On your marks. Get set. Go. The fourth Facebook goldrush just started.

With roughly a billion daily active users, whatever Facebook does is kind of a big deal.

Even when Facebook was smaller, the size of its audience dominated any other platform. Any time it offered other companies API access to that audience, a goldrush occurred and big audiences got built. We’ve seen this happen three times before:

2007 Goldrush 1: Facebook App Platform

Ah, the heady days of throwing sheep, picking your top 5 and posting to your friends SuperWall. Companies like Rockyou*, Slide, Flixster* and Hungry Machine reached enormous scale by jumping on the platform fast and optimizing for viral reach. Many never built long term businesses because they were spammy and their interests were not aligned with those of Facebook. So Facebook kept changing the rules on the platform, creating a constant game of cat and mouse. But some companies found exits and eventually the Facebook killer app was found, social games, and Zynga got built.

2009 Goldrush 2: Self Serve Right Rail Ads

Many startup ecommerce companies got built on the basis of the Facebook Ad platform. Gilt, JustFab, Shoedazzle*, Groupon, LivingSocial* all grew incredibly fast by creating a “shopping as entertainment” experience and advertising through the FB right rail. The core gaming companies did the same, including Kabam and Kixeye*. There was a window of about two years where this channel favored nimble startups with technical mindsets. Facebook for user acquisition wasn’t understood by traditional marketers at first. But eventually tools were developed that brought the big game publishers and retail incumbents to parity. The startups that had gotten to scale (and not overspent) made it through the window and others did not.

2013 Goldrush 3: External Links in the feed

There was a time when Facebook worried about Twitter. In particular, it worried about Twitter being a better place for content discovery. So Facebook put its thumb on the scale and started increasing the visibility of external links in the feed. This led to the explosive growth of companies like the Huffingon Post, Buzzfeed, Viral Nova, Distractify*, Mic* and Upworthy. Some of these companies have endured and some have faded, but all took advantage of the window of opportunity to grow to 50M+ UU/mth at rates not seen before.

2016 Goldrush 4: Live Video + ChatBots

This brings us to today. Everyone is expecting two big API releases to come at F8.

The first will support Chatbots built on top of Facebook Messenger. The killer apps will be conversational commerce.

The second will support video and live video that isn’t shot in the FB app. The killer apps will be shows and channels.

When Facebook makes something a priority, there is a huge opportunity for fast moving, nimble, technical and hacker minded startups who can work fast enough to deconstruct the algorithms that determine what gets placed in the feed and optimize for that. The short term winners will do just that and see extraordinary growth and reach. The long term winners will build on this reach and align their interests with Facebook’s. They will create high engagement experiences that are valued by Facebook’s users on top of their reach. They won’t assume that this window will be open forever, and will build their own channels to communicate with their users. Many will eventually alleviate their Facebook dependency over time.

These goldrushes never last longer than a couple of years. There are lots of zigs and zags along the way (e.g. Goldrush 3 ended up in Instant Articles), and some end in tears (e.g. the Facebook platform APIs underlying Goldrush 1 has been largely sunset). But these opportunities to get to massive scale quickly don’t come along often and they create a new generation of interesting startups. The earliest movers gain strong advantages as they walk down the experience curve further and faster than fast followers do.

Get going now, and tell me about it!

☞ If you agree with what I’m saying Please tap or click “♥︎” to help to promote this piece to others. If you disagree, please respond in comments and we can talk about it more

☞ To hear more of my thoughts in the future, follow me on Twitter


* Lightspeed portfolio companies