Sachin Rekhi

Despite the over 200 music startups that launched in 2008, I am disappointed with the lack of startup innovation in the space. While many of them definitely nailed building something people want, most failed to make something people will buy. When developing a startup, figuring out a viable business model is as important as producing a compelling product. And unfortunately there was little in the way of innovation in business models in the music space.

This is an even more pronounced issue in music, where content licenses are owned by an oligopoly of four highly litigious record labels. The labels have been eager to shut down or sue a variety of music startups, including Muxtape, Songbeat, Seeqpod, Project Playlist, and others. Yet what the labels are struggling most with is recouping lost revenue from the 45% drop in CD sales since their peak in 2000. What they are most desperate for is not a large settlement, but a new sustainable revenue stream. What they need are startup partners seeking to help them generate new commercial value with their content and through relationships between artists and fans.

So are you thinking about adding a virtual economy to your app or website? The great news is there are a variety of startups out there waiting to help you!

2008 saw an explosion in virtual currencies and their associated virtual goods all across the internet. With Facebook social game Mob Wars suspected of making a million dollars a month and Zynga rumored to have made $50 million in revenue in 2008 off of its social and iPhone games, companies are seeing real revenue from this burgeoning monetization model. Even other indie social game developers like Mobsters and Lil Green Patch who also monetize virtual currencies have seen huge success with 13M users on MySpace and 5.9M monthly active users on Facebook, respectively. To top it off, over $580 million was invested in virtual goods related startups in 2008.

Silicon Alley Insider recently announced The Create a Twitter Revenue Model contest. I decided to throw together an entry and today SAI has picked it as one of the finalists. So I thought I would write a blog post summarizing my submission.

Y Combinator is famous for its well known motto "Make Something People Want." This very simple statement serves as a guiding principle for a startup, helping to focus it on this core goal early on: to ensure that its product provides compelling value to its target audience. It also de-emphasizes many secondary issues that, while important, are not likely to be an early cause of failure for a startup. I'm a big fan of the motto and use it myself as a quick filter for all the startup ideas I evaluate.

Yet the economic recession that we are in the middle of poses new challenges. While it hit in the financial and real estate sectors first, it is undeniable that it will have a lasting effect on all sectors of our global economy.

The announcement of Facebook Connect in May 2008 brought the next major chapter in the Facebook platform story. After building the first and most successful social networking platform, Facebook decided to expand beyond its own destination to bring the power of the social graph to any third party site.



Facebook Connect promised to deliver on the five following tenants: trusted authentication, real identity, friend linking, dynamic privacy, and social distribution. In the half a year since the announcement, how has Facebook Connect done?

Let's take a closer look at how Facebook Connect has fared on each of these tenants.

Last year at the SocialMedia Business School I gave a presentation on Media APIs and how they could be leveraged to enhance existing experiences or build entirely new services around freely available media content. Since I have received many follow up questions, I thought I would take the opportunity to expand on the topic.

The most exciting news out of CES 2009 was the Palm announcement of the Palm Pre, webOS, and Palm Mojo Application Framework.

2008 was definitely a year of open platforms with the continued growth of the Facebook and OpenSocial communities, the unveiling of the iPhone and Android app stores, and the countless Twitter clients and mashups.

Yet I believe there is still considerable untapped opportunity in several promising platforms that have yet to see significant traction in terms of hype, developers, and ultimately end users.

So here is my list of the top underhyped platforms that I hope to see many entrepreneurs build on in 2009.

It's that time of year that everyone is putting together their predictions for 2009 and so I decided to do one of my own.

Over the past year I've had the opportunity to work with a variety of music startups. Not only with the two music startups I've been directly involved with (Anywhere.FM and imeem), but also countless music startups looking to leverage the imeem Media Platform APIs I manage at imeem. Based on what I've seen, there are three music verticals that I am bullish about and 5 exciting startups that have started to pursue them in 2008 and expect to see much more from them in the new year.