The Bebo effect
Bebo co-founder Michael Birch, who sold the social network to AOL in 2008 for $850m, is back with Jolitics.com, a social networking site for political debate. He talks to John Kennedy
THERE was a time not so long ago in this country that all anyone under 25 could talk about was Bebo. Ireland boasted one of the highest per-capita penetrations for the social network globally and kids under 12 would try to lie about their age to be where their friends were.
It was the place to be for social kudos, to share photos, gossip and videos and be somebody.
At its height in 2008 the social network even made Facebook, which dominates today’s social networking world, look square by comparison. But after its acquisition by AOL in 2008 for $850m, a move that made founders Michael Birch and his wife Xochi an estimated $595m profit, Bebo drifted into the online wilderness.
Earlier this year AOL said it would sell or shut down Bebo because of plummeting traffic, and eventually sold it to venture capital firm Criterion Capital Partners for an undisclosed sum. It has been suggested that the sale raised less than $10m.
As I speak to Birch on a video call via Skype he makes it clear that, in his view, AOL failed to make the most of Bebo, but with a new CEO in place he believes it can be rejuvenated.
In the intervening years since the Bebo sale, Birch and his wife had another child, he underwent heart surgery, they travelled a lot and they both concentrated on existing profitable businesses.
His latest venture is uncannily suited to its time. Jolitics.com, after going into stealth mode in Ireland over the past month and now on global public beta, is a place where individuals can provoke political discussion, nominate leaders and vote on issues.
Birch comes on-screen wearing a Guinness t-shirt and with an infectious laugh.
“Politics can be a bit dry at times, so our aim is to make it a little less intimidating and appeal to the mainstream.
“A lot of communities online are represented by extreme political views and not necessarily representative of the majority of people. What we’re trying to do is make it representative of ordinary people – especially in terms of a lot of analogies with social networking sites like Facebook and LinkedIn. Jolitics will be empowering,” he promises.
Birch says the objective of Jolitics is to get people to speak up and engage on subjects that normally wouldn’t have a voice.
“We’re not thinking this will be the next Facebook by any means, but we do think it is possible to have yourself represented on a political networking site even though you are not politically active.”
He doesn’t believe that Jolitics will pave the way for a replacement of traditional political systems. “I do think it will help make politics a little more open though. It might also give people a voice, help them to be more active, consider a career in politics and cure voter apathy.”
So does Birch think if he had remained at the helm of Bebo that it might today rival Facebook, which has 500 million people subscribing worldwide, including 1.6 million in this country?
“When we started Bebo in 2005 we were actually quite late on the scene. Facebook had already started and I felt we were always playing catch-up. You had a different perspective in Ireland; you saw Bebo before Facebook and that’s why it did so well in Ireland. The fact that Facebook was racing ahead was the primary reason we sold the company.”
Under new ownership, Birch says Bebo may once again thrive, particularly in the UK.
“The new owners have put in a lot of effort and focus; they’ve made some good hires on the product and engineering front. I can never see it overtaking Facebook but there’s a niche it can carve out.
“I think Facebook is a bit dry and very utilitarian but that works for an incredible amount of people. The longer Facebook is around though people will tire of it and seek an alternative. And you’ve always got that
children-parent thing. A lot of kids don’t want to be on the same network as their parents. Bebo has always been a little younger and will continue to grow. There’s a lot of work to do but I think the new team will do that.”
He believes AOL didn’t focus enough on Bebo or buy into it properly.
“They changed CEO right after the acquisition and I don’t think he bought into the vision so how could it succeed? It was never given that real chance to be what it could be. It reached rock bottom and was sold. But now I think, with the right CEO and investors behind it, it could climb back.”
Birch says he got his entrepreneurial flair from his father.
“He was already scarred but was always trying new ideas out. He was pre-internet and not that science-focused, whereas I was more mathematical and science-focused. I was born at the right time and so I was around when the internet was taking off.”
Birch studied physics at Imperial College London and then took up a sensible job in computers at a city firm. Eight years in he decided the time was right to set up a business.
“I think I have a natural aptitude to be an entrepreneur. I never liked working for other people and hated the routine of nine to five. That’s not because I didn’t like working hard, I work hard. The key to living is finding something you think is really fun and focus on it. It then becomes more like a working hobby than a job.”
Although Birch spends a lot of his time in Silicon Valley, and that’s where Jolitics is headquartered, he thinks you can succeed with technology start-ups from anywhere in the world and believes Ireland has many of the right ingredients.
“You need people around you who you can build into a community. You need a good source of talented engineers, not just good engineers but amazing engineers. To do that you need to produce the top 1pc to 3pc of engineering talent and to do that you need good universities. After that you need the right environment for entrepreneurs.
“When I left my stable job I told Xochi that if I didn’t make money after three years I’d get a job. I didn’t make money at all for the first three years so you can imagine the conversations. But I persevered and I got to the point that I knew I could spend the rest of my life building stuff, doing cool things, without worrying about paying the bills at home. But the first three years were stressful.”
Looking at today’s internet environment for start-ups Birch actually believes it is tougher and more complex to set up internet companies. For one thing, it is no longer about just building a website but also an iPhone app, an iPad app, an Android app. The list goes on.
“But what excites me also is every year there is more opportunity than before. For example, TV apps are about to go mainstream and I think they may even be more popular than smartphone apps. Facebook Connect is a powerful platform for start-ups to look at too. Zuckerberg has shown great vision with his social graph philosophy.”
Looking at his business interests today, Birch has invested along with other successful entrepreneurs in his own venture capital firm PROfounders Capital, which will invest in European start-ups. His business Birthdayalarm.com, which predates Bebo, is still profitable and brings in revenues of $4m a year. He is focusing on a new start-up called Zuno, which will integrate with Facebook Connect to bring online greeting cards to 500 million people. Birch has also created an R&D business called Monkey Inferno, which is based in Silicon Valley and creates new technologies and ideas to spin out quickly.
“Our main focus is to get up each day and try and build the next cool thing.”
Birch says his love for internet start-ups and the exciting evolution of technology is all-consuming. “The nice thing about the internet is you can work from anywhere and you don’t have to be at the office every day.”
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