Blue Dots Partners

There is a company, you probably have never heard of called JNJ Mobile. The Boston-based company is the parent of MocoSpace. It was founded on October 2, 2005 by Justin Siegel and his best friend, Janie Hall, two years before the iPhone was famously introduced by Steve Jobs. MocoSpace is a mobile social network available on iOS, Android, mobile web and desktop. It is based on HTML5, so any user with a smart phone and an Internet connection can enjoy playing games, meeting people, messaging, chatting, and sharing photos.

In January 2007, the company raised a $3 million Series A round of financing from General Catalyst, that invested another $4 million in a Series B a year later. In September 2013, SoftBank Capital invested $3.5 million. With over $10 million in total funding, the company enjoyed a significant growth ultimately peaking with a monthly community of over 10 million active members and three billion pages. This enabled the company to generate close to $20 million in revenue from advertising and games, which were the two primary business models. At its peak, it was the largest mobile gaming community in the US and Canada with over one million hours spent every single day on MocoSpace.

Back in 2007, the company was racing to be the dominant mobile social gaming leader. This was before Facebook took over the world and became what Justin described to me as a “black hole” that increasingly swallowed up time spent on mobile phones and the web at the expense of many apps, websites, and other activities. In early 2011, MocoSpace expressed an interest in buying MySpace that had been acquired by News Corp in 2005 for $580 million, but the deal never materialized.

So, what happened to MocoSpace?

In the consumer space, it is very hard to retain the attention, the enthusiasm and the engagement of users. Consumers tend to be fickle and unpredictable. We tend to follow fads and when Facebook masterfully pushed its App and mobile experience, more time was spent by its users, and advertisers started to spend more and more money with Facebook, especially given its targeting ability. With less revenue, less money to develop new games and less marketing budget, MocoSpace started a slow but ineluctable decline.

I recently had an interesting discussion with Justin about the possibility of growing MocoSpace again. Justin’s thoughtful answer was actually a question he challenged me with. He asked: “Can you cite a social network consumer company that managed to reignite growth after a significant period of decline?” I scratched my head, racked my small brain and could not come up with any answer. Justin went on to explain that he has looked all over for examples including asking many industry experts the very same question, and no one could give him an example. He even asked Ben Horowitz, who co-founded the blue-chip VC firm Andressen Horowitz with Marc Andressen. MySpace, Bebo, Friendster, Tumblr, Geocities are all examples of once hot, growing consumer networks who have failed to regain growth after a substantial period of decline.

Sometimes, top-line growth is outside our control and reach. When consumers change taste or centers of interest, they leave you, and your brand becomes more of a liability with no real future or possibility to come back. If and when, as Gertrude Stein said it first about the city of Oakland in California, “there is no there there,” then move on and try a different way to make the planet spin the other way and change the world.