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Turner Novak

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2020-07-14
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2020-07-14
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  1. “I think the pricing on those ads is still kind of figuring out what the equilibrium will be. It will probably increase a little bit over time. But really, those are probably the best ads for mobile. And so Instagram obviously saw the rise of Snapchat how good it was doing. And they said, oh, let's add this product too. Let's stick it at the top of our feed. Let's have a feed. The app opens to the feed and we'll stick these little circles up at the top of the feed that you can tap into and get into this full screen product. I mean, in theory and evidently what's happened, it's been very also very successful for them. But when you really think about it, why did they still have the feed? Why do you have to tap to get into this stories experience? I think what TikTok ultimately did, there were a lot of competitors over the last 10 years that were doing similar products, similar sort of full screen videos. I think what TikTok really did was they designed”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Was a function of you're sending messages to your friends, you're going to send it to 10 people, why not just throw it on your story? So you just click one more button and it just sends it to this feed of full screen videos that play back and forth. It's like a progression of all the different messages eventually, not messages, actually things that were posted to the story purposely. And that was obviously full screen mobile video, probably one of the better advertising products you can have on mobile. slowly got away from the feed, which when you kind of think about how the feed works, you're scrolling your feed, you see an ad. On Facebook, there's a lot of white space. There's the ability to comment and like, which blocks out part of the video, there's person's name. So when you really think about how advertising products work on mobile, the Facebook feed, the Instagram feed, it's probably only taking up about 30 or 40% of your screen versus in stories, it's a full screen ad. So theoretically, it's going to be more effective.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Instagram did 20 billion in revenue in 2019 that the NA bought it for a billion eight years ago. So pretty good acquisition. And so I think when you've kind of seen Snapchat emerge, it was really mobile first, probably one of the first mobile first social networks to hit scale. Just the behavior on it was different. It kind of unlocked really the ability to quickly communicate people with your phone. You could send a text to someone. You could say, hey, Patrick, I'm hanging at the beach. I'm with my friends. My dog's here. We're having some sandwiches and just cracked open a beer. We're on the beach. Or you could just take a picture and send the same thing in two seconds. So it reduced the friction to communicate with your friends. And Snapshot did a lot around that general idea to build like a really big business. But that was kind of the core use case. It was way different than what you do on Facebook. And then obviously stories.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Think the best way to explain what happened with TikTok is to first look at some of the existing products. So Facebook was founded and sort of grew up on desktop. And originally it was profiles that you could post to. And eventually they were tied together with the news feed, which was probably one of the greatest products of all time. I think Facebook did 70 something billion in revenue on a trailing 12-month period at extremely high margins. So one of the best products of all time. The whole product is built around desktop and even Instagram, which was kind of its mobile play, which was a great acquisition. The product was designed for really the feed was designed around desktop. It's the same sort of idea. And for Facebook, like I said, it was a great acquisition. I read somewhere that it took them six weeks to basically copy and paste and tweak the code from the Facebook news feed into the Instagram news feed.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “And specifically, I think to be really successful is a behavior that some of the other existing social networks will have a really hard time trying to copy or layer into their network just because of the DNA of the product makes it of the existing incumbent product, just makes it too hard to copy what you've done.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Of the big things is helping. Or helping the average person express themselves. Connect with someone. I think that's the really social networks, digital social networks. They're replacing our offline conversations and habits. You can figure out a way to make it easier for someone to have a digital conversation or digital interaction that they would have had in person. I think there's an opportunity to build a business there. And there's a lot of people trying a lot of different things to your point of how often do I see them. I think the flavor of the day lately has been TikTok, the next TikTok were TikTok for X. But one of the interesting things about that proposal is those usually don't work trying to copy what other people have done.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Or two decades earlier when Facebook was kind of getting founded, you could say, wow, their users are not only creating user generated content, they're also creating user-generated ad profiles, which I don't even think any of those things matter anymore because Facebook does it all automatically based on how you interact with the product. I think it's a core piece to how I think about social is it doesn't necessarily have to be ads, but it's more of what's the business model going to look like? How do you go public with this? And are you building towards that today? Or are you going to have to pivot or change? And then just how do you think about sort of creating the business model as you grow?”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “I think a way to think about friends and identity Reddit is a super popular social network, if you want to call the social network, specifically in the US, which is where people have the highest disposable income to spend on things that are shown in ads, but they really don't make that much money right now. Part of that's related to the ad product, but part of it is also related to they don't actually know who their users are, so they can't target them with ads versus the way Facebook built the business. It was let's figure out exactly who these people are. And even before they rolled out a lot of the machine learning pushed advertising when it was, you update your profile and you tell us your 10 favorite movies, your 10 favorite musicians, your favorite activities, that's basically what the ad system does now. Is it just figures those things out? So Facebook's product was basically having people create their advertising profiles for them. So I think looking back, if you were to be looking at some of these companies a decade earlier,”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Think one of the prime tenets of sort of social networks is UGC user generated content. And that essentially gives you higher margins over time because you don't have to pay to acquire the content your users do it for free. And then you can show ads in between the content. In historical cases, that's been the case. And that's super high margin when you hit scale. I think that the quality and the competitive advantage that Facebook built was all built on real identities and high quality real identities and they kind of use that as a position of strength to expand into what they've built today. Maybe at the time if you were just looking at spreadsheets looking, comparing user growth, looking at charts, that might have been hard to see compared to some of the competitors. I think it's really important to look at the product that's being built. And then in social specifically, I think friends are a”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Thanks, Patrick, for having me. The first big thing that I really kind of think through is there was a point in time where Facebook was the fifth fastest growing social network. There's a lot of things you can unpack there. But I think one of the big things is that growth is really important, but the quality and the type of growth that you have as a social company is also very important. And it kind of all ties into the competitive advantage that you're building over the long term. And Facebook built a pretty good one. And we've kind of seen that reflected in how the companies and the business performed over the last two decades.”

    2020-07-14 · Invest Like the Best · Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] · IDENTIFIED FROM THE TRANSCRIPT · source