I’ll say this for Marc Andreessen: he knows how to make a splash. First, he writes a whole series of excellent (and lengthy) blog posts with advice for startups — so excellent that my friend Paul Kedrosky jokes about how he’s making the rest of us look bad — and then he announces a blockbuster financing round of $44-million for Ning, which values the company at something north of about $200-million and has got everyone talking.
My friend Rob Hyndman, a lawyer who advises technology startups, says he is skeptical of Ning’s ability to justify that kind of money, and so is Rob Hof at BusinessWeek — who draws a comment from the man himself by comparing Ning to Facebook. Don Dodge says that he doesn’t think Ning’s revenues will scale. And Umair comes right out and says Legg Mason’s investment in Ning is an example of dumb money. But is it really? I think some of those criticisms miss the point about what Ning is trying to do. Whether it will succeed or not remains to be seen, but I think Ning is trying to become the “Intel inside” for social networks.
In some ways, Ning’s strategy is the opposite of Facebook’s. Whereas the Mark Zuckerberg show is all about bringing people — and eventually transactions — to Facebook, and becoming a platform in that sense, Ning wants to be the plumbing for any kind of social network. The company is even happy to help you turn your soc-net into a widget that you can then embed in Facebook.
I used Ning to set up an ad-hoc social network for a class reunion I was involved in organizing, and it was easy enough to use that even the ancient classmates I was dealing with could figure it out. I think Ning’s vision is that instead of everyone going to Facebook or MySpace, there will eventually be hundreds of thousands or even millions of social networks, all tied in to each other in some way (through Google’s SocialSystem perhaps?).
Ning clearly wants to power that explosion — and the way it has been configured is easily powerful enough to do that, I think, given enough horsepower and resources to allow it to scale. Will it succeed? I haven’t a clue. But I think the strategy is an interesting one.