Mashable reported on SecondMarket’s users’ picks for the top ten private companies (list below). SecondMarket allows investors to buy and sell shares of privately held companies.
Interesting analysis: take 2 of the 10 out of the list – SecondMarket itself (no surprise); and Bloom (an energy company) – and you get 8 businesses built on connecting with others - via collaborative filtering or through direct connections - over: music (Pandora), games (Zynga), classifieds (Craigslist), local ratings (Yelp), everthing (Facebook), anything (Twitter), careers (LinkedIn) etc. These companies don’t *make* anything.
Is there a new economy in helping us connect with each other, or is this a fad?
I think about when I lived in Hungary in the early 90′s, without even a landline or cell phone (and of course no internet), and my buddy Willy would knock on my ground floor window when he wanted to go out and play 1:1 Rollerblade hockey next to the pub. [We'd play to eleven points, he'd win, we'd have a beer, play to eleven, he'd win, etc. I didn't start winning until the fifth beer. But that's another story.]
Do we really have time for all the ”connecting” that is flooding the market today? Maybe the answer is “yes, if it makes our lives more efficient by helping us conduct necessary activities more efficiently: finding music, buying a couch, sending an invite.” These sites have helped me this way.
Or, is the answer: No, all these things just eat into our leisure time, which: (1) is finite and can only support so much fiddling around; and (2) is prone to responding to fads (e.g. rollerskating).
1. Facebook
2. LinkedIn.
3. Twitter
4. Zynga
5. Craigslist
6. Groupon
7. Yelp
8. SecondMarket
9. Pandora
10. Bloom Energy
Popularity: 1% [?]
And the hardest part of rollerblading……telling your parents you are gay!!
Good to see you in the blogging world. I remember the old GO TOAST days with Dave Carlson and yourself well.
Hope you are well and I saw on another post soon to be 3 boys congrats on the newbie.
Harrison, my apologies I’m a bit late to responding to this. I was on the road, although with connectivity these days that is no longer the excuse it once was.
This reminds me of a conversation I had with the CFO of eBay while I was still working on Wall Street covering new media stocks. The reason that these companies may trade well in the private market is something that the CFO of eBay said. (For the life of me, I can’t remember his name…Craig, maybe.) He said that compared to media companies, eBay does not need as large of a sales & marketing force as, say, Yahoo does.
From a business investment standpoint, this is the crux of why crowdsourcing models work well. Theoretically, their sales & marketing costs should be less since the return on word of mouth marketing is so much better than traditional marketing. That said, you never know which one has figured out to do word-of-mouth marketing until they’ve done it. But I digress…
Nice post!