Making sense of good and bad content

Have you adjusted your privacy settings in 5 different places?  If not, your friends may be sharing your Facebook pictures, status updates, religious views and more.  Preventing your information from being used  across the web requires:

• Visiting  Facebook’s settings for “What your friends can share about you”
• Visiting  Facebook’s settings for “Instant Personalization”
• Visiting Yelp
• Visiting Microsoft Docs
• Visiting Pandora

Instead of requiring 5 steps (a quintuple opt out!), Facebook should offer one setting, which allows you to easily opt out of sharing your data unless you give permission.

It seems like every year Facebook automatically ensures its members share more data with the world.  In 2007, Facebook Beacon automatically shared what members bought, without their permission.  In 2009 new privacy settings automatically defaulted most members information to the public.  Now, Facebook is looking to your friends to make your data public.  Senator Schumer is being polite when he says, “This opt out procedure is confusing, unclear, and you might even say hidden”.

It might be acceptable if this was the only place where you had to go to opt out of sharing:

In the image above, you’ll see the top privacy setting area is for your personal information.  However, there are now more privacy settings that control where your personal information gets shared. The settings below are not located in “Personal information and Posts”–they’re in “Applications and Websites”.

In fact, after exploring all the options above, in “Applications and Websites” area, I came across these settings for “Instant Personalization”:

I thought I’d click to “Learn More”.  That led to a long list of Q&A, where I found this:

So, it turns out that to ensure my past comments and pictures stay private, I need to visit each “instant personalization partner” of Facebook and opt out.  After doing some research, the Electronic Frontier Foundation confirms that only way to fully opt out of Instant Personalization is to take all these steps.  If you don’t take all these steps, your friends may unknowingly share all your past activity on Facebook.

Facebook says it requires Yelp, Microsoft and Pandora offer “an easy and prominent method for users to opt out”.   It would be nice if Facebook took its own medicine.  Here is a proposed privacy setting:

Facebook could define partners as applications, advertisers, and third party websites. They could offer more detailed options.  But the general idea is to make it a double opt-in system (1. you say you’ll share, 2. you say which partners to share to) rather than a quintuple opt-out system.

What do you think?  Should Facebook offer one easy and prominent method to opt out of sharing?

Tags: Facebook, Privacy

About halfway through KartMe’s angel raise, I took a second to jot down some lessons learned.  This post originally appeared on KartMe.com’s blog. Without further ado, here are the lessons:

1. Angels want to see you making measurable progress.  To get to the next level, you’re going to need to show measurable results.  Whether it’s revenue per customer, user growth, or a viral coefficent, something measurable is required to either raise money or pay your bills. Start measuring something now.  It could be retention, content creation, unique visitors, bounce rates, something.  Should you get investors, they’ll be following progress in monthly updates…which will mostly include numbers.  So start measuring, and start showing improvements to investors.  Investors know your ideas are going to change, and all they’re going to have to judge success on is numbers, so you might as well start executing and improving based on more than just your gut.  A big mistake I made was showing investors new “designs”, thinking that qualified as measurable progress.  No one cared. In fact, they just wondered why the designs weren’t live and doubted my ability to execute quickly. To summarize, get to know angels a few months before you want to raise funds, and start showing measurable improvements.

2. Angels like simple ideas.  Investors are busy.  Angels are even busier as investing is often a side project for them.  They’re not all going to sign up for your product.  They’re not all going to read your business plan.  Give them a simple explanation that they can remember and explain to their colleagues, spouse and child.  When I explain KartMe now, it’s:  we help people share lists and we monetize with commissions.

3. Angels like teams.  Ideally, your team with have 2 technical co founders and one business person.  It seemed that every investor had a story about a technical person who became unintereseted in the company, leaving the business person floundering.  They like to see long standing relationships between teammates located in the same location, so flight is unlikely.  They like to see that the business person can “attract talent”.  They like the idea of 3 people working until midnight for what amounts to a very low hourly cash wage.

4. Angels are sophisticated investors. Nearly all angels I spoke to throughout the process knew everything I’d learned in business school about fundraising.  They all wanted price protections, participation opportunities, “caps” on convertible notes, etc.  Once you get beyond friends, family, and supportive entrepreneurs, assumes angels willl know more than you about investment terms.  The investors committed to KartMe have probably done over 100 deals as angels, VCs, and private equity investors.  They’ve gone through every term in our agreement, thinking about good and bad outcomes. They thought to set aside funds in case things go bad (and they can buy more of KartMe at a discounted price) or good (and they can preserve their share).  With the new  angel funds, like Founders Collective and IA Capital Partners, I’d assume the sophistication of angels is ever increasing.

5. Closing takes momentum, which you can generate. There were at least 5 different “mini-events” I’ve used during the last couple weeks to get commitments.  A PR hit let to an investor putting an offer a on the table.  One party putting an offer on the tabe gave me something to get another party in.  One resume of an investor got another investor excited.  One parties cash in the bank account helped me get another party to commit.  Getting over half the money I wanted committed enabled me to get another party to commit.  As you approach your fundraise, try to have as many exciting, momentum generating events as you can ready.

Fundraising has been a great experience.  I’ve been able to refine the marketing pitch and have a better sense of what metrics matter.  These are just 5 of the many lessons learned.  More about the experience of raising capital is coming.  Stay in the loop by following KartMe on Twitter.

Related:

Kart:   Best Startup Reading - Articles

Blog:  Pitching without PowerPoint: 8 Tips for a First Meeting

Page: The Best of 2,000 Karts

Are you afraid a competitor could quickly replicate your web application?  If you’re not, you should be.  For better or for worse, intellectual property rights appear to not mean much on the web.  And as a web application provider, you’re offering is up there for everyone to see.

Recently, Google launched two products that may have immediately put competitors out of business.  Its “to do” list list is a direct threat to Remember the Milk and its Latitude product is a direct threat to Loopt.  Whether fair or not, Google, Facebook, Amazon, Apple and Microsoft have virtually free distribution through their “installed base” of search, social, ecommerce, music, and browser/os users.  And those firms have the technology talent to copy many web application’s features.  So, how can you build a business that is not a feature big firms can replicate and distribute?

1) Target a profitable niche: Most big companies only look at big markets.  They need to increase the value of a multi billion dollar business.  Only Amazon seems to go after tiny markets, given its decentralized operating structure

2) Create switching costs with users: If a user has to invest time to learn your application, and placed data in your application in a proprietary format (think: photoshop and their file system), then a user is likely to remain with your service even if someone releases the same features.  But be careful.  Data in a proprietary format that exists elsewhere (e.g., my friendgraph is known by Facebook and Google/gmail) or data with a high decay rate (e.g.,  last week’s “to do” list)  does not create a switching cost.

3) Build supplier and distributor partnerships: Unlike features, businesses have suppliers and distributors.  If you’ve negotiated exclusive partnerships with a low cost or unique supplier or distribution partner, then you have an unfair advantage that can’t be replicated.

What else do you think differentiates a business from a feature?

Reddit had a catchy tagline. They were going to be your “front page of the web”. After getting an audience, and selling to CondeNast, they quickly changed business models to focus on providing a technology that can go after verticals, like cosmetics with lipstick.com, now weheartgossip.com.  Why wasn’t Reddit bought to be a front page?

Some things in media don’t change too much. One is that the front page isn’t where the money is. Back in 2001, I was given a case interview from a global consulting firm on why newspapers revenues were declining. The answer was that websites like Monster, eBay and Craigslist were taking away the profit centers of newspapers. The lesson was that newspapers used their front page to draw readers into verticals that they could monetize. And the web was doing a better job in serving consumers in those verticals with functionality like search instead of getting ink on your hands.

Mozilla’s FireFox has an interesting in their approach to this problem. By providing you a browser or entry point to the web, they’re essentially a frontpage, if only the outside border of your page. And they’ve monetized this space by selling ‘default’ positioning in the search bar. iGoogle and MyYahoo have a similar approach to monetization. Front pages can serve as lead generation for search businesses.

This is why Digg is going to have trouble delivering returns for investors with an advertising based business model. They can’t grow the value of their ad inventory unless they can steer users to a profit center. Of course, Digg can try other things.

Can Digg provide a myDigg to users that serves as a front page, allowing them to tap into this search revenue? Is that where they are heading with their recommendation engine and your data made available through Facebook Connect? Time will tell.

Tags: Advertising, social bookmarking exits

Online communities have a tough time getting started. There is a chicken and egg problem. Who wants to join a community that doesn’t exist? To solve this dilemma, Yelp’s CEO openly admits that early on the company decided to pay reviewers and now pays “community managers” in major cities. A second founding decision was to focus on getting the most reviews possible with its user rewards system.

Yelp’s founding community in any city is those who are willing to contribute reviews for low pay (i’m assuming rates did not attract top writers and bloggers…because it didn’t). For example, for many moderate and expensive restaurants, reviews often cite discounted Restaurant Week specials. Yelp is now challenged with broadening its set of active contributors in order to get broadly applicable content for the larger audience it is attracting.

The second original decision founders made was to encourage the community to review often. Online Karma awards are given for Firsts, and users compete to see who can have the most reviews or Firsts. As the community prefers to be heard rather than rated, Yelp accepts reviews about old meals or reviews that focus on the circumstances of the meal. Sadly, this has led to a proliferation of low quality reviews for restaurants, a category where one size does NOT fit all.

I think Yelp has a lot of potential (17 million unique visitors a month is already impressive), but right now the main feature that helps me is the mashup of google maps, yellow pages, and pictures.

Tags: Community incentives, Founding decisions, Social karma, Yelp