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When Facebook came around, wouldnt the addressable market have looked tiny? Basically US based college campuses. Or was Zuckerberg already envisioning opening

When Facebook came around, wouldnt the addressable market have looked tiny? Basically US based college campuses. Or was Zuckerberg already envisioning opening it up and spreading it far beyond college (and maybe high school) campuses?

skewart 11y ago
I don't know what the conversations around FB's early investment were like, or if expanding to a billion users was always part of the plan. My understanding is that very early on (i.e. the first six to nine months after it started) they wanted to be a kind of information hub for school campuses, with course listings and whatnot. Even if that's true and they pitched investors on a kind of online campus hub for students, they woukd still have been going after a pretty big market - they could sell software/functionality to schools and/or they could sell advertising (reaching young people is quite valuable for brands since young people tend to have less fixed opinions and loyalties as consumers). It may well be that investors thought it could grow to compete with MySpace. Others might have just thought being an essential part of every student's life would be a good enough outcome. (After all, there's plenty of VC in "ed tech" these days).
w1ntermute 11y ago
Peter Thiel said recently in an interview[0] that when he made his initial $500K investment in Facebook at a $5M valuation in September 2004, he thought it would be big on college campuses, but didn't anticipate how successful it would actually become. 0: https://www.youtube.com/watch?v=ryFB6mvy4uE#t=3m18s https://www.youtube.com/watch?v=ryFB6mvy4uE#t=3m18s
morgante 11y ago
The hub for all college students is actually a pretty big addressable market. It's certainly not as big as Facebook ended up being, but it's still big enough to interest VCs.
mahyarm 11y ago
Another thing about startups I've realized is you want to start with something small, but you could also see being expanded further. For example, snapchat started with LA teenagers. Facebook started with harvard, then ivy league colleges, etc. Uber was licenced black car services in SF only at first, etc.
- tedmiston 11y ago
  Always. And it's funny - the startups that try to start with "we're revolutionizing the world" end up over-promising. The ones like you mentioned actually do. Not only just in starting in one market, but focusing on one customer segment, or one feature, or one vertical.
- andyidsinga 11y ago
  pg discusses some of these things in his essay "do things that don't scale" http://paulgraham.com/ds.html http://paulgraham.com/ds.html This is really hard advice to take ..and in my limited experience also hard to convince investors of. But I think he's right ...and it amounts to getting in the game / get out of the building etc.
jsprogrammer 11y ago
Isn't Facebook's market their advertisers? Do regular users, nin-advertisers ever pay Facebook for anything?
joslin01 11y ago
He has said himself that while working on Facebook in the early days, he thought the whole world needed something like it. I believe the college-first approach was more of a tactic, but also a somewhat obvious one after his earlier expeditions with "who's hotter?" or whatever. If he had launched "Facebook for the world" from the start, user reaction would see it just like MySpace and ask themselves why? Going with colleges first gave it a feel of exclusivity allowing it to grow the way it did.

skewart 11y ago

I don't know what the conversations around FB's early investment were like, or if expanding to a billion users was always part of the plan. My understanding is that very early on (i.e. the first six to nine months after it started) they wanted to be a kind of information hub for school campuses, with course listings and whatnot. Even if that's true and they pitched investors on a kind of online campus hub for students, they woukd still have been going after a pretty big market - they could sell software/functionality to schools and/or they could sell advertising (reaching young people is quite valuable for brands since young people tend to have less fixed opinions and loyalties as consumers). It may well be that investors thought it could grow to compete with MySpace. Others might have just thought being an essential part of every student's life would be a good enough outcome. (After all, there's plenty of VC in "ed tech" these days).

w1ntermute 11y ago

Peter Thiel said recently in an interview[0] that when he made his initial $500K investment in Facebook at a $5M valuation in September 2004, he thought it would be big on college campuses, but didn't anticipate how successful it would actually become. 0: https://www.youtube.com/watch?v=ryFB6mvy4uE#t=3m18s https://www.youtube.com/watch?v=ryFB6mvy4uE#t=3m18s

morgante 11y ago

The hub for all college students is actually a pretty big addressable market. It's certainly not as big as Facebook ended up being, but it's still big enough to interest VCs.

mahyarm 11y ago

Another thing about startups I've realized is you want to start with something small, but you could also see being expanded further. For example, snapchat started with LA teenagers. Facebook started with harvard, then ivy league colleges, etc. Uber was licenced black car services in SF only at first, etc.

tedmiston 11y ago
Always. And it's funny - the startups that try to start with "we're revolutionizing the world" end up over-promising. The ones like you mentioned actually do. Not only just in starting in one market, but focusing on one customer segment, or one feature, or one vertical.
andyidsinga 11y ago
pg discusses some of these things in his essay "do things that don't scale" http://paulgraham.com/ds.html http://paulgraham.com/ds.html This is really hard advice to take ..and in my limited experience also hard to convince investors of. But I think he's right ...and it amounts to getting in the game / get out of the building etc.

jsprogrammer 11y ago

Isn't Facebook's market their advertisers? Do regular users, nin-advertisers ever pay Facebook for anything?

joslin01 11y ago

He has said himself that while working on Facebook in the early days, he thought the whole world needed something like it. I believe the college-first approach was more of a tactic, but also a somewhat obvious one after his earlier expeditions with "who's hotter?" or whatever. If he had launched "Facebook for the world" from the start, user reaction would see it just like MySpace and ask themselves why? Going with colleges first gave it a feel of exclusivity allowing it to grow the way it did.