z on life

I have mad respect for the Xobni guys. I think they have more courage than almost every other YC company combined. Though I don’t know anything about the cap table, I would guess Matt and Adam could have walked away with something like $5MM each. And hey, is a year or two at Microsoft that bad? These guys took an outcome that many other YC companies would die for and told MS to stick it. Walking away now means a lot, and these guys are definitely ballsy.

So what’s next for Xobni? It feels like there are three main issues to address. First, they need to get out from a position where the only logical buyer is Microsoft. Second, they need to grow the business either by generating revenue, or by becoming far more strategic in both the depth of their product and breadth of their domain. Third, since they have asserted their defiance, do they create an IPO roadmap?

So what would I do if I were running Xobni?

1. Support a whole range of email clients and become the de facto email analytics plug-in across the board. By doing so, Xobni will escape the Microsoft-only trap and will increase their pool of potential users. They have already started doing this with Pine (yes, joke acknowledged) and I am sure others are to come. So, this one is no surprise.

2. Produce an email client themselves when their value proposition gets good enough. As a middle ground, you could simply have Xobni synchronize all of your mail with its own Xobni webmail service (for sure in certain setups, a little technical magic might be needed, but its doable). In this way, anyone with Xobni installed could start to use a Xobni webmail service as a standalone client with all of their messages, contacts, and the like pre-populated. Because they can control the messages, there are lots of powerful things they can do with viral user acquisition strategies a la Hotmail (or even pull some strategies from the Facebook app community since Xobni is a slightly social being). If they get in the door with a plug-in, wean people off with a webmail or local client that has all their existing information pre-populated, and spread like wildfire with some finely tuned viral processes, they could do some serious damage.

3. Don’t build a social network, just make email fun to use and make it easy for people to see what their email graph looks like. While Bill Gates said Xobni is the next-generation of social network, I think this is hardly the place to take that literally and incorporate pictures, walls, and pokes. The communication stack is a hard thing to challenge, and because people have pre-existing and quite different notions of how they use email and social networks, it will be quite the uphill battle to merge those together. People need to feel that each thing they use has identity, and when you blur the lines too much, they get confused or turned off. I would stick to making a fun and useful layer of tools that leverage the social graph instead of becoming the medium on which the graph is built. People love rankings, quantifying friendships, and colorful behavior graphs enough as is. The temptation to be the next Facebook is one to ignore.

4. Become the all-in-one contact threshold tool, and by that I mean users should be able to see their activity across all aspects of communication and set personal alerts for when their interaction level with somebody drops below or goes above a certain level. Efficient networking in the business (and sometimes social) world means knowing exactly how much time to spend with each different person. This sounds cold and impersonal, but if your network is large and sheer efficiency is your game, then it is crucial to have your thresholds just right. If Xobni monitors the whole spectrum of communication, they are in a unique position to do just that. Imagine a day when in Xobni you can set person A to a level 1 contact, person B to a 3, etc and then give weights to different communication types to ensure the level of interaction you are engaging in with someone is not too much or too little given how important they are to you. This is the next level of streamlining your life.

5. Sell employee analytics to HR departments via the huge amount of mailbox data that they can parse and interpret. What if Xobni did some natural language processing on the tone of intra-company emails to sense employee happiness? What if they could sense conflict within an organization before things got serious? What if they could see the exact structure of communication within the company from an organizational behavior perspective to see who really talks to whom, how often, and how decisions are really made? This reminds me in a way of services like those from Success Factors, a company that recently IPOed and now has a market cap of around $500MM. Businesses will pay through the nose to understand their employees and keep things going as a well-oiled-machine. Xobni could be the oil-filter of big business.

6. Attack other verticals on the local machine like the media player, the instant messenger, the file system, the browser, etc. Xobni as a company is clearly good with data, and there’s ways to enhance all of these areas with some kind of data play. I can think of a few right off the top of my head. It’s clear that these guys have the DNA to think of data-driven enhancements, so I am sure they would be able to crack at least a few more verticals on the local machine. If they can unify this data in the right way, they could do anything from building the cross-domain uber-recommendation engine to selling the most detailed, parsed, and dissected consumer data to analytics companies and others. This sounds like ‘Big Brother’, but as long as Xobni adds enough value to those who install, users simply will not care.

X. I wanted to throw a fun one in the mix just for kicks, and that is to implement premium email delivery. Imagine anyone with Xobni could set a price for which they would have any email auto-bubble to the top of their inbox. You as the sender who also has Xobni could certify an email as premium and actually pay money (revenue shared between Xobni and the receiver) to get that email at the top of the receiver’s inbox. You essentially create an open market for everyone’s prime inbox space. How much would you pay to guarantee a super-important business email gets read ASAP? Could sending a premium email be the new ‘virtual box of chocolates’? Would you pay $100 to get your email at the top of Barack Obama, Perez Hilton, or Tiger Woods’s inbox? Sounds like a joke, but maybe just maybe there is a business in there.

So what would you do if you were running Xobni? Would you have taken the money to begin with? If so, why, and why not go big? If not, what would be your strategy now? I would love to hear some thoughts in comments or email.