The enthusiasm for investing in social networks that have caught the zeitgeist of consumers but don't have discernible revenue streams shows no sign of abating.
Blog-hosting platform Tumblr is the latest start-up to be boosted by a further injection of funds. According to The Wall Street Journal, it has scooped a new round of funding of up to $100 million, valuing the cool blogging site at $800 million.
Co-founder David Karp hit the front cover of New York magazine and the site is achingly trendy and popular with hipsters, but it has substance beyond the hype. Founded in 2007, it offers users a short-form blogging platform that is flexible, easy to use, interactive, and accessible. It has uniqueness. And it has caught on.
So has Twitter. Tuesday's earthquake on the East Coast of the US once again showed Twitter is now the place where big news breaks. It is ubiquitous and all-consuming. Again, it is still establishing its revenue model and has suffered behind-the-scenes managerial in-fighting that would have crippled many companies. But it marches on, growing exponentially and dragging more and more users along with it. It has unique selling points – and people have bought into it.
Foursquare also recently attracted more VC funding, this time $50 million in a round led by existing investor Andreessen Horowitz. The New York-founded location-based start-up is innovating and evolving its service offerings. It continues to offer users upgrades they find useful and interesting. It has uniqueness – and the revenue potential is starting to become clear and match the hype.
Compare these three examples with Facebook, the template for social media innovation and blueprint for success. This week it quietly scrapped Facebook Places – a me-too service launched last year that attempted to steal Foursquare's lunch. At the time, many commentators – not me, I hasten to add - suggested Foursquare's days were numbered as the behemoth that is Facebook would utilize its scale and crush it like a beetle. But it hasn't turned out like that.
To engage the modern-day consumer you have to delight them and make it easy for them. You have to innovate. Facebook Places didn't tick that box and the Palo Alto-based golden child of Silicon Valley will have to go back to the drawing board and remember the qualities that made it successful in the first place.
These are the new media that are shaping communications. But they must concentrate on quality product upgrades and innovation to continue to evolve and prosper.
If there is one lesson departing Apple CEO Steve Jobs taught us it is that playing me-too and copying competitors does not make for a sustainable ongoing strategy.