Product Lessons from the Early Days at Friendster by Dan Olsen

2. My Background n  EducaFon n  BS, Electrical Engineering, Northwestern n  MS, Industrial Engineering, Virginia Tech n  MBA, Stanford n  Web development and UI design n  20 years of Product Management Experience n  Managed submarine design for 5 years n  5 years at Intuit, led Quicken Product Management n  Led Product Management at Friendster n  CEO & Cofounder of YourVersion (personalized news) n  Product consultant: Box, YouSendIt, Epocrates, Chartboost Will post slides to h[p://slideshare.net/dan_o Copyright © 2013 Olsen SoluFons

4. Se_ng the Stage: Summer 2004 n  2002: Friendster launches n  Mar 2003: Friendster opens to public n  Aug 2003: MySpace launches n  Oct 2003: Friendster raises $13M from Kleiner & Benchmark n  Feb 2004: Facebook launches n  April 2004: Abrams replaced by interim CEO n  June 2004: New CEO hired Copyright © 2013 Olsen SoluFons

6. Wild West of Social Networking: Friendster’s CompeFFon in 2004 Tier 1 Tier 2 MySpace Facebook Orkut Tickle MulFply Ryze Hi5 Classmates Tribe Match LinkedIn Xanga Blogger Copyright © 2013 Olsen SoluFons

7. Global Competition: Unique Visitors •  We are currently the global leader but everyone is growing •  Orkut was above us in August •  Hi5 is gaining ground internationally 7,000 6,000 Friendster Unique Visitors (000s) 5,000 Orkut Friendster 4,000 MySpace MySpace Hi5 3,000 Orkut Hi5 2,000 1,000 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 03 03 03 04 04 04 04 04 04 04 04 04

8. U.S. Competition: Unique Visitors US Unique Monthly Users (000) 2500 2000 1500 1000 500 0 N 3 M 4 Se 3 O 3 04 D 3 Ja 3 03 Fe 4 04 Au 3 Au 4 Ju 4 M 4 Ap 4 -0 r-0 0 0 -0 -0 0 l-0 l-0 -0 -0 0 g- p- g- n- n- n- b- ct ov ec ay ar Ju Ju Ju 1 MYSPACE.COM 2 FRIENDSTER.COM 10

9. •  Open vs. closed network Connected to Tom At most 2 degrees away •  Proﬁle personalizaFon •  Music •  Groups •  Chat (IM) •  Blogs

11. Business ObjecFves 1. Provide a Compelling Product Experience 1.a. Ensure good site upFme (availability> 99.5%) 1.b. Ensure fast site performance (page render Fme< 2 seconds) 1.c. Ensure good user saFsfacFon (>x%) 1.d. Ensure good ease of use (>y%) 1.d. Ensure strong product value proposiFon relaFve to compeFFon 1.e. Ensure good user info/content (current, accurate, detailed) 2. Grow US Ac>ve Users 2.a. Improve new user acquisiFon (> z new users/month) 2.a.1. Improve viral acquisiFon (e.g., avg # invites per user) 2.a.2. Improve non-‐viral acquisiFon (e.g., acquire users at CPA<$y) 2.b. Improve retenFon of exisFng users (retenFon rate > x%) 3. Grow Revenue 3.a. OpFmize exisFng business models (direct sell-‐through %, CPM) 3.a.1. Grow US adverFsing revenue 3.a.2. Grow internaFonal adverFsing revenue 3.b. Experiment with new business models 15 Copyright © 2013 Olsen SoluFons

12. Product ObjecFves & Engineering Resource AllocaFon 1 -‐ 2 3 -‐ 4 Months Months 30% 50% 1. Provide Compelling Product Experience -‐ Ensure good upFme and performance -‐ Improve Usability -‐ Enhance Value ProposiFon 60% 30% 2. Grow US AcFve Users -‐ Improve viral acquisiFon -‐ Improve yield of acquisiFon process -‐ Improve retenFon & frequency of use 10% 20% 3. Grow Revenue -‐ OpFmize exisFng ad placements -‐ Experiment with new ad vehicles -‐ Experiment with new business models Copyright © 2013 Olsen SoluFons

16. Product MarCom Metrics/Research VH Address Book Scraper • US mthly active uniques data VH Improve Registration • Friendster monthly signups H Invitation Reminder Email • # of visitors to Friendster.com • Registration Data Acquire H Prospect Tour • Friends Invite Data H Improve Invite & Find Friend Features M Invitation Email Optimization M Extending site access to non-registered members • US Orphans Data VH Recurring newsletters Reactivate Orphan Strategy VH New Product Features • Cancellations • Emails Data Retain • Add a Friend Data Tutorials • Lapsed User Survey Copyright © 2013 Olsen Solutions 20

18. Friendster’s Viral Loop % of users sending = 15% Invites per Invite invites sender = 2.3 click-through rate Active Invite Prospective Click Registration Fail Users Users Process % of users who are Succeed Don’t active Click Conversion = 85% Users rate •  MulFplied together, these metrics determine your viral raFo •  Which metric has highest ROI opportunity? Copyright © 2013 Olsen SoluFons

19. The Upside PotenFal of a Metric ? 100% 100% 85% 15% 2.3 0 0 0 RegistraFon % of users sending Avg # of invites Process Yield invitaFons sent per sender Max possible 0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?% improvement Copyright © 2013 Olsen SoluFons

20. Okay, so how can we improve the metric? n  How do we increase the average number of invites being sent out per sender? n  For each idea: n  What’s the expected beneﬁt? (how much will it improve the metric?) n  What’s the expected cost? (how many engineer-‐ hours will it take?) n  You want to idenFfy highest ROI idea Copyright © 2013 Olsen SoluFons

25. Personalized Emails Had Amazing User Engagement n  627,204 sent n  615,402 delivered 98.1% delivery rate n  248,627 opened 40.4% open rate n  120,343 clicked 48.4% click rate (opened) 19.6% click rate (delivered) Copyright © 2013 Olsen SoluFons

26. Personalized Emails More than Doubled ReacFvated Users

28. Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Customer’s Perspective What does it mean to us? How easy to use is it? Usability & Design Satisfaction Increasing Does the functionality Feature Set meet my needs? Does the functionality work? Absence of Bugs Dissatisfaction Decreasing Is the site fast enough? Page Load Time Is the site up when I want to use it? Uptime Copyright © 2013 Olsen SoluFons

29. Friendster Q4 Product Roadmap Add to existing messages 1. New Features 1-to-many: Enable Members Ability to select Discussion Groups to Better multiple friends Boards Communicate & -Public -Public -Private Interact Ability to define -Private subsets of friends Instant Messaging 2. Improve UI & Usability CSS cleanup Header & Global Messaging Gallery UI Profile cleanup Nav cleanup UI cleanup cleanup & extensibility 3. Better & More Photos: More & bigger Dynamic Content Blogs/ Link to Links to my Links to most Blogs RSS: mine favorites popular 4. Improve Prospects Tour on Exposing parts of the Friendster New User Friendster.com site to non-registered users Acquisition

31. “Network Eﬀects”: Not all Networks are Created Equal Network Type Broadcast CommunicaFon Social Law Sarnoﬀ Metcalfe Reed Example Cable TV Fax machines Social network Network value N N2 2N proporFonal to (linear) (squared) (exponenFal) Copyright © 2013 Olsen SoluFons

32. For Social Networks, Number of Users Is A Very Important “Feature” Reed’s Law ~2N Network Users Value ~N2 2x 4x ~N 3x 8x 4x 16x Details: h[p://www.reed.com/dpr/locus/gfn/reedslaw.html 5x 32x 35 Copyright © 2013 Olsen SoluFons

33. Lessons Learned n  When you have contenFon for resources: n  Define objecFves and prioriFes and get buy-‐in n  Explicitly allocate resources n  Improving your product n  High ROI opportuniFes usually exist n  Define causality, track metrics, and iterate n  If problems arise, focus on lowest level first n  Live site issues trump new features n  Say “no” to other things unFl bleeding stops n  For social products, size of user base ma[ers Copyright © 2013 Olsen SoluFons

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