OPW INTERVIEW — Mar 31, 2006 — Michael Birch is the driving force and chief architect behind six community Web sites over the last decade. He launched his latest venture, Bebo.com, with his wife and brother in 2005. In seven months it attracted 22 million members and ranked as the largest social networking site for students in the U.K. Prior to Bebo he started Ringo.com, one of the first social networking sites, which was sold to Tickle.com. Birch earned his BS degree in Physics from Imperial College, London. Now he has his sites on the U.S.! Here's BEBOs story… – Mark Brooks
What is BEBO's founding story?
BEBO was started in January, 2005 as a photo sharing – contact sharing website and we re-launched it in June 2005 as a social network. I met my wife, Xochi, at the original site, a bar, in the UK when she was studying abroad and I was in college in the UK. We thought it would be cool to create a social networking site around a global community of students in English speaking countries, and so that led to Bebo. It proved very early on to be very popular with universities, colleges and schools, particularly in the UK, Ireland, US, Canada, Australia and New Zealand.
How big is BEBO now and how did you get it to grow so quickly?
BEBO has a total of 23 million registered members. We're turning about 60 million page views a day and it's growing purely through word of mouth. We're growing incredibly quickly, setting new page view records every week now. We've never done any marketing. The key to the success has really been creating a product that has proven to be popular. We spent a lot of time thinking before we started developing a product, how it should work and how to make it popular and what features to include and as importantly, what features to exclude from the finished product. All the sites we've worked on in the past have always been focused on word of mouth marketing so that's kind of been our specialty. We initially took that approach simply because we had no money to spend on marketing and word of mouth marketing is a
matter of time rather than money to get it right.
What other sites have you worked on in the past ?
We worked on a number of them since 1999. It's been a matter of learning through trial and error. So, we did 3 sites in the early days which had a mixed degree of success but never had the kind of exponential growth that's so critical. The first one that actually took off was BirthdayAlarm.com, which is the web's largest birthday reminder service with eCards. We monetized it, and with reminders as well as eCards it seemed to be very viable. The second site that was successful was Ringo.com in 2003; Birthday Alarm was 2001. Ringo was a very early social network. We actually launched it 13 days following the day we heard about Friendster. We started negotiating to sell the website 3 months later . It was 6-months from launch to closing the sale-a very stressful time. It took off very quickly, and after 2 months we had over 400,000 members. At the time, Friendster had a million members. We were second largest in the market at the time. The reason we sold it, was that it was growing so quickly that we either had to get a VC or we had to sell it. We couldn't afford to scale it. We weren't profitable with Birthday Alarm at that time, the way we are now.
Why is BEBO better than MySpace or Friendster ?
The advantage of being late in the market is you have the benefit of hindsight. So we managed to apply everything we learned from Ringo and analyzed what was and wasn't successful on Myspace. So it was really just getting the product right and the subtle details of the product that make it work. One of the major distinguishing factors is that from the start we've focused on schools and universities in 6 key English speaking countries-US, UK, IE, CA, AU & NZ. Also. we offered, from the very beginning, unlimited
photo uploads. I think we were the first social network to actually have no limitations on photos. The other thing is that we offer the 'White Board,' where you can actually draw directly onto your home page. The third is that we allow customizations through skins, rather than people having to write their own HTML to customize their page. They can select new skins and their page can be updated through a click of a mouse. We've struck the right balance between customization and personalization, without allowing members to break pages and create a bad user experience. Bebo is fundamentally different from anything else that's come before it.
How do you see social networking evolving and where is the money to be made?
We're still in the relatively early days of social networking and if you look at the rate at which social networks are growing today, they are growing faster than they ever have. Friendster was considered in the early days to be a fad, and now social networks are a huge order of magnitude larger than they were 3 years ago. I think they still have a long way to go. They are becoming much more, and will continue to be much more of a utility over time rather than being a pure gimmick, they're actually providing a genuine benefit. For example, Bebo is a cultural phenomenon in Ireland, and a Beboer contacted us from Ireland and told us that before Bebo, the folks in his small town in Ireland were not getting along, and then everyone independently joined BEBO, and thanks to Bebo, they got to know each other and their friend's friends, and now there's a community spirit in the town pub that wasn't there before BEBO.
In terms of making money, the leaders in the social networking space, to date, have been rather uncreative. It's very early in this process and social networking creates a new advertising mechanism for brands to reach the tough to reach 13 to 30 year old demographic who are spending more time online and skipping TV commercials with TIVO. Also, major brands will be able to do amazing word of mouth marketing campaigns on social networking sites that are only possible to do on social networking sites because influencers are already connected to all their friends.which makes the word of mouth that much easier. But, you've got to engage this audience which means doing much more than the traditional banner advertising that's still the common form of advertising on SN sites.
So, I think the income breakthrough hasn't happened with social networks yet, but it will happen in time. The likely direction that will take will be with product sponsorships and product placements rather than traditional banner advertising. The advertising and promotion needs to be more integrated into the social network itself, and targeted. And, we're beginning to go in that direction with Bebo.
How is the partnership with Skype working out and was it the uptake like?
Skype is proving to be very popular on BEBO. We faced the option of developing that feature in-house, which is by no means a trivial application to develop, or to do it in partnership with someone else, so we chose Skype. Since we launched this co-branded partnership with Skype 3 months ago, 360,000 Beboers have added the Skype/Bebo co-brand to their homepage; and we're seeing 6,000 new Skype/Bebo registrations each day now..
What do you have in store for 2006-2007?
That's a long way ahead in terms of social networking. The product road map is very aggressive. We are aiming to making an improvement every week; which may be just a small feature or a major release. We're doing this very carefully because we don't want to add features which are not popular. One of the major features coming up is a music product. We've been taking time to do this because we want to do this the right way and make sure we have the very best of breed.
We're growing phenomenally quickly in the UK and Ireland. I haven't actually seen the official figures, but the internal figures show that we're the largest single website in Ireland. I'm doing radio interviews literally every day with radio stations in Ireland about the phenomenal growth of BEBO. In the UK, we are probably ranked 25th in terms of overall websites, but we're growing at about 10% a week. In the U.S. we are growing at a similar rate. Our focus has been on the UK and Irish markets, and we're now just turning our attention to the US market as well.
