Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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How to lose fans and (falsely) influence people

Wow.  My post yesterday got a lot of attention.  Techmeme for most of the day.  And nice compliments from Fred, Bijan and Alley Insider.

Unfortunately, I probably should have named my post "How to lose fans and (falsely) influence people".  While I still believe in my conclusion (that a coming exodus of Yahoo and Microsoft employees will benefit startups), I think that my experiment was flawed.

Ad Apparently, when I set up the ad campaign, I checked a box that said "Add Social Actions to my Ad" - and guess I didn't fully understand what that meant.  That box apparently adds a Facebook picture to my ad - in this case, the picture of Yahoo and Microsoft employees who had previously joined the First Round Capital group.  I had no idea these pictures were running -- the only thing I saw in the Facebook Ad Control panel was the ad (right).  And since I'm not an employee of Microsoft and Yahoo, I never actually saw the ad running. 

Anyhow, I've now been informed (loudly) that my ad which said "Leaving Yahoo?" was accompanied by a picture of a current Yahoo employee.  Most of those employees joined the FRC group before the ad campaign -- and (obviously and justifiably) were not too pleased by any implications that they were leaving their employer.  And while I've apologized in person to those that contacted me, here's a very public apology to those who haven't.

I now believe that most of the clicks on the ad were due to the surprise of seeing their colleague on the ad -- rather than an implicit statement of their desire to leave.  The email below  from one Yahoo employee sums it up much better than I can:

Earlier today, I read your post on the social ads experiment. I agree that it’s an interesting polling mechanism to judge the mood of folks at Y! or Microsoft. But I want to offer an alternate / adjunct explanation to the reason behind the rise you are seeing in CTRs. The ads are shocking.

Social ads were designed as an endorsement. By becoming a fan of a business, I lend my likeness to the business and allow them to promote their products and services to my fans. It most instances, this would have a purely positive connotation. For example, if I were a fan of BMW my likeness might appear alongside a Newsfeed ad which might read “The Ultimate Driving Machine.” The ad tagline is generally positive and straight forward. In the case of the ads you designed (attached), my face appears alongside a tagline, “Leaving Yahoo!?”.  To the casual eye, the ad tagline reads as if it could be reporting a rumor that I am leaving Yahoo!, or that I have already left and that I am recruiting for a start-up.

The negative connotation of the ad design introduces the potential to elicit responses of surprise and shock – not necessarily directly related to employee satisfaction. In fact, if the clicks on the ads are driven by “surprise and shock” it may also provide an explanation as to why the Microsoft CTRs were higher than the Yahoo CTRs. It could be that people at Microsoft were more surprised than Yahoos to see that their colleagues were leaving the mothership.

An interesting experiement in social ads and a good lesson for me about the twists and turms related to Beacon and passive endorsements. I don’t want my colleagues to think I’m leaving Yahoo, so while your experiment is ongoing, I’ve pulled my “Facebook fandom” for First Round Capital, but I very much remain a fan!  I know that your experiment was done with the best of intentions. You should keep doing them! Afterall, if we can’t be fascinated by this industry (and maintain our sense of humor) it’s time to move on.  We’re all still learning about Beacon and social ads in general. It’s a really powerful concept, but I think there we’ll discover a line between implicit and explicit endorsements.

So, here's a belated apology to all the Yahoo and Microsoft employees for their unanticipated role in my Social Advertising experiment.  I feel kindof like the guy who's girlfriend found out about their Christmas gift through Facebook beacon.  I've stopped running the ads -- and welcome back all our fans. 

As people begin to deploy Social Advertising it's sure going to be interesting to think of the unanticpated consequences.  For example, assume I’m a “fan” of Nike. Nike decides to run a New Year’s Resolution promotion, with the tagline “Get in Shape This Year!” Would my friends think that I was telling them to lose weight???

Social ads sure do have social consequences...





oops :)

Joe Lazarus

As a recent former Yahoo!, I find that rather amusing. Fair mistake on your part.

Even though it wasn't intentional, this is a great example of why Facebook's Social Ads product makes no sense. Just because someone is a fan of your company, doesn't mean that they blindly endorse every message you might blast out to their friends without their knowledge. I know that wasn't your intention, but it highlights the fundamental flaw in their model. The entire concept is backwards. Facebook should be using what they know about people's interests to target ads to THEM, not their friends. Their monetization strategy is doomed in it's current form.


The more I read stories like this (and there seem to be more and more these days), the faster I run away from Facebook.


Oh, and listen up Facebook ('cause I just know that they read these comments): my friends are running away, too.


josh, way to get your fouls!


WOW! This is scary stuff.
This is WHY Facebook under its current platform will NEVER be a "go to" place for working adults. Adults have to much to lose, on the other hand the young kids with high levels of testosterone would take this as a compliment and simply find it funny :)

I agree with Dave's post above.

btw- congrats on your recent fund.


I've been harping on about this alot, it's about what people DO as in what apps they have installed and the frequency of use of those apps. Do you have photo apps isntalled, then great, heres a shiny new camera from amazon you might like. Do you have flash apps installed? Great, heres some new Wii games you might like.

This "use graph" rides on top of the demographics engine. And of course a taxonomy that describes/maps their apps would be needed.

Chun Xia

Agreed with Marc, the missing link in facebook social engine is the semantics. However, this is an extremely challenging task for AI, as we don't have any reasonable social model for any semantic approach.

The simple machine model doesn't work for human. If the ad is going thru viral channel, human social ability would mostly place it in appropriate social context. However, this natural human model seems not working for facebook's eager revenue objective.

Anyway, it's funny to see actual people being placed by ad engine in the way of AdSense which is often non-sense. I'm happy to collect such fact as this is a perfect sample of first generation social ads.

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For what it's worth, before Paypal was going to send money between Palm PDAs, they were going to be in the business of linking field sales to the home office with IPSec, etc. for Palm.

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