Friendster, one of the original social networks, was founded in 2003. It was one of the first social networking sites to attain over 1 million members. The service offered the opportunity to meet friends of your friends, share videos, photos and messages with your contacts, discover events and bands, and was also used for finding dates.
Already in 2003 Google offered 30 million US dollars to Jonathan Abrams, the founder, but Silicon Valley's venture capitalists convinced him to turn down the offer and funded him. He decided to stay a privately held company instead of selling out. And then Myspace and Facebook beat him in the clash of the social networks. Why?
In 2004 Myspace overtook Friendster in page views. What made Myspace better than Friendster was that it was more easy going, and allowed users to customize their profiles, while Friendster was removing profiles of people who put pictures of their dogs instead of pictures of themselves. Also, on Myspace you could look up anyone's profile, while on Friendster you could only view profiles of those in a small circle of your friends.
But then Facebook beat Friendster and Myspace.
Sean Ammirati, an early stage VC and an Adjunct Professor of Entrepreneurship at Carnegie Mellon University, wrote a book The Science of Growth where he explains why some companies would scale up and other similar ones wouldn't.
He came to the idea from teaching one of his courses which was based on Eric Ries's The Lean Startup. He then started looking for the equivalent of The Lean Startup for that next phase where a company could become the next big thing, but couldn't find it.
He took his best students and asked them to build case studies where they looked at pairs of companies, where one company took off and the other didn't. What they found was that there are common patterns companies go through when they go through the three phases of growth, and things you can do at each phase “to be the Facebook and not the Friendster.”
Even though Friendster had a head start and top tier VC's, Facebook focused on the right things at the right point. “The Friendster board would have conversations about how they could go into different languages, how they could monetize the site, when the site wouldn't even stay up.”
“At Facebook they were obsessed about really solving the real problem for their customers and creating a great interaction, and then slowly rolling that out to larger audiences.”
What he also admired about Facebook was their discipline. One of the things they suspected turned out not to be validated by their research. They suspected companies to do more things when they were in the rapid growth stage, but instead, the more successful companies were focused on doing the right things.
With all the mistakes Friendster made, their end was inevitable. Even though in 2008 Friendster was still a well-known brand and had 115 million users (most outside the US) and was steadily growing in Asia, they couldn't compete with the others. Friendster then hired ex-Google executive Richard Kimber as the CEO, who focused on Friendster's expansion in Asia. By the end of 2009 the company was acquired by one of Asia's largest internet companies, MOL Global. In 2011 Friendster went from a social networking site to a social gaming site. In 2015 the site was shut down. Now the brand that it once was is almost forgotten.Business Modelling Facilitator training.