The birth of Bebo

Building networks is hard. Here’s how Bebo’s founders do it—again and again
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Serial social entrepreneurs Michael and Xochi Birch

Building networks is hard. Here’s how Bebo’s founders do it–again and again

Any teenager will tell you the stats: is currently the most popular social network in New Zealand. The site’s popularity—and commercial success—has endured despite greater press interest in competitors MySpace and Facebook. This is probably because Bebo’s creators have done it all before.

As long ago as 1999, Founders Michael and Xochi Birch were working on websites and web-based business ideas. “We didn’t have much success, because we didn’t really know what we were doing,” admits Michael Birch. He shouldn’t be too hard on himself—who did know what they were doing on the web pre-Y2K?

Success arrived in 2001 when the Birches added another branch of their family tree; together with Michael’s brother Paul, they launched The site, still running today and still Birch-owned, has been “incredibly profitable”, despite very little media attention. simply reminds people of their friends’ birthdays, and lets them send e-cards. The site’s income comes from premium membership, where members pay an annual fee for premium greeting cards and to have birthday reminders sent to their mobile phones.

The Birches followed that in 2003 with, a social networking site, two weeks before another upstart called MySpace.

These were the days before the business world took social networking seriously, and Ringo was the market leader, boasting eight million members at the same time as MySpace was in the mere tens of thousands. was such a resounding success that the Birches sold the site six months after launching it—but they signed a non-competitive clause in the process, which kept them out of the social networking scene for two long years.

The long wait didn’t deter the Birches from getting back into the social networking network, though. They launched in 2003. “We went from being a really early entry into the social networking market, to being a really late entry,” says Michael. “We had to come back from nowhere. But by that time we’d found out we had insight; we could implement a lot of the ideas we originally wanted to try out. It succeeded pretty quickly.”

The site’s first members came from a link placed on From the outset the site’s features were designed to be social, encouraging users to share their profile and photos with their friends. “We didn’t spend any money on advertising,” says Xochi. “The main growth we experienced in the early days was from our members inviting their friends.”

New Zealand was one of the countries to embrace Bebo early on. Bebo is the leading social network here and in the UK and Ireland, and it’s the third most popular social network in the USA, Australia and Canada.

In some ways, creating a successful social network is a bit like harnessing wind power. You can provide an environment and a mechanism, but for the key ingredient you’ve got to depend on what’s already out there.

“You’ve got to nurture community,” says Michael. “You can’t direct it. We listen a lot to what people want to do, what features they’d rather live without, but it takes on a bit of a life of its own. You’re partly leading, but you’re also following. I think that’s the only way you can do this.”

Bebo is popular with a young demographic, which raises concerns for many parents about online predators and safety. Bebo’s solution is partly automatic—people can block particular users from contacting them—and partly staff-based, with a large customer care team monitoring user behaviour. “If they see a member behaving outside our terms of use then their membership is cancelled,” says Xochi. The site also has a ‘Safety Tips’ section written by Parry Aftab, the head of

Like other social networks, Bebo has a natural advantage when it comes to product development: feedback is built into the system.

“We get immediate feedback on features,” Michael Birch says. “We follow the trends.”

With competitors like Facebook grabbing the headlines this year, how much attention does Bebo pay to other players in the market? “We look at what they’re doing and also what other companies don’t do well, that we can focus on,” says Michael. But ultimately, Bebo’s main focus is on its own community. “If you spend your whole life obsessed by competitors, you don’t innovate.”

Innovation is a big priority for Bebo, and Michael says openness is the key. “Innovation is phenomenal when you open it up. Nurturing that as a social network is our main aim.”

That openness extends to media companies, application developers and advertisers. “Just come along to Bebo and be part of that ecosystem.”

Bebo is also paving the way for the future of TV, partnering in July 2007 with the makers of YouTube sensation LonelyGirl15 to create the sequel, KateModern.

This year, Bebo is partnering with Endemol to create Gap Year, an online reality TV series. And, lest you think this is speculative venturing typical of Silicon Valley companies, Michael is quick to note: “The shows we’ve done have all been profitable.”

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