Building a $50M Profitable Social Network Focused on Discovery: Greg Tseng, CEO of Tagged (Part 2)

Sramana: Tell me a bit more about Jumpstart Technologies. When did you start it, and what was the thought process behind starting it?

Greg Tseng: We launched Jumpstart in 2001. One of the luckiest things that happened to me is that I met Reid Hoffman when he was at PayPal. He became our mentor and helped us buy office space and hire our first employees. We ran Jumpstart Technologies from 2001 to 2005, and we launched 10 different businesses. Of the 10 businesses, four of them were successful cash businesses, four failed, and the other two were hi5 and Tagged.

Sramana: You said there were four companies that turned out to be cash businesses. Did you structure them to be cash businesses?

Greg Tseng: We structured them to be cash businesses. For some of them, we knew that users would only use it once or twice and that revenue could only be generated by getting new users. In that case we knew from the beginning it would be a cash business and structured it accordingly. In other cases we knew they had a chance to grow and they were structured for growth, which is how we handled hi5 and Tagged. In 2004 we let go of some of the underperforming businesses and we spun out hi5. By the end of 2005, we were entirely focused on Tagged.

Sramana: What did you do with the four cash businesses? How did you let go of those?

Greg Tseng: They essentially ran their courses. They stopped getting new users and stopped making money. We basically spun those out as new companies and started a winding down process from the Jumpstart perspective.

Sramana: What was the premise behind Tagged?

Greg Tseng: We started it in October 2004 to be a social network for U.S. teenagers. This is back when Friendster was the biggest social network and Facebook was for college students. We thought we would carve out a niche among high school students. We did that for about three years, and we got to about 10% of all U.S. high school students.

At that point we opened up to all countries and all ages 13 and up. We went into competition against MySpace and Facebook to become the world’s largest social network. Unfortunately by 2007 we were number seven in the world, and we realized we were not going to win. We decided to pivot and go from a social network and evolve into a social discovery site.

It was hard to accept defeat. I do give us credit for being honest with ourselves and making the pivot when we did. All of the other networks that pivoted too late ended up getting crushed by Facebook. They are all dead or dying these days.

Sramana: What does social discovery mean?

Greg Tseng: Social discovery is a fancy way of saying that you are going to meet and connect with new people. Facebook is a great way to stay connected with people you know. Social discovery is about discovering new connections. It can be for dating and flirting, playing social games together, shared interest or activity partners.

This segment is part 2 in the series : Building a $50M Profitable Social Network Focused on Discovery: Greg Tseng, CEO of Tagged
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