GenuineVC David Beisel's Perspective on Digital Change

November 16, 2005

I’ve been thinking about web traffic lately. And yes, I know that the traffic graphs of MySpace and TheFaceBook have been circled around the blogosphere a million times, but I am going to repeat them anyway:

myspace.png

thefacebook.png

Two years of data. Let’s compare them with two other more recent startups which are looking “successful” (from a traffic standpoint, that is) but are not social networking sites. Here are the graphs from vertical search sites Kayak and Indeed one year after they’ve launched:

kayak.png

indeed.png

My impressions when I compare the two sets:
1. All four of these graphs are “pretty,” but clearly the first two are prettier (linear vs. geometric growth).
2. The social networking sites don’t exhibit break-out traffic behavior early in their existence.
3. There is clearly display a magical inflection point when the network effect of all the users in a social networking site causes a dramatic shift towards geometric growth.

Obviously there are many examples of both vertical search sites and social networking sites where the traffic launches flat/limited and continues along those lines.

My gut conclusions (based on limited set of data with selection-bias, etc., etc.) from all of this:
1. The success of a social networking site is difficult to discern from its early traffic pattern. It isn’t until later in its life if the traffic usage will really ramp after the network effect has kicked in.
2. Vertical search sites which will be successful display early traffic patterns signaling this future growth.
3. From an investor point of view, be patient with social networking sites in the beginning, but cautious with vertical search ones which haven’t demonstrated immediate traction.

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  • Lee Hower
     - 1 day ago
    here's a summary of @pmarca tweets which make all the naysayers about Facebook over the years look somewhat silly http://t.co/5rIEYkVbZU
  • robgo
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    To parents helping their kids set up lemonade stands: at least take the lemonade out of the store bought jar!
  • robgo
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    @patk @uber i am 4.7. What a jerk!
  • robgo
     - 2 days ago
    wow, that bald cap I had on last night was really really ugly

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