The Social Media Channel

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• How much does it cost to build the world’s hottest startups?
• Tumblr adds ‘Sponsored Trending Blogs’ section for brands
• 7 powerful Facebook statistics you should know for a more engaging Facebook page

How much does it cost to build the world’s hottest startups? Posted: 02 Dec 2013 11:29 AM PST Could $100,000 and the right developer skills make you an overnight billionaire? How much does it really take to build a product like Twitter or Instagram? With mobile development agencies and product incubators on the rise and more corporate "labs" spinning out each day, there's no shortage of talent to help you build the next great Web or mobile app. We interviewed the heads of the top Web and mobile development companies, incubators, agencies and labs to understand what it takes to design and develop the most successful apps of our generation. Here are their breakdowns of the costs and time investments to create 10 of the world's hottest startups. 1) Twitter Henrik Werdelin, the Managing Partner of Prehype, a venture development firm based in New York City that has helped build companies like Tradable, Barkbox, FancyHands, Basno and Path, says recreating Twitter isn't necessarily difficult, but the layered features will take time to get right. "The short answer is that it will take 10 hours," answers Werdelin, who built a Twitter clone in a one-day Ruby on Rails course. "But a good developer could make it quicker." This means — assuming you already have a laptop — the cost is almost nothing to build the next Twitter. Assume $160 for a Ruby on Rails course plus free Heroku, a cloud platform as a service that allows you to instantly deploy an app. However, Werdelin is quick to qualify his statement. "It's not that simple," he says. "These days, it's less an issue of creating a technology stack and more about creating the 'experience layer' on top, the interface that makes a product relevant and intuitive for people to use while quickly demonstrating its value." Still, a product is nothing without scalability. "You can't just build a product today, you need to build a venture. And that involves processes, structures, feedback loops, analytics and a community." Therefore, if you want to bring an MVP (Minimum Viable Product) to market, Werdelin approximates that you'll need $50,000 to $250,000, depending on the skill sets of the developers and designers you hire. Werdelin equates building a successful product to building a nightclub. "You need more than a DJ, a dance floor and a few bottles of alcohol," he says. "You have to ensure that the right people come in at the right time, and you have the right decor, ambiance and music. And of course, the cocktails." 2) Instagram "Instagram is slightly more complicated to build than Twitter because you need a wider range of skills to handle image-filtering for iOS and heavy backend image loads. However, you could still build an Instagram-like product inexpensively, in the $100,000 to $300,000 range over a three-to-six-month period," says Werdelin. "But even with a billion dollars of investment on day one, it's highly unlikely that you'll ever be in a position where you might grow as quickly as Instagram." Founder Kevin Systrom launched Instagram with 25,000 beta users on October 6, 2010; two years later, the app continues to see massive growth, recently reporting 150 million active users. Systrom, now a multi-millionaire after selling his company to Facebook for one billion dollars, turns 30 next month. "Luck, timing and social engineering are bigger components than most entrepreneurs care to imagine," adds Werdelin. And the best way to be lucky is to position yourself in a place where luck may find you." 3) Facebook Ben Schippers is the co-founder of HappyFunCorp, a Web development company that has built sites for TeePublic, Of A Kind, Postography and Yeah TV!. "If you asked me to build Facebook.com for you, I would quote you $500,000 and nine months of development and design time," says Schippers. "Others would say one million or a much bigger number. But it's a very challenging question to answer because what it would cost to build is a small number while operational costs are enormous." With the existing product in mind, the $500,000 would be broken out evenly over the nine months with the first two months dedicated to design, specifically user architecture, brand and polish design. The remaining six months would be focused on bringing the design to life, while the remaining would be focused on deployment and refinement. Taking into account the difference in storage costs in 2002, Schippers estimates that Zuckerberg was spending $3,000 per month on hosting for the first year and about $10 million per month by 2006 as the network grew exponentially in that time period. Considering Facebook's scale, the company is now in the business of operating power plants to operate its servers, therefore, Schippers estimates that Facebook has a $30 million dollar monthly burn rate just for hosting. Suddenly, those multi-million dollar financing rounds that startups raise don't seem so outrageous! 4) WhatsApp "Real-time communication support can be more difficult than other apps that provide e-commerce or news," explains Ryan Matzner, the Director of Strategy at Fueled*, a mobile development company based in New York and London that has built apps for companies such as Elevatr, Ribbon, UrbanDaddy and JackThreads. "To put out an MVP of WhatsApp with basic functionality — something that verifies phone numbers, perhaps with a Twilio integration — and includes a payment management system would cost about $120,000." Follow that up with another $120,000 round for design, additional development and branding. And then another $25,000 to fix the remaining bugs and add a level of stability and robustness to the technology stack. In total, that means WhatsApp would cost a quarter of million dollars and take approximately nine months to build, assuming you already have a large user base to assure quality and facilitate initial momentum. 5) Uber Artem Fishman is the Vice President of Engineering at Huge, a full-service digital agency that has recently helped build NYC.gov, Revolt.TV and the redesign of TED.com. The Huge team took a deep dive at the numbers on CrunchBase to work up estimates for Uber. The San Francisco-based company made do with $50 million to build its product from scratch to current iteration. Then Google and Benchmark pumped $258 million more into it this past August. "When you're answering the question of what it takes to build the mere technical proposition, then the answer is, surprisingly, very little," says Fishman. "Based on its early rounds, a minimum viable product for Uber cost about $1 to $1.5 million to develop." It becomes increasingly difficult when you're trying to scale your business both from engineering perspective and market penetration. For Uber, the issues are more about local regulations than scale for the time being. 6) Pinterest At its core, Pinterest, the popular photo-sharing pinboard site, is a very simple product. According to Sam Mathews, the founder of Neverbland, a product studio responsible for products behind brands like Slate and Diesel, says Pinterest could be created with a team of four in just 120 days for $120,000. Yet, it becomes increasingly more difficult to fathom Pinterest's cost as its user base explodes from 1 to 75 million. "It's not about the product with something the size of Pinterest, it's about the economy of scale," says Mathews, who estimates that it costs Pinterest, a San Francisco-based company with 150 employees, $2 million per month in developer and storage costs to maintain its current product at scale. 7) Shopify To build a replica of the e-commerce platform Shopify, Mathews estimates it would cost between $250,000 and $300,000 with highly-skilled designers, developers and product people. These costs don't take into account the many relevant systems within Shopify's business such as maintaining its API, the infrastructure and server space needed to support its 50,000+ shops and designing and developing all of the beautiful templates that help make Shopify so successful. "Oftentimes, the biggest costs with a product like Shopify come down to the decision-making process involved with the customer and product development expenditure," explains Mathews. "But if you were to replicate the product exactly, all those decisions are made for you. You just have to figure out the architectural structure, which would take approximately four to six months." Riffing off of Paul Graham's essay How to Start a Startup, Mathews says, "To build something complex you first have to build something simple. If you want to build something complex it will never work." The issue with building a product like Shopify is that it required seven years of iteration and feature roll-outs based on customer feedback and experimentation. Mathews adds, "So even if you replicated the product exactly from the outside looking in, you're not going to have as robust a background system to manage all traffic and experiences that take place on the platform." 8) Angry Birds Our only viral gaming app on the list, we asked DJ Saul, the CMO of the DC-based iStrategy Labs, a DC-based digital agency that has built products like Grandstand and Social Machines for clients like The Washington Redskins and Nickelodeon, for input. "First, you have to take into account the time to develop a brand identity including the logo, color palette and typography," says Saul. "There's the ever-important UX, both for the app itself and especially for the game. You need experienced game designers and engineers who can develop cross platform. Then factor in building for the expansive world of Android and you have a multiplying effect on costs!" Saul estimates that he'd want a 20-person team working more than one year to deploy Angry Birds and at an average salary of $110,000 for a total budget of $2.2 million plus overhead. Of course, if you're hiring an agency, you're probably looking at 1.5 times that amount in total costs. 9) Tumblr According to Saul, Tumblr would be much easier to build than Angry Birds as you wouldn't need game-specific designers and developers. But the testing, refining and bug squashing would remain the same. To develop Tumblr, which is currently hosting 140 million blogs, "The biggest looming variable would be hosting," explains Saul. "On top of costs needed from the product marketing side, I would need a 15 person cross-platform development team working on Tumblr for just under one year. So 15 people at an average salary of $110,000 and you're looking at about $1.65 million." 10) Vine: Defining the MVP "While the term 'MVP' is thrown around quite a bit in our industry, we consider an MVP to be when the product is at a "good enough" point to be released and gain traction in the market and begin to build a user base," explains Paul Choi, CEO of Worry Free Labs, a mobile UX, design and development firm that has developed apps like KeyMe, Sendgine, TwizGrid and CraveMate. To create an MVP of Vine, Choi estimates that it would cost between $125,000 and $175,000 with four to six months of development and design time. He says that Vine is a relatively straightforward app that leverages the iPhone's processing power to compress video files. "With Vine, you're building a backend system that stores video and a front-end that is a simple viewer and an easy way to share content out to social networks," says Thadd Selden, Worry Free's CTO. For those just starting out building an app for videos, be aware of the escalating storage costs involved. While tools like Amazon Web Services and Parse can help you get off the ground, paying for the storage for 40 million plus registered users quickly becomes a major hit. Worry Free's VP of Business Development Brian Badillo estimates that storage costs for an app like Vine can cost well over $50,000 per month. All the grains of salt Each of these Web and mobile apps has evolved over months and some over years. Estimating costs is incredibly complicated because it comes down to hiring the "right" designer, developer or product manager who could build each app for less. There's an enormous amount of complexity that goes into each app's environment: not just hosting costs but office infrastructure, product management and marketing to name a few. There's also the enormous looming cost of distribution — one that's hard to measure and even harder to predict. Fifteen years ago, starting a business was primarily a technology problem. Now that the barrier to entry to start a business is so low — $100K in many cases — entrepreneurs are faced with a different problem: standing out from the crowd and getting their product into the right hands at the right time. In comparison to creating effective and data-driven distribution funnels to get your app out to millions, software is cheap. "It's always easier to copy a proven model than to conceptualize it yourself," says Paul Murphy, VP of Betaworks, a New York City product network. "The hard part isn't necessarily the tech, it's building and validating the product and adjusting it until you find a fit. We could probably build an MVP of any one of these products using public SDK's, frameworks and a rudimentary design at a weekend hackathon. But cloning something that's been proven is the easy part." And truthfully, you couldn't rebuild Twitter, Instagram or Facebook today for a billion dollars. But you could potentially spend a few million on an exact replica that no one will ever use. As an aspiring entrepreneur you want to build something remarkable, captivating and new; something with better features, different features or fewer features. That's what the next Jack Dorsey, David Karp Kevin Systrom and Mark Zuckerberg would do. The way to get good ideas is to get lots of ideas and throw the bad ones away. – Linus Pauling Fueled* is currently a member of audience.io, an audience development studio founded by the author.   Image credit: bloomua/Shutterstock This posting includes an audio/video/photo media file: Download Now

Tumblr adds ‘Sponsored Trending Blogs’ section for brands Posted: 02 Dec 2013 08:34 AM PST Tumblr has introduced a new sponsored content section in a bid to give brands an easier way to garner more attention and ultimately to generate more money from its platform. The new Sponsored Trending Blogs ad unit is the latest in a line of units introduced since Yahoo took over the blog network last year. Today's beta introduction comes ahead of its official introduction in January next year, a spokeswoman for the company told The Next Web. "Sponsored Trending Blogs is an opportunity to put advertisers' blogs at the forefront of what's hot on Tumblr within a feed of the most popular blogs of the day," the company said. Sponsored Trending Blogs will be displayed with a $ icon next to the Follow button and will show three entries by default – customizable by the blog owner, naturally. Clicking anywhere other than the Follow button will take a user directly to that sponsored blog. Companies that have signed up to take part in the beta trial include: Twentieth Century Fox (Devil's Due), Delta, Calvin Klein, Turner Broadcasting and Sony Pictures Entertainment. The move will provide brands with a unit dedicated to building their presence on the network, and follows the initial introduction of the Trending Blogs back in July this year. Featured Image Credit -  Josh James / Flickr This posting includes an audio/video/photo media file: Download Now

7 powerful Facebook statistics you should know for a more engaging Facebook page Posted: 01 Dec 2013 05:30 AM PST This post was originally published on the Buffer blog. One of the things we focus on most at Buffer is the best time to post to Twitter and Facebook. This is because we want to help you get more engagement with your audience, which is beneficial for everyone. While the best time to post is definitely important, there are some other things to keep in mind. I had a look at what kind of updates work best for Facebook pages to increase interaction and found 7 interesting statistics that you'll probably find useful if you're trying to make your page more engaging. 1. Photo posts get 39 percent more interaction Not only do photo posts get more engagement than links, videos or text-based updates, they actually account for 93 percent of the most engaging posts on Facebook. According to Kissmetrics, photos get 53 percent more likes, 104 percent more comments and 84 percent more click-throughs on links than text-based posts. And as we've mentioned before, self-explanatory photos seem to perform best. Wishpond's data says that overall, photo posts get 120 percent more engagement than the average post, and photo albums actually get 180 percent more engagement. This was a surprising one for me, but it seems that if you have multiple images to share, you'd be better of putting them into a Facebook album than publishing separate photo posts. Especially Buffer's new image posting feature lets you right click any image on the web and then share it in full-size to your wall in seconds. No more downloading, uploading nightmare here. 2. Shorter posts get 23 percent more interaction Writing shorter posts isn't just handy on Twitter. Keeping your posts below 250 characters can get you 60 percent more engagement than you might otherwise see. You can even get up to 66 percent more engagement if you cut it down to less than 80 characters. Either way, the result seems to be that getting to the point quickly and concisely works best. Perhaps that's why Facebook fans like photo posts so much? Especially looking at the overall Social Media statistics for other social networks, it's really interesting how this stacks up to other platforms. 3. Using emoticons increases comments by 33 percent If you thought emoticons were only for teens, you might want to rethink that idea. According to this AMEX OPEN Forum infographic, emoticons can make a big difference to your engagement rates. No only do posts with emoticons get 33 percent more comments, they also get shared 33 percent more often. Even better: they get liked 57 percent more often than posts without emoticons. Emoticons tend to add a more human side to your communications, and it seems like this comes across fairly well with users. 4. Engagement rates on Thursday and Friday are 18 percent higher Compared to other days in the week, Buddymedia's study found that engagement rates for Facebook are 18 percent higher on Thursdays and Fridays. As they put it, "the less people want to be at work, the more they are on Facebook!" The study also looked at different industries, including sports, retail, automotive and healthcare, to see which days worked best in each industry. Although they did vary, most of them sat around the end of the week, from Wednesday-Friday. Apparently no industry has users that are engaged on Mondays or Tuesdays! To find out more about the best times to post to Facebook, we've also written an extensive guidethat you might find useful. 5. Question posts get 100 percent more comments If comments are the kind of interaction you're after, questions might be the way to go. According to an infographic by Kissmetrics, they get 100 percent more comments than standard text-based posts. HubSpot shares a similar finding, although this data points out that question posts often get fewer likes and shares than other types of posts. What I found really interesting about this stat is that HubSpot's data also shows which question words attract more comments, with the most popular being 'should,' 'would,' 'which,' and 'who.' This makes me think that closed questions which have a very limited answer option are the highest attractors of comments. Open question words like 'why' and 'how' which make the user think more to articulate their answer sit at the bottom of this chart. This is especially interesting an points to a stark change in marketing, turning the funnel upside down. In short: Keeping engagement high with your existing customers might be more important than trying to find new ones. When we observe how most updates sent through Buffer perform, we found a similar pattern of greatly increased lift through questions being posted. 6. 35 percent of Facebook Fans like a page so they can participate in contests If you're chasing down new fans, a contest seems like a fairly good way to encourage likes. A report from earlier this year showed that 35 percent of Facebook fans liked Facebook pages specifically to compete in contests. Contests obviously solicit interaction by asking for people to enter. It turns out this can work, as 'caption this photo'-style contests actually bring in 5.5 times more comments than regular posts. In Buddymedia's report, contest-related words like winner, win, entry, contest, enter and promotion were all more likely to engage users. 7. 42 percent of Fans like a page to get a coupon or discount According to Socially Stacked, 42 percent of Facebook fans like a page in order to get a discount or coupon. A study by Wildfire Interactive showed that coupon-based campaigns received the highest engagement rates. Giveaways and sweepstakes came in just behind coupons as highly engaging post types. What have you observed has changed the most on Facebook in the last few months? I hope these statistics might be helpful to get your Facebook page on the right track! Photo credit: ROBYN BECK/AFP/Getty Images This posting includes an audio/video/photo media file: Download Now

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