Gnip Says To Make Money, Make Sure Your Customers Have Money

Following on to yesterday's visit at Lijit, I knew my two-day trip to Boulder would not be complete without making time to visit Gnip, the interesting company started by former MyBlogLog and IGN founder Eric Marcoullier. So Micah Baldwin, my trusty sidekick and part-time chauffeur for the trip, and I caught breakfast with Eric and the team this morning, and visited their cozy headquarters. While we didn't get hours to sit with the executive team, as we did with Lijit, we learned that Gnip is growing and hiring talented developers, and has made an important discovery in its business model - target companies that have money and are willing to pay for your product.

In July of 2008, when Gnip first launched (See: Gnip CEO's Goal: Make Twitter's Data Flow Suck Less), the company made headlines for finding ways to move data around more quickly and without as much overhead, acting as an arbiter between different Web services. But as I was told today, making Web 2.0 services the primary client was pretty much a guarantee for low revenue. After all, if your customers aren't making money, how could you expect them to pay you?

As a result, Gnip, which has grown to 11 full-time employees, all of whom Eric says are required to be smarter than him in order to get hired, has gotten more activity with more traditional companies, including one market research firm that is analyzing as many as 100,000 different Twitter accounts and checks for user sentiment.

Gnip's office in Boulder has the industrious start-up feel to it. Desks are pushed together in a small space that reminds me of my freshman year dorm room I had to share with two other guys. But while the company is growing, it has a small quandary, as Boulder commercial real estate works great for small spaces and large spaces, I was told, but there just aren't enough options for medium-sized companies looking for an "in between" solution.

In fact, there is so little open space at Gnip's office that Eric, Shane Pearson and I talked on the front porch. Unfortunately, the front porch bench that adorned the office had been stolen overnight. The main suspect? "Stinking hippies", Eric tweeted.

Such growing pains are good, of course, because that means the company is growing, period, and it sounds like they are focused on continuing to improve the product, hire smart developers, and they even finally managed to grab the ever-elusive gnip.com domain, after using the gnipcentral.com site since launch.

To learn more about Gnip's unique view on the data world, check out their blog. Product news will no doubt be coming soon. Of the 11 employees, 8 are full-time engineers.

10 Top New Web Services of 2008 and Their 2009 Forecast

2008 has been both an exciting year and a very trying year for the world of Web innovation.

When the year kicked off, we were still in the middle of Web 2.0 fever. We were just two months removed from Microsoft having invested $240 million in Facebook at a stratospheric $15 billion. In the first week of January, Yahoo! CEO Jerry Yang made his first appearance at CES and promised the company was "ready and excited". By mid-month, Pownce launched to the public to offer an alternative to Twitter. And by the end of January, Twitter crashed hard - for the first time.

It turns out that Twitter's crash might have been the canary in the coal mine. Even looking at January 2008, and considering what has happened to Facebook's valuation, Jerry Yang's reign as CEO of Yahoo!, and the eventual extinguishing of Pownce in the ensuing months and it almost seems unbelievable. Of course, as you know, Twitter crashed again and again throughout the year, and in parallel, so did the fortunes of many Web companies, from the smallest startup looking to raise funds, to the monoliths, including Google and Yahoo!, who have had to rapidly make changes as the economy changes under their feet. Meanwhile, as business conditions deteriorated, the public markets were closed and valuations were decimated.

But before the doom and gloom hit, a good number of Web services pushed and shoved their way out the door in the first half of the year, and look to be here for at least the near term. Even as the second half of the year saw a drying up in new services and very little innovation, as we start to look toward 2009, there are new brands that many of us know were but a glimpse in an engineer's eye when 2007 finished and 2008 took over. And while no list is complete, here are some of the best that can claim 2008 as their birth date. I expect this will miss quite a few, so please make sure to nominate your favorites and tell me why I'm wrong!

1) Summize (Twitter Search)

Search is still king, and real-time search is having a huge impact on the way people find news, share ideas, and see trends. Summize built its business around being a search engine for Twitter, and soon became more stable, and theoretically, more useful, than Twitter itself. The Twitter team, in desperate need for more engineering help, acquired the company and absorbed into the microblogging service.

Expected Exit: Acquired - Already Complete

Twitter's acquisition of Summize was a smart move, considering how real-time search is becoming critical in times of breaking news. Many, including myself, are turning to Twitter search instead of Google, Yahoo! and the traditional news wires to hear reports from people on the ground, unfiltered.

2) Socialmedian

While many different sites have conquered the online activities aggregation space, Socialmedian went about the process in a different way than all the others, letting people not only follow friends and pipe in their shared content from a wide variety of 3rd party sites, but organized it in terms of categories. The category feature was so successful, CEO Jason Goldberg has been able to showcase specific events, including the 2008 election, and the financial crisis, and make Socialmedian a go to site to interact with "newsmakers". The site, starting from scratch in the Spring, has risen up to challenge FriendFeed, Digg and other sites for social news - and continues to grow at a rapid clip.

Expected Exit: Acquisition by First Quarter of 2009

With Goldberg and team having raised so little capital to get the product off the ground, and having kept costs very low, with the development team in India, the bootstrapped Socialmedian looks to be a ripe target for an acquisition, in my opinion. Without strong revenues and the public markets the way they are, Socialmedian would be smart to find a strong content or media partner, to join forces and enable the service to continue its growth.

3) BackType

Technorati and Google Blog Search, as well as many other directories and search engines have typically focused on the blog as the central nervous system for their offering. But as many would agree, it is the comments and conversation, no matter where they are, that have real meaning to blog authors and participants. While everyone was busy trying to see who could land on the Techmeme leaderboard or break new ceilings in Technorati Authority, BackType debuted a site that tracks comments by individual, lets you follow individual commenters across a wide variety of sites, be alerted when comments with keywords take place, and see charts that display keywords' momentum.

Expected Exit: Acquisition in Second Half of 2009

The BackType founders are working together on their second startup, having abandoned the first when it didn't gain traction. While BackType doesn't yet have an amazing market presence, they have forged a unique foothold that so far looks unchallenged. With any luck, I would expect the BackType team to deliver more enterprise-capable brand and identity management tools that would enable the service to gain revenue and exposure, letting the service to remain independent through the majority of 2009 before finding a place within WordPress, Six Apart, Google or Twitter.

4) TweetDeck

TweetDeck isn't a Web service, but this Adobe AIR application introduced new functions to Twitter usage that changed the game in terms of how people use the service. By introducing a multi-columned app that features groups, integrated search, direct messaging, and replies functionality, many are swearing by TweetDeck, and it looks like it may soon overtake Twhirl as the most popular Twitter application. Busy Twitter addicts including Guy Kawasaki swear by it.

Expected Exit: Remaining Independent through end of 2009

Iain Dodsworth is continuing to upgrade the product, and it's widely rumored he may soon integrate multi-account support, as well as integration with additional services, outside of Twitter. If he can get enough people to donate or pay for the application, there's no question he could make a full-time living from the resulting revenue. The question is, will people who expect a free service to have 100% uptime spring for the app that gets them there?

5) Strands

While FriendFeed, Profilactic and others were first out the gate in 2007 with their lifestreaming and social activity aggregation tools, Strands has worked on their own social news and lifestreaming site, in beta, since mid year. Focusing on delivering a clean interface for their Web, mobile and iPhone application versions, and keeping a strong emphasis on tracking musical preferences, Strands has developed a loyal following who find the site less noisy than some services and cleaner than others. Strands, instead of marketing to early adopters, like me, has given a great deal of focus to converting the more mainstream user, and acting as an evangelist for other third party applications, ranging from Pandora to Twitter.

Expected Exit: Remaining Independent through end of 2009.

Strands' history both bodes well and plays against them. Their VC funds offer them a strong balance sheet, but may also force the company's investors to seek a return that would be unavailable, given current market conditions. The company will need to find a better way to differentiate against FriendFeed and others, and hope that appealing to mainstream America works.

6) ReadBurner

A service that would tabulate the most frequently shared items from Google Reader was high on my list of sought-after sites in 2007. The catch is that I always thought Google would do it themselves. When ReadBurner debuted in January, it was a delight, and the simplicity of the service bred many clones, including RSSmeme. Later in 2008, its older cousin, Feedheads, broke out of the Facebook garden and entered the general Web. ReadBurner, and others like it, serve as having the potential to unseat less-democratic popular news hierarchies, such as Digg, assuming they execute well. As an advisor to the service, I'd like to say they are on the right track, or rate the service higher on this list, but development has been slow of late, and needs to get going again.

* Not Listing an Expected Exit Due to Assumed Bias *

7) Feedly

Like many other smaller services this year, especially those around the Google Reader and Twitter ecosystems, Feedly takes an existing popular product and makes it better - giving a news magazine feel to what previously had been a standard RSS reader. Feedly launched as a Firefox plugin in the middle of the year, highlighting recommended articles from friends, popular feeds, and integrating with Google Reader, so when you made changes to your Feedly, those changes tracked back to Reader.

Expected Exit: None

Feedly's founder recently noted his excitement over earning the service's first dollar, after a user Tweeted that she'd gotten distracted by an ad within Feedly and clicked through. Given most other RSS based apps haven't found any revenue yet, a single dollar is a lot more than zero, but Feedly doesn't look like it has any kind of mass that would push it to the mainstream, let alone turning into a viable business. For now, it's just an interesting twist on data consumption. The site will only go away if its developers get bored of it.

8) Gnip

With sites like Twitter, Facebook, Flickr, Delicious and others getting pounded all day by third party services tapping into their API and sucking down their users' updates, Gnip recognized these external sites might soon see backlash from the data sources, as too much of their own infrastructure was being used to power other programs. In light of Twitter's up and down summer, Gnip debuted to act as the middleman, essentially making data portability easier, reducing one-offs between services.

Expected Exit: Acquisiton by end of 2009

It's hard in life to be the middleman, trying to play equal with every service. Should Gnip really start to become the Akamai of data portability, it's likely that one of the biggest data producers would want to snap up the service for themselves, and either limit competitors' access to it, or start charging fees. In a world when VC money is hard to come by, Gnip would be smart to take the offer.

9) Toluu

You'll note two major themes regarding hot services in 2008: RSS and friends. Finding out what your friends were reading and sharing were key facets of most of the new products that gained my attention this year. Toluu, developed by Caleb Elston, offers a site where you can upload the OPML file of feeds you read, mark your favorites, and see how compatible you are with other users of the site, helping find new feeds, and new people. Over time, the service enabled me to see new blogs my friends were subscribing to, and you could even notify Twitter if you had added a new blog to your reading list.

Expected Exit: None

Toluu is a geeky hobby for Caleb. He's recently also gotten behind Kallow.com, a gift recommendation service. Toluu hasn't been monetized in any way, and is unlikely to develop into an acquisition target, unless another service wants to use his recommendation engine.

10) SocialToo

Twitter and Facebook have become such a part of the blogging ecosystem, that new services have sprung up to make it more useful and intuitive. Among them is fellow louisgray.com author Jesse Stay's SocialToo. The service looks to act as a bridge between multiple social networks, including Twitter, Identica and Facebook, letting you automatically follow those users who follow you, offering a black list of people you never want to follow you, setting up an automatic message to those who choose to follow your account, and recently, the addition of surveys that can be distributed by Twitter and tabulated on the site, much like SurveyMonkey and PollDaddy.

Expected Exit: Remaining Independent through end of 2009.

SocialToo contains some advertising, and if I were to guess, it may offer premium features, as the survey functionality could be improved a great deal, possibly even going head to head with sites like SurveyMonkey. While Jesse is unlikely to get rich off SocialToo, it's smart in that it's not tied just to one service (Twitter), but has the flexibility to add on new networks as they rise in prominence.

Also on the list but outside of the Top 10:
12seconds.tv, BlogRize, Identica, LinkRiver, OneSpot, PeopleBrowsr, Plurk, Rejaw, RSSmeme, Shyftr, Yokway

Twitter Planning to Open Up the Firehose "by Thanksgiving"

By Jesse Stay of Stay N' Alive (Twitter/FriendFeed)

In an assuring statement in the Twitter API Developers Group, Alex Payne, the API lead at Twitter, shared that they have plans to have their Fire-hose of Data available to developers and users by "Thanksgiving at the Latest".  The Firehose, or Twitter's continuous XMPP stream (the protocol that powers services like Jabber and Google Talk), has been at the center of controversy for Twitter, where they opened it up briefly to developers, and had to take it down again when they realized the traffic was simply too much for their servers.

The shut-off of the firehose has set off a slew of critiques, including my own, even sending Steve Gillmor to Identi.ca briefly, and ending up in a get-together of like-minded Twitter and other developers to "bearhug" Twitter.  Twitter responded saying at times there would never be a Fire-hose again, and at others, that they were now sending users to services such as Gnip to access the data.  With Gnip closing its doors on its own XMPP stream recently though, it would appear even more frustration is brewing amongst developers.

All that controversy may just come to an end however, as Payne stated in the developers group:

For what it's worth, we've actually been cranking on the "firehose"
solution all week. We've evaluated several queueing systems, and I've just finished work on a proof-of-concept backup plan if those don't pan out. We'd really like to have a solution in place by Thanksgiving at the latest.

There's no doubt with FriendFeed opening up their Firehose of Social Media data, and Gnip cutting off it's XMPP stream that Twitter is feeling the pressure lately to open up real-time data to developers and users.  With Gnip out of the picture, Twitter now has no more resources to send people to in order to hold people off until they get their API in order.

Proof is in the pudding however, and it will definitely be interesting to watch as Twitter attempts to tackle this problem.  Maybe we'll all be getting a little early Christmas gift from Twitter after all?

Read more by Jesse Stay at Stay N' Alive.

Throttled By the Twitter API? Try Something New.

Guest Post By Rob Diana of Regular Geek (Twitter/FriendFeed)

Well, the microblogging API space sure got interesting in a hurry.

First, on Thursday, Louis Gray reported that Twitter was throttling unauthenticated API requests. This obviously would effect several applications in a very bad way. Later in the day, Dave Winer let everyone know that Identi.ca has implemented the Twitter API. And on Friday, in a surprising move, TechCrunch announced that Twitter is sending the XMPP firehose to new middle man Gnip.

So, what does this mean to you? Well, that is a good question. First, we know what the Twitter API looks like. Identi.ca replicating the API is good for interoperability as well. Yes, they copied the main Twitter API, but have yet to include the searching capabilities that Summize supplies. However, they do have RSS feeds for any search query which does suffice for basic searching. The other big players in the microblogging space, Jaiku and Pownce, also have APIs. But, what do they have to offer?

Jaiku's API contains the usual suspects, the public feed, a user's feed and a user's profile. It also allows for "presence" updates which is helpful for allowing applications like Ping.fm to post to multiple services. It also provides a method to get a user's current "presence", their last item in the "presence" stream and as well as a specific item in the "presence" stream.

Pownce's API is similar as well. There is a public "note" list, a user's note list (which can be filtered for replies, private messages and other coolness) and a user's profile. You can also retrieve a specific note, with replies included optionally, and the list of recipients for the note. For social graph fans, you can get the friends (mutual relationship) of a user, fans of the user and who the user is a fan of. For posting notes, there is the normal post method as well as separate post link, event, file and reply methods.

Interestingly, there is a method to determine the list of users a post can go to. There are some other minor goodies like feeds for the public list and a user as well as simple web post integration. Obviously, this is an API designed with developers in mind. They thought of several different ways to use the application and provided APIs accordingly. The only problem that I could see is that there is no search supported. Hopefully a third party service like Gnip will fill that void, like Summize did for Twitter.

Now that looks like a good foundation, but there are some fundamental problems. It is not obvious that Pownce and Jaiku support something like an XMPP feed, so, there may not be the ability to have the full public stream at all times. This type of thing is critical for interoperability. There is also inconsistent support for threaded messages and other post types (like the Pownce event and file posts). Why haven't we seen a real multi-microblog client? Ping.fm is doing multi-writes, but does not support multi-reads. In the instant messaging world, where the XMPP standard comes from, we do have multi-chat clients and few actually support XMPP! We are starting to see some standardization in this space as well with Identi.ca copying the Twitter API as well. If we consider the Twitter API a defacto standard and we have the XMPP standard for real time transfer, there should be little stopping developers from creating the ultimate micro-blogging client.

Now, the question is, are you willing to wait or do you want to crown someone king?

Gnip CEO's Goal: Make Twitter's Data Flow Suck Less

Data publishers and data consumers can be both friends and enemies, when it comes to the seemingly infinite demand for and growth of real-time data from Web services. Services like Digg, Flickr, Del.icio.us and Twitter are happy to see their user bases expand, and to see developer communities be built around their products. But with each new application hitting their API, and each new user, comes new demand that can put strain on their infrastructure, even if the outside application is just checking for updates which aren't there. Gnip is looking to act as a go-between for data publishers and data consumers, delivering updates from the services to the applications, and reducing the queries that can drag popular sites to a crawl.

Today, Gnip made headlines with an announcement that Twitter notifications would be sent to the service via XMPP, letting outside developers tap into Gnip instead of adding more strain to the embattled microblogging giant. And while this won't solve all of Twitter's issues, it does offer developers an alternative, taking some of the power out of Twitter's hands. The announcement did not contain any money changing hands, done quid pro quo.

After the morning's hubbub, I talked with Eric Marcoullier, CEO of Gnip, to better understand how adding Twitter to the team's growing array of partners would help users and developers, and whether this solved the growing concerns around Twitter's API limits that have seen application authors frustrated. And the answer so far, is that Gnip can solve some problems today, and is preparing to solve more issues soon. But it won't make Twitter's problems disappear.

"All these data protocols can be an exponentially scaling hassle. I like how people thought Gnip would single-handedly fix Twitter's problems, but that minimizes how big Twitter really is," Eric said. "Some developers don't just want the user stream, but the reply stream as well, and others want Track, which bangs against the Summize (now Twitter) API, to find if there is a new tweet that has a followed word. We might not ever solve that. It's a big scaling problem of reading the content, and it doesn't fix all of Twitter's problems."


Gnip's Data Flow Architecture
What Gnip is looking to do is help publishers looking to syndicate their data, and consumers, who are building businesses off user generated data, by simplifying the complex back-end work needed, and giving entrepreneurs more time to work on the front-end of their product, delivering tangible benefits.

"We're able to go to them and say, all of the effort you are doing to aggregate that data, stop now," Eric said. "Tell us what services you like, what protocol you like, and the data magically appears in real time."

While Twitter has been the most visible client so far, it's by no means the first for Gnip, which launched with two partners out of the gate, in Plaxo and MyBlogLog, where Eric was a co-founder. Since launch, Gnip has also penned partnerships with additional services, including Lijit and Iminta.


Gnip's Growing Partner Roster
Today, developers of applications are authoring products that query popular sites, like Twitter, Digg and Del.icio.us, and do so thousands of times a day, even if the overwhelming majority of the time, there are no updates. Where Gnip works well is for centralized services, like Plaxo, who can dramatically cut back on the amount of times they need to make requests. "It doesn't matter how many people are following an individual on Plaxo Pulse. They just have to ask once." Eric said.

But the way centralized services make queries to Twitter is different than the issues faced by the many apps that are struggling against the 100 API calls per hour per IP address limit discussed yesterday. For that, more work is needed.

"For the average user, 100 queries per hour is fine, as long as you're only querying the API when there is new data," Eric said. "But for, say Thwirl, where they each have their own user connections, they would have to query maybe 50 times, and that's half the load. We're looking for a simple way of creating anonymous buckets, so somebody like Twitter Karma can say 'we have 10,000 users with this collection', and we can centralize it. We're still a ways away from helping folks with distributed clients."

Gnip's initial efforts and partnerships have been completed on the first version of their product. In about a month (or two), the company expects to not just send service notifications to partners, but also, the full metadata, which will bring more rich information from its many supported services, including Del.icio.us and Disqus, Flickr and others. Maybe, at that point, you'll also see Twitter passing on reply streams as well, but that's not set in stone.

"Working with people like Twitter, we want to be sure we are serving their best interests and the developer community," Eric said. "It's a huge win for us."