There’s an interesting conversation thread going on at publishing2 regarding Facebook apps. This quote from Dave McClure, who I know from the days when my job search engine used to compete with his job search engine [and who I have the greatest respect for].
Interesting use of one data point to provide the proof for a wide-ranging empirical assertion.
i guess as a comparison, i can give you 90 other data points from students in the Facebook Apps class i’m teaching at Stanford this fall who would offer a contrary perspective. they have formed 30 teams of 3 to build apps and learn about using Facebook as an launchpad for startup entrepreneurship. i doubt any of them feel like they’re wasting their time, as you suggest.
I’d love to know the assumptions behind Dave’s course.
10 Million profiles have your app installed (See the graph on my recent blog entry)
Each of them gets 3 hits per day on average.
A CTR of 0.04% to your own website (based on FB’s ad CTR)
= 12,000 pageviews per day or
360,000 pageviews per month.
At $10 CPM (adsense is more like $3) you earn a grand total of:
$3600 per month with 10 Million Facebook users using your app.
Just for fun, increase that to 30 hits per day per profile and you’re still only earning $36,000 per month. Hardly a VC worthy investment.
But what really bugs me is the strategic implications of being a remora to the great white shark that is Facebook.
To me, building a business around a Facebook app feels more like being an eBayer both in terms of the hard ceiling on your businesses scale and the total reliance on the facilitator you’ve hitched yourself to.
What am I missing?