How Facebook Applications Will Expose the Gold Mines Beneath Micro Networks

Facebook applications

Ever since May 24, 2007, the blogosphere has been abuzz with news about Facebook opening its platform to developers. The buzz is completely justified, though, because unlike other APIs, Facebook’s allows developers to take advantage of an existing base of over 30 million active users.

Anyone who understands the power of networking will immediately recognize the fact that being able to offer an indispensable service to the Facebook community is a juicy proposition. It’s no secret that if you can hook half a million users on an application that they use repeatedly, then you’ve got yourself an extremely valuable commodity.

But what really defines a valuable Facebook application?

Is it sheer number of users? If that’s true, then an application like Zombies, which has 2.6+ million users, is extremely valuable. Upon further inspection, though, Zombies really offers no real benefit or service to its users—people simply “bite” their friends, thus turning them into zombies.

My internal “value meter” has never been so uninspired.

Finding the Real Value on Facebook

It’s clear that one metric alone is not going to define a successful application on Facebook, but I think there are a few tried and true indicators that are just as valid on Facebook as they are on the rest of the Web.

1. Pageviews
Are people really using your application, or is it just sitting on their profiles, collecting dust? If you’re not driving people around through different pages and actions, then are you really doing anything?
2. Users
Sure, you might generate 5 pageviews per user, and that means you’ve got an interactive application, which is great! But what if you only have 124 users? The power behind Facebook lies in the way you can create cross-sections of existing networks, and if you’re not reaching enough users, then you’re not really leveraging this power in a valuable way.
3. Information

Human-to-human networks are living ecosystems, and like any living thing, they leave behind tangible evidence of their existence. On Facebook, these networks produce data – information about their members – that can be harvested, dissected, analyzed, and used in various ingenious (and hopefully honest) ways.

Flixster is an example of an application that is creating a ton of value in the information space, and it’s doing so through the collection of user-generated movie reviews. Since launching their app in June, Flixster has gotten users to submit hundreds of thousands of reviews, and believe me—they’re loving every minute of it.

Leveraging Network Hierarchies to Find Success

The real key to unlocking the economic “sweet spot” in the Facebook app community is to fully understand the network hierarchies that exist on Facebook. To understand these, though, you don’t have to know anything about Facebook—you simply have to know a little bit about human nature!

Each one of us exists in an all-inclusive network that consists of everyone with whom we interact. In addition, we are members of micro-networks that are more distinctly tied to one another. For instance, one of my micro-networks is a group of friends on my softball team.

These micro networks literally define who you are, what you do, and the general experience that is your life.

They are also the “sweet spot” for finding value in a Facebook application.

Facebook is the all-inclusive network, and now Facebook applications are serving the highly-targeted, highly-relevant, and highly-personal world of micro networks.

Now what is Facebook worth?

When Facebook reportedly turned down a $1 billion acquisition offer last year, I thought they were crazy for not taking it. After all, at the time, it was just another networking tool. Granted, it was a damn good one, but there wasn’t anything truly remarkable to distinguish it from the competition.

Now, however, by open-sourcing its platform, Facebook has uncovered a completely new networking vertical that is infinitely extensible and closely tied to the very fabric of basic human interaction. Suddenly, 12-digit valuations don’t seem so ridiculous.

As an application developer myself, I can see how future generations will be accustomed to having all of their micro networks not only tied to one another, but also available in the same place. At this point, it looks like Facebook is going to be that place, but on the Internet, suppositions like that are always subject to change :)

My Application – Pro Pigskin Pick’em

For 9 years, I’ve enjoyed the NFL season by picking games against the spread and competing for prizes in season-long pools. Somewhere along the way, pool management moved from Microsoft Excel to the Web, which is the perfect medium for running a game like this.

Pick’em-style games can be found all over the place, from CBS to Yahoo! to smaller independent outlets. Problem is, these games rarely integrate with people’s existing online traffic patterns or contacts. As a result, pool managers have trouble growing their pools organically, most notably because they are isolated in protected corners of the Web.

When I looked at this problem, I realized that a Facebook application would be the perfect opportunity to synthesize a popular online game with the benefits of being able to leverage people’s existing networks. With that in mind, I created Pro Pigskin Pick’em, a very simple, very cool way of creating, managing, and tracking NFL pools on the Facebook platform.

Now, I could go on and on about why I think Pro Pigskin Pick’em is the best platform out there for running Pick’em pools, but when all is said and done, that’s not what’s really going to make it stand out from the crowd.

The most remarkable thing about the application is the fact that Facebook users will be able to slice and dice their existing micro networks to compete against one another in a variety of different ways—nationally, against their friends, and within whatever pools they’re members of.

And of course, they’ll never have to leave the Facebook platform in order to enjoy a game that they would otherwise be playing somewhere else on the Web (or not playing at all), which I see as a huge benefit. It’s kinda like the Wal-Mart effect:

Would you rather buy all your stuff in one place, or would you rather make a bunch of separate trips to specialized retailers?

This season, only make one trip—head on over to Pro Pigskin Pick’em (edit: link removed) and check it out!