An Entrepreneur Takes On LinkedIn — and Facebook

Entrepreneur Rick Marini has a lot to be thankful for, including smart, connected friends who’ve supported him in the launch of two of his businesses. The most recent of these is BranchOut, which leverages Facebook to help people find business connections and that has an enviable list of backers and advisors.

Marini may soon need them more than ever.

The 38-year-old entrepreneur first benefited from close ties when he and his best friend from Harvard Business School, James Currier, created Tickle back in 1999. The company — which raised $9 million, mostly from August Capital — leveraged viral marketing to become an immensely popular purveyor of intelligence, matchmaking, and personality quizzes. It sold to the jobs colossus Monster in 2004 for roughly $100 million.

Marini’s friends have more recently come to his aid with BranchOut, a 20-person, San Francisco-based company that started life as a social entertainment site called SuperFan in 2008. The bootstrapped service struggled until last summer, when a friend of Marini asked for an introduction for a sales lead to a company. As Marini recalls now: “I couldn’t remember who in my Facebook graph worked for that company and typing in the company name took me to its Facebook fan page.”

Marini asked one of SuperFan’s six engineers to create a widget to solve the problem. Four weeks later, BranchOut was born. Accel quickly lined up to lead its $6 million Series A, along with Norwest Ventures and Floodgate. Marini also assembled a more than a dozen angel investors, including Ben Ling, a Googler who leads the monetization efforts of YouTube; Twitter product manager Josh Elman; Path founders Shawn Fanning and Dave Morin; and Matt Mullenweg, the founder of WordPress.

“I still have to prove the value of BranchOut” to potential partners, says Marini. “But if I want to do a deal with WordPress or Twitter, I have an investor who’s motivated” to help.

Still, the greatest test of Marini’s connections may come in a couple of years, when Facebook — presumably a public company by then — will need to keep feeding investors’ growth expectations.

Right now, BranchOut charges companies to post their job listings. But it plans to begin charging a monthly fee for a product aimed at recruiters and salespeople this summer, à la business networking giant LinkedIn. Asked if Facebook might begin requiring a levy from the company when that happens, Marini sounds doubtful. “I think Facebook would love to see BranchOut bring recruiting to Facebook because billions of ad dollars could follow,” he says. “That’s a bigger opportunity for Facebook than trying to tax us.”

But Marini wouldn’t be the first entrepreneur to misjudge in putting himself at the mercy of the big platform providers. In March, for example, Twitter told third-party developers to stop making any Twitter client applications. (The company argued at that time that it was “under-serving users” but naturally, the company also wants to own its users so it can profit from their engagement.)

Meanwhile, Facebook’s constant redesigns regularly force companies to retool their strategies, if not abandon them altogether. Many expect that Facebook’s decision to make its Credits currency mandatory will cripple many game developers that have until now relied on their own proprietary in-game currencies. (Facebook takes a 30 percent cut on Credits revenue.)

BranchOut certainly has a better shot of drafting safely off Facebook than most. Accel’s Kevin Efrusy, who sourced his firm’s famous investment in Facebook, sits on BranchOut’s board, which can’t hurt.

Marini also knows how to dodge a bullet. At least, Tickle had its own near-death experience between 2000 and 2002, when online advertising budgets disappeared. It saved itself by charging for the “extended results” of its IQ tests.

And Marini characterizes his relationship with Facebook as “strong,” saying that he’s “down [at Facebook's headquarters] every other week” as part of a “handful” of privileged companies that are working on some “private beta partnership ideas” with the company.

Whether that relationship, or Marini’s others, will forever insulate BranchOut from Facebook remains an open question. But clearly, Marini thinks the opportunity is worth the risk.

“We don’t have control over [Facebook’s] communication channels. We have to play by Facebook’s rules. But there’s no way I would have created a site like BranchOut if I couldn’t balance the lack of total control with the benefit of a huge user base. It’s the biggest distribution platform in the history of the world.”

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5 Comments

  • When facebook becomes inundated with corporate bureaucracy and the site is cluttered with money-making gimmicks, its luster will fade and people will use it less and less.

    Part of the allure of facebook to users currently is its simplicity and unobtrusiveness. The more I hear about these companies salivating at monetizing facebook, the more rapid and precipitous its decline will be.

  • [...] Asked if Facebook might begin requiring a levy from the company when that happens, … read more PE Hub Blog read [...]

  • [...] 1:44 pm No Comments BranchOut is a company founded by HBS alum Rick Marini. Angel Investors and a VC firm gave BranchOut funding to expand the company recently. With BranchOut, you have access to job [...]

  • [...] Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. [...]

  • [...] peHUB » An Entrepreneur Takes On LinkedIn — and Facebook [...]

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