The Next Net

Disruptors Video: Social Networks for Healthcare (Sermo/PatientsLikeme)

The problem with healthcare is that too often information  does not flow easily between those who need it most: doctors and patients.  In this week's episode of the New Disruptors, I speak with the CEOs of two startups—Ben Heywood of PatientsLikeMe and Daniel Palestrant of Sermo—trying to change all of that.  Both are creating social networks for healthcare. PatientsLikeMe gathers together patients who suffer from the same diseases and compare notes, track their symptoms, and anonymously compare their progress with one another (read our profile here).  On the flip side, Sermo is a social network for physicians to communicate directly with one another about the latest treatments and how they are working with actual patients.  Watch the video.  (Full transcript after the break).

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Imeem is Rocking

Dalton Caldwell is finally finding his groove.  His Sequoia-backed social network, Imeem, started out a couple years ago as a standalone, instant-messaging application.  He soon scrapped that in favor of a Web-based social music site.  But then, a victim of his own success, Imeem was banned from MySpace and threatened with a lawsuit from the Warner Music Group.

Caldwell, though, has turned all of that around, and made Imeem into a legitimate, ad-supported music streaming site.  He won over Warner Music, which dropped its lawsuit and licensed its entire catalog of songs to Imeem in return for a share of the advertising revenues associated with its music.  In fact, Warner Music CEO Edgar Bronfman, Jr. found the relationship with Imeem important enough to highlight in Warner Music's most recent earnings conference call.

Now, not only can you listen to songs from indie groups like The Essex Green (and embed them on your blog):

But you can also also listen to Warner Music acts like the Red Hot Chili Peppers and embed (30-second samples of) those as well:

Imeem claims 16 million unique visitors in July, 10 million registered users and more than one million unique logins a day.  Third-party measurement site Compete.com puts the number of unique visitors at 4.6 million, but shows that U.S. traffic is growing and beating both Last.fm and Bebo (see graph above).   

Comscore shows Bebo slightly ahead of Imeem in the U.S., with 4.4 million visitors in July versus 3.9 million for Imeem (and 1.8 million for Last.fm), but more notably shows an astounding 4,224 percent growth in traffic for Imeem compared to the same month last year.  (This compares to 112 percent growth for Bebo, and 59 percent growth for Last.fm).  No matter how you slice it, Imeem is rocking.

Caldwell dropped by my office earlier this week to explain his strategy.  He wants Imeem to become the first major ad-supported music streaming site, and he is working on landing deals with the other major labels to make that happen:

If you create an adversarial relationship with the labels, you are screwed.  If they want you to succeed, you will have a much easier time.

The Race to Buy Facebook Apps

Facebook only opened up its social network to outside applications last May, but already  there are 2,960 of them.  And the top apps are being snapped up by larger companies.  For instance, Slide  acquired an app called Favorite Peeps in June. 

The latest rumor in this regard is that TripAdvisor is paying $3 million for a mapping application called Where I've Been.  (Update: Looks like this rumor turns out to be not true, but there is obviously a general Facebook feeding frenzy going on).  That's would be a nice check for Craig Ulliott, the sole developer who cobbled together the Facebook app in his spare time.  It used to be that a few smart engineers could build a Web 2.0 site, and if i took off, Yahoo or Google or some other large company would buy it after a couple years for as much as $30 million.  Now all you need to do is build a blockbuster Facebook app, and you can be bought for $3 million after just a few months of work.  If you are only one person, and you own the entire company, you could end up with almost as much on an individual basis as if you owned 10 percent of a larger company.  The race is now officially on to buy the most successful Facebook apps. 

Still, the majority of these Facebook apps are nothing more than features.  It's just that anyone can buy a features on Facebook these days, not just Facebook.  Where I've Been is a widget you can put on your Facebook page and mark each country or state you've ever visited or lived in, and then show off how well-traveled you are to all your friends.  How TripAdvisor plans to make money from that is unclear.  But it paid $1.30 for each of Where I've Been's 2.3 million users.  That is probably a population with a high percentage of avid travelers, the type of people TripAdvisor would like to lure to its site or sell travel-related advertising against.   So really what it bought is a highly targeted list of leads.

JibJab's "Starring You" Now Live

JibJab has finally launched its "Starring You" series, where you can upload your head into a JibJab animated video (you can see me and my wife shaking it above).  This an example of giving average people the tools to create high-quality content (see previous post).  I broke the "Starring You" story a month ago in one of my Disruptors videos.

The Race to Become the YouTube of Online Video Games (Kongregate Vs. YoYo Games)

The culture of participation is gaining steam in the gaming arena.  Kongregate, a site that lets users upload their own simple Flash video games, announced today that it raised $5 million in a venture round led by Greylock Partners.  Web 2.0 angel Jeff Clavier is already an investor.  These tend to be simple games, but the site seems to be gaining some traction, with 750 developers having uploaded 1391 games since the site's public launch last March.  That in turn is driving some gains in traffic.

But Kongregate is not alone in the quest to become the YouTube of online video games.  A newer startup out of England called YoYo Games, which I highlighted in this year's Web 2.0 map of the world, just launched a couple months ago, but already boasts 5,510 user-submitted games.  One reason why YoYo Games has been able to seed its site with so many more games in a shorter period of time is that it offers a free  software download called Game Maker that pretty much anyone can use to create their own games.

While Kongregate still seems to be drawing more traffic (at least, according to Compete.com), the more games on a site, the more likelihood that any one of them will turn into a hit.  So the race is on.

Sites that are driven by audience contributions—whether they revolve around video, photos, music, or games—need to start helping their members create better entertainment content.  Those who do will have a better chance of separating themselves from the pack.  For that reason, my money is on YoYo Games.

Startup Watch: Fellowforce.com (the Business Smarts of Strangers)

The best ideas for new products and businesses often come from outside a company's walls.  Now, those companies have a Website called Fellowforce.com to help them try to tap into the business smarts of strangers. 

On August 1, the Amsterdam-based startup launched its consumer-facing site where people can sign up as "fellows" and answer challenges posed by companies large and small.  There are only about 20 challenges so far.  Some have been posted directly to the site itself, like one startup's plea for a "blockbuster TV-format for a new website." While others are links to existing crowdsourcing efforts elswhere on the Web, such as Nokia's invitation to consumers to help design an N76 phone, or the Motion Pictures Laboratories quest to  "develop a theatrical projection screen" that can handle both 2-D and 3-D movies. 

Like InnoCentive or NineSigma, what Fellowforce fosters is a form of open-source innovation.  People who submit the best ideas can get paid by the companies anywhere from $250 to $10,000.  Fellowforce itself is offering 1 percent of its stock to the person who comes up with the best tag line for the site.  (How about: "Where it pays to have good ideas").  Fellows can submit unsolicited brainstorms to specific companies as well, such as one member who came up with a novel type of door hinge. Fellowforce charges companies $295 to $1,000 to post a challenge.  The site is free for Fellows.

And in a few days, the company plans to release an "Innovation Box"—essentially a widget that companies can place on their own Websites or blogs to solicit suggestions from customers, vendors, or whoever.  It's a Suggestion Box 2.0 (with the suggestions being digital and coming from outside the organization). 

Jeff Crites, Fellowforce's director of North American operations (which consists of his laptop in Virginia), explains what the company hopes to achieve:

We all have those ideas ... why doesn't such and such company do this, or what if they just did 'that' with a product, or maybe we come up with a variation on a product, but we know there's no way we'll try to start a business.  Our Innovation Box will free up millions of ideas that are just wasting away in people's brains because they're afraid to let them go, that they'll be used with zero compensation or recognition.

It's smart for companies to accept terms on idea submissions, to reward people, to celebrate consumer creativity.  It just breeds more innovation. And the whole Open Innovation process is more than innovation and ideas ... it can be a vast PR machine for companies, celebrating consumers and their passion for products and services.

For instance, Crites has his own idea for a manly tissue called "Manex" (I'll spare you the details). He is sure that if he could just pitch his idea to someone at Kimberly-Clark, this rugged line of tissues could one day hit store shelves.  I kind of doubt it.  But if Kimberly-Clark could solicit 100 such ideas, chances are that one or two of them might be worth commercializing.   

Ideas are only worth something if somebody puts them into practice.  So what's the price of a good idea?  That depends both on the idea and who you tell it to. Fellowforce wants to match the best ideas with those most likely to implement them.  To do that it needs to lure a critical mass of both idea generators and implementors to the site.  While that concept might sound straight-forward enough, making it happen won't be easy.

Google News Now Accepting All Letters to the Editor

Google News is trying an experiment in participatory journalism.  It will begin to post comments next to its links of news articles by anyone quoted or mentioned in those articles.  Google claims that it will try to verify the identity of any such commenters (good luck), but it won't fact-check the comments before publishing them (as most newspapers and magazines do in their letters pages).

The play here for Google News is to add a layer of original content (conveniently produced by others, at no cost to Google) to the news links that make up its pages.  Google News wants to become the aggregation point for all the news that's fit to link to, and offer a platform for interesting people (i.e., the subjects of news articles and blog posts) to expand on or grouse about the stories that mention them. 

By allowing these selective comments, Google is inviting them into more of a conversation, and that's great.  Although, many times, the best comments come from people not mentioned in an article, like competitors or just smart readers. 

But what worries me more is that I'm not convinced that Google News is the best place to have those types of conversations in the first place.  That sort of feedback makes a lot more sense on the Webpage that contains the actual news article or blog post in question.  Otherwise, the comment is stripped from its context. 

Most blogs, of course, already allow comments from pretty much anybody except spammers.  Now, maybe more traditional news sites will be forced to do the same.

Social Startups Kaboodle and Clipmarks Get Snapped Up By Old Media

Old media wants some of that Web 2.0 mojo.  Hearst, the magazine company that publishes Cosmo, Esquire, and Seventeen, is buying social-shopping startup Kaboodle.  And Forbes is reportedly closing in on a deal to buy Clipmarks, a bookmarking site that lets you clip, save, and share parts of Webpages you find interesting  No official word on the purchase price for either one, but the word in the Valley is that Kaboodle sold for between $30 to $40 million.

Why are media companies buying Web software startups?  Because simply feeding people information—whether it's stock tips or style tips—is no longer enough.  If media companies want people to stick around their Websites, they need to give them something to do.  And that requires Web-based software.   Clipmarks makes it easy for people to share information with each other, while Kaboodle lets them create virtual shopping lists. 

What is not clear is whether these Web services will be better off as captive arms of big media companies than they are on their own.  For Kaboodle, the risk is that instead of becoming the general social-shopping engine of the Web (it's previous ambition), it will be seen as nothing more than a feature of the various Hearst magazine Websites.  That opens up the field for other competitors such as ThisNext (see earlier post), StyleFeeder, or Stylehive to pursue that goal.

For Clipmarks, selling might be the best move, since it doesn't seem to be gaining much ground on other social bookmark services such as del.icio.us (owned by Yahoo) or reddit (owned by Conde Nast/Wired). 

But look at what's happened to del.icio.us since Yahoo bought it.  According to Alexa, traffic has been coming down.  (See graph at right, where dwindling del.icio.us is in blue, steady reddit is in brown, and laggard Clipmarks is in red).

Update: Joshua Schachter, founder of del.icio.us, disputes Alexa's numbers in an e-mail to me:

Just wanted to note that Alexa's not a great indicator of traffic (they're showing a lot of sites down in exactly the same pattern.)

We passed 2.5m users a few months ago and are seeing huge traffic from the firefox extension, which I don't think is even counted in their metrics.

A quick check on Compete and Quantcast, shows traffic growing, especially in the past two months. As does comScore, which measures monthly unique visitors at nearly 1.5 million for July, up from 1.1 million in May.  And these don't include off-site usage, as Schachter points out.  So perhaps del.icio.us will prove to be an exception in this case.  We'll see.

A World of Cool

Here's a Google Map mashup for cool hunters everywhere.  It overlays activity on the social product recommendation site ThisNext on top of a Google Map.  So now you can see what people in Morocco think is cool versus people in Seattle.

(Read my initial post about ThisNext here).

It's Time For Open-Source Hardware

Open-source software has proven that users are sometimes the best designers with products like the Linux operating system and the Firefox browser.  The next logical step is open-source hardware, a movement that is gaining ground in design circles.  For instance, Chuck Messer at Tackle Design in Durham, North Carolina has developed an open-source jaundice light for developing countries using blue LEDs that can be manufactured for $75 (versus $3,000 to $5,000 for a similar piece of hospital equipment). And he is also involved with the Open Prosthetics Project, which is trying to bring back an updated version of the popular World War One-era Trautman Hook.  Similarly, there are efforts to create open-source computers, cars, telephones, and 3-D printers.  There is even a venture-backed company called Bug Labs trying to apply the concept to the commercial realm with what sounds liek open-source consumer electronics.  As Fred Wilson, an investor in Bug Labs, cryptically puts it:

The thing about Bug is that it's not anything like the iPhone. It's closer to Ning. It's all about what people will make with a Bug, not what a Bug is when it comes out of the box.

The buzz around open-source hardware is just going to keep getting louder because it is an idea whose time has come.  Bringing the culture of participation to physical products is a natural evolution of the open-source, DIY world we are now living in.

What open-source hardware/products would make the most sense to build a business around?  Comments are open.