Dave Morin, founder and CEO of of Path, is literally on a path towards making the private social network into a freemium business along the lines of Evernote. In an interview with TechCrunch, he said we can expect to see changes this year to the ‘personal network’ which famously limits you to your ‘real’ 150 friends and family.
He said that since launching the new search engine on Path, traffic had gone up by 50%, and that is only with search being available in English. Since Path is available in 18 languages, there is plenty more engagement to be had with users. Next up will be Spanish, and then search will roll out to the other languages starting with Asia: Japanese, Indonesian, Korean and Chinese are next.
“We fashioned Path as a journal, a path through life. A product like that is about accessing memories. A problem with your iPhone is searching through camera albums – on Path you can search for ‘last year in Japan’ and bam, your content comes up.”
“A lot of our usage is Asia, East Asia and we’re strong in the UK and Germany.” France remains “early”. But Germany has been “gaining steam” in the last few month.
Indeed, Path appears to be quintessentially European, in some respects.
“We’re so focused on privacy that in cultures where privacy is important, we tend to end up having some strong fans. We’ve designed Path for both control and simplicity, so in cultures that appreciate that we have an audience.” Indeed, the huge controversy in Germany about the perceived intrusion on privacy of Google Streetview, appears to have chimed in naturally with Path’s general approach.
Turning to Facebook Graph Search, Morin called it an “amazing achievement,” but also reminded us that Search was a product which worked long before it was switched off and “took a vacation.”
“When I was working at Facebook it was called Advanced Search. You could search for ‘my friends in SF that ski’. It was all possible on Facebook, but it was turned off. This is the return of search ‘with a vengeance’. What they’ve achieved is at massive scale now. Most searches tend to be about people. ‘Find me friends of friends who were designers at Apple’ is a powerful search, right? For us [at Path] we’re more focused on your content. It’s less about people. It’s all focused on your experiences and moments. So you may not find the ‘best’ coffee shop nearby but you’ll find the one your friend used, so you’ll be able to share a story.”
One of the long-held questions about Path has been the question of how it will monetize its audience, and for that Morin made clear the fact that they will be going after a fermium business model.
“We’ve always said we are a premium services focused business. We think of Path as a personal network, in the same way Yammer is a business network.” Although he admitted that being called a “social network” is a useful tag-line, the better description is of Path as a ‘personal network’.
“In 2009 I realised I was not using Facebook to communicate with my then girlfriend – now my wife [Brit Morin, founder of Brit.co]- at all. Or my mom or my sister. So I wanted to create a network where people interacted every day. That is not a media/advertising driven thing – it’s a love driven thing.”
Path has tampered with paid-for virtual goods and services but we can expect this to ramp up.
“We started out by selling some photo filters but that’s been a small business. Later in the year we’re going be rolling out virtual goods and a premium service in the first half of this year.”
It’s a delicate balance to strike with Path’s user base.
“A business model is important, but we want to be in a trust relationship with users. Evernote, Spotify and Dropbox have had great success with fermium models… Yammer and Basecamp have always been subscription models – so it’s not that different… The friction for converting users to a freemium service is much lower than it has been in the past… We’re seeing big numbers in freemium so we guess it’s worth a shot. And mobile is driving this.”
Morin explains that Path’s focus on “simple things” has been at its core.
“We wanted to capture that intimate community feeling, like the early days of Twitter. Now it’s a huge media news platform.” He says Facebook was similarly intimate and effectively private in the old days: find the cute girls, find the keg stands in college. But now it’s connected to high school, work colleagues, groups, movements and events. “It’s all social and public – like being at a party all the time.”
Path, he says, is about being intimate and “the gravity does not change.” To that end, the fourth most popular content on Path is” Sleep” – so you know when your family goes sleep, no matter where they are.
To that end, what does he make of startups like Pair and Cupple (he’s an investor in Pair) which literally allow only two people – usually couples – to share intimate conversations?
He admits these apps ‘haven’t been as broadly accepted “as I would have guessed…” That said “I’m excited by couple networks – but they probably need to concentrate on the types of information that only couples share.”
Does he feel there is the so-called “Series A Crunch” going on right now?
Although he admits he’s been mostly focused on Path in the last year than on Angel investing, “My sense is that there is a lot of talk about the Series A crunch, but I think the Facebook IPO affected the market a lot. Yes, the second half of the year was harder to raise a series A. But Facebook is now on its way up so maybe we’re past the worst of it.”
He blames the perceived crunch not on a lack of funding, but a paucity of big ideas.
“I do think that there are not enough people swinging for the fences. Our generation is beginning to take on the mantle of entrepreneurship and it’s important people are swinging for big goals. You see a lot of small goals being chased and getting finding.”
He believes it’s less about a ‘Series A crunch’ as much as a lot of small ideas getting funded and then not being able to raise another round because the vision is too small, too limited.
In reference to Michael Arrington’s recent quip, “I”m not bored’, Morin says “I like the Founders Fund’s take: We wanted flying cars and all we got was 140 characters.”
He was downbeat on the rash of “Airbnb for X” ideas which suddenly appeared last year.
“Uber and AirBnB brought capital market efficiency to markets where there was none, like unused bedrooms. There was massive liquidity of empty rooms – so you get AirbnB.” The same with Uber and cars. But some people misunderstood that idea, and just invented ‘Uber for X’. “They don’t understand the underlying idea of bringing capital market efficiency to underserved markets, where assets are super inefficiently allocated. If you focused on that you’d make a breakthrough.”
To that end he’s excited by a startup like MatterNet, which is building a network of autonomous drones for Sub-Saharan Africa which can deliver goods to villages inaccessible by roads. “That’s a fascinating and disruptive idea,” he says.
“I’m from Montana – I don’t see why you couldn’t use drones to herd cattle. That seems like an awesome application but no-one is doing it. There are markets just waiting for us to apply this technology to.”
In the education market for instance, he’s excited by Clever, a startup which has taken every back-end system for elementary schools and created a simple REST API on which any app can be built.
A favourite of his is 3D printing. “We’re just starting to reach a tipping point. Most 3D printing has been in plastics. But the killer application seems to me to be food.”
In fact, he came across a Cookie dough extractor for a 3D printer which printed Christmas Cookies “of all things.”
But, finally, he believes Mobile is the “biggest technology opportunity of all time.”
“There are already more smartphones than desktop computers. The market is massive. The thirst is like TV. We find this with Path, if it a new release is only bug fixes only, it’s like you ran a ‘re-run’ [of an old TV show]. The thirst for new apps is incredible.”