Social Privacy

I was watching Mark Suster and Tom McInerney on This Week in Venture Capital mainly for fun, though Tom is a good friend.  If you have not watched it you should as it is highly engaging.  Well into the discussion Tom and Mark delve into privacy and Tom mentions that many teens have moved to having more than one Facebook account.  This was the same week that Hashable re-tooled their privacy settings, moving from a very open public followship model to an ‘Inner Circle’ model.  All of this got me to thinking further about privacy in the online world.

For many years people would designate themselves on the web using a pseudonym such as sexybear103@aol.com.  It was not until Facebook, LinkedIn and the like coerced users to register using their real name that the social network revolution really started to matter.  Since then people have be educated to be online using their real name.  This has been important for many reasons: (1) it allows social networks to function; (2) it builds trust and improves overall behavior – visit a comment stream that forces real names vs. one that does not and you will see a huge difference in civility and relevance/quality of discourse; (3) it allows algorithmic psyco-analytical companies to flourish, such as Klout, that are a benefit to consumer in many ways; (4) it enables information to find people via crowd-soiurced trusted networks (Okay I simply should have said Twitter!) rather than have to search for it, which is bad news for Google.

But, but privacy gets in the way, or at least defines the usage of the service.  Twitter is clear: it is open, there is no privacy (even DM’s can be read by 3rd parties from their API’s), it does not pretend to be private and so it is like walking up to the town square, picking up a soapbox and shouting.  There is no pretense that something tweeted is private.  Facebook pretends: it wants you to think that what you say/share/do is private to you and your intimate circle of ‘friends’, but it is not; and even if you shut down most of your privacy settings you are dependent, sometimes, on what privacy settings your friend’s have.  People want to share and so they are resorting to pseudonyms on Facebook which, well, reduces some of the utility highlighted above.  Hashable has moved from defaulting all people checkin’s from being public (or private) to being shared with your Inner Circle (or private).  This, for me, massively increases the utility and going forward all the CEO’s of my portfolio companies and my employees will be in my Inner Circle – we will share with each other our meetings and what we are getting up to and I am sure there will be many occasions where this serendipitous sharing will lead to new ideas, new connections and new business.  Hashable will add real utility from getting privacy right.  Others will be shut out, but that is fine, this information was not easily shareable before.  This seems to me to be the optimum level of privacy for me to get the most out of Hashable.  I am sure it will evolve, but I like this latest iteration.

Social privacy should mimic actual privacy, and so be different for different services.  In the real world you compartmentalize what you know/think and who you share it with.  We all have a private self that we keep, basically, to ourselves.  Then there is a public self that we are willing to share with everyone – though some people have multiple public persona that they like to keep separate, e.g. fraudsters and bigamists.  Then there is everything in-between: some people have just one setting for friends and family, and others have different settings for different groups that don’t intermix e.g. their guy friends, or work colleagues.  The online world has to mimic this, and so a service either has to address just one of these privacy groups, of be uber-flexible if it wants to cover more than one.  It is clear that I think Facebook is attempting and failing to do this.

Services will continue to evolve and getting social privacy right is essential for them to increase their utility to us as people and them for engagement.

Life Mechanics

As a child I read books about Transactional Analysis and OneUpmanship, probably at the prompting of my mother.  I found these interesting in the way they described bow people play games in life and expect a reaction for every action.  Have you never been in a crowd and someone waived to you?  You probably waved back, even if you had no clue who there were.  Even so, I have generally thought that only part of society really runs with this quid-pro-quo mentality, and only for part of the time.  It is an interesting analysis but not core, mainstream or how we all live our lives.

It was not until I saw Inception with my wife that  I thought about these ideas again.  Inception for me was an indication of how far game mechanics have now infused society, and game mechanics are simply the modern-day representation of these ideas I was exposed to in my formative years.  What was it about Inception?  Well, my wife is not a gamer, and yet the movie was not “strange” to her.  It was just another romantic, thriller.  The plot, however, revolves around not just a gaming structure, but with rules espoused throughout the film.  This was not jarring as more and more of our experiences, online and offline are becoming rule-based with prizes, points, quid-por-quo built in.  We used to say that gaming would change computer interfaces and impact reflexes, and though that might still happen is it is the logic of gaming that is changing us first.  Some of the fundamentals of games are working their way into society at large.

Given that I am a VC does this perspective change how I look at companies?  In some way it does.  Game mechanics can affect adoption and are built into the business models of hashable, Identified.com, Klout, Livefyre, OfferIQ, ORCAone, and Phone.com.  I suspect that more will be built in in these and other companies over time.  To link buzz words from not to a decade a god: Game mechanics can increase the stickiness and viral adoption of your site as we are and have been trained, or re-programmed, to think this way.  Like Pavlov’s dog playing Wii.

The Internet of People

Since the mass adoption of services such as LinkedIn and Facebook people have increasingly come online using their real names.  There has been a shift from representing yourself as angrybear101@aol.com to using your actual identity.  This phenomenon is culturally more important.  I like to refer to it as the Internet of People, compared to the the original Internet of Data or The Internet of Things.  It is significant: it involves people that have rights, emotions, intentions, and other attributes that toasters, phones, and databases do not.  It will lead to a changed understanding of information rights, privacy, and what is creepy and what is acceptable.

At its core I see four fundamental pillars: Identity, Trust, Reputation and Influence.   Yes, social networking is part of this, but this perspective gives a different, and I would say more informative, way to look at the space.  Here are a few thoughts:

• These four pillars will become increasingly important to two different constituencies: advertisers that want to reach consumers, and individuals themselves;
• Game dynamics can be applied to “manipulate” or “guide” people into certain behaviors that can then be measured in real-time – shopping and flash-deals come to mind;
• Regulation will have to play catch up – this is not longer cookie tracking it is stalking;
• People will be rewarded for the data  they surrender: a better table at a restaurant, front row seats, free goods, if they can influence others to follow their lead.

Companies will grow up over the next few years to address these needs.  Watch this space as it is going to be very, very interesting.

Laser Focus

Many VC blogs deal with fund raising and pivoting, but few cover just as important an area: managing a team in a high growth environment, ensuring that everyone knows what the firm stands for and what is expected of them.  It is easier in low growth companies as the challenges are often less dynamic.  High growth, however, needs constant reevaluation of needs, resources and priorities.

I have just returned from the offsite of one of my portfolio companies.  We came away with three simple things: a mission statement, long-term goals, and a set of  tasks for the the next three months and six months.  That does not sound hard, but it took us a day of meetings over two days to hash this out – we all knew it in general, but the meetings allowed us to clearly articulate it to ourselves and others as needed.  No confusion going forward.  At the end, every member of the team felt empowered, and knew exactly what they needed to achieve and what part they could play in the company’s success.  The CEO was able to communicate a laser focus on what the company wants to achieve and achieved buy-in from the entire organization.  Sounds simple enough, but in practice it is rare to see put in action.

For instance, how many start ups have a clearly defined mission statement?  Few, I suspect.  How many of those then articulate the necessary but sufficient goals that have to be met to enable the company to meet its mission?  Fewer.  And, how many of those then sit down and make sure that all the work is directed at tasks and milestones over the next six months to achieve those goals.  Big companies attempt this from time to time, but for startups it is critical as every resource is precious, missteps are costly and  the faster you run the more important this is.

We left the offsite with concrete tasks that we all knew would lead to meeting the company’s goals and be consistent with its mission statement.  Now comes the hard work: execution.

Management can’t simply leave it there.  They need to give everyone in the firm simple metrics to follow and targets related to those metrics that if met will achieve the goals.  Anyone on the team then knows how to measure their work as it relates to the company’s needs.  Again, laser focus.  How do you achieve this?  You make sure that everyone has access to these metrics, everyone has access to everyone else’s metrics and everyone helps everyone else on the team.  It is all about culture and team spirit and when it works amazing things can be done.

I left the offsite with the view that not only the CEO but every employee had a very clear understanding of what was immediately ahead of them and, with that, their chances of success are significantly enhanced.

“I Don’t Use Twitter” – Huh?

I hear this from a lot of very intelligent people.  In fact, when I ask someone if they tweet I generally know the answer before I even ask it.  I do not then proselytize, but it is instructive how many people do not understand the benefit of using Twitter.

To me Twitter is the digital equivalent of broadcasting.  This allows me to take a very simple view re users: there are two types – those that “broadcast”, and those that “listen”.  Broadcasters and those with something to say: celebrities, brands, news organizations, and folks like me that like to share curated information with other.  Listeners, are, well, the rest of us.  Twitter provides a listener some of the best dynamic aggregation of relevant content out there.  How to find interesting content?  Well one way is to use Klout’s BirdBrain took (full disclosure: Klout is a portfolio company and I sit on the Board), but there are many ways.  For those that do broadcast Klout provides great tools to measure your influence, even it it is as pathetic as mine, and ranks my influence vs. everyone else’s.

I suspect as time goes on more and more people will listen into Twitter, and find it a great source of relevant curated content from their favorite news and entertainment sources.  A few simple souls like me will continue to broadcast into the ether with a belief that in some small way they are helping humanity, as well as increasing their ego via the Klout Score:

Online Reputation

[Okay, this post refers to a portfolio company, and hopefully is not seen as a shameless plug]

During the due diligence for a recent investment in Klout by my fund, ff Asset Management, we have been thinking about  online identity and reputation and trying to understand what is changing here.  Recent posts by Fred Wilson and other are scratching at the surface.  It is clear to me that something changed with the mass adoption of Facebook, LinkedIn and other real-name social networks.  Facebook Connect has further extended it to the non-social web.  People moved from being anonymous to leaving real footprints on the web.  People are no longer hiding behind “anonymous” or “cutiebear107@aol.com” but are leaving traceable marks as to what they think, who they know, who thinks what they have to say is important.

This real-name web will lead to a host of services that connect-the-dots and help manage their identity, reputation and influence.  We are moving from the Internet of idea to the Internet of things to the Internet of people.  Clearly privacy, gossip, reputation, influence, trust, all are relevant here.

We invested in Klout as they are working on the influence aspect of the influence of people.  They people-rank tweets real-time and give people, for the first time, a measure of their influence on the web.  Fred Wilson has a Klout Score of 70, I have one of 12 - so you can clearly see who carries more weight on the web!

Over time we think that people will want to know who they are dealing with on the web in a simple manner, knowing their influence and their reputation.  In the same manner there will be companies that will work to help people manage them.  This is an evolving space and one which will be of increasing interest to venture capitalists and the media at large.  Thank you Facebook.  Thank you LinkedIn.