Are You Building Your Product For Google Or Facebook?

Nabeel Hyatt 4x3

Nabeel Hyatt is the Founder and CEO of Conduit Labs. This post was originally published on Nabeel’s blog, brinking. It is republished here with permission.

Since the beginning of the web, search engines have represented the centre point of a users experience with the Internet. I think (and I’m not the only one) that this long-standing truism may no longer hold. This hasn’t happened since the web overtook AOL, Compuserve, and others, so of course there are many sceptics. But in December Facebook had more traffic than all the Google properties combined. And today the Chronicle wrote about how mainstream news sites are seeing, for the first time, more traffic coming from Facebook than Google.

Being “downstream” of Google has never been contentious – you build a web page and you need to show up on search engines because that’s how people find things on the Internet! Being “downstream” of Facebook has always carried a lot more baggage.
With Facebook, you hear comments that you would never hear about the general web. Things like, “this category is really just for late stage companies,” or the concept of “social network fatigue.” Like there is “web fatigue,” that’s ridiculous.

Of course, the tricks of the trade that worked two years ago have changed, but that is pretty much true everywhere. This was really brought home when a fellow entrepreneur mentioned the other day that Google makes it near impossible for startups to enter a category in SEO. Due to the way Google values “link-ageing” and massive sites linking to each other, incumbents are at a massive advantage. In addition, thanks to the mass number of keyword arbitragers, Adwords is no longer the low-cost targeted channel it used to be.

So just for fun, let’s look at what is actually different when you build with Google (ie search) versus Facebook (ie social networks) in mind.

If you’re building your product for Google:

  • Customer Acquisition – Google Adwords, a highly competitive market largely saturated
  • Activation (getting a unique user) – Google accounts or opensocial, both of which have done relatively poorly in our tests.
  • Viral/Organic – Search engine optimization, an opaque and constantly changing “primary” channel for potential organic customer growth. Difficult but possible.
  • Retention – Nothing particular to Google. Search engine optimization?
  • Revenue – Optionally opt for Google checkout, which has been a mediocre product so far.

If you’re building your product for Facebook:

  • Acquisition – Facebook ads, a less expensive, less competitive market with better targeting by demographics. Although for strict “intent” like ecommerce purchasing it can under-perform. For games like ours it’s a no brainer.
  • Activation – Facebook connect or authorization flow of fb apps. We saw activation jump by 4x via typical email/password.
  • Viral/Organic – Feed & invite optimization (viral, viral, viral!), an opaque and constantly changing “primary” channel for acquisition. Very much analogous to SEO, but with more control in the hands of product builders. Although more difficult than two years ago, a much better market to be in than SEO.
  • Retention – Internal bookmarking, games/app dashboard. Thin but they’ve got something.
  • Revenue – Optionally opt for Facebook payments. Early, but we’ve seen good results in their alpha and their team has been very responsive.

Here’s the way I see it. Lots of tactics work no matter which you are building for. You can ask for an email address on Facebook or the web. You can charge with PayPal or credit cards, etc. It still boils down to whether you are building a great product people want, and that they want to pay for.

My experience in a previous startup selling consumer products at retail has made me think of any “platform” as ostensibly a channel for users. The caveat to all of this is to be careful about how reliant your are on any single channel, whether Facebook or Walmart. I’ve heard of a single Google recalibration to page-rank knocking traffic by 30% or more, and I’ve heard similar about Facebook.

But that doesn’t always mean the most open channel wins, it is often the opposite. The iPhone is much more strict than Android, yet you would likely still pick the iPhone because of the growth of that platform. And the iPhone platform is much more onerous than Facebook in most regards. If you are focusing on “growth” (and who isn’t) – Facebook can’t be beat in the current ecosystem.

Nabeel Hyatt is the Founder and CEO of Conduit Labs. Check out his blog for more startup advice.

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