Instagram's Windfall Proves Path's Worth
My friend, a tech-savvy one-time user of Path, summed it like this: “Path. $30 million. Wtf?"
Indeed, it’s a fair question. The investment, which came days after news of Facebook’s $1 billion acquisition of Instagram, valued the niche social network at about $250 million. My friend thought that was, for want of a better word, bullshit.
Having used the service, he said it doesn’t offer much beyond a nice UI. No one uses it, he complained, and he couldn’t see it going anywhere. You can’t access your content outside of the mobile application, and there’s nothing to inspire you to go to it for any reason other than why you’d go to Facebook or Twitter. His grand conclusion? “It’s kinda meh.” Dead in a year.
Other friends have similar gripes. They love the design and the idea, but because not enough of their close friends are using it, it’s not worthwhile. They say they keep getting hassled by other early adopters to join their network, when eschewing such loose ties in favor of tight connections is supposed to be Path’s very selling point.
And then there’s the problem that there are just too many social media presences to maintain. I’ve split my personality between Facebook, Twitter, LinkedIn, Instagram, About.me, Spotify, Pinterest, Quora, and Google+. (Just kidding about that last one.) Adding Path, a slightly more granular social network, to that list just seems indulgent, not to mention annoying. (Hey! Business idea: Software that auto-updates your profile across whatever networks you’ve ever touched.)
So $250 million. Seems like a stretch, right? Maybe. Last year, Google thought Path was worth at least $125 million. And even though just a few months ago it seemed like it was about to run out of money, in the light of the Instagram purchase, Path looks a whole lot more attractive. Why?
Because Mark Zuckerberg’s $1 billion says that mobile is hugely important – and Path is nothing if not mobile. Unlike Facebook’s mobile apps, which are just the Web experiences ported to smaller platforms, Path was built with the handset in mind. Instagram has already showed that our mobile devices will be the main portals to our social worlds (if they aren’t already; and yeah, I’m sure there’s a Pew stat somewhere that proves that). Path is valuable because it knows how suck in our mobile photos and videos without having to think of batch uploads, and how to make them fit beautifully and brainlessly into an environment built for that very purpose.
Then there’s the niche thing. Mobile might be Path’s winning proposition, but, in the event that Facebook manages to come up with its own killer mobile app, the niche element might serve as a pretty good second trick. People have talked about this issue before. David Morin, Path’s founder, said himself at the last PandoMonthly that while Facebook has built the town square, Path offers the dinner table.
I encountered a perfect example of this in my Facebook feed just last week. My 13-year-old cousin in Australia was blithely enjoying a conversation with her friends based on her most recent status update, which, actually, I think was rather insightful. It said: “I like pie,” and was Liked by three people. The first commenter, a girl named Kara*, said “3.14?” which I thought wasn’t bad for a 13-year-old. Then one of her male friends, Walt, added “penis pie,” which I thought was rather cheeky for a 13-year-old. Very soon, my cousin’s mother jumped on. “[Cousin’s name]!” she said. “You forget I can read everything you say on here! What Walt said was disgusting!”
“Bummer for my cousin,” I thought. “I bet she can’t wait to escape to a place where she doesn’t have to hang out with her mom,” (except, in my head I said “mum”). Path could be that place. Just like Everyme could be that place, or even, for more private conversations, Pair or the mysterious Just.me could be that place. (Serious question: Is that going to be a social network for one? If so, I’m on board).
But with 3 million users, Path might be the natural place for my cousin to escape to when she gets savvy enough to maintain a family-friendly presence on Facebook and a secret, racier version of herself in a more exclusive neighborhood. Someone like Google could really use a social pull like that. Or Path could just go ahead and build itself into the best dinner table in town without asking any bigger companies to sit down at it.
So $250 million. Is Path worth it? Even leaving the prospect of an acqui-hire aside, it seems like a decent bet. So let's go with a tentative yes. And in the meantime, I’ll leave my friend to pour his cynical doubt-juice all over his next target...
* Names have been changed to protect the young
Update: Apparently my cousin is 14.