This had to be the least innovative startup PG has ever invested in. I literally had at least 3 friends quitting Facebook because they couldn't stand SocialCam spam (yes, I am sure there are ways to turn those off, but go ahead and educate half a glob about it -- this crap should be opt-out, not in).
Now said that, I'm scared that PG will learn a lesson here and continue this route by investing in more of those, just because it can virally grow (read: spam) on Facebook:
PG: what's your idea?
Team: we have this awesome website where every click makes a unicorn poops a rainbow bricks!
PG: what problem does it solve? how we make money?
Team: we haven't figured out this one yet.
PG: can we connect via Facebook?
Team: oh yes, definitely people will want to share photos of their pooping unicorns with others on their Facebook Wall.
We care more about founders than ideas, and the founders of SocialCam are great in every respect: nice, effective, and good technically. And SocialCam itself is necessarily innovative because video sharing is being invented right now. The app looks simple because they worked hard to make it so.
So the lesson here is actually one that we learned long ago. Great founders succeed.
Financially, this was probably a great venture. But it's a bit disingenuous to really consider SocialCam as being a positive innovation. It relied on spam and taking advantage of users not knowing that it was "opt-out"[1].
I'm not hating on SocialCam (though I do hate it :)). But let's call it what it is - a good investment.
While not explicitly stated, it's implied that the team built a "good" and innovative product. Sure he never said good but he did say that the team is great in every respect going on to list a few.
The most explicit way to say it would be, "We got in this one for the money. It's a terrible terrible product in terms of adding value to society but that wasn't our goal on this one".
He's entirely entitled to do just that...but don't spin it into something different by skirting the original points he's responding to.
He said he liked the team. I have my issues with Paul Graham but I'm inclined to believe him when he says a startup has an excellent team.
Apparently, he owes you some deeper explanation about how every company YC puts money into --- it's more than 100 every year now, isn't it? --- is managed.
Sorry, I didn't mean to get in the way. By all means: cross examine the witness.
I find it very unlikely that you had "at least" 3 friends quit Facebook because of SocialCam but whatever you say. I personally think this is exactly the kind of startup PG should invest in anyway. It fits the YC model perfectly.
oh yeah? So would you mind telling me what was SocialCam revenue model? My understanding is that PG is investing in startups with at least have some sort of a plan of making profits.
They couldn't become an Instagram because they knew their growth wasn't sustainable or real in any way. They had to sell or they'd fade into obscurity.
New distribution channels don't appear that often and when they appear you should rush to be early and aggressive, as they decline in effectiveness over time, which limits competitors' ability to match you.
Of course a strong product and good retention are essential to keeping those users, but you are a video app and this opportunity were to present itself you would be crazy (stupid) not to jump on as quickly as humanly possible.
SocialCam's main competitor, Viddy, just raised at a $370M valuation, and some data[1] show SocialCam at around 2X the traction of Viddy (post-sharkfin for both). The modest scale of this acquisition is not the kind of comp you want to see if you're Viddy, especially with their Series B terms[2].
I'm curious what the HN crowd thinks – has mobile social video peaked, or has it just not been done well enough yet?
Nearly all of social cam's traffic came from the timeline. Viddy is just content uploaded by me or you, so I'd venture to say most of their traffic is real but SocialCam was embedding YouTube videos of women in bikini's, funny clips, etc and whenever you watched one of them it would post on your Facebook timeline, just watching a video made you a user. This is why half of my Facebook friends seemed to have SocialCam accounts but not one of them had actually posted a video.
It's not sustainable and they knew it, Facebook will eventually kill off this kind of traffic so they sold out before the wave completely fizzles out.
Well, isn't the image you provided [1] answering your question already? It has been a trend for a while (hard to determine how organic since both companies spammed the heck out of Facebook wall) and now when the dust settled, there is nothing left behind.
In this example a large corporation agreed to be the one to turn the lights off (vide Zynga purchase of DrawSomething -- nothing can save the dropping audience #s) and so congratulation to PG and SocialCam team: selling rotten eggs is becoming hard to do.
Traffic inflation via user manipulation => Lots of spam traffic => People hate it but because it's spammy it still gets traffic => Socialcam guys realizes nothing good will come out of the situation => A fool approaches => Sell.
No one's hurt--the founder's made money, the investors made money--except for the users who found out more than they needed to (and wanted to) know about their friends and family, such as a daughter finding out their dad watched bunch of bikini videos and wet tshirt contest videos, etc.
SocialCam is a 'social media' company? Serious question. I've always felt it was more of a link/video spam site that holds barely any original content - just a long chain of forwarding/referral links.
It's collects media (video) and shares it (social), so I think it would be considered a social media company. Honestly, not too worried about the semantics here, the point is that it has nothing to do with 3D modeling/manipulation software. Buying for customers? Talent acquisition? Revenue acquisition? It's an odd one for sure...
Autodesk is getting into the consumer space, trying to build a community of creators via acquisition. Another example of this strategy was the Instructables acquisition last year.
I don't know what they specifically plan to do with SocialCam but I'm sure it fits into this consumer community strategy in some way.
I would imagine it is a talent acquisition. Autodesk has been trying to hire for a new cloud team in Detroit and San Francisco for a while...without luck, I think. (I was a reject)
Because their numbers were boosted using shady tactics that Facebook are starting to stop, when Facebook completely kills these apps their real traffic (videos people are actually uploading) will become non existent.
Now said that, I'm scared that PG will learn a lesson here and continue this route by investing in more of those, just because it can virally grow (read: spam) on Facebook:
PG: what's your idea?
Team: we have this awesome website where every click makes a unicorn poops a rainbow bricks!
PG: what problem does it solve? how we make money?
Team: we haven't figured out this one yet.
PG: can we connect via Facebook?
Team: oh yes, definitely people will want to share photos of their pooping unicorns with others on their Facebook Wall.
PG: ok, that's it! I'm in!