UberVU – Mapping conversations across the web

by on July 22, 2009 at 9:44 am

This is a repost from TechCrunch

While at the recent Seedcamp Speed Dating event, I was introduced to UberVU. UberVU provides a single location to track conversations across multiple locations and sites. This social aggregation tool provides a conversational graph of threaded conversations. UberVU get comments, reactions, and mentions around a story from multiple services. This can be used by corporations to monitor the buzz surrounding a brand, but it also allows users to take part in the entire conversation.

For example, with the plugin, someone reading an article in Google Reader can see what others are saying about a post. I wonder, though, if we’re already inundated with information and if there’s a need for yet another aggregator. A case in point: a recent story in the Guardian (and this happens on many other news sites) has 300 comments (many of which are by trolls and don’t provide much insight) and a recent post on TechCrunch Europe has 44 comments. Multiply that by the number of comments on other sites and it’s pretty overwhelming.

In the video below, Vladimir Oane, one of the co-founders of UberVU, explains how the service works and its potential for expansion. Developers can add the UberVU plug in to their own sites. Vladimir also explains how it can be used for personal branding as well as brand management.

Huddle and Spotify Talk About Their Services

by on July 22, 2009 at 4:58 am

Huddle’s Andy McLoughlin and Alastair Mitchell and Spotify’s Shakil Khan talk about their value-adds for the consumer. We chatted in central London earlier this month. Tune in below for their stories in their own “voice.”

Social Media in Schools

by on July 21, 2009 at 6:00 pm

Below is a little background on Andrew Davis, Director/Coach of The Worst Kept Secret, who is spearheading a social media initiative in English schools.

We first connected at a London tweetup this month, where I learned not only what his project is doing in education but also about his consulting work which facilitates brands to maximize their marketing potential through social media. And, of course the man has a blog so you can tune in if interested in learning more.

Andrew Davis

Having helped to launch MySpace in the UK as well as BBC Radio’s 1Xtra, he is now turning his attention to developing social media courses for secondary schools.

Andrew’s school project is gaining momentum, so much so that the Daily Telegraph, the Brand Republic and ITN’s Teachers TV all have something to say about it.

Entitled Social Media Fundamentals, this is the first time social media will be taught in secondary courses. Davis aims to explain the rise and relevance of social media including networking sites and integrate core subjects such as English and Maths at the same time.

London’s Bishop Challoner Catholic School is the first school to book Davis’ services. He will deliver a four-week course starting September where students will be required to submit a reason for being on the course, and the application will work as part of their GCSE coursework requirement. Thirty will be chosen and the fact they have had to work to get onto the course, means only those most eager to learn will be involved.

Davis has worked alongside Heads Of Faculty to devise a course tailored specifically for the needs of the school. In this case, the students will plan the school’s end of year music event.

Davis has developed lesson plans that look at planning an imaginary event, writing for web, and fundamental social networking skills that will eventually be used on a real event. As part of the course, Davis will invite former contacts from the music/media industry to share their experiences with the children.

Qype – What’s the latest at the “European Yelp”?

by on July 21, 2009 at 8:36 am

This is a re-post from Techcrunch Europe.

I met Qype last week at the Seedcamp Speed Dating event as part of the Traveling Geeks tour.  Here’s a quick heads-up if you’re new to it: Qype is a way to discover new places (restaurants, events, nightlife, sports, etc.) with a focus on European cities, by going through other users’ reviews and feedback. There are many categories for each vertical, along with a simple to use search engine and Google maps. The site currently enjoys a traffic of 11m visitors per month and has over 350,000 registered users from 9 European countries (UK, Germany, France, Spain, Austria, Switzerland, Poland, Ireland and Brazil).

In the video below, Andrew Hunter (UK General Manager) explains how the service is differentiated from competitors like the well-known – at least in the US – Yelp. For instance, the site shows each review in 6 different languages, thereby allowing people to read a review about a restaurant in London in German, French, English, Spanish, Polish or Portuguese.

DishyMix: Susan Bratton Podcasts & Blogs Famous Executives 2009-07-20 20:22:12

by on July 20, 2009 at 8:22 pm
Image representing BaseKit as depicted in Crun...
Image via CrunchBase

One of the most impressive companies with whom I met earlier this month in England on the Traveling Geeks tour was Basekit. Founded by three Welshman and now being headed by Juan Lobato, Basekit is an evolutionary step in technology for web designers and developers. Basekit is a web site builder and content management system; a better way to create web sites. It is a live online (cloud hosted) browser based application that enables the creation, deployment and management of dynamic CMS web sites for businesses.

Basekit Executives

Basekit Executives

Their are many template-drive and drag and drop form builders as part of the application, but the process that allows a designer to import photoshop (.psd) files directly into Basekit to create a ‘template’ seems to me to be the most valuable and time saving attribute of this very helpful site creation tool. Now a designer doesn’t need to code their designs into html / css templates – Basekit does it all for them. Users can then access the CSS / HTML from within Basekit (if they wish), once Basekit has transformed their design into a flexible web template.

Here’s my Q&A with Richard Best.

Tell me a little about yourself and how you founded Basekit :
Basekit – head office in Chepstow, South Wales.
Simon Best ( CTO & co-founder ) – age 30, Welsh.
Richard Best ( Commercial Director & co-founder ) – age 33, Welsh.
Richard Healy ( Lead Developer & co-founder ) – age 27, English.
Juan Lobato ( CEO ) – age 36, Spanish.
Simon and Richard Best set up their first web tech business in 2002 – with Richard Healy joining in 2003. The 3 of us went into business together in 2005, setting up a web agency which worked both on internal web tech projects and external SME web site projects.
Juan joined the team at the start of April 2009, bringing commercial management experience mixed with an additional injection of entrepreneurial flair.
We started to develop the Basekit concept in 2006. The Basekit concept was founded out of our experiences building web sites for SME businesses. We noticed that many of the small business sites we created for customers had very similar features, and the vision of BaseKit was to make it really simple to build these sites. We initially developed Basekit with a view to using it internally; but quickly realised its potential as a product in its own right.
Having developed a working prototype, we entered Seedcamp 2008 and ended up as one of 7 winners out of some 400 European web tech companies. Since then we have secured investment from 2 top European VC’s, and grown the company from 3, to 8 full time employees.
We are looking forward to launching our public Beta in September 2009.

Note: If you are a US web designer/developer and interested in being involved in the private beta, send an email to me at susan at personallifemedia dot com and I’ll introduce you to Richard.
Where did you get the idea? How has the product evolved today from your original concept?
We created BaseKit out of our belief that typical web 2.0 development should be quick and easy, and should not require complex coding skills. The idea sprung from our desire to complete more web site projects, in less time – without compromising quality. By moving the focus away from coding, Basekit users are able to focus on the visual aesthetic qualities of their web projects – making them look better, and work better.
Traditional web development processes are disjointed and convoluted – and surprisingly ‘offline’. We believe web sites (of all things) should be created ‘in the web’.
The Basekit product has evolved from an early prototype (taken to Seedcamp 2008) – which despite displaying some impressive qualities and results, had a very steep learning curve. We now have a much more rounded product, with a highly intuitive and easy to use interface. We have focused a lot of attention on usability – and consistently score higher in usability tests than our closest competitors.

Describe the Basekit service.

Basekit is a state of the art web site builder and content management system; a better way to create web sites. It is a live online (cloud hosted) browser based application that enables the creation, deployment and management of dynamic CMS web sites for businesses. It has been described as, ‘a web builder with an injection of superjuice’!
Basekit will enable users to go further without code than ever before – without compromising flexibility.


Tell us how it works.

It works via an intuitive point and click, drag n drop interface making the creation and management of functional and dynamic business web sites quicker and easier. The ‘coding’ elements are taken care of by Basekit, and become trivial – therefore the user is able to focus on the design / layout of the web site resulting in a better looking, more effective end result.
We believe that ‘web sites’ should be created on ‘the web’. With Basekit, what you see really is what you get – you edit web sites live online in true context.
What features are most used and least used of the feature set now?
This is a difficult question to answer, as we are currently in a private Beta testing stage, running set on site weekly user testing sessions with a range of delegates.
We have some really neat and unique features such as :

i)    A process whereby a user can import photoshop (.psd) files directly into Basekit to create a ‘template’. This means that users do not need to code their designs into html / css templates – Basekit does it all for you! Users can then access the CSS / HTML from within Basekit (if they wish), once Basekit has transformed their design into a flexible web template.
ii)    Custom web forms can be created in a fraction of the time, simply by dropping the individual form fields into the page. Basekit automatically sets up a back end (MySQL) database – so that all form submissions are stored in the ‘back end’ of your site. This data can then, of course, be used dynamically.
iii)    Instant database creation. Create databases in Basekit simply by copying and pasting data from an excel spreadsheet. It really is that easy! Again, this data can then be used / displayed dynamically.

Who are your target customers? Be as specific as possible.
Our primary market research has shown that most small businesses currently source the creation of their web site through ‘web designers’ (74%).
Basekit was initially conceptualised and created out of our own needs (as a small web agency) to create, deploy and manage small business web sites in a quicker, easier and more effective way.
Therefore, our go to market strategy will initially be focussed around the ‘web designer’ channel. For them, Basekit is a faster and better way to create, deploy and manage small business web sites. The Basekit platform is flexible enough to accommodate existing web design workflows and can enable web professionals to do more with the capabilities they have.
Basekit delivers particular benefits to the ‘designer’ end of web designers – with Basekit helping them to focus on the visual aesthetic qualities of the web sites they create, with all dynamic coding elements taken care of for them.
In addition to the web designer channel, we can also target small business segments directly either with a Do It Yourself web builder offering for the 26% of ‘tech savvy’ small businesses that favour this method, or as an assisted set up service where we act as web designer rapidly deploying small business web sites at an increased monthly fee.
What’s the #1 reason your customers will use your service?
There are many reasons why people will use Basekit, but the number one reason is that it is an ‘enabling’ technology. It ‘enables’ users to create dynamic, functional web sites quicker and easier than ever before – without having to write a line of code (although for the coders out there, access to code is ‘optional’ !).
What are the first features you hope to launch? What’s the feature roadmap?
We have a very defined set of features that we are in the process of implementing for our public Beta launch in September 2009. We have deliberately held back on locking our feature roadmap beyond that point, as the important thing for us will be listening to our users and developing the features that matter to them.
Who are your competitors?
We truly believe that there is no direct comparative to Basekit. But, we have identified our 3 closest competitors as Square Space, Light CMS and Goodbarry.
What do you need from the market to be successful?
Lots of delighted users, who LOVE Basekit so much they tell all their friends!
On a serious note, we feel strongly that the market is ready for Basekit; in fact it is well over due! We built Basekit out of a genuine need – a need which others can relate to. Web development should not be so hard, and Basekit is here to make it much easier and much quicker.
We hope that in the future people will look back and wonder what life was like before Basekit.
How are you doing on funding?
We have secured funding from 2 top European VC’s – who have not only helped to finance the company, but also provide invaluable support to the business on an operational and strategic level.
We are looking to bring in a further funding partner by November 2009.
What is your business model? How will you monetize?
Basekit is free to try and free to use to develop a prototype web site. Once a user deploys a web site, a monthly subscription fee (per site) is charged. This fee is similar to existing hosting fees, therefore we are not creating a new market but rather being a disruptive substitution for traditional hosting models.
The monthly fee paid per web site deployed in Basekit increases as new features are added to their basic package (e.g. capability to update content, email marketing, promotion, eAccounting etc.). Once web sites are deployed in Basekit the switching costs are always above the price sensitivity of substitutive offers making the lifetime value of each web site high. In fact, we estimate that the net present value of each web site deployed could be more than £1,000.
What kind of US partners would help grow your business faster?
The ideal US partners for us would be people / companies that have either :
a)    Cracked the US SME market.
and / or
b)    Cracked the US web designer market / channel.
and / or
c)    Has a major sphere of influence over either of the above.

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Skimlinks UK Start Up Rewrites Affiliate Links on the Fly for Content Publishers and Bloggers #TG2009

by on July 20, 2009 at 8:03 pm

On my Traveling Geeks blogger junket to the UK earlier this month, one of the most impressive start ups I met was a company called Skimlinks. Founder Alicia Navarro’s business model is solid and she provides a real value to publishers and content creators who want to easily include affiliate links on their site. Here’s an interview Alicia and I did as a wrap up for you.

Image representing Skimlinks as depicted in Cr...
Image via CrunchBase

Tell me a little about yourself and how you founded SkimLinks.
I have always yearned to run my own business, and had studied IT and worked in internet application product management in order to learn what I needed to achieve this. While in an interview for a job at Google that I didn’t want, I was asked to come up with a product idea. I started talking about a social decision-making tool, and I loved the idea so much I started Skimbit the next day. Skimbit didn’t do amazingly well on its own, and went through a few iterations, and during this process we came up with a way to reverse engineer affiliate marketing links from user-generated content. This technology became so popular we decided to change our business strategy and focus exclusively on this and other technologies that helped publishers monetise their content. Thus Skimlinks was born!

Note from Susan: The sign of a good entrepreneur is one who alters their business model until they find the right set of offerings and revenue. Alicia is proving she can do this.

Describe the SkimLinks service.
Skimlinks is a simplified affiliate marketing service for publishers. It automates the process of creating and maintaining affiliate links on your site. It aggregates 19 affiliate networks and 11,000 merchant programs into one account, giving publishers instant access to every affiliate program. Publishers just need to add one line of code into their site footer once, and their whole site, including all archival content is immediately enabled. Publishers do what they normally do: write posts and link to retailer products, eg. a review on a pair of shoes and then linking to the shoes on Macys.com. Then when a user clicks on this link to Macy’s, Skimlinks checks to see if the link can be turned into an affiliate link, and if it can, it automatically turns the link into its equivalent affiliate link on-the-fly. Its seamless to the user, and means all your archival content is monetised and kept up to date always, without any effort on behalf of the publisher.

Note from Susan: Though I can’t vouch for how easy it actually is for a publisher to integrate the “one line of code” on their site, I am very impressed with the way Skimlinks automatically changes a direct link into an affiliate link on the fly. This makes the user experience on the site much better.

Alicia Navarro, Founder, Skimlinks

Alicia Navarro, Founder, Skimlinks

What features are most used and least used of the feature set now?
The most used feature is to use Skimlinks on user-generated content, like social bookmarking, social shopping and forum sites. As we have a custom subdomain feature, we can make Skimlinks look completely internal to your site; and as we don’t rewrite the links until they are clicked on, there is no impact on page load, and the links don’t appear to be affiliate links increasingly chances of clickthroughs.

What’s the #1 reason publishers use your service?
Publishers use our service because they want to earn revenue from their site in an easy way. Rather than spend their own time working out the complexities of creating and maintaining affiliate links, they can focus 100% of their time and effort on their content and their community, and outsource their affiliate management to a company that can do it more efficiently and with the best technology.

What are the next features you hope to launch?
We are in the process of launching our innovative Global feed (one single aggregated global product feed and API) and SkimKit (editorial toolkit to help journalists and bloggers research products), both of which help publishers add more content that can be monetised on their site.

Note from Susan: I’d like to see Skimlinks integrated with Zemanta, another start up I met in London on the TG2009 tour. Zemanta is installed in my WordPress software now and gives me related images, links and online articles I can easily drag and drop into my blog posts. If I had Skimlinks as part of this, I could also easily add affiliate links into my blog posts. Putting more add ons into my current WordPress set up always worries me. I’d like to see more partnerships and wider integration, rather than a bunch of stand alone features from different companies.

Who are your competitors?
Our main competitor is a publisher doing their own affiliate marketing, although increasingly we are getting more and more existing affiliates using Skimlinks because it makes them more efficient and lets them focus on their core competencies: content, SEO, and community.

What do you need from the market to be successful?
There are changes afoot in Europe to force publishers to explicitly disclose if they use affiliate marketing – this would have a big impact on the industry. We are instead supportive of publishers retaining editorial integrity as they use affiliate marketing, and disclosing it within certain sections of their site.

Alicia Navarro, founder, Skimlinks at the US/UK Seedcamp SpeedDating Event

Alicia Navarro, founder, Skimlinks at the US/UK Seedcamp SpeedDating Event

How are you doing on funding?
We are lucky to be funded by some great companies: Sussex Place Ventures, The Accelerator Group, and NESTA, plus some great Angels.

What is your business model? How will you monetize?
We retain a small revenue share of what we make the publishers, but above and beyond our technology, you get attentive account managers who help you maximise your revenues;  you get access to our innovative research and optimisation tools; and we help publishers get voucher codes and discount information to offer their readers, so its a very value-rich service we offer.

Note from Susan: I like the percentage model of Skimlinks and they are smart to include a human optimization element so they increase usage of their features and become a must-have part of a publisher’s revenue model.

What kind of US partners would help grow your business faster?
We like to talk to all sorts of publishers that want to start earning money from affiliate marketing. We are keen to speak to publishers that already have a lot of retailer links, even in their user-generated content, but also from sites that want to create their own ‘related products’ widgets using our Global feed, as we can now help them too.

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Blonde 2.0 Tries Hard to Get Me in Trouble

by on July 20, 2009 at 6:18 pm

One thing I've noticed during my six months of jet-setting is that entrepreneurs around the world want to be compared to Silicon Valley, but frequently get upset when you do it. Michael Arrington jokingly asks how I intend to piss off a whole country this time before I leave for any trip. (At least, I think he's joking…)

So, note the tap dancing below as Ayelet Noff asks me to compare Silicon Valley entrepreneurs to London entrepreneurs and Israeli entrepreneurs.

Why Zynga Is Worried about Playfish

by on July 20, 2009 at 6:07 pm

[Cross-posted from TechCrunch]

When I wrote my BusinessWeek column on Zynga a while back, every venture capitalist in the Valley told me that Playdom was the company’s biggest competitor.

After all, it competes game-to-game, with similar mob-style and
poker games, and was said to be doing the same revenues as Zynga with
much higher profitability. (As my column pointed out, Zynga’s revenues
are more like double Playdom’s—and since I’ve heard the discrepancy is
even greater.)

As you’d expect Zynga’s CEO Mark Pincus pooh-poohed Playdom as any
sort of threat. But tellingly, he said the company he was worried about
was UK-based Playfish. So, while I was across the pond, I decided to
see what the fuss was about and sat down with Playfish’s founder and
CEO Kristian Segerstrale. I came away convinced this was one of the
hottest companies to watch in the UK. Here are five reasons why.

1. Not “The UK Zynga.” Playfish is very much running its own
race in this market, and this may be a case where distance from the
Valley is actually healthy. It doesn’t try to compete on specific games
with Playdom, SGN, and Zynga. For instance, it doesn’t have a mob game,
the most popular genre right now, and it doesn’t have a poker game,
Zynga’s top earner. “That’s such short term thinking,” Segerstrale
said. “Something is wrong if your route to success is copying
competitors’ games.”

2. Platform Development Doesn’t Have to Mean Half-Ass Development.
Playfish is not about building a game in a week or so and throwing it
up on Facebook. Playfish spends six months to a year designing a game,
and they’ve only produced seven of them. While everyone else talks up
how quickly and cheaply you can build a game on social networks,
Playfish still employs the same artistic discipline of a console game
with a Wii-like look and feel. The plus with platforms like Facebook
and the iPhone isn’t speed to market for Playfish, it’s easier
distribution and greater social engagement.

3. Traction. The painstaking design process appears to be a
hit. Every one of Playfish’s games has been a top ten hit on Facebook.
Across all platforms, those seven games have yielded 100 million
installs and 30 million monthly uniques, says Segerstrale. Playfish
pays “practically nothing” for customer acquisition and makes money
through virtual goods, ads and premium versions of games.

Playfish is profitable and hasn’t spent a dime of its recent $17
million funding round. That’s gotta be some top line given Playfish has
200 employees across several offices. In fact, TechCrunch Europe’s Mike
Butcher speculated that
Playfish could be the $1 million-dollar-a-month Facebook app maker,
back in September 2008. It certainly puts the company in an enviable
position given the paucity of venture funds in the UK.

4. Proximity to the Valley Insiders via Investors. While
Playfish enjoys distance from the one-ups-man-ship or developer
poaching of SGN, Playdom and Zynga, it’s connected into the Valley
where it counts. One of its main investors is Accel—also one of the
main backers of Facebook. Yes, that matters. (See Sequoia
Capital-backed Google’s purchase of Sequoia Capital-backed YouTube.)

5. Segerstrale Knows Games. This is the fuzziest one, but
also probably the most important. As a CEO, Segerstrale comes to this
industry from a different point of view than Pincus. Pincus has said he
was never really much of a gamer—Segerstrale on the other hand has
loved games since he was three years old playing Pong with his older
brother. He always got a visceral rush from playing, especially with
other people. So he’s spent much of his career working towards two
goals: Decoding what makes a game “fun” and deconstructing the concept
of a “gamer” so games are just something everyone plays.

His first attempt was at mobile, thinking that with phones in every
pocket, everyone would essentially have a game console. Indeed, the
company he cofounded, Glu Mobile, went on to a successful IPO. But
gaming was still a niche activity on phones.  There were too many
barriers set up by the telcos and it wasn’t as easy for people to find
and download games. Facebook turned out to be a much greater platform
for this kind of democratization of gaming because users could market
games to one another.

Segerstrale’s macro theory is that we’re in the first shift of a
move from physical games and goods to digital ones, and from games as a
product to games as a service. It’s a theory that seems right-on to me.
For one thing, we already saw it with the transition from enterprise
software to software as a service. For another, sales of console games
are down 20% year-over-year according to NPD, while comScore says
social gaming is up 20% year-over-year. It’s nice to see a CEO who can
articulate not only a product vision, but a clear industry vision.

All the positives above aside, I’m still not convinced that
Segerstrale will succeed in his mission to democratize games. I still
mainly use Facebook as a way to connect with friends, not to build
virtual restaurants and I don’t necessarily see that changing. In fact,
Facebook has so de-emphasized apps in its new all-feed iteration, I
spent nearly an hour trying to find a listing of games, before someone
finally told me it was on the throw-away bottom bar of the profile
page. And by emphasizing the social stickiness of a game, there’s a
chicken-and-egg risk that the games are boring for people who don’t
have enough friends already playing.

But these are execution risks and every promising startup has them.
When it comes to business model, financing, vision and product,
Playfish is certainly a formidable competitor to Zynga. With hundreds
of millions in real dollars already swarming around social gaming, this
will be fun space to watch.