Today Josh Elman & James Currier discuss the history of social media, where it is today, and the next wave of social companies that may be a result of the current lockdown situation. Due to the massive behavioral changes over the last few months, Founders may have room to build and the 'Golden Age' of social media might see a resurfacing. Josh Elman has run product for top-tier companies like Robinhood, Facebook, Twitter, and LinkedIn and was a partner at Greylock. In this episode, we discuss: - A brief history of social media - The behavioral changes from COVID-19 - The 'New Wave' of social media platforms - The opportunity for founders to build companies - How social products reshape the human connection Be on the lookout for new episodes on The NFX Podcast and read more NFX content at - www.nfx.com/essays
James Currier (00:01):
Josh, you and I have known each other for over a decade. You've been one of Silicon Valley's top social media and communications experts for over 20 years. You were in the product management engineering side of Realnetworks, one of the first video communications tools up in Seattle, right? They acquired Philip Rosedale's video codec, then he went on to build Second Life. Then you were at LinkedIn at the beginning in product and engineering. Facebook product. Twitter product. And then most recently at Robinhood in product. And then, of course, you're an investor in TikTok. And in between, of course, you were a general partner at Greylock, right, for eight years, investing in social media and communications companies including Medium, Discord, Meerkat/Houseparty.
James Currier (00:43):
And so, we've been hanging out talking about viral growth and social media and social communications forever. And right now is a really interesting time. The recent growth in remote working tools and digital communications, the takeover of our world by social media companies that you've been part of building obviously. I thought it would be a great time to dig in to get your perspective on all things, social communications. What's the general arc of the timeline of social media and communications tools? Take us back to the beginning and bring us to the present. And maybe if you could drop in some of the frameworks you use to understand where things are today, it would be super helpful. Just hearing you talk about this stuff is always a pleasure.
Josh Elman (01:19):
Thanks, James, so much for having me. I always love talking to you. And we've shared a lot of this history of building all these things together. And I think it really comes back to the early internet, that sort of late '90s vibe where, in general, it was first about companies setting up web pages and setting up presences and sort of the early internet was a business internet. And then, people realized they could set things up for themselves.
Josh Elman (01:41):
I was actually interning at a company that was called Homestead. And we were starting to talk about what it was like to build a web page on the internet that represented you. And it was like, "Don't just build a homepage, build a Homestead." And this idea that people could have a presence online sort of made their identity now twofold. But it wasn't just the people that knew them in their community, but it was anybody on the internet could find out who you were, what you were thinking about. This then turned into blogging where a very small group of people figured out how to write every day and they would write these incredible pieces and we would all start to read them. And these few writers became somewhat famous in the small, nerdy internet world. And it was exciting to kind of think about what that meant and how you could start to get to know somebody just through an online presence without ever having met them in the real world.
Josh Elman (02:26):
AOL had chat rooms where a lot of people were hanging out. And that was sort of the early genesis of what became this idea of an internet presence related to your real world presence. But in the beginning, they were mostly different. Who you were in the AOL chat room might not be the same thing as who you were online. Go through the internet bust, blogging, and everything are still growing. AOL is already starting to fade. And a bunch of people said, "Wait a sec, what if the internet presence and the real world presence are the same?" So they can be, one, you can actually put your real self online. If you remember back then like a resume was something you only did when you were looking for a job. And Reid Hoffman had the idea that it was like, "What if your resume is a living, breathing thing that represents you online, that people can find you all the time." So it's not like you're searching for a job, they still have your resume online and that was sort of the genesis of LinkedIn and then it became that and your professional network.
Josh Elman (03:13):
And Monster which was the largest job site at the time, only had resumes of people who are looking for jobs. And all of a sudden LinkedIn had the online professional profile of every single person in the world now who's working, or not everybody, but almost. What was this idea? Friendster came out and said, "Hey, if you want to start dating somebody instead of the awkward trying to find people through your friends or trying to ask around because you're single, what if you just knew who your friends' friends were and you could just browse them?" And you say, "Hey, James, I think you have a friend who seems kind of neat. Maybe you could introduce me to her." It eases the burden for the person in the middle. Until all of a sudden not just do we have these online profiles that represent our real identity, but we actually now have we know who knows who and who's connected to who and we can start using those to get to people and realize our reach is much bigger than just us personally.
Josh Elman (04:02):
And these kind of two things, the real identity online, the ability to talk which the small group of bloggers sort of showed us it was possible. And this idea of our friend networks, our social graph, as it eventually got to be called, just became these foundational things that have now spawned trillion dollars worth of companies and billions of people now using new products every day.
Josh Elman (04:24):
So that was sort of the genesis that got us into that, 2003-2004 era. I joined LinkedIn right at the beginning of 2004 when it was 15 people and I remember we were like, "Someday, we'll get to a million users on LinkedIn." Now, it's hundreds and hundreds of millions. But it was this idea that this actually could work. I even dropped out of business school to join LinkedIn. And my professor was like, "Social networking will never make money." My friends came and did a class project since I was at LinkedIn. They got a C minus or C plus or something on the project because he just didn't ever believe it.
Josh Elman (04:55):
And so even in those early days, it was still a big question of like, "So we have people online, the real identities. So what, why does that matter?" And that's where the real change then especially as Facebook came out said, "Hey, we're going to map peoples' real identities. We're going to do this in these closed communities like colleges. People will then start to share updates." Status was a big thing. And this came again from instant messaging which have been very private in the past. We would only kind of you would chat with your friends in a very private way. And all of a sudden, you could sort of chat in a slightly more public way on Facebook.
Josh Elman (05:26):
There's this feature that people have forgotten now called "writing on walls" that was actually one of the most important early social communication features. I could go to your profile, James, and say, "Hey man, happy birthday," or "Hey, what's up," or, "Hey, I think I saw you walking across the quad." And other people could see it and start to comment on it as well. And that collectively is what made our sort of communication patterns start to change. And so, Facebook realized this and said, "Wait a second, everyone can talk to each other.
Josh Elman (05:55):
People are updating their status with real time updates almost of what they're doing. People are updating pictures, they're updating their relationship status, they turn that into the news feed." And then I really think that was the invention that sort of invented the next wave of the social internet, was the idea of a newsfeed. A place that we can post information and immediately at one glance see what everybody else is up to. And kind of everything we've really built in social since then has been based off of that core idea that you could post something around your identity and people kind of consume it in this sort of feed like form. And that really set us for the next 15 years.
Josh Elman (06:29):
Twitter took all the bloggers who were writing long form posts and gave them a place to do very short posts in between that became an incredible feed. And people used to call it microblogging but that was because it was the short form of blogging and then everybody would go back to their longer form blogging and say, "Well, on Twitter, we were all discussing this in short form. Now I'm going to write a long piece on it." And so it became sort of the in between place where all the conversation happened. And that became the more important place because it's where all the conversation happened for that community of bloggers which then became the community of media professionals, celebrities, people who just like to talk. And that's what really helped Twitter kind of still become this place where important conversation happens for the whole world. And at the same time, Facebook then just got everybody in the world building their profile, sharing things, et cetera.
Josh Elman (07:15):
So that takes us kind of through the end of the 2000s, 2008, '09 and '10. And all of a sudden our phones come out, and all sudden people are like, "Wait a sec, this posting, man, I still have to go to a website on a desktop computer to make updates. What if I could just do it from my phone." And we also had cameras on our phone. So all of a sudden the transformation goes from simple post you make when you're on a web browser, maybe a few times a day to conversations you can have all the time.
Josh Elman (07:41):
Twitter started this little SMS service but it became really popular once everybody was doing on their phones. Instagram came out and said, "Hey, your phone pictures kind of suck, let's make them look a little bit better." And all of a sudden you have this lens into the world because of what everybody's sharing on their phones. And then Facebook finally figuring out mobile, you have this transition from early 2010 to 2014 where the entire world moves on to mobile social networks.
Josh Elman (08:08):
There's a company called Path that got started in the meantime that was trying to be the first mobile social network that pioneered a lot of things we know like reactions and other stuff. You have Snapchat that said, "Hey, we're all sharing photos. What if they just disappear?" And as every high schooler was getting their very first phones, the idea of content that disappeared that wasn't permanently logged was so attractive to them just because it freed them up to change their identity and change things around. Facebook felt so permanent and Instagram felt so permanent that Snapchat took off in that generation.
Josh Elman (08:36):
We had this massive revolution and at the same time, obviously, mobile messaging became so inordinately popular. You have WhatsApp, you just have regular SMS and iMessage. And all of a sudden our ways to communicate now have gotten so much faster than emails and phone calls and all the things of the past. And really, I think we've been living this over since those early days. I'd call that 2010 and 2014 was sort of this heyday where we're all getting on Snapchat.
Josh Elman (09:01):
Instagram was becoming a thing and Facebook mobile was really finding its way. And then by the end of that period, they all started making money too. Facebook mobile really became a very large advertising center of the company. They figured out how to do ads in the newsfeed that weren't abysmal because remember, this whole lens of social media always had a will it ever make money question.
Josh Elman (09:21):
And so by that point, now we get to sort of this era where these companies are big. They're making a lot of money, things are really working, Snapchat is on its way, Twitter is on its way. And that sort of takes us up to 2014, 2015, which I think as of 2020, we're still kind of in a similar state of the world where Snapchat, Instagram, Twitter, obviously Facebook, things like WhatsApp, iMessage in the Western world are the dominant media forms. And then if you go to Asia, you can add LINE, KaKao, and then obviously WeChat.
James Currier (09:51):
Right. And it's amazing that the last six years hasn't seen that much change, right? I mean, there was so much change for 12 years and then there's been less change. How do you read that? Have our core behaviors evolved because of these tools or are the needs being fulfilled, the network effect is just too great? How do you see the opportunity for new products coming in?
Josh Elman (10:13):
So I think of couple things happened. One is, through this whole period. I mean, I went all the way back to the era of blogging and homepages to now. We've just been adding people to these networks. It started as there were probably hundreds of bloggers in the '90s to billions of people posting things on social media in the past hour. And so as part of this expansion, we kept expanding and getting new people on the platforms and there were just so many new opportunities to fill that even a lot of the old ones didn't really die.
Josh Elman (10:42):
I mean, MySpace got eclipsed by Facebook, that was very early on. Other things kind of never really got going but they just kept layering on. Snapchat fills the needs that Facebook didn't. Instagram filled the needs that Facebook didn't. Twitter was able to coexist. And you start to get to the thick where it's hard to find and fill new needs as all these platforms got big and bigger.
Josh Elman (11:02):
And there's eight or 12 apps I have on my phone that fill so many of my needs that you either have to now replace one or truly find something different that I would probably drop one for. And that gets much harder. And we do have network effects. When you post to Instagram, it's hard to get you post somewhere else. When you post a video to Facebook and your family comments on it or your friends do or people just call you and say, "I love the video you posted on Facebook. Why would you post that somewhere else?"
Josh Elman (11:29):
Even YouTube, which people think of as this massive platform, and it certainly is. It's much more of a media platform than it ever has really become a social platform because people don't just post content there for reactions. They might post it for storage but they need to share it elsewhere where their networks live. And so, you kind of have this interesting thing where our networks are so big and so dense, and our audience and where we want to get feedback from is so fixed already that it's hard to imagine somewhere new.
Josh Elman (11:55):
Now there have been a few things, Discord and TikTok in particular that have grown substantially over the past five years but those are late additions to this social media stack, I think, rather than signs of things to come.
James Currier (12:08):
And for the founders out there that all the NFX content is really for early stage founders. And a lot of people still come to us and say, "Look, I've got this social idea." They're excited about it and they're like, "This is why it's different and whatnot." And let's talk to them for a second. I mean, while we have these big hits like Facebook and LinkedIn and Zoom, we've literally had thousands of companies that didn't hit it big in the social space because social products are exciting, they're fun. You want to build them.
James Currier (12:34):
Boy, wouldn't it be great to have a big network effect business that you could run and have fun connecting people. It's sort of a dream, right? But so few of the companies that got started, even the ones that got 10, 40, 100 million users, never became big. They didn't go anywhere. When you were in Venture Capital, did you look at a hundred or a thousand of these media things? Give us a sense of the scale of how many people are still trying it? And then I love to talk about what you think early stage founders today should be looking for in this space given that a lot of the network effects are preventing new players from coming in against the incumbents.
Josh Elman (13:06):
No, I probably looked at 600 or 700 new companies in sort of the consumer and media worlds every year when I was in Venture Capital from 2012 through 2017 where my full years as a full time VC. And there were so many people doing interesting things but a lot of them fell derivative or a little gap or sort of not trying to play the new trends. So what I was really always looking for was sort of three things. One is, is somebody writing a new trend that I think if they get it right can actually own a new habit formation in the future that starts small but can snowball very large to become a new center of gravity for that new habit or behavior. And it really needs to be something new. It's like "I have a better way to share photos," just wasn't nearly as interesting as interesting.
Josh Elman (13:53):
"Hey, I think people are actually going to start recording a lot more videos and I think we have a way to do it that we might become the hub of short form videos," which was what actually led me to invest in Musical.ly when it was starting to work in 2015. But looking for a new habit or trend and I think right now in the world for the first time in sort of four years, I've been thinking about this, the remote work, remote connection, staying at home, being just as happy to get on a video call with friends might be enough set of new habits that new things can form that could not have before. So new habits is one.
Josh Elman (14:23):
The second is you think about stickiness and sort of what that really means is like, is this a habit that becomes central to somebody's life that they want to do it often and be top of mind for it? And so if you think about it like if I'm bored, right now what do you do? You might go to Facebook, you might go to other things. But being bored is you can always try to be something else to help people when they're bored.
Josh Elman (14:43):
We have to be really, really good at that. We see Quibi just launching, trying to say, "Hey, we're better content than everything else, use us." And it really depends on how good the content is there. If they'll be able to fulfill being bored and wanting entertainment better than anything else. So I look for like I want to get out more or I want to connect better with my friends where I could find more meaningful time with my friends like what are some of these needs that you can actually become central and solve in people's lives that other products don't today?
Josh Elman (15:09):
And when I'm looking at a company, usually for a little bit of traction where there's a small group of people who you're completely solving that for already, who swear by your product to say, "Every day I check into this product because it does this thing for me." And when I look for traction, I don't care about the big numbers per se, I care about the depth of the numbers for the people who've already converted to your product. Because if you have that, then you have a chance to take that deep meaningful connection with some people and expand that to a lot more.
Josh Elman (15:39):
And then the third thing I do look for is a growth hook. It's not that you've already figured out how to grow or exploit that but, "Hey, if this small group of people are using it, here's why they want more people to join them and here's how this will expand and this will grow and this will rise above the noise." Because any company that you want to grow from something small to be very big needs enough reasons why I would grow above the noise. Discord was one of the rare examples that I found in my Venture career that sort of keyed on all three of these.
Josh Elman (16:05):
It was riding the trend of gaming where people were starting to play a lot more games with each other. And the tools to connect their gaming were pretty terrible. You had to share IP addresses, people could blast the IP and sort of ruin the game for everybody. If you found out some of these IP addresses that were using for their Skype group chat or their Mumble server. Gaming was becoming much more of a core behavior. We've obviously now seen that with Fortnite and everything else but even in 2015, this was already becoming much more mainstream.
Josh Elman (16:32):
And the third was, it was really hard to get into those other gaming tools to share in chat. Discord did it in a web browser where I could just send you a link and we were voice chatting within about a minute and it was pretty amazing. And back then it was a total aha experience to have 10 people in a voice chat over just a text that was shared over a link, sorry, that was shared over SMS. And so we found that they had a couple hundred thousand daily users but they weren't just daily users. They were every day, hours a day, 10% of the people have the app open over 10 hours per day.
Josh Elman (17:02):
And so this was a really, really committed group of people. And then they had a really good growth hook like the gaming ecosystem was blowing up. Twitch streamers were talking about using Discord. Once you get one person, they would share it with all their friends who they gamed with. And all of a sudden it just kept growing virally and through the use of Twitch and other gaming influencers. And that really helped Discord become such a meaningful company, but I kind of bet on it because of those three things but it was rare to find all three of those in one product.
James Currier (17:29):
Sure. And Discord had been tried a couple times before. I mean, Mike Cassidy tried Xfire earlier, like 12 years earlier or something.
Josh Elman (17:36):
That's right. Yeah, I mean, look, there's very few ideas that have never been tried before. It's all about getting the right product at the right time with the right trend and wave and the right way for the viral growth to actually flow through current channels for something to really take off versus being stuck. Xfire was such a good product when it came out. The gaming was just nitchier enough and just more isolated and people didn't sort of proudly talk about themselves as a gamer back then. And so it always ended up feeling much nitchier than it could have.
James Currier (18:08):
Yeah, that's right. And I remember in 2015, you and I are sitting at what I think was my first and last NFL football game. And you said, "Hey, have you noticed that there haven't been any big social networks since Snapchat in 2011? And it's been four years since anything major happened in social, it might be over." And you didn't mean it was over but you're kind of saying, "Hey, look, we're in a new phase." And so what you're saying is going forward, what's going to be going forward is we need to find new habits, stickiness and growth hooks in order to really make an impact on the incumbents the way it is today.
James Currier (18:38):
And there's really been the shift. And so when you think about what's going forward for this area, you would mention work stuff, maybe there's this change to remote work, the shelter and place stuff, the various changing social behaviors we're going to have to have as a result of COVID. What do you see going forward? I mean, we've already got Zoom. Now we've got some new tools that are trying to lock down on like Tandem and other things. Where do you see the opportunity for early stage founders going forward?
Josh Elman (19:06):
Well, so I think what's really special about what's happening right now is that we're normalizing a lot of behaviors that have sort of been out there for a while, like Zoom has been around for a while and it's been an exceptional workplace video conferencing product. But it always felt second rate to get on a Zoom versus trying to have a meeting in person. It always felt like if somebody was working from home, they were sort of doing the secondary option and having to Zoom them into the meeting was a slight burden. Even if you are a company with multiple offices and you were doing video calls often and there was the person dialing in on the TV in the meeting room, it always felt like it wasn't quite as good as being in person.
Josh Elman (19:44):
And what I think the shelter in place and these surreal times are doing is making us go, "Wait a sec, what if this is the default? How do we then learn new norms and operate and make sure that this is as effective as possible?" I think people are going to learn to be a lot better writer so we'll get things written down that will make the communication a lot more effective. Writing is hard. Writing well is really hard. But I think it's worth spending the time in order to do it. And then the video calls and the communication we have, we learn how to make that higher fidelity and we have to replace not being in person because that's all we can do right now.
Josh Elman (20:15):
And then I think by normalizing this, the next time it's like, "Oh, you can't meet in person? Hey, let's just do a Zoom," becomes an affirmative action and something that we do and we almost prefer to do to save everybody the hassle of commuting or moving around and we only do that when it's really special. Now, if we're going to do that, the number of ways we need to connect, share content, share information, it's going to be transformative.
Josh Elman (20:36):
And there's so many different pieces of what we used to get in person, whether it was a hallway chat after a meeting or the greetings or sharing food or giving gifts, all of these things that we just do naturally in person, we have to figure out how to replicate and bring to our digital tools. I think people will be able to carve out lots of slices of these to become important parts of peoples' working lives.
Josh Elman (20:59):
And then I think on the social side, we're learning exactly the same thing. "Hey, normally we would want to go out to a concert and that would be like our fun event that we might do." Some people do that every week, some people do that monthly, and right now we can't do any of it for across humanity. So, doing the live stream concert is actually pretty good. But it's still not as good as seeing some other people in the crowd sharing it. Maybe sometimes it's an intimate gathering, maybe sometimes it's a matched one.
Josh Elman (21:25):
And there's so much more to invent for the tools that make that experience feel much better even than it does today. But I've personally been amazed watching some of the live streams, some of these artists from their homes. It's really brought me there. This Hamilton thing that was done on John Krasinski's Feel Good News was just amazing, and I just watched that yesterday like five times. And it kind of shows you the intimacy that can happen over digital if we start creating those experiences.
Josh Elman (21:49):
And I personally did poker night with some friends on Friday night. And I normally would never have jumped in the car to go up, people in San Francisco and Oakland and one person even joined from Hawaii where he lives, and I never would have gone out to poker night because it was a Friday night, it was late and I probably would have been tired. We started at like 8:30 and we're still going at 12:30 and I had so much fun.
Josh Elman (22:09):
We had Zoom on, a mediocre poker app on the phone, but it was really about the people. And I think now that we start to go, "Hey, that was actually more fun than I thought," it's going to become normal and we can build great products to help people do this more effectively. And I think there's going to be a huge world of opportunity to build the places and spaces that we go on evenings and in other times in order to do this.
James Currier (22:31):
Is this what you're talking about when you say that your media is becoming social? Is this an idea that you'd written about?
Josh Elman (22:38):
What I've been thinking about is social media has sort of drifted away from truly being social. With social media, we had gotten to a point where it actually I think is becoming more media where what James Currier shares on his Facebook, certainly on his Twitter or his LinkedIn is, James Currier, the media channel, not James Currier, the human that I love interacting with, and being with and going back and forth with. Podcasts I think are much closer to that.
Josh Elman (23:05):
But being social is really the art of being together, conversing, engaging, sharing experiences, sharing moments, these emotional connections that happen. And so, I worry that Facebook, Instagram, I mean with what's happening in the time of COVID, like Instagram is pretty boring. People aren't going out and doing all these cool things that they're showing off. They're living their lives and creating a media channel about yourself living your lives is less interesting. Instagram Live, Discord, phone calls, poker nights, those are real social experiences that bring back that feeling of connection.
Josh Elman (23:36):
Those feel much, much more powerful these days. And so, that's kind of what I mean is like we might be moving away from thinking that social networks are about social media and that the best social networks are the ones that bring us together. When you're talking to somebody, you have so much more adrenaline and endorphins and connections between you two and even if it's just a phone call, better if it's a video call and you're making eye contact, still highest bandwidth in person but that's so much more powerful than, "Cool, I saw your photo and I double tapped."
James Currier (24:05):
Right. And you had this recent piece in Medium where you're talking about the move toward experiences. This is what you mean. These experiences together about poker, these experiences together seeing the eyes, connecting as real human beings, these experiences as opposed to the Instagram experiences like, "Look, I'm jumping into this waterfall in Hawaii," sort of thing.
Josh Elman (24:23):
Yeah, that's right. Now, I'll put a little plug in for TikTok which is I think is somewhere in the middle. One of the things I've found really profound with TikTok is it's no longer just about snapping something that you're doing and sharing it, but it's actually about the art of creating. When we first invested in 2015, like one of my theories was that we had sort of with Instagram and Snapchat, we had made capturing a moment so effortless and so fast that you could sort of get anything you wanted and just share it out there and it might actually take longer for somebody to consume it than it took for you to make it. And so we are kind of tipping the balance where we're putting the burden on consumers as opposed to the creators to make something that's valuable for the people they care about.
Josh Elman (25:02):
With TikTok, we flipped that, again, which is to actually make a lip sync, to make a good dance video, to make a funny, humorous piece of content, like people actually spend hours learning steps and going to make them and we turn the world back into creators with our phones. And that's the other part of sort of social media that I do like which is it's not media that we're just capturing to show off what we're doing but it's media that we're creating with our heart and wanting to share and wanting to get feedback on.
Josh Elman (25:32):
I've long dreamed that the best social network out there could be one that shows how long you spent making a post. Or if you go on a trip and you make a collage. It says, "Hey Josh, James just spent, three days or like six hours over three days curating these pictures to share his album from this amazing trip he did, would you like to look at it?" And if it said that you would put that much time in, I would always look at it. Whereas, if I just see you slam up a hundred pictures, I'm like, "Thanks. I hope you had a great trip."
James Currier (26:01):
Right. So it brings to humanity, it brings the time we spend, the life's energies that we spend into the actual media form.
Josh Elman (26:08):
That's right. And I think TikTok is the beginning of that.
James Currier (26:11):
Got it. And we've got some ideas around things like a Reply Time and Jam session and Lunch Buddies. Tell us about those and then what kind of ideas are you thinking about these days?
Josh Elman (26:21):
Yeah, that was just a Medium blog. That was just a funny thing that I was thinking about the other night, a couple weeks ago, and I was talking to a friend and I was brainstorming all these ideas of how can we come together in this time of remote work and humanity. And I kind of went down two different paths. So, the idea of like Jam session, what I wrote was, wouldn't it be fun to give all these artists a tool where they can set up a private jam Session and charge $50 or $100 per person to join for an hour or two and have a very intimate live video chat experience where you can have one on one conversation and you can know who the other friends are who are sitting there and you can all kind of groove to the music together and have that same feeling as if you were in a social club.
Josh Elman (27:05):
We've actually now seen this. I wrote this before all this stuff was blowing up. We've now seen and I watched Chris Martin in his living room or John Legend or a bunch of Broadway stars singing from their bedrooms. And they've been doing this in a way that it's just so much more intimate but it's still like one to many. I feel like they're doing it for their fans but it hasn't sort of turned into a club and a business. And I do think there's a great room for someone to build products that can actually allow people to run these things.
Josh Elman (27:30):
We're seeing that in fitness too where a lot of fitness professionals are starting to run virtual classes and they need tools to run the class, charge money, know who's there, have a real interactive experiences while this is going on, and no great products yet fully solved that. Lunch Buddies was a similar silly idea that I had which was getting food right now is hard. Either you go into grocery stores and following very strict social distancing rules or you're trying to get delivery which is getting harder and harder as everybody is trying to get delivery and everything at capacity.
Josh Elman (28:02):
What if we could deliver food to a whole bunch of people and they could all sort of cook it together. And you could have sort of the cook at home, talk over lunch experience with a group of 10 people with even a professional chef. Now logistically that may actually be hard to do but I was just trying to think about how do you bring the humanity back into these moments of time?
Josh Elman (28:20):
And then with Reply Time, this was something that I had been thinking about a lot just for how do we change work and work patterns especially when we're all remote? When we're all working together, you might put out a question in a meeting and then certain people talk and dominate the meeting. You might send something out over email and then people who are just faster repliers always reply first. And we all know that the first person to reply often sets the tone for a conversation. If you put out a question or a thought and the first person is like, "That's terrible!"
Josh Elman (28:47):
Then the entire rest of the reply thread or the slack thread or the meeting conversation is unwinding why it's terrible and why there might be some merit in the idea. I've just been thinking about like in a workplace, you can usually get over this because you can grab somebody afterwards and say, "Hey, please don't respond that way." We can go to three other people privately and say, "Please give me your feedback." As we move to fully remote, it gets harder to have those sort of side conversations as meaningfully as in a sort of softly.
Josh Elman (29:13):
And so I've seen like what if we change the way that we go and ask for feedback? What if instead of first reply always wins and sets the tone for the thread, you put out an email and you say, "Everybody can reply to this email and that an hour or two later, we will share all the replies all at once." So everybody gets to write a thoughtful piece of feedback. And you sort of delay the power of firstness.
Josh Elman (29:35):
And especially when everybody's working at home, they have other distractions maybe at home, they are doing real work and they can't just be on threads to respond to everything. If you could put in some delay, I think you could really transform how we communicate at work. And I think this isn't just an idea for remote times. I think this would be useful in so many ways and in so many conversations. And we got to remove the power of being first to make sure that we hear from everybody. So these were just ideas I've been dancing around and are all about how do you go find those moments of humanity that we can bring back in and thoughtfulness and connection.
James Currier (30:15):
But what's notable, of course, is that you're talking about psychology, you're talking about emotions. We say that we're in the tech space but the fact is the way you're thinking about this is much more liberal arts, right? It's much more about being human and how we think and feel. And painting with those colors, painting with that language as a way to seek out new products, as a way to seek out new ideas that could impact people make the world better, build networks. A lot of times within the tech space you see with SaaS or with eCommerce, people are talking about just pure numbers.
James Currier (30:52):
These are spreadsheet type businesses, whereas, what you're talking about is very much a work of art around how it makes somebody feel or make somebody think or the order in which we communicate. I mean, this is not usual. This is an unusual sector within the tech space that you've now been encamped in now for 20 years. Do you find that a lot of people can go with you with these conversations so you find like a lot of the founders out there understand the depth of emotion and psychology and need to understand in order to find something that's valuable and new and important?
Josh Elman (31:28):
I mean, I very much think so. And in fact, I think the best founders, especially in this space, are great studies of humanity. They are great studies of people and they are really great psychologists. I used to say this maybe 10 or 12 years ago, like Google is a technology company and Facebook is a psychology company. If you think of the early tech of Facebook, it was really just a bunch of forms that people could fill in and how it communicated the forums to other people.
Josh Elman (31:55):
But it understood how to do that in a way that made humans feel better. And that's really the secret of almost everything that's been built then. Evan Spiegel when he was talking about the early days of Snapchat, he very much sounded like a psychologist too where he talked about why deletion by default changes the entire way that you perceive the person on the other side and have the human connection.
Josh Elman (32:18):
Ben Rubin, who's the founder of Houseparty and Meerkat, is talked so much about the power of live video and how being live and trying to create togetherness when we're not together has been so powerful. And Houseparty that hasn't changed that much in almost two years as a product has been blowing up in the time of COVID because so many of those architectures that Ben and Sima and the team built still live and thrive.
Josh Elman (32:48):
And that's what makes these products so special. Some people who come to technology are architects. They think about building cities, they think about planning. Some people are psychologists and they think about people. But I think these types of humanity need to be applied, technology is just the enabler. It's an ingredient in the sauce but it's no longer the meal.
James Currier (33:11):
Got it. The real product here is the psychological insight. I was an early angel investor in Meerkat and help Ben Rubin come over from Israel to the US and you and I invested in Meerkat. Let's just talk quickly. I think these are useful stories for the founders. Why do you think Meerkat didn't work? What do you think happened with the Houseparty evolution and now it's blowing up, now it's working, now it's growing really quickly? What's the story there?
Josh Elman (33:39):
So when I first invested in Meerkat, if I go back to my three pillars, I believe that there was a massive trend towards live video. I believe that our phones could now support it. I believe that the networks could now support it so you could turn the camera on anywhere. And if you could create the hub, the habit of live video, the shows that people made, the shows that people wanted to tune in to watch, you could actually build a unique independent network. And at the very earliest days, there's only a few weeks old when I invested. It was right before South by Southwest 2015. You were seeing just amazing adoption, the way that Ben had hooked into Twitter and into the Twitter graph and it was creating these connections.
Josh Elman (34:15):
And one of my favorite internet moments was the end of February in 2015 when a couple friends were at a restaurant and I was sitting on my couch at home and they were live streaming conversation in the restaurant. And a whole bunch of us were in the comment thread then people started dialing on their phones into the conversation. So we had other people dialing in to talk to the group and it was just this amazing social moment that we were creating on the fly even though not everybody was together. And it was so powerful and I was like, "This feels like the future."
James Currier (34:47):
This is on Meerkat?
Josh Elman (34:48):
This was all on Meerkat. This is, again, end of February of 2015, a couple weeks before South by and it was just blowing up and they've been out for two or three weeks at that point. And so we funded that and we invested a lot in the company and the technology and to keep growing. But a couple things that didn't quite happen is it's really hard to make good live video and to be a good host. And very small number of people can do it and those people tended to be more interesting if they were already "interesting" in the world. Create audience and then a very small group who could sort of become new live stars.
Josh Elman (35:22):
The second thing was it wasn't really a habit. We thought that there was more of a habit there but it's exhausting and intense to go live. And if you're only getting tens or hundreds of people to join your live video, that actually doesn't feel as fulfilling, if you're an important celebrity getting thousands or millions of views on something else that you create. So you'd rather spend time doing that to reach. And so, it became this thing where it was sort of a nice to have occasional thing to do to augment your social media.
Josh Elman (35:49):
And on a personal level, a bunch of people felt like it was too hard to keep going on. We get awkward people in the chat you didn't know and you weren't really having these meaningful conversations, interactions. And so, once Facebook and Twitter both came out with their great live products, it was sort of clear that Meerkat itself as an independent standalone entity wasn't going to work because so many people already had audience on Facebook or Twitter. They didn't feel they needed a new app and it wasn't enough to build a new network.
Josh Elman (36:16):
So Ben took those insights with Sima and they went and rebuilt Houseparty and said, "Wait a sec, what if it's just those private small interactions that really matter? Can we go live? Can we create a room? Can we create a space where we now want to come and hang out in more often?" But even Houseparty, while it had a couple moments of real blowing up and it's so wonderful to see what it's serving right now in the world, it never quite took off in the way that I hoped it would as a premium social network because getting on video chat for a long time still felt intense. It felt like an extra effort.
Josh Elman (36:49):
And a lot of us would do it sometimes and then go, "I don't want to do that all the time. I'd rather be there hang out with my friends or just go home and watch TV." And so Houseparty never quite became as normalized. I'm optimistic that after shelter-in-place, we'll look forward to that even more than we used to. But there was a period of time, we launched Houseparty in the middle of 2016. And there's a period between then and now that it wasn't ever as much of a thing to get on video with people other than a very occasional basis or maybe called Grandma.
Josh Elman (37:20):
And so, we got to find those right things you really believe in the world and have the right time for it to become normalized and exactly the right product. I mean, even Zoom was just a great business tool for a long time with what, 10 million meeting participants per day. And they said, "Look in March, we went from that to 200 million because all of a sudden it became normalized and the only thing you could do." And so, sometimes you wait long enough to get lucky with something happening in the world. Hopefully you don't get lucky at others tragedy like what's happening right now. But you kind of have to wait for your moment.
James Currier (37:54):
Got it. And Meerkat, one of my least favorite internet moments was we're South by and the whole Meerkat team was staying in my hotel room. Everyone's sleeping on the floor and whatnot. And it was a Friday night at 10:00 PM and we got a call from the Biz Dev folks at Twitter telling us that Dick Costolo had decided to turn off Meerkat's access to the API, which meant that the viral growth was going to stop because it was blowing up all day long. That ended up having some impact on us. Well, building these things on top of somebody else's network typically leads to getting turned off if you actually start to get some traction, so.
Josh Elman (38:33):
Yeah, that's that growth hook that I talked about earlier that it's so important to understand your growth and to find a durable, sustainable, repeatable channel. Because if you can't sustain it through your own engine and your own effort, it's easy to have the Google algorithm change, the Facebook algorithm change, a business development person or CEO decided to shut you down, that all of a sudden can take your growth away.
James Currier (39:00):
Were there some investments that you wanted to make at Greylock but didn't?
Josh Elman (39:05):
I got really close to the Snapchat team in the early days just really believing again that this deletion by default was going to be transformative. And we ended up not being able to pull it together at the last minute and that was quite a big bummer to me because they've gone on and just built an amazing company. I'm not sure that Snapchat is as big and it seizes much of opportunities I thought it could back then but it's still quite large and quite impressive and really special what they're doing in changing with lenses and cameras and other stuff.
Josh Elman (39:36):
I also look back at Zoom. And I met Eric in the very early days and he was actually trying to build more of a consumer product in the first days rather than a B2B one and just thought the technology they were building it was already so much smoother than anything else. And I wish we had invested. I think we thought video conferencing was such a sort of tried and tried and sort of worn path and it was going to be hard to build a new company. And I think still Eric as an example where we build better technology than everything else and it just works and then you can turn that into a really great company.
James Currier (40:12):
It's interesting that we had Skype and then we got Google Hangouts and they were sitting there with the networks. They were sitting there with the identities of people already. And then Zoom just came kind of out of nowhere and did basically the same thing, right? It wasn't like there was a big psychological insight. There was no big emotional insight. It was literally just technology.
Josh Elman (40:34):
Right.
James Currier (40:35):
And that was kind of hard to predict, I guess, is what you're saying. It's like even though you saw them, it wasn't that easy to predict that that was what's going to happen. I mean, clearly other investors who invested are saying, "Oh, I was so prescient and I could see exactly what was going to happen," but.
Josh Elman (40:48):
But I do think that it sort of does come back to the, can you actually build a 10x better product and truly deliver on that promise? And Zoom truly is 10x better than every other video technology. I mean Google, giant company, has been building video, meeting technology, for a long time, it's just never worked as well and smoothly and seamlessly and scalably at Zoom. So, I do think that there is a path to building the 10x better product. Discord was 10x better than the audio chat products that gamers were using before. But I think if you're going to do that, you really need to be technology first and writing a new technology wave that makes it work differently and truly spread differently.
Josh Elman (41:26):
Discord was able to leverage web RTS for audio streaming within the browser that made it easy for me to send you a link and be talking to you within a minute without you having to download anything. Zoom was able to use this cloud technology to make the video streaming so much more efficient and so much faster and get out to the edges much better than everything else. And so I do think that you can ride technology waves but you really have to be a great product, as well as a great technology.
James Currier (41:57):
And so if I'm an early stage founder, how do I know if I've got a 10x better product? I mean, I can logically say, "Oh, we've got this edge computing with the cloud now that's going to hopefully allow me to build a 10x better product with Zoom. Or this web RTS is kind of sucky right now but I anticipate it's going to get good over the next 12, 14 months. I can imagine why that would give me an advantage in 10x-ing the technology with product experience. But how do you know? What are those things you look for? Because investors have to also know that it's 10x better product in order to want to put the money and then take the bet when you're going into crowded marketplaces like Zoom was.
Josh Elman (42:33):
I mean, this is the hard part is that you as the founder and the founding team really have to believe in that premise that now is the time to build something better and that you're so frustrated with the old technology that you can go do it. The Zoom founders had the benefit of having built Webex for many, many years. And so they knew what would work and what didn't and what old architectures were and what new architectures could provide. And again, they started in the consumer space but then eventually probably when their non-competes ran out pivoted back into business. And it's a market that they knew well and that they could do it, just build a better product.
Josh Elman (43:08):
With Discord, they just were gamers and they built something that they wanted to use that was better than the stuff that they had before. And so that was a big shift for them. They were just like, "This is so much better. And look, we can do this." And when they started using it and shared it with their friends, all their friends were like, "This is amazing. Why would we ever go back?" So you just have to know that.
Josh Elman (43:29):
And one of the things I often ask founding teams is, do you use your product? How much do you love your product? Is this embodying your habits? And I think in the consumer world, that's foundational. And if you don't love your product and use it all the time and haven't shifted over completely for these reasons, it's going to be really hard for you to convince others to whatever growth tactics or other things you use.
James Currier (43:51):
Right. It's interesting. I mean, Discord is a little bit like just Unix IRC from the '90s, right?
Josh Elman (43:57):
Yep.
James Currier (43:58):
Just with emojis. And although bells and whistles we can put on it today but it's a behavior that we saw taking place right at the beginning of connectivity.
Josh Elman (44:06):
That's right. And really it's not so much, that's a new behavior is that it's done better and done so much more easily than any of the ones that came before. Whereas, Snapchat, Facebook, TikTok, Musical.ly, these all really brought new behaviors into the world. So both can work.
James Currier (44:24):
Right. And as you think about some pinnacle things you've seen in the last 12, 15 years around social media and social communications, I would love to hear any things that stand out that CEOs did that you thought were, "Wow, that's incredibly innovative, that really stands out, that was a big shift in how things could have gone because of what that founder did." Are there some things that you look back on like that?
Josh Elman (44:51):
I'm not sure that I ever think of the grand gesture are really standing out. The ones that stand out still to me the most were the ones who had their heads down building and found their way to a product that they loved and that they got other people around them to love. And so, the examples I keep coming back to you is when I first met Evan at Snapchat and he talked about how they started with this thing and then they kept showing it to high school kids and it wasn't quite working and they would make these changes.
Josh Elman (45:23):
And then they figured out that screenshotting freak people out so they added screenshot checking, and then all of a sudden everybody felt comfortable to use it. It was the story of how we talk to people, heard what their objections were, heard what their challenges were, went and build features that tried to solve those, gave it back to them and kept that tight narrative loop. And that sort of talking to customers, being your best customer, is really what made it work.
Josh Elman (45:47):
When I met the Musical.ly folks. The founder was actually in his late 30s and had a young child. And the majority of his early users were 13, 15, 16, 18, who were building Musical.ly but they had a WeChat group setup. And they were talking to them every day, asking them questions, sending them mockups, getting feedback, what would make you switch from Instagram to use this? What else do you want us to do? They would send them videos they were trying to make and say, "Hey, if you meet the capture tool, do this, it would be amazing. And they were just in such constant communication with their customers. That is what made it take off. And I think that is the real secret.
James Currier (46:30):
And really, it's the emotional tenor of that CEO to be able to maintain those conversations and to realize that the product you have now isn't quite working. You thought was right last week is still not right this week. And you need to keep being humble. You need to maintain this nice balance between believing in yourself and believing in your product and believing in the mission, but also being relentlessly skeptical that you've nailed it. And that's a difficult emotional place for people. There's a real facility that Eric and others have shown in balancing those two things. Did you find that personality type in these CEOs that are successful this way?
Josh Elman (47:08):
Yeah. I mean, I think that that's a real important secret, especially in social, your product is never good enough, you're never harboring enough of the trends. And you have to keep searching for what really moves people. And you have to keep building the features that do that and keep understanding the growth hooks and the reasons that somebody uses your product and spreads it. Because you're so dependent on people, using it meaningfully in their lives all the time on a repeat basis, that you really need to keep changing.
Josh Elman (47:38):
And people keep changing and so products have to change too. And I think that's a really important thing to understand. And as you go from your earliest adopters, to your later adopters, to the early majority, you also have to understand that it has to get simpler and it has to get dumbed-down and the onboarding process has to get a lot more robust in order to get more and more people on it and great products have to evolve that way as well.
James Currier (48:00):
And that's been one of the strengths of Facebook is this, it's like a shark constantly swimming forward, constantly experimenting and changing every feature on all of their products. And that mentality to constantly iterate has stayed with them all these years despite the fact that they're so big now. Seeing founders who don't have that approach, trying to get into social media, I just don't feel like there's a good personality fit there. I mean, you look at Vine. I mean, Vine was before TikTok, right?
Josh Elman (48:27):
Yes.
James Currier (48:28):
And yet, why didn't Vine go? Why wasn't Vine and TikTok too? Do you have a few reasons that you could point to there?
Josh Elman (48:34):
Yeah. One of the things that was unique about Musical.ly because it was really why it wasn't Vine, Musical.ly because Musical.ly got big then it got sold then it got even further invested in to make TikTok, which is the phenomena now. And we can even talk about what changed between Musical.ly and TikTok to make it a true phenomenon. But with Vine, they were six seconds long and a couple people got so good so early at making things really, really funny that it felt very hard for most people to create anything. And so Vine very quickly moved into a world where there were a few great creators and a lot of watchers and very few other creators or shares. And so, it became a media network more than anything.
Josh Elman (49:15):
Musical.ly became a lip synching product where it was actually pretty easy for anybody to make something that felt pretty good. Just like Instagram let you make a photo that felt pretty good in the earliest days of Instagram. With Musical.ly, you could put on a song you like and just sing into the camera and it looks more professional or more fun than any other video you might have made to record your life, and just the music soundtrack changes everything. There were 15-second samples and they quickly became, in partnership with all the music labels, so.
James Currier (49:45):
And so you're saying that the original Musical.ly features were instead of six seconds with Vine, it was 15 seconds. And they started the community to do lip synching which guided a certain social behavior within the community which turned out to be an easier thing for more creators to do better at which is what made the difference. So they narrowed down the types of content they wanted people to make around lip synching music. And by narrowing, they actually created a wider, hotter center to then launch from. Is that part of the story?
Josh Elman (50:16):
Yeah, but when you say narrowing, I would say actually just enabling people to make something that was better because it actually just had a soundtrack. And so a lot of people, the simplest thing you could do when you have a soundtrack is just do a lip sync. There were a lot of people that were also trying to make fun videos of life or other things, but when you have a good song underneath and even mediocre video content, it makes the whole experience much better.
Josh Elman (50:39):
Now, part of the reason that Musical.ly didn't get as big as TikTok is right now on its own without selling to ByteDance is because the music soundtracks in the early lip syncing use cases actually did become somewhat narrowing where most people were doing lip syncs and they wanted people to be doing comedy and dancing and funny things and educational things and all of these other types of content. But because soundtrack made people think about lip syncing, too many people actually lip synced, part of what the change to TikTok did.
Josh Elman (51:11):
They rebranded it, they did pay hundreds of millions of dollars. And then a lot of that was getting different influencers to create different types of content onto the TikTok, but they were able to show all these examples of things that weren't lip syncs. And they're actually algorithms, make sure that you don't see a lot of lip syncs videos right now. And so all of a sudden, they were able to change the mix of the content that people viewed and people were inspired by and people did what other people were doing to be a much broader mix. And that's what sort of helped spawn TikTok to be the massive phenomenon that it is today.
Josh Elman (51:43):
So elevating the early videos on Musical.ly with soundtrack will both help them get break out in a way that Vine didn't. But then also became just enough of a drag that it had to flip into this other model with TikTok. It was a massive reinvestment but it's going to pay off in spades.
James Currier (52:03):
Yeah. I mean, this is something I feel founders make a mistake on all the time. I mean, there were several social networks that were at 30, 50 million people before Facebook ever launched. Facebook comes in and says, "We're just doing colleges," really narrow market. But that ended up allowing them to use real identities first which then allowed them to springboard into owning the whole space. You see the same thing with Fiverr, the marketplace where they said everything for $5.
James Currier (52:29):
They really restricted it. They narrowed the focus until it was a white hot center around just things for $5. And now of course $5 or more. They've now expanded it over the last six, eight years. And then Musical.ly ended up doing the same thing saying, "No, let's do lip syncing instead of doing everything." And then that got them to get big enough so that they could then be a springboard to then go do everything. And it's really hard as a founder to decide to narrow your focus, to limit or guide your community or culture onto a specific thing.
James Currier (52:59):
Or look at Twitch, right. Twitch came out at Justin.tv. Justin.tv was everything. And then they found one narrow niche around the gaming, and then they actually went from broad to narrow. And then that narrowness is what gave them their real growth. And so, sometimes narrowness can really help. You just have to know when to broaden it. And I remember having a debate with Bill Gurley at a dinner. It was very loud and vociferous where he was claiming that Facebook should stay focused on colleges and do classifieds and use books and everything for colleges and that was their best way.
James Currier (53:31):
And my argument was like, "No, they need to flip out of colleges and go after everything but it's a matter of the timing of when they're going to do that." And so this narrow focus can be very, very helpful for companies at the beginning. And it's hard to do because you want to take the whole thing and there's a lot of Venture people who say, "Well, that's not exciting, why would I just want to do lip synching, that's stupid." "That's too small, why would I just want to do colleges, that's too small." But in the end, as you said, you've got to find that white hot center where you've got a few people who you're serving their needs 100% and then expand from there.
Josh Elman (53:59):
Absolutely. Absolutely. It's really finding that early group that doesn't just use your product but really uses it, depends on it, brings it into their lives in a super meaningful way. And once you have that, now you have a base that you have a chance to build from and replicate and keep expanding. We're seeing that in Discord right now which is the gamer use case that's so fundamental to get it as big as it is. But a lot of people now aren't gamers that are using Discord and the product has to change a little bit to serve those people while not alienating that core base of gamers as well. And if it really wants to help a lot more people connect and so that's always the trade-off is to build a giant gaming business or do you build something that's even bigger.
James Currier (54:43):
Yeah. Well, Josh, this has been a fantastic conversation as always. I love talking with you buddy. I love thinking about these things with you. It's great fun. Thank you.
Josh Elman (54:51):
Thanks. Thanks so much for having me. This was awesome.