Andrew Chen Archives

Subscribe · Featured · Recent · The Cold Start Problem 📘
Dear readers, I have moved to Substack and I will be writing here from now on:
In the meantime, I will leave up for posterity. Enjoy!

When will Slide release their hounds on the social gaming sector?

I have huge admiration for the Slide guys how they are dominating the new industry of social apps, using deep skills in viral acquisition, metrics, and consumer psychology. So when their CEO makes a dramatic statement about the internet economy, it’s worth paying attention.

There was a recent quote in Valleywag about the impending recession and how Slide views it: Slide’s Max Levchin: It’s time to shift away from advertising.

Worried about an upcoming recession, PayPal cofounder Max Levchin told that his company, Slide, is "trying to shift away from advertising partially" and go "direct to consumers" for its revenues. "It cuts out one more party from the equation," Levchin said.

Wow – "direct to consumers" – I wonder how long it’ll take before they announce a direct product in the social gaming space. After the recent funding events for Zynga, SGN, Friends for Sale, and others, it would be the next logical step.

I’ve written extensively on the topic of virtual goods for Web 2.0 web properties: Forget advertising – are virtual goods the killer revenue model for Web 2.0, What every Web 2.0 entrepreneur should know about virtual goods, and 5 things that make your social network monetize like crap.

To summarize these posts, the movement towards looking at virtual goods to monetize social sites comes from a combination of factors:

  • Brand advertising on social networks is quite hard, and quite slow
  • With the larger economy experiencing a downtown, brand advertising will take a big hit, making new ad unit types harder
  • There’s widespread consumer familiarity with games and game mechanics
  • Large-scale existence of virtual good economies exist (particularly in Asia)
  • There continues to be a casual-ification of games, making them more social, less time-intensive, and more like social networks

It’ll be very interesting to see how this works out.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of AH Capital Management, L.L.C. (“a16z”) or its respective affiliates. AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell -- or a solicitation of an offer to buy -- any securities, and may not be used or relied upon in evaluating the merits of any investment.

The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any charts provided here are for informational purposes only, and should not be relied upon when making any investment decision. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, I have not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. The content speaks only as of the date indicated.

Under no circumstances should any posts or other information provided on this website -- or on associated content distribution outlets -- be construed as an offer soliciting the purchase or sale of any security or interest in any pooled investment vehicle sponsored, discussed, or mentioned by a16z personnel. Nor should it be construed as an offer to provide investment advisory services; an offer to invest in an a16z-managed pooled investment vehicle will be made separately and only by means of the confidential offering documents of the specific pooled investment vehicles -- which should be read in their entirety, and only to those who, among other requirements, meet certain qualifications under federal securities laws. Such investors, defined as accredited investors and qualified purchasers, are generally deemed capable of evaluating the merits and risks of prospective investments and financial matters. There can be no assurances that a16z’s investment objectives will be achieved or investment strategies will be successful. Any investment in a vehicle managed by a16z involves a high degree of risk including the risk that the entire amount invested is lost. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by a16z is available at Excluded from this list are investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets. Past results of Andreessen Horowitz’s investments, pooled investment vehicles, or investment strategies are not necessarily indicative of future results. Please see for additional important information.