Author: Josh Constine

Facebook builds Patreon, Niche clones to lure creators with cash

Facebook is eager to displace YouTube and Patreon in order to become the home of online content creators, so it’s testing a bunch of new ways for them to earn money and connect with fans. Facebook’s dedicated Creator app that launched in November on iOS will come to Android soon, and it’s also starting a closed beta program where social media stars can work with it to build new features. It’s already cooked up new ones like a leaderboard for each creator’s most engaged fans who earn a special badge next to their comments, as well as a version of its Rights Manager tool for removing or taking over monetization of unofficial copies of their videos.

But most interesting are the new monetization options Facebook is trying out. It will let some users sign-up for a monthly subscription patronage payment to their favorite creators in exchange for exclusive content and a fan badge just like on Patreon . This will bring Facebook into the world of in-app purchases. Fans will be able to sign up for a $4.99 per month subscription, with Facebook forgoing a cut during the testing period, though the App Store and Google Play will get their 30 percent cut. That means creators will get $3.50 per month per subscriber.

It seems that rather than letting creators set their own price points including a cheap $1 per month option like on Patreon where the average subscription is $12 and the startup takes a 5 percent cut, Facebook is aiming for simplicity of pricing at mid-tier point. However it did mention custom pricing could come later. Not adding its own rake shows how much Facebook is prioritizing getting creators onto its platform. Facebook will launch the program next month with ten creators across the U.S. and U.K.

Meanwhile, Facebook has created a tool that lets creators show off a portfolio of their content expertise and audience, and get connected to businesses to hammer out branded content and sponsorship deals. It’s effectively Facebook’s version of Niche, the creator-sponsor deal broker that Twitter acquired in 2015 for around $50 million. [Disclosure: My cousin Darren Lachtman co-founded Niche] Facebook isn’t taking a cut here either during the testing period.

In both cases, Facebook might add a 5, 15, 30, or 45 percent cut when the features officially launch. Facebook already takes a 45 cut of ad break revenue when creators insert ads into their videos. Facebook also has a direct, one-time $3 tipping feature it’s testing with game streamers.

Creators who want access to the new product and monetization tests can sign-up here. “Creators are vibrant, diverse, and wonderful at building community, bringing people from across the world together around shared passions – and that’s why Facebook is a natural home for them” says Facebook’s VP of product for video Fidji Simo.

Facebook already lets creators use ad breaks and self-brokered sponsored content deals to monetize, but the digital arts economy still doesn’t let them earn enough to survive on this long-tail audience model. Facebook is taking a hint from its work with game developers, where it found that a tiny percentage of “whales” spend most of the money that games earn. Similarly, Facebook is now trying to equip creators with ways to earn the most possible from their biggest, most passionate fans who might pay way more in a tip or monthly subscription than a creator could ever earn through ads.

Facebook lets all PC games Live stream and reward viewers

Facebook is challenging Twitch and YouTube for video game live streaming supremacy with the release of its new Games SDK for PC. After testing Live streaming from games like Overwatch from developers like Blizzard since 2016, today Live broadcasting from PC games to the News Feed opens to all developers. And Facebook will let them reward fans who watch by providing in-game items or bonuses. For example, beneath the comments reel, users might see a promotion like “Watch Paladins streams for a chance to earn random loot to use in-game.”

The potential for viral growth and sales could convince tons of game developers to bake in Facebook’s new SDK, while players could use the simple broadcasting feature to reach a big audience — though one not as dedicated to gaming as on other platforms. Viewers might choose to watch on Facebook because they get rewarded there. Facebook meanwhile benefits because game streams create compelling niche content that can drive long viewing sessions, helping Facebook monetize viewers in the moment with ads while locking them deeper into the platform long-term.

Facebook is also hooking up developers with deeper analytics through custom “app events” that are now available on PC as well as web and mobile. Game developers can also integrate Facebook’s enhanced Friend Finder feature that lets them play with friends and now see “Key Player Stats” about other people they want to join up with to keep playing together. Developers who want access to the SDK can sign up here.

Facebook got a late start in the game streaming world but has been rapidly developing features and signing deals to grow its viewer base and content catalogue. It inked a deal with esports league leader ESL last year, and just added streaming from tournaments of top games like Counter-Strike and DOTA. It’s brought Live streaming to Messenger games. Facebook also recently started testing a way for viewers to tip cash to their favorite streaming stars, and has even hired some of them for its games team.

The question will be if a catch-all mainstream social network can succeed in such a niche content space. 800 million people play Facebook-connected games each month. But not everyone’s real-world friends care about video games or want to watch their buddies play, so broadcasts could fall flat if they don’t find the particular subset who love gaming. On networks like Twitch or corners of YouTube, people are there specifically to watch game stream. So Facebook will have to use rapid feature development, and it’s size and potential for audience growth to attracts streamers, viewers, and developers. Otherwise gamers might stay where they never feel embarrassed about their passion.

Facebook and the endless string of worst-case scenarios

Facebook has naively put its faith in humanity and repeatedly been abused, exploited, and proven either negligent or complicit. The company routinely ignores or downplays the worst-case scenarios, idealistically building products without the necessary safeguards, and then drags its feet to admit the extent of the problems.

This approach, willful or not, has led to its latest scandal, where a previously available API for app developers was harnessed by Trump and Brexit Leave campaign technology provider Cambridge Analytica to pull not just the profile data of 270,000 app users who gave express permission, but of 50 million of those people’s unwitting friends.

Facebook famously changed its motto in 2014 from “Move fast and break things” to “Move fast with stable infra” aka ‘infrastructure’. But all that’s meant is that Facebook’s products function as coded even at enormous scale, not that they’re built any slower or with more caution for how they could be weaponized. Facebook’s platform iconography above captures how it only sees the wrench, then gets shocked by the lightning on the other end.

Sometimes the abuse is natural and emergent, as when people grow envious and insecure from following the highlights of their peers’ lives through the News Feed that was meant to bring people together. Sometimes the abuse is malicious and opportunistic, as it was when Cambridge Analytica used an API designed to help people recommend relevant job openings to friends to purposefully harvest data that populated psychographic profiles of voters so they could be swayed with targeted messaging.

NEW YORK, NY – SEPTEMBER 19: CEO of Cambridge Analytica Alexander Nix speaks at the 2016 Concordia Summit – Day 1 at Grand Hyatt New York on September 19, 2016 in New York City. (Photo by Bryan Bedder/Getty Images for Concordia Summit)

Whether it doesn’t see the disasters coming, makes a calculated gamble that the growth or mission benefits of something will far outweigh the risks, or purposefully makes a dangerous decision while obscuring the consequences, Facebook is responsible for its significant shortcomings. The company has historically cut corners in pursuit of ubiquity that left it, potentially knowingly, vulnerable to exploitation.

And increasingly, Facebook is going to lengths to fight the news cycle surrounding its controversies instead of owning up early and getting to work. Facebook knew about Cambridge Analytica’s data policy violations since at least August 2016, but did nothing but send a legal notice to delete the information.It only suspended the Facebook accounts of Cambridge Analytica and other guilty parties and announced the move this week in hopes of muting forthcoming New York Times and Guardian articles about the issue (articles which it also tried to prevent from running via legal threats.) And since, representatives of the company have quibbled with reporters over Twitter, describing the data misuse as a “breach” instead explaining why it didn’t inform the public about it for years.

“I have more fear in my life that we aren’t going to maximize the opportunity that we have than that we mess something up” Zuckerberg said at a Facebook’s Social Good Forum event in November. Perhaps it’s time for that fear to shift towards ‘what could go wrong’, not just for Zuck, but the leaders of all of today’s tech titans.

Facebook CEO mark Zuckerberg

An Abridged List Of Facebook’s Unforeseen Consequences

Here’s an incomplete list of the massive negative consequences and specific abuses that stem from Facebook’s idealistic product development process:

  • Engagement Ranked Feed = Sensationalized Fake News – Facebook built the News Feed to show the most relevant content first so we’d see the most interesting things going on with our closest friends, but measured that relevance largely based on what people commented on, liked, clicked, shared, and watched. All of those activities are stoked by sensationalist fake new stories, allowing slews of them to go viral while their authors earned ad revenue and financed their operations with ad views delivered by Facebook referral traffic. Facebook downplayed the problem until it finally fessed up and is now scrambling to fight fake news.
  • Engagement Priced Ad Auctions = Polarizing Ads – Facebook gives a discount to ads that are engaging so as to incentivize businesses to produce marketing materials that don’t bore or annoy users such that they close the social network. But the Trump campaign designed purposefully divisive and polarizing ads that would engage a niche base of his supporters to try to score cheaper ad clicks and more free viral sharing of those ads.
  • Academic Research = Emotion Tampering – Facebook allows teams of internal and external researchers to conduct studies on its users in hopes of producing academic breakthroughs in sociology. But in some cases these studies have moved from observation into quietly interfering with the mental conditions of Facebookers. In 2012, Facebook data science team members manipulated the number of emotionally positive or negative posts in the feeds of 689,000 users and then studied their subsequent status updates to see if emotion was contagious. Facebook published the research, failing to foresee the huge uproar that ensued when the public learned that some users, including emotionally vulnerable teenagers who could have been suffering from depression, were deliberately shown sadder posts.
  • Ethnic Affinity Ad Targeting = Racist Exclusion – Facebook’s ad system previously let businesses target users in “ethnic affinity” groups such as “African-American” or “Hispanic” based on their in-app behavior as a stand in for racial targeting. The idea was likely to help businesses find customers interested in their products, but the tool was shown to allow exclusion of certain ethnic affinity groups in ways that could be used to exclude them from legally protected opportunities such as housing; employment, and loans. Facebook has since disabled this kind of targeting while investigates the situation.

    Exclusionary ethnic affinity ad targeting, as spotted by ProPublica

  • App Platform = Game Spam – One of Facebook’s earliest encounters with unforeseen consequences came in 2009 and 2010 after it launched its app platform. The company expected developers to build helpful utilities that could go viral thanks to special, sometimes automatic posts to the News Feed. But game developers seized on the platform and its viral growth channels, spawning companies like Zynga that turned optimizing News Feed game spam into a science. The constant invites to join games in order to help a friend win overwhelmed the feed, threatening to drown out legitimate communication and ruin the experience for non-gamers until Facebook shut down the viral growth channels, cratering many of the game developers.
  • Real Name Policy = Enabling Stalkers – For years, Facebook strictly required to use their real names in order to reduce uncivility and bullying facilitated by hiding behind anonymity. But victims of stalking, domestic violence, and hate crimes argued that their abusers could use Facebook to track them down and harass them. Only after mounting criticism from the transgender community and others did Facebook slightly relax the policy in 2015, though some still find it onerous to set up a pseudonym on Facebook and dangerous to network without one.
  • Self-Serve Ads = Objectionable Ads – To earn money efficiently, Facebook lets people buy ads through its apps without ever talking to a sales representative. But the self-serve ads interface has been repeatedly shown to used nefariously. ProPublica found businesses could target those who followed objectionable user-generated Pages and interests such as “jew haters” and other disturbing keywords on Facebook. And Russian political operatives famously used Facebook ads to spread divisive memes in the United States and pit people against each other and promote distrust between citizens. Facebook is only now shutting down long-tail user-generated ad targeting parameters, hiring more ad moderators, and requiring more thorough political ad buyer documentation.
  • Developer Data Access = Data Abuse – Most recently, Facebook has found its trust in app developers misplaced. For years it offered an API that allowed app makers to pull robust profile data on their users and somewhat limited info about their friends to make personalized products. For example, one could show which bands your friends Like so you’d know who to invite to a concert. But Facebook lacked strong enforcement mechanisms for its policy that prevented developers from sharing or selling that data to others. Now the public is learning that Cambridge Analytica’s trick of turning 270,000 users of Dr. Aleksandr Kogan’s personality quiz app into info about 50 million people illicitly powered psychographic profiles that helped Trump and Brexit pinpoint their campaign messages. It’s quite likely that other developers have violated Facebook’s flimsy policies against storing, selling, or sharing user data they’ve collected, and more reports of misuse will emerge.

Each time, Facebook built tools with rosy expectations, only to negligently leave the safety off and see worst-case scenarios arise. In October, Zuckerberg already asked for forgiveness, but the public wants change.

Trading Kool-Aid For Contrarians

The desire to avoid censorship or partisanship or inefficiency is no excuse. Perhaps people are so addicted to Facebook that no backlash will pry them their feeds. But Facebook can’t treat this as merely a PR problem, a distraction from the fun work of building new social features, unless its employees are ready to shoulder the blame for the erosion of society. Each scandal further proves it can’t police itself, inviting government regulation that could gum up its business. Members of congress are already calling on Zuckerberg to testify.

Yet even with all of the public backlash and calls for regulation, Facebook still seems to lack or ignore the cynics and diverse voices who might foresee how its products could be perverted or were conceptualized foolishly in the first place. Having more minorities and contrarians on the teams that conceive its products could nip troubles in the bud before they blossom.

“The saying goes that optimists tend to be successful and pessimists tend to be right” Zuckerberg explained at the November forum. “If you think something is going to be terrible and it is going to fail, then you are going to look for the data points that prove you right and you will find them. That is what pessimists do. But if you think that something is possible, then you are going to try to find a way to make it work. And even when you make mistakes along the way and even when people doubt you, you are going to keep pushing until you find a way to make it happen.”

Zuckerberg speaks at Facebook’s Social Good Forum

That quote takes on new light given Facebook’s history. The company must promote a culture where pessimists can speak up without reprise. Where a seeking a raise, reaching milestones, avoiding culpability, or a desire to avoid rocking the Kool-Aid boat don’t stifle discussion of a product’s potential hazards. Facebook’s can-do hacker culture that codes with caution to the wind, that asks for forgiveness instead of permission, is failing to scale to the responsibility of being a two billion user communications institution.

And our species is failing to scale to that level of digital congregation too, stymied by our insecurity and greed. Whether someone is demeaning themselves for not having as glamorous of a vacation as their acquaintances, or seizing the world’s megaphone to spew lies in hopes of impeding democracy, we’ve proven incapable of safe social networking.

That’s why we’re relying on Facebook and the other social networks to change, and why it’s so catastrophic when they miss the festering problems, ignore the calls for reform, or try to hide their complicity. To connect the world, Facebook must foresee its ugliness and proactively rise against it.

For more on Facebook’s non-stop scandals, check out these TechCrunch feature pieces:

Facebook launches Express Wi-Fi app for its local-operated hotspots

Facebook wants you to pay for internet. This week TechCrunch was tipped off that Facebook had quietly launched an Express Wi-Fi Android app in the Google Play store that lets users buy data packs and find nearby hotspots as part of Facebook’s distributed Wi-Fi network. The company’s Express Wi-Fi program is live in five developing countries that see local business owners operating Wi-Fi hotspots where people can pay to access higher-speed bandwidth via local telecoms instead of paying steep prices for slow cellular data connections.

Previously, Express Wi-Fi users had to dig out a mobile website, or directly download an app from a telecom that required reconfiguring a phone’s settings. There wasn’t any way to look up where hotspots were located. The new Google Play app can be downloaded the normal way. It’s now live in Indonesia with bandwidth from telecom partner D-Net, and in Kenya through Surf. The app can also tell if a user’s Wi-Fi is turned on to help with set up, and they can file reports to Facebook about connectivity or retailer issues.

The launch signals Facebook expanding its pursuit of developing world audiences that first need internet access before they can become lucrative Facebook users. Unlike its much-criticized zero-rating program called Free Basics (formerly, Express Wi-Fi offers a full, unrestricted version of the web for a price instead of only low-bandwidth services approved by Facebook. This strategy could help it achieve its mission of getting more disconnected people in the developing world online without the net neutrality concerns. Making Express Wi-Fi an actual business might save Facebook from backlash about it masking a user growth driver inside a philanthropic initiative.

Facebook confirmed the launch to TechCrunch, with a spokesperson telling us, “Facebook is releasing the Express Wi-Fi app in the Google Play store to give people another simple and secure way to access fast, affordable internet through their local Express Wi-Fi hotspots.” Sensor Tower first tipped us off to the app.

Weak or expensive connectivity is a huge barrier to Facebook deepening its popularity in the developing world at a time when it’s reaching saturation or even shrinking in some developed world nations. Facebook saw its first user loss ever in the U.S. and Canada region in Q4, with daily active users decreasing by 700,000 in part because of News Feed changes that reduced the presence of engagement-drawing viral videos.

Facebook needs user growth more than ever, and the developing world is where it can find it. That’s why it’s developing advanced technologies like the Aquila solar drone and satellites that can beam down connectivity. It’s also working with telecoms that use microwave towers to beam backhaul bandwidth to its Express Wi-Fi units.

Monetizing the international market has been a big focus for the company. It’s launched new region-specific and low-bandwidth ad units like click-to-missed-call and slideshows. It’s paid off. From 2012 to 2016, average revenue per user grew 4X in the Rest of World region. And that revenue grows even faster when people can load Facebook quickly and cheaply thanks to strong Wi-Fi access. The more accessible Facebook makes this program, the more it could see those internet users turn into social networkers.

Robinhood hires Josh Elman as VP of product, who’ll stay at Greylock

Zero-fee stock trading app Robinhood is getting some product firepower as it dives into cryptocurrency and weighs platform aspirations. Investor Josh Elman will join Robinhood as its VP of product while remaining a partner at Greylock.

With 4 million registered users, $176 million raised and a $1.3 billion valuation, the five-year-old fintech startup is shifting from a period of finding product-market fit to building a serious business. Elman’s experience with rapidly rising companies like Facebook, Twitter and LinkedIn could help guide Robinhood toward maturity.

“In January, I started talking with a few of my partners about how I want to spend the next decade of my professional life. What gets me the most energized is when I can dig in on product with a hyper-growth company. To that end, I’m joining Robinhood to lead product, where we will continue building powerful tools to give everyone broader access to our financial system,” Elman tells TechCrunch. “I am going to continue my role at Greylock as a venture partner, and will continue to represent Greylock on the boards in my portfolio. I am grateful to my partners for their support, and excited for what is next.”

Greylock has always been known as a fund run by veteran operators like Reid Hoffman, who joined as a partner while still the CEO of LinkedIn . A Greylock spokesperson tells me, “Josh is a sharp product-thinker who has backed excellent entrepreneurs and innovative companies that we are proud to have as part of the Greylock portfolio. We are supportive of Josh as he takes on this new operating role, and look forward to continuing our work with him as a venture partner.”

The new role could create some conflicts, though. Greylock recently invested in cryptocurrency exchange Coinbase’s August Series D. But Robinhood just launched its own cryptocurrency trading platform in December, undercutting Coinbase’s 1.5 percent to 4 percent fee on trades in the U.S. by charging zero commission. Coinbase might worry that plans it shares with Greylock could make it back to Robinhood.

Read our post on the roll-out of Robinhood Crypto

Elman has dealt with this before, having hyped text fiction app Hooked whose seed round Greylock funded before it backed competing app Yarn’s parent company Mammoth Media with Elman joining its board. Elman declined to comment about the matter.

Josh Elman at TechCrunch Disrupt SF

An eye for interfaces

Elman began his career after a bachelor’s degree in symbolic systems with a focus on human computer interaction at Stanford in 1997. Elman worked on product for music company RealNetworks, and growth and job boards for LinkedIn before joining custom merchandise startup Zazzle . His big break came working on the launch of the Facebook Connect platform. He was then a PM at Twitter until joining Greylock as a partner in 2011.

In my experience, Elman is one of the best investors at spotting emerging social trends and helping companies find winning product strategies. Despite being in his 40s, he’s quick to dive into teen-focused social apps, understanding and funding them before they blow up. He was on the boards of Musically (sold to Toutiao) and SmartThings (sold to Samsung), plus was one of the few investors in honest feedback app tbh, which sold to Facebook. He’s currently on the boards of Medium, Houseparty and Discord — which are redefining blogging, video chat and video game communities.

Robinhood’s Bay Area HQ

Robinhood could use Elman’s skills as it tries to unite the traditional stock and cryptocurrency worlds using free trades up front while monetizing with subscription bonus features. The way Facebook and Twitter turned friends and thought leaders into a feeds of content to consume, Elman could assist as Robinhood does the same to financial markets.

Robinhood founders Baiju Bhatt (left) and Vladamir Tenev (right)

“I’ve known Josh for a couple years now and he’s always struck me as one of the most thoughtful product builders,” says Robinhood co-founder and co-CEO Baiju Bhatt. (Disclosure: I know Bhatt and his co-founder Vlad Tenev from

college). “We’re lucky to have him lead our product initiatives and join our leadership team as we take Robinhood to the next level.” Robinhood now has 170 team members across the Bay Area and Orlando, Florida. It’s planning to hire a VP for engineering and for customer support while scaling those teams, as well as legal and biz dev.

Having jumped the regulatory and engineering hurdles to offer cost-efficient stock trading, Robinhood has a huge opportunity to become the backbone of a new generation of fintech apps. The company declined to comment, but the startup could one day build APIs so other products could interact with your Robinhood balance and bank account. Elman worked with Facebook to let partners piggyback on your identity, and he might have ideas for turning Robinhood into a fintech platform.

Snapchat removes Giphy feature due to racial slur GIF

 Snapchat has temporarily removed its Giphy GIF sticker feature after a user saw an extremely racist GIF as an option. Snapchat confirms to TechCrunch “As soon as w were made aware, we removed the GIF and have disabled Giphy until we can be sure that this won’t happen again. The spokesperson says that all GIFs in Snapchat are meant to be “rated PG”, meaning… Read More