Showing posts with label facebook. Show all posts

Innovating towards the traditional - Facebook & Amazon

Just a short post now - and really just two observations/trends I have commented on before that are continuing their trajectory.

 Amazon bring grocery delivery to the UK - Announced today, Amazon will be bringing their "Fresh" service to the UK, starting with London and Leeds - continuing with my previous observations on innovating towards the traditional.

Facebook messenger no longer needs a Facebook account - this is older news, and I have been meaning to comment on this for a while. Basically, customers can now sign up for and start using Messenger without an account, just using a phone number, which is an un-surprising move towards phone as identity and recognising that the phone has the potential to be a node in any social connected network on the platform (much like I have preached about before..).  It is also another step towards Facebook moving further down the stack and more directly competing with native messaging apps as a system level.
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Hello Facebook..

I have been away on a mini-break for the last few days, and whilst relaxing I was mentally planning out a blog post about mobile phones as identity and the social platform they provide (again!), then, I woke up this morning to Facebook's announcement of their Hello app.  In short the app will attach FB user details to phone numbers, so if you get a call from a mobile number you don't know, but have the app installed on your phone, it will attempt display FB info to identify the caller.




For my money, this is a very smart move.


Moving down the stack

One of the questions for the future mobile landscape is whether players like Facebook and Amazon can move "further down the stack" - that is, to start being more core to devices, or making their own. Amazon have tried with their Kindle Fire phone, and Facebook had Home - both bombed out, however, and there hasn't been much to suggest that there is more promise for them.

However, Hello seems to me like it could be a small step to bridging that gap.  The app is simple in itself, and done well I could see it being very popular - after installing, it doesn't need any active engagement from the user, but (hopefully - without having tried it myself) just sits there and enhances the users phone experience (as long as they don't try and do anything stupid, crazy annoying notifications, battery hogging etc) - As a simple enhancement to the incoming call screen, I can imagine pretty high retention/install rate - because why would you go back to unknown numbers?

One reason this could be a huge win for Facebook is that this step could make Facebook more core to the mobile device (and seemingly appear more and more like just part of the OS).  If you have the app installed, and miss a call, I would expect the missed call notification screen to be Facebook's Hello - with the normal stuff you would expect - so and so called you, return call, send message etc - which will inevitably give FB the hook to drive users to FB messenger, WhatsApp etc - This is a chance for FB to hijack the core functionality of the phone and drive traffic to its other properties, quickly FB messenger could become the default messaging app.



Your phone as your identity & network

This is something that I have ranted about before - there are two powerful and fairly unique traits of mobile phones that have the power to really disrupt the social/technology/online space:

Your phone is your identity - Whilst people continue to struggle to fix online identification/authentication issues, with a host of different providers offering Login-as-a-Service (Twitter, Facebook etc) and lots of people complaining about the proliferation of user logins/passwords that need to be remembered, the phone offers an interesting solution to that - Granted, phone numbers are not for life, but they offer simple, unique identification of individuals, plus, with two-factor authentication, it can be simple to verify that the person attempting to login is in physical possession of the device.  And with more moves to ApplePay and NFC payment with your device, this identity/device becomes even more tightly coupled.  

By Facebook tying your phone number with your profile it is an impressive move to help future proof their platform: so your phone is your identity? Well now your FB profile is intrinsically linked to that too.


Your phone as a social network - For a long time, Facebook have been the dominant force in social networking. Despite Google's effort with Google+, they haven't been able to displace the social network king. Do you think they struggled because they couldn't match Facebook's superior product? You think people stay at Facebook because they just love the features so much? Of course not. They stay because of user inertia - the feature that keeps users at Facebook is the network effect, no one would move to Google+ without the rest of the network, and how to you move your network?  As if to prove this, there are fairly regular outcries from the Facebook masses when FB changes their layout, or people find out about some terrible clause in the privacy policy - but do people leave? Nope. They just get on with it and keep using Facebook.  After all, the users are the real product, not the software.

Now, mobile phones change that a bit.  Traditional online social-networking basically just models the real world network of friends/colleagues/etc - In your real life social network, you are the node in the graph, and your mobile phone basically represents your node - If you think of Facebook as a centralised social network, mobile phones are a distributed social network (in other words, Facebook knows about the entire graph, and keeps that information centralised, but with your phone you know about your immediate neighbours in the graph - e.g. the people you have contact details for, but not the rest of the graph).  This is a pretty powerful idea - and this is what has made it possible for apps like SnapChat and WhatsApp to enjoy sudden and un-precedented user growth where non-mobile only apps (Google+) haven't.

If we add to that the fact that modern smart phones aren't just an address book - they have your photos, they have your videos, they have your messaging, they have your friends - is there much on your Facebook profile that you don't have (the ability) to have locally on your mobile phone?

All of this makes the smart phone and the real world mobile connections a very powerful platform for anyone to come and disrupt Facebook's crown - So this move by Facebook again just helps establish them as leading the mobile-social platform, not just an old internet company trying to compete.



An aside - Google needs to catch up

My original thinking for the blog was going to be about how Google should, in my opinion, be capitalising on the Android platform as a social network, and rather than trying to convince users to sign up to Google+ (or Wave, or Buzz etc) focus their efforts on making Android a more social OS and make more of the Android as your identity.  They would have to do it carefully with regards to stuff like "private by default" so not to cause uproar, but if they could effectively make all their Android users a node in the social network, then all of a sudden they could find themselves with a pretty good social network, and can start thinking about how to add value to the product.  Furthermore, with Android being the OS (as low down the stack as possible) then they would have a lot more options with regards bringing together all the aspects above - Your smart phone knows instantly when you take a photo or record a video (because you are doing it with the device!), it knows your location, it knows when/who you are messaging, it knows who your friends are - some nice usability around that and it starts to sound like a very strong value proposition!
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Was WhatsApp overpriced?

As is to be expected, in the aftermath of the WhatsApp acquisition, there has been a lot of talk about how it was overvalued and Facebook payed too much. $19billion is a lot of cash, however you look at it.

But did Facebook overpay? Possbily.  

If we look back through history, a lot of big acquisitions have been decried as overvalued, sometimes rightly, sometimes not. When Facebook bought Instagram for $3billion there was a similar uproar, but now, things have worked out ok, and $3billion is looking more and more like a pretty good price.  When Google bought YouTube, there was an uproar over the valuation but no-one is now saying that wasn't a good purchase.  Incidentally, Google paid around $40 per active user when they bought YouTube, which is a slightly higher per-user cost than Facebook just paid for WhatsApp, at about $38 per user (although it's not really a relevant comparison in this case though, as you could argue that Google's projected monetisation model for YouTube is clearly different for Facebook and WhatsApp).


Facebook should have just built it

This is also a common line of argument. With $19billion  to play with, they could easily dedicate a decent dev team to building something awesome, and then market the hell out of it, possibly even incentivising user installs (If they wanted 450million users, they could give the first 450million installs $5 each!  disclaimer: app installed != active user).

My suspicion is if Facebook had built the app/platform themselves, it would have bombed.

Facebook as a company are becoming less and less focused, which is to be expected as their product becomes so multi-faceted, and are apparently getting worse at building fast/well. If they tried to dedicate a bunch of their guys to build it, it would be taking the opposite approach of WhatsApp - 32 engineers, 450million users, 99.9% uptime - all possible because they were so single-minded in their focus on the core of the product - You think an internal Facebook team could achieve those stats if they built the platform? I think that might be a stretch.  You think they would have been able push back on no advertising? no integration with the FB graph? No integration with existing FB messaging?  Every integration point is a potential pain point. Every pain point is a potential outage.

They also wouldn't be helped by their existing brand - people are wary of FB. Between the NSA scandal, their ongoing privacy policy changes and their *apparent* general disregard for their users I think people would be inclined to go to WhatsApp over a FB app.  As mentioned before, these days your phone is a social platform/graph in its own right - so the FB core product doesn't really have much more to entice users away from something like WhatsApp - Sure Google+ couldn't get the FB masses to budge, but their is no intrinsic value offered in FB that would really enhance an app platform like WhatsApp. In fact it's most likely the opposite and WhatsApp simplicity and absence of additional clutter in the product that makes it so appealing. It just works.

FB have promoted their messenger app pretty hard, and it hasn't been hugely successful. They have had to recently retire their email system. My gut feel is that an overly aggressive push for their home-rolled WhatsApp competitor would just serve to irk even more people and drive them away from their offering.


Stopping Google

So this is where it gets interesting.

WhatsApp apparently turned down a $10billion bid from Google, and finally chose to go with FB even when Google matched the $19billion offered.

Despite both being formidable tech giants, you might think there isn't that much real competition in the market place between Google and Facebook - Facebook email failed to make a dent in the world of email just as much as Google+ failed to make a real dent in Facebook's world of social networking. But, in my humble opinion, Google with WhatsApp could have been a game changer. For real.


Let's think about this:
  • Google have Android - the most pervasive and widely used mobile OS available. Available on a range of devices, including relatively low-powered affordable ones (critical in developing markets)
  • Google have strong working relationships with several hardware manufacturers with their Nexus hardware range, but now also have skin in the game having bought up part of Motorola and are now producing their own (suprisingly good) handsets
  • Google have bout Nest (home automation software) - more on that below..


Google have the software, hardware and market dominance in the mobile space. Can you think of a reason Google couldn't/wouldn't take on the mobile carriers? They are building more and more infrastructure around the US, and in heavily populated areas is there any reason they couldn't shun the carriers traditional networks and create adhoc mesh networks - using the actual mobile devices to power the network. Sure it wouldn't work everywhere, but couple that with traditional mobile infrastructure and it is looking more and more like a viable option.


Now let's consider: 
  • Google has the infrastructure, software and hardware to take on traditional carriers
  • They have viable monetisation models across their products to make cost not a big deal, coupled with falling back on to a mesh network where available they could potentially offer people free mobile plans - have an android device and Google account? then call/surf/message for free - no ongoing costs
  • Tied in with Nest home automation, that is a pretty promising value proposition


This is all good and well, but why should Facebook care if Google move into the mobile carrier space? As I have said before, your phone as a social platform/graph means that traditional social networks like Facebook that currently have the market advantage by being the incumbents start to loose that edge - and actually, if your social graph can be built up based on phone numbers/contacts then it can start to look more and more worrying for them. And that's what WhatsApp would have offered Google - a social graph built up based on phone numbers as identities - plus the ability to message pretty much anyone else in the world, regardless of device/OS/carrier.

You think there wouldn't be a massive rush towards Google/Android if they started offering free mobile plans? If they offer that, I think it's game over. And WhatsApp would have been one step towards that.
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Observations on the WhatsApp Acquisition


Yesterday's acquisition of WhatsApp is a great example of a few trends throughout the industry:

1) The importance of product

WhatsApp currently has 450 million active users, double that of Twitter, and is still growing at an insane rate (which probably hurts even more given Twitter's recent growth struggles), why is that? Sure, in no small part it is because they are the first major company to really disrupt and take on the SMS/MMS monopoly - Why ever pay for text messages through your provider if you can send pictures/chats to anyone in the world for (essentially) nothing? - but their success in becoming that major player is their single focus on the core of their product, they wanted to provide mobile messaging - and thats what they focused on. As users grew they could have spun out with gaming/video chat/desktop clients/etc but they stayed focused on their core product and did it well.

It is telling that founder Jan had this note stuck on his desk:
No ads!
No games!
No gimmicks!

Also, choosing to monetise by annual subscription rather than in-app adverts showed dedication to the statements above - having used pricing as a way to throttle growth to a rate they could manage, they grew confident that the model would work and didn't need to detract from their product with  gimmicks or ads.

Whats more, by focusing on the simplicity and usability of their core product, it also meant they could focus on the technical stability of their platform -  I doubt if they had spun out they would have been able to maintain their impressive tech stats - 32 engineers, 450million active users, 99.9% uptime.  Twitter's "Fail Whale" was infamous during their period of growth as their platform couldn't scale to handle it, but with a more accelerated growth WhatsApp's simplicity has allowed them to maintain 99.9% uptime - failing to keep platform stability could have easily seen them lose their position in the market and not be signing the deal they have.


2) The importance of mobile

Mobile is the platform of growth for the future. We are, and will continue to see more and more mobile-first (if not mobile only) startups. Instagram, Snapchat, WhatsApp - the three biggest recent startup exits - all mobile focused.

And should we be suprised? Let's have a look:
  • On average, people use their phones 150 times a day
  • There are currently ~1 billion people using smart phones
  • But, there are still ~6 billion using feature phones - so huge room fro growth

Smartphone usage has exploded, other mobile computing is growing as traditional computing devices decline.  There is a huge market opportunity for new mobile users, and for many parts of the world, mobile is providing first experience of the internet.

What's more, the mobile eco-system is offering a new opportunity for startups to take on social incumbents - For a long time, Facebook has had the crown of social, and could not be tumbled by others efforts, primarily because it's where people are. It's where people's photos are. It's where people's social graphs are. Sure Facebook's design is kinda clunky now, and kinda ugly, with terrible ads all over the place, but who is going to try and convince their entire social graph to move?  Exactly.  But the mobile eco-system offers something different - your mobile device contains your contacts/address book, your photos, your videos - more and more, your mobile device is becoming your social platform that really holds your social graph.


Mobile is the future.
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Software Engineering Interview Questions Part 2

There was also recently an article that was doing the rounds with the 20 most craziest interview questions, quoting allegedly real questions from interviews at places like Google, Facebook, Goldmans etc. Here are a few, along with my attempts to answer them..

Facebook: Twenty five racehorses, no stopwatch, five tracks.  Figure out the top three fastest horses in the fewest number of races.
This needs a few assumptions before we begin: 1) each track only races 5 horses, and races cant be started at the exact same time - preventing effectively just running all the horses at once; 2) horses run the lap in a consistent time (e.g. if horse A beats horse B in one race, and horse B then beats horse C, then A will also beat horse C)
  1. Race 5 races, each with 5 horses in it (so all horses have raced) (5 races)
  2.  Race 1 race with the winners of the first 5 races (6 races)
  3. Find the winner of race 6 and from that horse's original race take the horses that came second and third (2 horses); take the second place horse of race 6 plus the horse that came second in his original group (2 horses); take the third place horse of race 6 (1 horse) - Race these 5 horses, this will give the second and third fastest horses (we already know the number 1 fastest horse is the winner of race 6)
Total races: 7

Goldman Sachs: Suppose you had eight identical balls. One of them is slightly heavier and you are given a balance scale. What’s the fewest number of times you have to use the scale to find the heavier ball?
Answer: 2
  1. Arbitrarily split the balls in to three piles, 3-3-2
  2. weigh the two sets of 3 balls (first weighing)
  3. If the two sets of three balance (weigh the same) then we know the heavier ball is one of the balls in the set of 2, so weigh those two (second weighing), and you will see immediately which is heavier
  4. If the two sets of three do not balance, then take the heavier set and weigh any two of those balls - if the first two balls you weigh are the same then you know the third ball in the set of 3 is the heaviest. If they do not weigh the same then you will immediately see the heaviest ball


Google: You are climbing a staircase. Each time you can either take one step or two. The staircase has n steps. In how many distinct ways can you climb the staircase?
The trick to this question, as with a lot of complex sounding questions(things that start with "there are 100 prisoners.." or "there is a village with 1,000 married couples") is to break "n" (or the number provided" to a much lower number.

In this case, lets start off with n=2 (we will skip n=1) - in this instance its easy to do the mental arithmetic to work out the number of permutations: it can be 1,1 or 2. So therefore there are 2 different permutations. Obviously, in this case, whilst n=2, permutations(lets call it x)=2, but its safe to assume n=x will not be consistent as n increases.

So let's increase n, this time, n=3. Again, simple mental arithmetic and we can work out possible permutations: 1,1,1;  1,2 and 2,1. So again there are 3 permutations (x=3).
We will continue our approach to see if we can see a pattern emerging.

n=4: possible permutations: 1,1,1,1;  2,2;  2,1,1;  1,2,1;  1,1,2, so x=5
n=5: possible permutations: 1,1,1,1,1;  2,2,1;  2,1,2;  1,2,2;  1,1,1,2;  1,1,2,1;  1,2,1,1;  2,1,1,1;  So x=8

We could continue this process untill we could see a pattern emerging, although as n increases, the number of permutations increases so might need a pencil and paper if you wanted to carry on. Fortunately, it seems to be heading in the direction of the Fibonnaci sequence! So to find the number of permutations for n steps we just need to find the nth position in the fibonnaci sequence (still not that simple!)



I have not validated that these answers are correct, but this is what I came up with! Leave a comment if you think I have done something wrong somewhere along the way.
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