IRC-Galleria

You know me as a strong advocate (and ex-CEO) of www.irc.fi - IRC-Galleria who has long held the top spot in the finnish youth Internet world and still remains as one of the most active social media sites on the net.

I blogged a detailed entry on their recent-enough statistics in November here:

http://tane.li/2008/irc-galleria-remains-most-active-social-media-net

and more recently compared them to Facebook's Finland network here:

http://tane.li/2009/facebook-finland-network-revealed-irc-galleria-compa...

This time however I have to objectively look at some data and ask the questions:

* Has the growth of IRC-Galleria hit a wall?
* Has it reached its saturation point in Finland?
* Are they suffering from Facebook's success in Finland?
* Is the focus on foreign expansion leaving the domestic site/service lost at sea?

Please note that I haven't been with the company for quite some time now, so I will have to speculate a bit on this.

On 18th of October IRC-Galleria had a big party to celebrate 500K registered + active users. That's only about 3 months 2 weeks ago.

Now they have a userbase of 506484 users. Growing by 6 thousand users in 3.5 months is about less than 2000 users a month - a very dismal figure for a service that has become accustomed to seeing that amount of growth in a week or so.

It seems that IRC-Galleria's growth has slumped by roughly 75% and is currently as little as one fourth of what it used to be - in fact what it has been pretty much throughout the history of the successful site.

Old ancient data that I have shows IRC-Galleria having 283509 users on December 14, 2005.. which would suggest a growth rate of more than 200 (about 207-210) users per day up until they hit 500K in October 2008. Naturally the curve isn't entirely flat like that; towards the more recent years daily user growth has been quite a bit more than that.

The current growth rate ever since hitting 500k has been no more than about 60 users per day or so.

And it looks like it might be slowing down further.

IRC-Galleria's user counter only counts the registered and active users. When people leave the service they almost certainly delete their accounts. Because the whole concept is being built in a way that requires you to be active. Having an inactive account in there is out of the question for many people. Thus every day hundreds of people come in and hundreds get removed from the number, the grand daily total showing currently as modest growth of 60 or so net users per day.

Altogether there has been something like over 2 million accounts created throughout the service's lifetime. Which means that user churn is rather high and some people frequently switch accounts, never complete their registering etc etc. the usual stuff.

Why are the numbers growing so slowly? There might be couple of reasons:

- They have really hit the saturation point. Which I think is rather unlikely. There should be room to go upwards to 750K or ever 1M registered users by making the concept more appealing to older (in this case 30-something) people.

- They are focusing so much on conquering the foreign markets that their primary source of revenue; the domestic service, is left to drift lost at sea. Things such as this are known to happen to companies, and if they do have this going on they would not be the first to make this mistake. Hard to speculate further without much visibility.

- Are people leaving for Facebook? This seems entirely plausible; Facebook has grown "like crazy" in Finland with the kind of numbers IRC-Galleria has never seen. It is somewhat likely that especially the "older" folks in the service are starting to be come less active and switching the primary portion of their usage into Facebook. As far as I know this wasn't yet the case in early fall, but things might have changed over the past few months - as everybody seems to suddenly rush into Facebook. My 18 year old sister is in there. So is my 50+ year old mum. Similar situations seem to be the norm nowdays, with entire families and possibly generations of Finns having their stuff up in Facebook.

Wonder how many of them realize that Facebook has background ties to the CIA (through their venture capital arm, In-Q-Tel) (further reading on that can be found all over the place, for example here.)

Yet still; IRC-Galleria is a giant in the local youth Internet and the activity levels are way high up there far above Facebook.

That's the double-sided sword right there; if your concept requires everyone to be very active, it is very hard to turn it around if people start abandoning it en masse (for any reason) or some other place has more contemporary sex appeal of the hour.

IRC-Galleria got started in December of 2000.. in "Internet years" the service is pretty ancient and not much of the similar sites from 'back in the day' are around anymore. "oh where are the snows of yesteryear?" (some old medival lament).

The only way to survive in a changing world is to change yourself. Perhaps that's what IRC-Galleria needs to face - or we might start to see those tiny growth numbers turn towards the negative territory..

Neil Gaiman was once asked to summarize his truly marvelous and epic masterpiece story The Sandman in once sentence (it is 10+ books long). He said;

"The Lord of Dreams learns that one must change or die, and makes his decision."

As far as I know nobody has yet made an analysis about the Facebook Finland network with precise data.

I managed to get my hands on some Facebook Finland network data, and as far as I know it is entirely accurate. Meaning that it should represent quite accurately what they have in the real database, and there are no intentional errors and corrupt entries in it.

The data also allows me to do some comparison to IRC-Galleria's current data and perhaps even draw a few conclusions.

All data is a snapshot from 19 january 2009 and should be accurate enough.

Facebook Finland Network data contains all accounts that claim to belong to the "Finland" regional network. However such a claim can be made by anyone. Also people can have multiple accounts. Bands have accounts. So do companies. And imaginary entities like characters from TV shows or cartoon figures. This means that not nearly all the users listed in the Finland Network are actual people. It is simply everyone who claims to belong to the network at all - with no filtering what so ever.

IRC-Galleria data is more "pure" in that sense; all of it has been either verified by a real cell-phone number or manually screened by an administrator person. There are still a few hundred known fakes in the data, and a probably a few hundred unknown ones.

Facebook data doesn't know all of its users' gender, which I guess is a result of inanimate objects and such being capable of having their own Facebook accounts. While IRC-Galleria data is gender-precise.

All data in both cases have been provided by the companies directly.

IRC-Galleria data is publicly available here:
http://irc-galleria.net/dob.php
(as pointed out in the comments. Edited & added on Jan 20th)

Some stats from the Facebook data:

* Finland Network is about 927,530 users strong
* Males represent 363,120 users or 39.14%
* Females are the clear majority with 530,510 users and 57.19%
* There are 33,900 entities of unknown gender, or 3.65%
* Largest age-group for Facebook Finland is the 25 year olds with 54,100 accounts
* The ONLY age-groups with more men in them are the 64 and 65+ year olds
* Oddly enough there are 14.81% of users by the age of 63 with unknown gender
* and 16.13% of 61 year olds with unknown gender
* in 14 year old the unknowns only represent 0.63%
* The 25 year olds have most entities with unknown gender; 2180

Stats from the IRC-Galleria data:

* IRC-Galleria data only contains data for 12 to 40 year olds, not extending as high up as Facebook data does
* IRC-Galleria is 506,751 users strong
* About 7 thousand users are over 40 and thus not included in any of the following stats
* Females dominate again: there are 257,061 females to 242,025 males
* Largest user group is the 16 year olds with 47,705 users
* While the average age is still well above 20 at 20.41 years
* In all the younger age-groups females dominate, until at 21 years of age the tide turns and from thereon males form the majority
* The biggest difference is in 15 year olds with clear female dominance of 59.14%
* While after the tide turning 30 year old males form a majority of 68.57%

And here's the real beef, some charts that chew through the data.

Each image opens up to a higher resolution version for better examination of the data. All charts were made with Apple Numbers (which did beat the hell out of excel for this task):

Image: Facbook Finland Network by Volume, Age and Gender

Image: Facebook Finland Network by Gender distribution and Age

Image: IRC-Galleria by Volume, Age and Gender

Image: IRC-Galleria by Gender distribution and Age

And the Grande Finale:

Image: Facebook Finland Network vs IRC-Galleria on the same scale

I am not going to share the specific numeric data with you on this post. But if you do want to get it; feel free to contact me directly, or leave a comment.

..and then for some conclusions from all of this:

• IRC-Galleria is a service used by "young girls and old men" ;-)
• Facebook seems to have a whole lot of fakes and non-people profiles in the Finland network; if you compare some age group masses to the actual population structure, it doesn't quite add up.
• IRC-Galleria is clearly a youth service, where as Facebook is more used by folks that are generally 4-8 years older
• Finland seems to have an odd "business networking inside Facebook" effect that draws many senior professionals in there. (just a theory/idea)
• Facebook's data shows weird stuff about older males; they use it clearly more than females of the same age, wonder why is that? Grand daddys more adaptive to the Interwebz than grannies?
• The obvious: Social Media services are very much a Girlie Thing. The female dominance in the user figures is quite evident.
• Facebook has been way more successful in attracting females of all ages than IRC-Galleria has. This is quite obvious from looking at the both services in the same scale chart: the violet-color females are so much more "thick" and present in the Facebook demographics.
• Final interesting fact: according to my sources IRC-Galleria is about 6 times better than Facebook in monetizing its users. If Facebook would be equally good in monetization they would make over 2 billion EUR of annual revenue, which they certainly do not achieve quite yet.

I did this whole numbers play without really considering much about what facets in the data might be the most interesting.

How do you find all this, and is there anything useful or insightful in it?

I was recently asked by one of the Dopplr team members to answer a series of questions regarding Ye Olde IRC-Galleria strategy stuff for a master's thesis she is currently writing.

www.irc.fi is commonly known as one of the clear success cases in the local market here in social media. I have been writing a few blog entries about that in the past. I haven't been with the company since about mid 2007, after the tradesale to Sulake Corporation. Current strategy is being shaped by different folks than myself, but yet still much of what's visible now was part of the plans and known back then - thou I'm sure with their dedicated and competent team the future will be even more bright for them.

I thought of posting the answers to the thesis questions here on my blog

.. so I did ;)

1. What was the idea behind IRC-gallery?

IRC-gallery is IRC-Galleria in it's "proper" original-language form, so I'm using that in my answers here.

IRC-Galleria's idea is quite simple: share your photos, blogs, stories and comments among friends (and strangers) and discover new ones through active communities and shared interests. Basically the classic kind of hub of social media and social activity online. IRC-Galleria has a heavier emphasis on the groups, interests and communities than is immediately apparent. IRC-Galleria is also very different from Facebook: it's a place to really actively encounter new interesting people with similar hobbies, sense of humor, or what ever - it very strongly isn't just a place to be active with people whom you already know.

2. How did you start the company? Closed betas etc.?

The company was started as a hobby originally. Then it ran as a non-profit organization, and finally became a company after that. It had its "beta" (if you can call it that) with a group of the founders' friends. They were pretty much dragged in and forced to try out the service, which they liked and found simple and fast to use. The usability and focus on the ease of the experience was there from the beginning, and the service jumped into immediate growth mode.

3. What was your growth strategy?

IRC-Galleria's growth strategy was moderate (as opposed to explosive and out-of-control) growth with strict control on quality (quality of both; people and content). For example: IRC-Galleria has never just openly accepted memberships. It takes bit of an effort to register into the site: you either have to have a reliable verified email (like a corporate/school email), or verify your cell phone number to the site, or have one of the admins to check you out manually and approve you. This is quality control and ensures that the kind of people who become members are more likely to actually be active and positively contributing part of this much-loved hyperactive community. IRC-Galleria grew through word of mouth and through spreading school by school, class by class. The growth has always been fast - but linear, never quite exponential. Since the beginning the service has placed heavy emphasis on moderation, clear understandable guidelines and active administration. Quality really helps to produce good activity levels and maintains a great service experience for everyone.

4. How did you build the strategy?

The strategy was build as an intuitive consensus-decision pretty much. People who directed the future of the service strongly felt that this was the right option to take. And you can argue in hindsight that it was. It's a group of smart people who really know their product inside out. So; it was built by talent and vision.

5. How was the strategy implemented in practice?

Growth strategy was implemented in practice by couple of things: The summary of them really being; emphasis on quality and on the unique product, with these components:

1) high quality screening of new members joining the service,

2) active moderation and administration that also frequently removes content and people from the service if necessary,

3) all the employees of the company are very active users of their own product, including all the new and latest features of it. Helps maintain a clear grasp of what's going on and focus on the quality again.

4) IRC-Galleria's personnel growth was also moderate; the company has always generated plenty of positive cash flow, but has still hired based on a conservative growth strategy and getting quality instead of quantity. The aim was always to reach to become the largest and most active Internet site in Finland; the "most active" part was already passed years ago when in 2006 TNS, the large multinational that measures different websites, announced in a press release that IRC-Galleria is the most active and frequently loaded site in all of Scandinavia - surpassing such as Aftonbladet and Lunarstorm (successful back then) in Sweden. The jury is still out on the "largest" -part thou ;)

CC Attribution: TheScream@Flickr

6. Did you have to make changes to the original strategy plan? If so, what kind?

The biggest change IRC-Galleria had to make to the original strategy was the addition of more products to the company portfolio and the opening up of the internationalized versions of the service. The original growth strategy proved day after day constantly that it DID work and there was no need to make drastic changes - growth was strong, linear and steady. Instead the strategy was amended to include other products based on the same tech-platform and international versions of the service.

7. When did you reach the goals / milestones of the strategy? In advance, in schedule, late?

The goals and milestones of the strategy were reached quite precisely on schedule regarding the Finnish primary service the company was running. However on the international versions growth was more demanding to obtain and the company was a bit late in meeting targets. The international versions were never projected to grow as fast as the finnish one had one - so there was no unrealistically high optimism around, but still success was lukewarm. Now, in December 2008, this looks quite different; the company is taking on foreign markets strongly.

8. What could have you done differently? Lessons learned?

IRC-Galleria is the kind of case that is widely known and recognized as a success. Thus hindsight is not 20-20 in this particular case; it is sometimes hard to point out what could have been done better. Naturally there's still a bunch of stuff and I could go deep into details with this, allow me to pick just a few:

1) Internationalization could have started earlier and with a more iterative-adaptive approach. This might have resulted in teaching the company the stuff it needed to learn a bit faster and with less effort.

2) IRC-Galleria has almost (but not quite yet) reached the saturation point of its current target group: it is after all being used very actively by just about the entire finnish youth, so it would need to extend beyond the youth: doing this with the same service or coming up with a separate one for a different target audience is the kind of strategic game you have to play here. The company might have done good with starting to plan all this a bit earlier and as a result possibly end up with an even stronger position in the marketplace. However do not underestimate how strong they are now: they are absolutely the top youth media in Finland, and they outsell every other website in advertising - especially sponsored campaigns with high yield results. That's not an easy (nor bad) position to end up in.

9. What is your growth startegy at the moment, different from the previous plan?

IRC-Galleria's growth strategy at the moment is better known by people who actually plan and execute it; like Mr. Ville Mujunen, senior vice president of Sulake Corp who is now responsible of the IRC-Galleria business. However I do know something about where they are headed and its twofold: 1) keep and strengthen their current top position in the domestic market, and 2) really seriously go for the international markets (or should I say: certain international markets). That's it in brief, the rest you will have to ask from the executives there directly. I'm sure they are also keeping the product unique and high quality.

10. Did you involve users in the development and if so, how much? How have the users enabled the growth?

IRC-Galleria involves (and always has involved) users in development very much. First off: all the employees are very active users of the service themselves. So they frequently test out pre-alpha stuff and just raw ideas that come from the developer team. Once something is excellent enough to get into actual production then the generic public steps in: IRC-Galleria has multiple test-groups which are used as a kind of continuous closed-beta.

New features are being constantly introduced to the test-groups, sometimes all groups get the same version of the feature, sometimes they all get different ones, etc. They all have a chance to participate, comment, test and post ideas about the stuff - also have discussions amongst each other in a special sub-community group within IRC-Galleria that's dedicated for that purpose. Besides the contributions they can directly make they are also being measured and "tracked" on the usage of the new features; this is very much necessary in order to see if it really is a successful new product or not.

Once all testing is done the new product/feature gets released into the service for everyone to enjoy. IRC-Galleria tests features, technical things etc by this process, but they also test revenue models and highly conceptual ideas. Sometimes the idea ends up as far as the test-group trials only to be taken back to the drawing board when it doesn't really quite fly yet. I would say that the users have absolutely enabled the growth, yes.

I did an interview with Viktoria Trosien for Tiburon TV at the Slush Helsinki event. It just got posted online as a video that you can find from here:

http://www.tiburon-tv.com/2008/12/01/i-started-with-failing-serial-entre...

It's about how I "started with eventually failing" when Taika Technologies had to discontinue after a promising start (that's another war story then). And moves on to stuff that I have been involved in, my views and opinions about how Finland is as a place for startups and what's the local scene like etc.

I make a claim that Finland would be a forward-looking place where people are willing to abandon the old ways if they don't work. Is this really true or not, what do you think?

www.irc-galleria.net has been the most loaded/active website of Scandinavia since about 2006. Back in September of 2006 this article (in Finnish) was published claiming IG as the most busy website in Scandinavia. Since that time the key numbers have gone up significantly.

The level of user activity remains at a much higher level than any other social media site on the web. In terms of "how often do the users login and do stuff?" IG pretty much beats the heck out of Facebook and posse. And they show no signs of slowing down either.

Some fresh stats:

- About 950.000 unique visitors per week (according to TNS Metrix)
- Over 504 thousand registered users
- Average user is 20.29 years, 60% are over 18
- The site reaches over 70% of 15-24 year old Finns monthly (making it a huge youth media in Finland, bigger by reach than any TV channel)
- Almost 60% of the registered users log in daily.
- 80% of the users log in weekly.
- Every day over 70.000 new pictures are added.
- There are 8 326 692 pictures visible.
- And millions more hidden from the public (estimated at 30-40 million pics total)
- every day over 40.000 blog entries are written on the site.
- Many audio blog entries and video blog entries as well.
- IG's users have self-organized to more than 500K community and interest groups.
- Over 1 million messages/comments are written every day
- There are an estimated 2-3+ billion comments (some really old ones get cleared occasionally etc).
- Monthly page loads are around 2.5 up to 4.2 (or so) billion per month. This is a significant percentage of Facebook or Yahoo! page loads, generated by site that has a fraction of the users they do; just one very strong proof of IG's super-active members.
- Front page alone gets tens of millions of loads per day, up to few thousand per second etc.

As a result of this amazing activity level that has remained high for years and years IG is also one of the most brilliant examples of end user revenue generation and profit. Who ever says that there are no models on how to monetize social media is dead wrong and obviously hasn't looked at IRC-Galleria.

How many of their registered users pay money for any of the services on the site? As many as over 80%. This number is significantly higher than any other conversion rate in any service I have heard of. I challenge you to find a service that would be "free, paying is optional" that would have a conversion rate higher than that anywhere in the world.

While I'm not a part of the company any more operationally (I'm an owner of Sulake nowdays), their success and strong continuing growth is something I (and the whole team) can be very proud of! It's a shame that the service isn't in english and going head to head with Facebook, because with those key figures expanded to a global scale, it would certainly win ;-) Which is probably part of the why IG is going to come out with some internationalization news and things in the near future..