LAUNCH001: The Path of Most Resistance

Elevator Pitch
A private photo-sharing and social networking site that limits you to only 50 friends in an effort to protect privacy and, perhaps, increase sharing in the safety of small numbers.

What’s Really Going On
Facebook started as a throttled social network that was limited to those with an .edu email address. Path.com has started out small and is slowly perfecting features, and it will eventually open up and go head-to-head with Facebook.

Few launches were so anticipated in 2010 as social network Path.com.

And for good reason: the site (launched mid-November) was founded by early Facebook engineer Dave Morin and Napster’s Shawn Fanning -- and it’s backed by an all-star list including legendary angel Ron Conway, Index Ventures (the “Sequoia Capital of Europe” as one entrepreneur referred to them), the hard-working, blue-collar First Round Capital and actor-turned-angel Ashton Kutcher.

Initial reception of Path has been harsh, with pundit Om Malik slaughtering the site in a post entitled “On A Path To Nowhere,” [ http://gigaom.com/2010/11/15/path/ ] and crazy-about-almost-everything tech critic Robert Scoble, on Quora, comparing the product to eating brussels sprouts [ http://jc.is/hVRoa2 ] before writing them a 1,000-word missive on what they need to fix. We’ll get into their complaints in the product review below.

Our assessment of Path.com is just the opposite. We find the site sophisticated, subtly powerful in its restraint and brimming with possibilities. Of course, we love brussels sprouts but understand they are an acquired taste.

What follows is our first attempt at covering a product release. We know this is not the perfect review, and we’ll certainly be building the LAUNCH model based on your feedback. We’re giving number grades in some of the sections below, and there’s a class survey for you to fill out at the end.

Branding: 10/10
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When you own an amazing domain name [ http://jc.is/fbloeK ] like Path.com -- one that’s punchy, evocative and easy to spell -- you’re starting the marathon in the 20th mile. Everyone knows what a path is, and the simple word conjures up romantic moments and life-changing decisions, giving potential users an immediate connection to the brand. Add to that a stunning logo, and Path’s branding is perfect.

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Design/UX: 9/10
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Building off the name, the site design of Path is beyond simple -- five buttons and only one data type to share: photos. Given that you can only use Path on the iPhonetoday, and that every post only allows photos, the design is perfectly clean, stunning and unique -- just like iPhone photos! When you post a new image on Path, your feed shows a cropped thumbnail. On clickthrough, it displays the full photo and the icons of friends who have looked at those images. It’s a clever feature that takes a lot of computing power. Imagine if you were to do this on Facebook’s billions of photos looked at by hundreds of millions of users. You’re talking about billions, even trillions, of events a day -- and databases generally don’t work well when you write to them that often. Of course, non-SQL databases like Cassandra are made for these sorts of efforts. Path is so simple that its instruction guide would be one page that even your mom would not need to read.

Uniqueness: 6/10
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On first glance, Path is just another micro-publishing platform -- a Twitter/Posterous/tumblr for photos. But it’s more than that -- because it’s less. Members of the Path community can only have 50 friends. No more. And therein lies the site’s strength: where Facebook is built on transparency and an overwhelming sense of community, Path builds a boundary for its users. In theory, this forces increasing interaction and eliminates the “public” option. Direct connection is at the heart of the site’s appeal. This alone is a huge declaration of intent in Path’s inevitable war with Facebook. While Zuckerberg started with private as default and then sneakily tricked users into becoming public (in order to compete with Twitter), Path has taken the public option off the table (so to speak). You can’t even make an individual photo public! Every photo you take must be described in terms of three vectors: people, places or things. The title of “the moment” (a.k.a. photo) on your “path” (a.k.a feed) is then generated for you using these words. For example, “Robert Scoble and Bill Gates, Chinese Food in San Francisco.” Said another way, you don’t get to title your photos -- the objects, location and people in it do. The obvious conclusion to this effort is a mind-blowing database of every “thing” in the world and who has interacted with it and when. Ironically, given Path’s private-only stance, that database, even if completed, would not be accessible by anyone but the db admins at Path! These decisions are what make Path such an enigma.

What’s Missing?
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1. Finding your friends. They don’t show up in Path, nor is there a Facebook or Twitter login. Inviting a friend consists of selecting them from your iPhone address book or typing in their email address. We can’t tell if this is because they ran out of time trying to launch at the Web 2.0 conference, or if they are throttling add-everyone users to maintain the integrity of the social graph.
2. Blackberry, Windows 7 or Android clients are missing, but Path’s Twitter feed suggests they won’t be for long.
3. There are no comments, no favorites and no ability to add a link to posts.

Business Model
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Like all social networks, the business model is to reach scale and sell lots of advertising at extremely low CPMs. If Facebook has $2 billion in annual revenues, and say 50 trillion yearly page views, they are making an RPM (revenue per thousand pages) of, ummm, two cents. Obviously, Facebook is grossly under-monetizing, which makes Zuckerberg a fabulously dangerous competitor. You can’t destroy revenue they aren’t collecting! Like all social networks, Path will have a horrible time monetizing in the short and mid-term. Only when they have reached significant scale will they be able to make a buck. Luckily for social networks, venture capitalists will trade a hockey-stick usage curve for steady growing revenue any day. The only other way to potentially monetize social networks is to sell user data, and since Zuckerberg told Lesley Stahl that Facebook [ http://jc.is/hKN2kj ] doesn’t do that, it must be true.

Odds
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If investors (correctly) see Path as a viable mobile SNS, it should be able to tap a steady stream of capital. After all, in Japan, social networking is largely a mobile activity, with Gree [http://gree.jp/] and Mixi [http://mixi.jp/] having spent years developing the space. Facebook’s lifeblood is photo sharing (some say over one-third of the activity is photos!), and better photo-sharing services like Instagram and Path would be the easy way to start a competitive SNS. Smartphone adoption is the fastest growing technology trend ever. If you haven’t seen the charts, click here [ http://jc.is/fxo993 ] for Mary Meeker’s excellent annual state of the digital union.

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In fact, Yahoo not being able to turn Flickr (OR Yahoo Mail OR Yahoo IM) into a social network is mind-blowing. Flickr is a sleeping social network giant. If you switch the default view into a feed of your and your friends’ photos, it would instantly boom.

The odds of any venture-backed company building an at-scale social network, defined as over 10M users, are 250 to 1. Path’s are significantly greater since their founders have been part of the largest social network ever built.

Here is the latest line from Launch HQ:
Bought by Twitter: 350 to 1
Bought by Facebook: 200 to 1
Bought by Google: 100 to 1
Bought by Microsoft: 50 to 1
Bought by Yahoo: 25 to 1
Builds to scale (10M+ users): 15 to 1
Lifts, or raises, the 50-user cap: 1 to 1 (even money)

Fast Facts
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* Company Tagline: “the personal network”
* Hater Tagline: “the antisocial network”
* Website: http://www.path.com
* Blog: http://blog.path.com
* Twitter: http://www.twitter.com/path
* (Founder) Dave Morin on Twitter: http://www.twitter.com/davemorin

Survey Questions
============
a) What do you think of Path.com? Meh, brilliant, promising or pretentious?
b) Who is Path.com really competing with: Instagram, Tumblr or Facebook?
c) Should Path.com increase, remove or keep the 50-friend limit?
d) Should Path.com provide a public option?
e) Should Path.com add comments?
f) Five years from now Path.com will be
• A viable Facebook competitor
• Largely forgotten
• A success with at least 10M members
• Something completely different than it is today
g) Which startup company would you like us to profile next?

Take the survey here: http://www.surveymonkey.com/s/LAUNCH-Path-survey

Epilogue: The Slow Product Movement
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We pinged Path.com founder Dave Morin to ask him two questions. The unedited responses are below.

Thanks for this Jason, I will answer inline:

1. What is your product development strategy with Path? I ask because the pundits seem confused by whether you are slowly iterating and rushed the product out the door for the Web 2.0 conference, or if you're simply a minimalist. Do tell!

At Path we believe in what I call building a "slow company." Similar to the slow food movement, we believe that more Internet and technology companies should look at building long-term, sustainable, organic growth companies. Not enough entrepreneurs are focused on the long term right now. And by long term I mean, the building of the next generation of great, high quality brands. At Path we look to long term, high quality, brands like Apple, Audi, Leica, Sony, Muji, Kodak, and Porsche for inspiration.

Our approach to our 1.0 was very intentional. We wanted to provide the most simple version 1.0 of our product that we could. We believe that intentional design is everything in a product, and that the details make a product. In building a product for a more personal network we knew that we had to start in a very minimal state to begin with. As I always say, the devil is in the defaults. We very much believe that where you start (with data structures and utility) with a product is often where you end up in the long term. We wanted to start in the most simple place we could, and layer on deep value for the user over time in an iterative fashion.

2. What is your personal motivation and belief system behind the “only private” feeds and 50-person limit? Those two features seem the most defining and deliberate -- am I correct in that statement?

At the highest level, our mission at Path, and my personal motivation, is to help people live happier lives. We also want to build a network which maintains it's quality over time. In order to do this we've been studying and collaborating with two scientists which have provided us with much inspiration. The design decisions are very intentional and deliberate.

First, we've been collaborating with Professor Robin Dunbar from Oxford. His research shows that the human neo-cortex can only manage, at a maximum, 150 social relationships at any given time. If you dive deeper into his research it shows that trust in human personal relationships moves in about factors of 3's. You generally have about 5 super close friends at any time. This is usually the people you would consider to be your BFFs or your "inner circle". Next, people tend to have around 15 to 20 people in their lives whom they regularly hang out with. These people are the people you would be happy to spend a weekend with, or go on vacation with, or do dinner with regularly. The next ring, however, is the most important. A person's personal network tends to extend to about 50 people. This is the number of people which we generally maintain personal, trusted, connections with. Some of these people already have established trust, and some of them are beginning to establish trust. But, Dunbar's research finds that this number is fairly stable. In our quest to create a high quality network, we have been enjoying collaborating with Professor Dunbar to figure out what the exact properties of the network should be. We began at 50 as the place to begin this grand experiment, and will likely evolve the model to map as closely to how the human brain works over time. In terms of how our sharing model works based on this research, we wanted to build a model which mapped more carefully to the way that the real world works. Building new relationships, and maintaining current ones, require the sharing of information. Generally, I will share information with you, you will share information with me, and the exchange works like that. We decided to choose an asymmetric sharing model which is based more on "sharing" rather than subscription. We like to think of it as a giving network. The only action you can take towards someone you'd like to connect with on Path is to share your life. We think this is a powerful, and intimate, action which requires trust and understanding between people. We want our product to map to the way relationships tend to work, and for it to be more fluid. The model is just at 1.0 right now, and we intend to really work hard to make this work. Secondly, we were very inspired by Daniel Kahneman's Nobel prize winning work in behavioral economics. Which, some people call happiness economics. Kahneman talks about how humans have two selves: an experiencing self and a remembering self. The experiencing self tends to ask the question of: how do you feel in your life? Where the remembering self tends to ask the question of: how do you feel about your life? At Path we consider this research, and way of thinking, paramount in how we think about the design of our product. We are trying to design Path intentionally in such a way that it helps both selves be happy. Our Today view enables you to share everyday moments with your close friends and helps the experiencing self understand how things are going in your life. Our choices around tagging and context allow you to better build out the moments of your life into tangible memories in your Path. Over time we will continue to add value to your memories in unique ways which you may not expect, but will be optimized to help your remembering self (and your close friend's remembering selves) understand how to feel about your life. These are just a few of the ways we think about things. As far as my personal product philosophy goes, my core product values revolve around design, authenticity, simplicity, quality, and joy. I hope that they are helpful for your letter. Dave Dunbar’s publications at Oxford: http://jc.is/dX3wMX Kahneman’s autobiography: http://jc.is/hiRy5O ------------------------ About LAUNCH LAUNCH is a media company that covers and celebrates new products, services and technologies in two ways: an email newsletter and an in-person conference. LAUNCH was founded by serial entrepreneur, former journalist and blogger and now angel investor Jason McCabe Calacanis. http://www.launch.is About the LAUNCH Newsletter Our newsletter is compiled in a collaborative fashion by a half dozen writers, researchers and industry pundits we invite to our Google Docs from time-to-time. Our conflicts are many (i.e., Jason’s angel investments: [http://www.crunchbase.com/person/jason-calacanis ] ), but our insights are always well-researched, honest and to the point. http://www.launch.is/newsletter About the LAUNCH Conference The LAUNCH conference brings together over a thousand startups, venture capitalists, angel investors, media, bloggers, pundits, recruiters, lawyers and fanboys to celebrate and commune around the launching of 40 new companies and/or products. The conference is designed to be the most accessible to startups, at only $400 ($360 if you use the code ilivetolaunch). There are two competitions at the conference: 1.0 for new companies and 2.0 for existing companies launching new versions and/or pivoting into new markets. So, if your company is already launched, you can still participate. http://www.launch.is/conference To advertise in LAUNCH: sales@launch.is LAUNCH Coda #17: Winning is altruism.