I can't wait to get out of this New York weather for a little bit. Don't get me wrong, I love my city but I could really do without 30 degree days and 20 degree nights for a little while. I know it's not 80 degrees and sunny in the Bay Area right now either, but I'm just in the mood for a change in atmosphere.
The sun's a little brighter, the streets are a little calmer and the smell of the Pacific just puts me in the right frame of mind.
Last year was my first trip to San Fran for the holidays and I'm thinking of making it a tradition. I feel like my year just starts off on the right note.
Who knows, maybe one day I'll make the move out there. My Dad was born and raised in San Mateo - he moved out here when he met my mother. Now I've met a woman whose family is from - believe it or not - San Mateo! So I guess I'd just be coming full circle if a ditched the East Coast and moved (back) out West.
I'm also pretty psyched because I get to meet some friends who I've only had the opportunity to communicate with over the phone.
So I'm leaving Sunday - farewell New York City (take care of her while I'm gone people!).
Friday, December 21, 2007
I can't wait to get out of this New York weather for a little bit. Don't get me wrong, I love my city but I could really do without 30 degree days and 20 degree nights for a little while. I know it's not 80 degrees and sunny in the Bay Area right now either, but I'm just in the mood for a change in atmosphere.
Wednesday, December 19, 2007
So we finally did it, we got TickerHound outta the dog house and back on the street!
For those who don't know, this is the project I've been working on for the better part of this year and I can't even begin to describe how happy, relieved and stressed I am (yes, all at the same time).
Happy - that the site is finally out there and getting used by investors for the first time.
Relieved - that it actually got launched on time (we set a pre-Christmas deadline and we beat it by a week!).
Stressed - we had our initial burst of traffic yesterday (not even a lot compared to other sites) and the site started to lock-up. We've got some code optimization to do! But not to worry, we have such talented people over here that I know this will get taken care of sooner than later.
Now my goal is to spread the word about what we're doing and get as much feedback as possible from our members. I really want to include them every step of the way in our planning and product development process.
That's the beautiful thing about doing business on the web - there's never been a time in history where businesses could rely on REAL TIME customer feedback to augment their product development process and strategy. Before the web we had focus groups -- people would come in, use a product in a controlled environment and answer a questionaire. This took time, money and you never got a very clear picture of how a product was used in a more "natural" setting. Don't get me wrong, focus groups are a useful tool and they have their place in a product development process (even a digital one). But, when I can use an automated tool to tell me exactly which links, features, and text are the most appealing to my visitors then I feel that I'm operating with information that will help me make the best possible decisions.
And forget bringing people into a room to answer questions - we have polls, blogs and forums where we can get information from customers right away. Not only d we get great information but our members now have a vested interest in the success of this product because they helped build it! Think about how powerful that is.
That's really what this is all about - building a service that will solve a problem for real people. If we keep listening to our members, giving them what they want and solving problems for them then I'm sure we'll do just fine in this market.
So definitely give TickerHound a look - I'd love any and all feedback.
And check out the official launch post on TickerHound Blog's by clicking here.
Friday, December 7, 2007
I finally got the clips from my Fox appearance two weeks ago (thanks CriticalMention.com). It's a bit weird seeing yourself on TV. I feel like I talk funny, look funny, move funny, etc...and just for the record, that isn't an invitation to agree and start cracking jokes on my blog ;)
It was definitely a fun experience and I'm looking forward to doing it again - in fact, I'll be on Monday December, 10th. So for all of those early risers out there, check out Fox Business on Monday between 5 - 7 AM and you'll see my ugly mug up there.
My real hope is to turn Fox onto the idea of using content from TickerHound (once we open the site up in a couple of weeks) so I can feature members and their contributions to the community. Hopefully they'll be into the idea.
I mean, Fox Business is part of News Corp. and all, but it's essentially a start-up media company focused on finance here in New York. TickerHound is a start-up media company focused on finance here in New York. That sounds like a match made in heaven to me :)
Thursday, November 29, 2007
Sorry I haven't been posting much lately I've been working my a$$ off on my latest venture, TickerHound.com
It's hard work getting a new site off the ground!
I know that may seem obvious to most folks, and being that this is my ump-teenth start-up venture, you'd think I'd be better at it by now. But seriously, each and every time I've ever gotten up to the "2 weeks and counting" phase of a launch, I just get overwhelmed with the "detail work" that needs to get done.
Most people think you spec the app out, get it designed, get it built and then launch...very simple. But the reality of the situation is much, much different. The saying, "the devil's in the details" doesn't even begin to do this process justice. In the last 2 weeks alone I've had to do everything from tightening up the copy on the site's registration page to integrating the weekly newsletter with our e-mail service provider.
Not to mention having our developers try to catch all the last minute bugs, optimize SQL queries and load test the app...I've gotta say, I'm exhausted. I almost need a vacation after all this, which is obviously impossible considering the REAL work starts after the launch.
I'm planning on posting a bit more this weekend.
I really want to write the follow up post to my Wall Street Sales Strategies and I'm dying to weigh in on some of the Facebook Beacon news.
Hope everybody is doing well!
Wednesday, November 7, 2007
So yesterday at ad:tech Facebook announced its long awaited ad platform. Here's a quick recap:
- Beacon - Beacon gives site owners the ability to integrate a user's actions on their own site into Facebook's newsfeeds. So if you have a customer who is also a Facebook user and they buy something on your site, it'll get displayed in their news feed.
- Social Ads - The social ads tool allows you to take Beacon a step further by having these "social actions" broad casted to people outside of your customer's network on Facebook. It's also highly targeted - you can target by gender, age, location and even political affiliations.
- Facebook pages - Now businesses can set up a page on Facebook where they can recruit fans/customers (new phrase: fansumer), and use FB as a new point of contact. The pages allow you to set up photo areas, discussion boards, a wall and even a messaging center so it's easy to keep in touch with your following. It's basically a souped up version of Facebook Groups.
- Insight - Facebook Insight is an analytical tool that helps you measure your reach and penetration into your target market on Facebook.
But in light of Google's OpenSocial announcement last week, I don't see this as being a killer app.
If you look at the argument I laid out in my last post, you'll quickly see how Google has the potential to cripple Facebook's ad platform. I mean, all Google has to do is get the rest of the social networks (and it's network of existing publishers and advertisers) to line up behind a new social ad platform, and then POOF, Facebook's value is greatly diminished. It becomes just another site to advertise on as opposed to a category killer like Google's AdWords.
Just as a side note, Google's AdWords is a category killer for a number of reasons. It's ease of use is just one reason, but the real value is in Google's reach (the network effect). The more publishers that serve Google's ads the more valuable the service becomes to an advertiser because they no longer have to reach out to all those publishers individually. The same will apply to any social ad platform that Google creates.
So all in all, Facebook showed some real vision due to the fact that this was a platform that had probably been in development for quite some time (definitely prior to the Google announcement). But they'll have to do a lot more if they want to protect their castle.
Saturday, November 3, 2007
Google's latest move in its fight to dominate all things web is one of its savviest moves yet.
With the launch of the OpenSocial platform Google basically commoditized the online application platform space.
Everyone expected Google to roll out a social network of its own, or make a bigger push for Orkut in the States. But instead Google decided to redefine the value proposition, side stepped the all out battle with entrenched competitors (i.e. Facebook, MySpace, etc.) and instead created a universal platform for all social networks.
Google has effectively become the fabric that will weave all of these networks together. Social networks have effectively become "portable."
If an application can function and reside on all platforms (thus, pulling data from each) then this application can effectively unify a user's social networking experiences. So my data on Facebook will now be accessible on MySpace or LinkedIn. This adds a tremendous amount of value to my web experience without requiring me to become loyal to a new brand - in this case, Google.
Here's where the money comes in:
Let's say Google decides it's going to leverage its reach in the advertising and publishing markets in order to start a type of "product news feed" - similar to Facebook's Porject Beacon, but on a global scale. So if I buy something on Amazon, then all of my friends on Facebook, MySpace and LinkedIn will know.
If I'm an influential member of these networks then it might cause other people to buy this book as well. Google can then take a cut of the revenue generated through the sale or on a CPC basis and even decide to cut me in (the same way it does its network of publishers). This would be phenomenal and truly be the first global application to monetize social networking.
I can't wait to see what Facebook's next move is!
Thursday, November 1, 2007
I hate to be the one to say it, but I told you so!
If you take a look at my "Beware the Banks and Brokers" piece I wrote back in September, you'll see just what I'm talking about.
Today we saw massive downgrades across the financial space - starting with Citigroup (NYSE: C) and ending with the Dow dropping over 362 points!
Like I said in my Sept. 19th post - the banks/brokerages (Wall Street) are always several months ahead of the curve. They feel the brunt of an economic downturn first, then it spreads to the rest of the market.
Now, this isn't to say that we'll have an all out crash like 2001 - my feeling is that if anything we'll see a mild dip in economic activity and capital investments.
My main concern for my fellow entrepreneurs is if this will trickle down to private equity financings as well. We've obviously been experiencing a bit of a bubble on the private equity front as of late - pre-money start-up valuations haven't been this high in over 6 years and VC activity is continuing to rise as money gets cheaper and cheaper.
I think we'll come out of this just fine but overall I feel that financing activity could start to see a dip as next Summer approaches. That still leaves time to get some money together but I would definitely be looking to keep my burn low, look for creative marketing strategies and execute my a$$ off! So pretty much what most start-up junkies have been doing, but this time leave "getting funded" out of your business plan :)
Wednesday, October 31, 2007
Since I've started writing this blog I've mainly been focusing on my current venture, technology, etc. I haven't really dug down deep and talked about many of my past experiences, especially about my time on Wall Street.
I was only on "the street" for a few years as an analyst/broker, but I learned my fair share about what it takes to succeed in that business. Reason being, I was working through the worst Bear Market we've seen since the depression.
While everybody was socking their money away under their mattresses, I was on the phone, cold calling and telling investors that now was the time to be buying stocks (considering the market has doubled since then, I guess I was right). Needless to say it was an uphill battle, but it taught me some of the most valuable sales secrets Wall Street has to offer. Secrets that enabled me to open more new accounts than even the most seasoned professionals in my firm.
I guess these aren't really "secrets", they're more like sales tactics that have been proven to work. I didn't invent these, but I made it my business to master them.
And now, in the spirit of blogging and open communication I'm going to pass on these proven, battle-tested sales strategies to all those who care to learn. So whether you're a broker on Wall Street selling stock or a door to door salesman hocking vacuum cleaners, these tips will help you take your business to the next level.
So here goes...
1. Welcome and Expect the Rejection - I know that this may sound counterintuitive to anyone who believes in the law of positive attraction. However, the reality of the situation is that out of the new accounts you've landed over the years, 90% of them probably didn't say "yes" the first time you asked them for the order. It's just a fact.
So when you go in there to land a new account, walk in there expecting them to say "no" right away. Because if you go in there assuming they'll say "yes", and when they don't, you'll not only be unprepared for the oncoming "verbal wrestling match", but you'll also psych yourself out wondering why they said "no" to begin with.
But if you go in there expecting them to say "no" then you'll be ready to follow up with appropriate questions and rebuttals. And that's when deals get closed - not after the first 10 seconds of your presentation, but rather after the 1 hour conversation you have with the prospect.
2. Just Listen - All too often I see novice salesmen who are so eager to "say the right thing" or tell the prospect just one more feature about their product that they don't simply shut-up and listen to what the potential client is telling them.
You have two ears and one mouth, you should listen twice as much as you speak.
Even if you're not totally buying into what the prospect is telling you (more on this in a minute), just listening and not chewing their ear off makes them think that you really care about them and what they have to say. This is so important because this is how you go from having a client to having a friend - and at the end of the day, people don't fire friends.
3. They're all Liars! - You might be scratching your head right now wondering why I just told you to listen to your prospects, but then in the next breath I'm calling them liars.
Well, let me explain...
They're not really "liars" in the sense that they're trying to trick or deceive you. But they are lying to you (and to themselves) when they give lame excuses for why they can't buy what you're selling. Excuses like:
- "I don't have money"
- "I have to talk to my wife first"
- "I'll think about it and call you back"
Those are all lame excuses...and it doesn't mean that they're simply "not interested".
In salesman's vocabulary, "not interested" really means "not convinced". Because if you did your job of pre-qualifying these prospects properly then you should know if they have money or not or if they are the decision maker for this type of transaction.
So when they use these excuses, listen to them because they might inadvertently tell you what you'll have to say to close them, but assume that for the most part they're just making excuses and lying to you.
By keeping with this mentality you won't get bogged down trying to give them advice on how to "come up with the money". Instead you'll start talking about the benefits of your product and why they can't live without it. And that my friend is how you close new accounts!
(NOTE: The first 3 Sales Secrets were basic principles, now we'll get into specific tactics)
4. Completely Ignore the First 3 Objections - That's right, this is another one of those "contradictory" statements when taken at face value. Let me explain...
If you're pitching a guy who gets lots of sales calls everyday - procurement managers, CEO's, individual investors, etc. - then they're conditioned to screen out the weak salesmen. Don't get me wrong, it's not like they sit there and go "I'm only going to buy from the best salesmen", but at the end of the day, it's the best salesmen who close the deals.
So chances are, his first 3 objections are just standard objections he gives to every salesman that calls. Most will go, "Ok sir, I'll call you back down the road." But that's not what he wants to hear...people are always looking for ways to make or save money. If you have a good product and you really believe in it, then you'd be doing this customer a HUGE disservice by not continuing to try and pitch him.
When I was recommending stocks I REALLY believed in what I was doing and that's why I would stay on the phone and pound the table until I got the deal. And that brings me to my next tactic...
5. Click or Close - This is an old Wall Street saying and I'm sure it applies to other sales jobs as well. The phrase basically means that the guy has to either hang up the phone on you (the "click") or open an account with you (the "close").
This is a tough principle to stick to but it's the difference between a million dollar producer (a broker who earns $1 million per year in commissions) and a guy who takes home less than $100k a year on Wall Street. It was the one characteristic I saw the million dollar producers consistently display.
They all had different sales pitches, they all had different ways of asking for the order, and they all even had different ways of approaching the market - but what they ALL had in common was the ability to stay on the phone no matter what. They would stay on a single sales call for over an hour (sometimes they got the account and sometimes they didn't) and would stay on for another hour if the guy let them. It was an amazing display of discipline and it paid off ten-fold when compared to the guys who would hang up after 3 or 4 objections.
Once you overcome the psychological barriers of rejection, this discipline is easy to put into practice and could mean millions in extra income for your firm and family.
Part II coming soon...
I feel that this is enough for one blog post - there's a lot of information to digest up there. Would love any and all feedback you might have so feel free to comment or e-mail me.
Tuesday, October 16, 2007
So, it looks like I was one of the winners for the contest Shel Israel was holding last week.
It started out as a Facebook flyer test and it turned into over $1500 being raised for Room to Read. This money may not seem like a large sum here in the States, but in Sri Lanka it could build more than half a library, or put a number of Nepalese children through school for a year.
I'm honored to have been part of this process and in return I not only got 2 hours of consulting time from Shel (who I'm a huge fan of), but I also got to do something good for an amazing organization.
This "contest", if it could even be called that, inspired me so much that I'm actively speaking with my partners on how we can use our web sites, blogs and newsletters to help this organization and others like it. So I want to put it out there to other bloggers reading this (especially my NYC blogging brethren) - this amazing medium we have and the ability to self-publish must not be used solely for selfish reasons.
We should be focusing on "self-less" publishing as well.
So if you have it in you to write posts about your company's current marketing strategy, or a new product you're launching, then take some extra time to write a post about a charity that you'd like to get involved in. And it doesn't have to be a global charity like Room to Read, there are plenty right here in New York that deserve our attention too.
Look at what Fred Wilson has been doing with Donor's Choose.
Or check out New York Magazines list of local organizations that could use our help.
If Shel was able to raise $1500 in one week by himself, what could everybody in the nextNY community raise together over the course of a month or two? $15,000? $150,000?
I don't know the answer - but I do know that with the collective creativity, brain power and reach of this community, something very special could happen here.
I'm definitely going to be doing plenty on my end to contribute to some of these causes. But if anyone is inclined to get the ball rolling on something like this on a larger scale, I'd be happy to help in any way I can. Would love to hear your thoughts - I can be reached at: wayne at tickerhound dot com.
For starters, let me just say that on principle I'd never call any software that Microsoft comes out with "AMAZING"...up until now.
Don't get me wrong, I'm not a Mac guy or anything - I've been a die hard Windows users since 3.0. But I think all die hard Windows users will agree that Microsoft isn't the greatest software company in the world. It might be the biggest, richest, etc., but the software they produce is less than stellar.
Windows Vista is a prime example. A day doesn't go by where I don't kick myself for not getting XP installed on my new ThinkPad. It's buggy, unstable, lacks a lot of the usability features that make Macs great, etc. etc.
However, this new version of Microsoft Office is off the hook!
Not so much for what they did with the standard set of tools (utility bar, easy document integration, etc.), but for a simple program that has changed my work life in a profound way - Microsoft OneNote.
This little baby made me toss my stacks of yellow legal pads in the garbage. It's the equivalent of a yellow legal pad on steroids.
Now I can have several note books in front of me at the same time - work, personal, brain storming, etc. And within those notebooks I can have different sections - Personal: cook books, blog posts, etc. Then within each section I can have various page that are also segmented however I want.
It's super easy to add, rearrange, and reformat whole chunks of text - you can even drag them off the page and put them into another application.
It saves as you type so you never have to worry about it crashing and losing all of your data. And unlike most Microsoft products, it runs super fast - the memory footprint is only about 4,900 K.
I use this thing for every little task, whether it be for when I'm talking to vendors and I need to keep notes, or when I'm compiling a task list for my developers...it really is very useful, usable, well designed and so "non-Microsoft" that I'm surprised that it wasn't copied off of something Apple already put out.
In fact I wouldn't even be writing this post if it weren't for the fact that it came out of camp Microsoft - if it had been an Apple product I wouldn't just chalked it up as another reason I'm thinking of jumping ship.
So score 1 for Redmond...great job guys!
Here's some advice for Bomber (Balmer):
I'd go so far as to argue that they completely replace Notepad with this product. Notepad is the same as it has been since the first version of Windows that carried it...no innovation whatsoever. Let one of your two million developers redesign the Notepad app along the same lines as this and you'll keep a few extra users around.
Then apply the same principles you put into building this application into all the others you build from here on out...it aint rocket science guys: make useful, usable products that help people work smarter...then you'll win. :)
Tuesday, October 9, 2007
Been thinking about this topic a lot lately...
In the wake of the tremendous success Facebook's application platform has had, many people have been wondering what the next "big" application platform will be. It seems like Facebook is doing for the web what Microsoft did for the desktop -- so in order to understand what might come next, we need to recognize why these companies were successful to begin with.
Facebook and Microsoft were successful because their platforms had 3 key characteristics:
1. Created an easy to use API (Application Programming Interface).
2. Opened up their system to anyone who wanted to build on it - no partnering necessary.
3. Created an effective distribution mechanism (Facebook really nailed this more than Microsoft ever did).
So what's next?
Many argue that the web itself is the next great application platform. However, I think it's clear that in order for this to happen there needs to be some type of social network weaved into the fabric of the web. That's the only way the crucial distribution component will work -- developers are going to need a frictionless mechanism for promoting and distributing their software.
Rockefeller had it right -- it didn't matter if you hit oil, if you couldn't distribute it then you couldn't make money. So he focused on distribution...and the rest is history.
So what could be done to make this vision of frictionless distribution occur on the web?
Well, the first thing we'd need is a portable social network - or a network that wasn't bound to a particular web site. It would require a standard to be developed for social networks, much like the standards that were developed around SMTP (e-mail), HTTP (web sites), FTP (files), etc.
Brian Oberkirch recently wrote one of the most compelling outlines I've seen for the necessary "ingredients" in a portable social network. Really amazing stuff there.
But I don't know how much of a reality this vision will become. OpenID has been around for a while now and even though more and more sites are becoming OpenID compatible, we're still not seeing a lot of traction.
I think we'll see the same when it comes to creating open social networks.
Maybe it would take the backing of a major internet company to get this off the ground, but then again Microsoft had tried pushing the Passport system for quite some time before raising the white flag last year.
We'll just have to wait and see, but if a distributed social networking platform were created and reached some level of considerable scale then I think we'd be seeing the advent of "Web 3.0" (I know, I hate using the version numbers for the web too).
Sunday, September 30, 2007
Although I've always wanted to add something to the Facebook Application community, I don't feel that my target audience will be found in abundance on Facebook. So I've always put most of my ideas in a notebook and tucked it back into my desk drawer.
But after reading about all the amazing stuff that went on at Startup Weekend, I thought I'd dust off my notebook and share an idea with the people out there who have the desire, time and resources to build an app. This isn't some blockbuster idea that's going to change the world, but I think it solves a problem for students and could be something fun to work on for those who are interested.
The only thing that I ask is that if you find this idea compelling and want to take it to the next level, that you share your development experiences/process with me so I can write about it here (obviously write about it on your own blog as well) :)
So here goes...
There are a ton of applications on Facebook that allow members to track the classes they're currently taking and find out who else is taking them. Then you can connect with other students, possibly friend them and message them through Facebook's existing infrastructure.
This obviously adds some value, but it definitely misses the mark on what we could be doing with an application like this. The social graph exposes a lot more than just simply connections between people, it also allows for communication and collaboration between community members as well - so we should be leveraging that within the applications themselves and not relying on Facebook's communication tools.
For instance, what happens when 2 or more students taking the same class are all having a problem with that week's homework assignment? Or what if they're in a study group but one student gets sick and can't make it? Or while they're in the study group they want to share a single source of study notes after the meeting?
What if we could build a "Courses" application that really took advantage of the communication and collaboration features found in many other applications on the web, but brought them into Facebook?
Create an application where students taking a course can join an associated group on Facebook for that course. Then within that "Course Group" they can utilize a number of collaboration utilities:
1. General White Board - I'd keep this fairly basic: no advanced formatting, basic text stylization (underlines, bolds, and italics) and allow for HTML links. No advanced permissions: basically anyone in the group can edit the write board. This will be good for keeping ongoing notes, ideas, and general assignments posted.
2. Files - This is where I'd allow students to upload any and all files related to the course they're in. This would also be a perfect place to charge for premium services (e.g. anything over 50 MB and if they want a direct URL so they can access them outside of the system and it'll cost $X per year/month).
3. Advanced White Board - This is the place where users can create multiple collaboration spaces based on the assignment they're working on. For example, if you're in the same study group for a particular class all semester, then you'll obviously be working on different projects. Here you'll be able to create a white board for each project and it'll have some advanced features.
Instead of just basic text editing you'll be allowed to import files - from the files section or linked to from 3rd party sites - add descriptions, easy PDF creation and printing, etc. A 3rd party HTML editing tool will be necessary but those are a dime a dozen now.
4. Deadlines - Simple calendar module with built in reminders and notifications (e-mail, Facebook message, Facebook notification, etc.).
5. Privacy and Preferences - The name of the game these days is privacy and control when it comes to social media applications (Case in point: See TechCrunch's piece of Facebook's new "friend grouping"). So the same must hold true for this application as well. I don't think ALL of these privacy controls need to be incorporated on the first build, but they should be included at some point in future iterations.
- Group Creator Preferences - Allow/disallow members (ie. only members can see content in this group). Group expiration - meaning, will the group die out after this class is over or should it be kept up for future collaboration and/or use by future students in this class.
- Member access - All members can/can't edit specific pieces of content, upload files, etc.
- E-mail notification - let members know about updates, new files, etc. via e-mail.
I'd host this thing on EC2 and Amazon S3 hybrid solution - all of the files could be pulled from multiple S3 instances and perform weekly/monthly backups to a physical server to ensure data is never lost. Use multiple EC2 instances to serve up the application and keep 1 physical web server to act as a load balancer and admin for the instances.
Obviously folks out there with more infrastructure experience than me will likely poke holes in this setup but I think it's a good, low-cost starting point -- especially if you slap a flash front-end on this, then an Amazon AWS solution would definitely be the way to go.
As you can see this is a mix of Facebook groups and Basecamp - in fact, it's more like Facebook groups on steroids! This is something that students will definitely find useful if it eliminates the friction found in Facebook's infrastructure and has an intuitive interface. I mean, Zuckerberg himself talks about building an app like this while he was still in school. And even if that's just PR fluff, it still illustrates the value something like this would bring to the community.
Making it go viral wouldn't be difficult at all because the application relies on invites and group collaboration for its most basic uses. That takes a lot of pressure off of thinking about marketing and will allow the developer to focus on the user and on the product.
And picture this application in the next year, 2 years or even 3 years. The data assets that will have been built from the millions of students putting up course material, study notes, papers, pictures, etc. will be a study tool in and of itself outside of Facebook.
I'd like to hear any thoughts and feedback you may have. And like I said, if you decide to go ahead with this please share your experience with developing it.
Wednesday, September 26, 2007
Been thinking a lot lately on what makes a "great" start-up.
You obviously need a good idea and to solve a real problem for a large amount of people.
You need a talented team and access to resources (technology, capital, etc.).
But what else gets a company from a pipe dream to a multi-million dollar enterprise?
Rock solid execution, that's what!
And I guess that's one of the things I've been wrestling with as my product gets closer and closer to launch. There's so much inherent risk in operating in unchartered waters; how is a founder to know what to do every step of the way? How can we mitigate this risk?
Well, there's no formula - if there were then everybody would know it and successful founders would be no different than anybody else.
My feeling is that many successful start-ups and founders all operate within a certain unteachable thought framework - a framework that marries logical reasoning with creative problem solving. Now, the "logical" part of that framework isn't very difficult to grasp....
If we have this much money, then we can buy this many servers and hire this many staffers, etc. etc. No sweat...
But the "creative" aspect of this framework is where one founder shines and another flops.
When a founder, a CEO or any stake holder in a project thinks creatively and critically about a problem they tend to not only find new solutions, but they gain an edge over other players in their space.
For instance, when James Hong, et al. first launched HotorNot.com they got so much traffic that their server was crashing all the time. They had no money and no time to raise capital. So what did they do?
They got creative!
They negotiated a deal with Rack Space where they gave Rack Space free advertising on their site and in turn Rack Space gave them free hosting for a year!
A month or two ago Hong participated in a panel where he quoted somebody else (I forget who) as defining "creativity" as:
"Creativity is what happens when you chop a zero off the end of a budget".
I was reading Shel Israel's blog tonight and he had a great quote from Steve Larsen:
"Constraint spawns creativity"
And I really have to say that both of these quotes are amazingly accurate - and why shouldn't they be, they're both spawned from experience in the trenches.
I think most entrepreneurs would agree -- our best decisions have been made under less than ideal circumstances. We've created the most successful features, we've cut the best deals (sometimes) and we've hired the best people all under circumstances where others might've just folded their cards and went home.
And that's what I think differentiates a successful businessman from a bad one - the ability to creatively construct solutions to problems.
Some may call it luck, but Sam Goldwyn said it best, "The harder I work, the luckier I get."!
Tuesday, September 25, 2007
So about a week ago Mark Hendrickson at Tech Crunch reported that Facebook (along with a number of high profile VCs) will be launching a $10 million fund for Facebook application developers. However, instead of investing in these applications and taking an equity stake, the fbFund will simply be giving cash "grants" to these budding entrepreneurs -- very similar to the cash grants many students receive while attending college.
So what is the fbFund?
Is this is an education fund for would be entrepreneurs -- the principle being to teach them to develop on the Facebook platform before deeming them worthy to conquer the rest of the web? Or is Zuckerbeg such a "good guy" that he just wants to throw money at ideas and see what sticks? I mean, it's a win-win for Facebook anyway - a tremendous amount of value gets added to their system each and every time an application gets developed. So they're just adding fuel to the fire that's burning within this hot mini-market of companies.
This must've thrown a bucket of cold water (no pun intended) on Bay Partner's idea to start a fund to do the exact same thing -- however, Bay Partners would be looking for equity right away while fbFund simply gets right of first refusal on any follow-on financing that takes place.
But is that the only benefit for Facebook?
Could these guys simply be looking to add incremental value to their product and possibly invest in some of these start-ups before anyone else can get their hands on them? That sounds possible - it seems like a sound business strategy...
But yours truly has a conspiracy theory hatching in his sick, twisted brain.
As some of you may or may not know, Facebook recently acquired web-OS company, Parakey. Parakey was founded by the same dynamic programming duo that built the oh-so-popular Firefox web browser.
And while most folks thought that the investors who put $2 million into Parakey walked away with a handsome reward of Facebook stock, that just wasn't the case. According to Arrington, it turns out Facebook paid only $4 million for the company - considering the previous round was done for just under $2 million, which probably had a much higher post-money valuation. In fact, I'd be surprised if investors made anything at all on this deal (read Mike's post to see his ideas on why investors even let the deal happen).
The founders of Parakey, however, walked away with a Facebook employment contract that included Facebook stock and options compensation agreements!
So it looks like these guys sold themselves AND their company...so even though Facebook came out of pocket for $4 million (not a large sum of money for this company), they in turn got two rock star developers.
Facebook isn't only looking to add value to their platform by encouraging people to develop great applications. Nor are they simply looking to invest in those companies down the road.
Facebook is looking for developers that know how to create very popular consumer software applications.
It's like a publisher being able to find an author like J.K. Rowling -- someone who already has a following and can consistently write list-topping best sellers over and over again.
Think about it: the relative cost for acquiring top talent is huge. By funding some of these companies for a comparatively small amount of money, Facebook sees some tremendous upside:
1. They add value to the Facebook community by making it easier for new applications to get launched.
2. They have the ability to invest directly in these applications as they become more successful and potentially move away from the FB platform.
3. They have the ability to acquire top talent after already seeing them in action (a HUGE cost savings along with a tremendous benefit).
So while I called this a "conspiracy", it's more of a very savvy business move on their part.
Wednesday, September 19, 2007
After reading a post by Fred Wilson yesterday, I started to get a little concerned about an impending economic downturn. While it's always been in the back of my head - considering we've been in a bull market for the last 4 years - I haven't paid it much mind in a while.
Now Fred was talking about a downturn specific to the web - I mean, that's where he makes his bread and butter so it's something that is near and dear to his heart - but my concern is more broad based. I think we can see a major downturn hit the stock market and that will have a reverberating effect throughout the economy, and especially in the fragile tech space.
Here's my take:
After working on Wall Street for a few years you learn a couple of tricks. One of which is, if you want to know which way the market is headed six months in advance, keep an eye on the banks and brokerages.
Once you see the banks and brokerages start to take a dive, you know that the rest of Wall Street isn't too far off - we'll call them a "leading indicator". Every major bear market was preceded by sub-par results in the banks and brokerages.
Now, much of this is going to have to do with the recent mortgage crisis the country has plunged into. A lot of these banks are going to take a monster hit on all of these defaults we're seeing.
In fact, the Wall Street Journal just reported that Morgan Stanley (NYSE: MS) took a 17% hit to Net Income this quarter. Lehman Brothers (NYSE: LEH) showed an increase in profits but took a hit in fixed income due to the mortgage issues.
I also think that many of the banks and brokerages have been reaping the benefits of an unsustainable bull market - the market has been up almost 20% a year for the last 4 years - that means that when this market heads south (or stops rocketing higher) these companies can no longer use their trading and investment banking fees to compensate for losses in other divisions. And that my friends means the brokerages will be headed south for the winter.
When that happens many of the IPO dreams and lofty valuations for many of today's web startups will go into hibernation for the winter as well. But in all fairness this "dot-com renaissance" we've been seeing isn't solely predicated on the public equity markets. But at the very least I think we'll see VC's and other private equity firms tighten the purse strings a bit.
Like I said in my comment to Fred's post, I don't think we're headed for an all out crash in the Internet space, but with the market looking like it might take a bath, investors and entrepreneurs alike need to be cautious now and prepare for a potentially tough winter.
Some steps to take:
1. Batten down the hatches and lower your burn rate: If you're currently supporting high fixed costs figure out ways that you can right-size your Income statement if revenue suddenly takes a hit (i.e. if revenue drops 25%, how can you cut costs by 25%?).
2. Stockpile your supplies: For investors and entrepreneurs this means you need to get capitalized! If you've got enough cash on hand and this downturn isn't "too" bad, you'll be just fine. But for those operating on a shoe string budget already, you might be in for even tougher times if this downturn hits.
3. Focus on the Fundamentals: At the end of the day most of this stuff is beyond any of our control, so there's not much we can do by worrying. So focus on your business - continue to execute on all fronts and proceed with your plan. Don't take your eye off the ball for a single second.
I think James Dean said it best - "Dream as if you'll live forever; live as if you'll die tomorrow."
I prefer, "Act like your company will be around forever; but plan like it could be gone tomorrow."
Monday, September 17, 2007
Sorry for the lack of posts - I've been on the road, mainly down in South Florida.
Surprisingly there's a bit of a hustle n' bustle down here - not in the tech sector, but rather in sectors like mortgages (well not so much here anymore), finance, insurance, etc. The standard of living is so cheap that if you make a moderate 6-figure income you can live like Puff Daddy.
There's also a booming adult entertainment sector in Miami - mainly for online-only companies, but these guys are doing big business nonetheless.
On a whim I decided to check out home prices - not that I'd ever move down here, I'm a New Yorker all the way - and I couldn't believe what I found.
I checked out a 5 bedroom, 3 bathroom, multi-floor home with a built in pool, court yard and jacuzzi with a 2 car garage...price tag?
Do you know what $1.5 million would get you in New York? Maybe a 1 bedroom in a decent building in the West Village.
It blows my mind at how overpriced New York Real Estate is. However, the situation may be changing soon, for renters at least. Over the next 12 months there's going to be roughly 160 new buildings going up in some of the trendier (highest demand) areas of New York. In my opinion, this is likely going to cause a drop in rental prices across the board, especially in these areas (West Village, Chelsea, Midtown west).
So anybody thinking about renting, sit tight for a few more months and I think you'll be pleasantly surprised.
I don't really have enough expertise to make any calls with respect to the home buyers market in New York, but with interest rates where they are I wouldn't be so quick to take a mortgage out right now.
Hopefully the Fed will do something to fix that this week.
On another note, I'll try to post more this week. I've been busy working on the front-end for my new web project and it's been taking up a heckuva lot more time than I thought it would.
Hope you're all doing well...Wayne, over and out!
Thursday, September 6, 2007
I'm not sure if I like this term "Community Manager" or not . Something about "managing" people - and in this case, managing how people interact with your product - just seems counterintuitive to everything that's going on in the social media space.
Granted I'm fairly new to blogging for myself, but I've studied the medium, participated in it and have developed relationships with people who helped shape the blogosphere. You see how I said developed "relationships"...that's what this thing is all about!
If one were to "manage" all of their relationships then wouldn't the authenticity and underlying importance and value of those relationships diminish? They'd become nothing more than numbers on a progress report at the end of every quarter.
Granted, some relationships are purely business and thus have to be consciously managed, but when you're trying to build a sense of community and evangelism around a product then why on earth would you use the title of "Community Manager".
It's like calling yourself the "Mayor", indicating everybody else is beneath you.
Sorry to go on a tirade here but I couldn't get over all of the posts I had read on Jeremiah Owyang's blog. Just to be clear, I have the utmost admiration and respect for Jeremiah, I've been reading his posts for a long while now and I think he's probably one of the most well versed people in this space. Furthermore, he's not the only one who uses that title. Look around, it's almost become "conventional wisdom" to use that as a moniker for the employee who reaches out to the customers. However, the implication of using a title like that is far reaching in the impression it gives to:
- Other bloggers
- And (most importantly) the consumers
After having worked in sales and owned a number of my own companies, I know that the only way to get people involved and to become excited about something is to get them on the same side of the table as you. The only way to do that is to present the opportunity for an equally beneficial relationship - EQUAL!
So what would a more appropriate title be?
I think Jeremiah used this term several times in reference to his various roles at different companies, but he didn't use it as his official title. I propose all "Community Managers" officially change their title to: "Customer Advocate".
That's really what you should be doing if you're reaching out into your community of customers, you should be their advocate -- their voice in and outside of your company. Take their input, give them credit for it and make the changes that they want.
It seems like a facile statement but we all know that this is something most companies just pay lip service to - but the ones who practice what they preach are the ones who will succeed.
Mark my words!
Wednesday, September 5, 2007
After reading Michael Arrington's post about Facebook allowing non-Facebook members to use its People Search feature, I decided to sign into my account and see what's what.
I wouldn't have been concerned at all until I read the announcement a bit more carefully:
People might be able to search for me, see my photo and personal information directly on Google? That's a little weird for me and I really think it goes against some of the early values of Facebook - privacy and control!
I understand what they're doing from a business perspective, but I just don't agree with it.
I'm sure they'll give us the option of changing our privacy preferences - which I'll be sure to do - but for people who don't check their accounts very often, or who simply don't pay attention to these sorts of developments, this could come as a HUGE shock to them to see their face plastered across Google.
Maybe I'm blowing this out of proportion but it just doesn't sit well with me.
I feel like a kid who just got a "gold star" on a spelling test. I submitted my last blog entry to Found+READ late last week and it appears that they liked it. The article is still on the homepage at FoundRead.com and I've included a direct link below:
I'm an avid reader of the blog so I was pretty proud/happy to be featured there. Hopefully I'll get a chance to put more entires like my last one together so I can submit a few more to the site - I'd be thrilled if other entrepreneurs found my advice helpful.
On another note, we're kicking off the design of TickerHound.com this week with our new design partners, BlueFlavor.com - I can't begin to tell you how excited I am!
More news coming soon...
Wednesday, August 29, 2007
When it comes to the topic of building and designing a web application, I can really say that I've been on both sides of the fence.
I've owned and operated a development studio before and now that I've gone through the tedious process of finding the right people to help build my own web property, I feel that I have a unique perspective on this (possibly) tortuous process. So, I wanted to impart my knowledge (or lack thereof) upon you and hopefully it'll be helpful as you go forth and try to take over the world.
I. Define The Scope and Goals
The first mistake that many people make when hiring a new development or design firm is that they fail to accurately convey the scope and goals of their project.
It's easy to say "I want this feature and that feature" - and I'm sure many out there have fallen victim to the "Design by Metaphor" (e.g. "I'm creating a MySpace for rock collectors") trap. Thinking the project through, from how it will function all the way to how the end-user will actually interact with it, is where the first step in a successful project begins.
For example, on my latest application I wanted there to be a notification system on the site to tell users when new content specific to them appeared. So instead of trying to describe the feature or relate it to something I saw on another site, I busted out my yellow legal pad and sketched it out, then I scanned it and pasted it right into the RFP (Request For Proposal). My developer literally thanked me and we haven't had to go through the usual "back and forth" on that feature once.
The other thing that's very helpful is to define end goals for the application. Right at the beginning set up success metrics for the app. This is easier to do if you're enhancing or redesigning an existing web site because you'll actually have benchmark metrics to compare it to, but even if you're building something from scratch try to conceptually think about what would define a "successful project." Then pass those goals onto your developer or designer - they'll now know what they need to do in order to make you a happy customer.
What this all really boils down to is expectation management -- if you expect one thing and get another you won't be satisfied. And when you're not satisfied it leads to a vicious cycle: you pass revisions back to the developer, they try to fix it, you're still not happy and now the project is late and you're getting angry and impatient. But now the developer is going over budget and they are getting angry and impatient and before you know it you're in their offices about to punch the project manager in the face...ok fine, maybe that was just me and it was only once, but you get the point.
Plan properly and set goals - that's the bottom line.
II. Finding Firms
This is probably one of the most difficult parts of the whole process. There are several ways to go about finding a firm to build and design your web application, some more effective than others. So for those of you who don't have a friend in the business or have never worked with anybody before, I'll go over some helpful ways to find a number of firms to send your RFP to.
1. Personal Referrals
This is by far and away the most effective way to find a quality design and development partner. If someone you personally know is willing to recommend a firm, then chances are they do quality work. Think about it, why would someone risk the screaming match you'd get into afterwards if the firm they recommended to build your "dream" sucked?
So before trying the next few options, tap your personal network first. Ask why they liked the person(s), what level of service was provided post-launch, etc. I've found designers and developers 8 years ago that I still work with to this very day by going through my personal network of contacts.
2. Favorite Sites
This one is a little harder, but also very effective. If you have web sites that you absolutely love then you should check out their "About Us" section - they sometimes list their development and design vendors there.
If they don't, your best bet is to Google the site along with terms like, "Clients", "Portfolio", "Design", etc. That'll help you nail down the firm(s) that they worked with to get their site built. You can even e-mail somebody at the company, if they worked with an outside firm they usually don't mind referring business to them.
Once you find a few design firms you like (either through your network or via Google) you might want to check and see if any of the head designers, developers or owners have their own blog. This can be one of the biggest assets you have in selecting a firm - you get to take a peek inside the mind of the people that might be building your web application in a few months. You'll immediately know if they share the same values as you, if they have a similar personality, etc.
It's very good for filtering out the good from the bad.
Case in point: We recently contracted with BlueFlavor.com to design the user interaction and information architecture for our upcoming application. How did I find BlueFlavor you might ask...through their blog!
I read through a ton of posts from every employee there and just knew that these guys were a quality shop.
The other thing that you can gain from a blog is access to other people in a firm's field. If they have a fairly popular blog then there's a good chance other developers and designers comment or post on it as well. I can't tell you how many other firms I found by bouncing around the comments section on some of these blogs.
The bottom line: Do as much research on a firm you're considering before you ever contact them. It'll save you a lot more time and heart ache in the long run -- and even if you don't like the firm, they might lead you to a firm that you love.
III. Make Sure the Shop is "Suitable"
It's very easy to say, "I want to find a great developer and a great designer", but what's "great" for one client might not be great for you. So you really need to find a company or person that shares the same vision and principles as you do.
I'll bring this back to my current venture to illustrate my point.
I have this big belief in minimalism in design - I think it's easy to make complex functions on web sites. On the other hand, I think it's very difficult to make a complex function appear to be a simple one. And that's the beauty behind many successful web applications, they make the complex appear to be easy. So that was the first thing I wanted to make sure my design shop was focused on: minimalism and simplicity.
So when I was going through various portfolios I would tend to get a knot in my stomach when all I saw were Flash sites or pages with crazy colors and graphics everywhere. On the other hand, if I saw a portfolio that was filled with sites that had a lot of white space, small logos, were quick loading and yet had a high degree of interactivity, I'd be very pleased.
What helped me the most was sitting down with my partners and actually writing those principles down. It really helped us and our design/development firms decide if we'd be a good fit - or "suitable" - for one another.
IV. The BIG Decision
Ok, so now you've put together a tight RFP: it outlines the features, how the user will interact with them, the goals for the site and what your core principles and values are.
Then you went out and found a handful of quality shops that you sent your RFP out to. They all came back with bids and now you have to make the BIG decision - which firm do you go with?
They've all demonstrated an understanding of your application, you know they have the right experience and principles and after a couple of phone calls you should know which people you get along with on a personal level (very important as well by the way).
So now how in the world do you choose one proposal from another?
This can be gut wrenching - you're about to drop a substantial chunk of change on a single firm...it's like betting on "Red17" at the roulette table and crossing your fingers -- but it doesn't have to be. If you come up with a strict set of selection criteria beforehand, then you'll find it easy to choose the right firm. For me, I find that the following criteria really helps me narrow down my choices:
1. References - If a firm can't provide me with several quality references then I can't do business with them. With that being said let me make something else very clear, a firm will obviously only give you access to people who will say good things about them. However, you can tell from the quality of those references whether or not to take them seriously.
For example, if they give you the number of the CEO of XYZ Company, and XYZ's website is hard to use and gets no traffic then I'd take that less seriously than if they used Digg.com as a reference. Maybe it wasn't the design/development firm's fault the site wasn't successful, but why take any chances?
2. Transparency - If a firm can't clearly tell me why they're charging what they're charging then I won't use them. I'm a numbers guys and I break my time down to the minute each day - I expect vendors I work with to do the same.
So when a firm says that they can't tell me what their hourly rate is because they work on a "per project" schedule then I automatically assume they're trying to hide something. At the end of the day they may work on a per-project schedule, but they must use some type of time-based calculation to come up with their estimates. If they say they don't then they're either stupid or lying, either way I wouldn't want to work with somebody like that.
For me transparency is equivalent to honesty - and when it comes to honesty in business, I'd pay a premium for it!
3. Accountability - A firm that is willing to be accountable for their work is a firm I want to do business with.
For instance, we used an overseas development shop to write the core code for our latest application. In the agreement we put together with them they were the ones who added the "financial penalties" section - so if they were X days late on a particular milestone, the final cost dropped by Y%.
I can't even begin to describe the warm and fuzzy feeling I got in my stomach when I saw that.
So in conclusion I wanted to wish you happy hunting in your quest for a quality developer and designer. It's a tough decision to make and it's arguably one of the most important ones.
If you work with someone good then you can focus on building a business and not playing "baby sitter." You also get your product out the door on time and it'll work and look how you wanted it to. Also when you feel comfortable with your site you'll be able to go out there and be confident when pitching customers, partners and investors. That's why some of the suggestions I've made may seem time consuming and tedious, but in the end the upfront time investment will pay off in spades down the road.
Monday, August 27, 2007
I've been trying to come up with a really good topic for my next blog post - the last few were just sort of ramblings about current news - but I can't seem to think of anything that is "entertaining, enlightening and informative. " There's a ton of stuff coming out in the news these days about mergers, rounds of funding, new gadgets, etc., etc. But with all the other blogs out there covering this stuff in depth why should my take on the situation matter so much?
The real question that's been racking my brain is, "how do I differentiate myself from the millions (ok maybe not millions) of other blogs covering the EXACT same topics?"
I'm not quite sure of the answer yet but I have a few ideas in mind.
What I'll do for the time being is simply jot down a few of the memes that have been popping up on my radar as of late.
I. Wall Street Journal: To Fee or not to Fee
There are a number of VC's/Bloggers/Entrepreneurs that I really admire who have been talking about the reasons for WSJ.com to go for a free model . BusinessWeek writes one of the most interesting pieces for why it may or may not make sense for WSJ.com to go free. Fred Wilson over at Union Square Ventures has also been writing about this topic since the News Corp./Down Jones merger was announced.
In the end this is going to boil down to a math equation on Mr. Murdoch's desk that will look something like this:
$65million = Annual subscription revenue from WSJ.com online
So the question becomes: At a $30 CPM rate (WSJ could probably get more but we'll be conservative) how many page views would it take to make up for the lost subscription revenue?
Well, let's do the math...
$30 * X CPM's = $65 million
X = 2,166,666 CPM's
Which translates into 2,166,666,000 page views (2.16 billion for those who have a hard time processing that many zero's).
Over the course of 12 months, WSJ will have to serve up 180.5 million pages per month in order to hit that mark. FYI: Compared to some of the larger social networks out there, 180 million page views isn't a lot.
WSJ currently does 1.5 million unique visitors per month - that's a joke when we compare it to some of the larger online financial sites. According to comScore, the top financial sites had the following unique visitors and page views during the month of June:
MSN Money: 12.7 million uniques and 180 million pages viewed
Yahoo! Finance: 10.4 million uniques and 327 million pages viewed
AOL Money: 10.5 million uniques and 206 million pages viewed
CNN Money: 5.4 million unqiues and 50 million pages viewed
Based on this data it's clear that WSJ stands a good chance of replacing its lost subscription revenue with advertising dollars. But, it's still not as "safe" as sticking with a subscription model. The thing that none of these bloggers/magazines have taken into account is the nature of investors.
I was a broker for a number of years and I know from firsthand experience that investors don't mind paying out the nose for good information. And WSJ undoubtedly has some of the best financial editorial on the planet. And with subscription revenue you don't have the ups and downs of ad-based revenue - it's like a utility company, you can reasonably predict how much revenue you'll do each year...that's very comforting for company owners.
Now, that isn't to say that WSJ.com shouldn't begin giving some of its content away for free - I mean, it's pretty obvious that there's going to be a dramatic shift in the investing demographic. As the baby boomers get older, stop investing aggressively (and sadly, begin passing away), this whole web-savvy demographic will take their places as the "investing demographic". This audience won't have a tough time navigating a web site and will be used to getting free access to content.
So to preempt this shift and gain tomorrow's investing audience today, I think WSJ should begin giving free access to some of its content.
Which content should it be? I'm not quite sure.
At the end of the day, yesterday's news is less valuable than today's so maybe giving away older articles would be helpful. It'll allow them to maintain the subscription revenue for those who want their information in a timely manner while still allowing bloggers and those in the non-mainstream press to openly cite and link to WSJ content (which will be very important for building loyalty, brand and traffic).
II. The State of the Web
There has been a ton of talk on this topic...Everybody from Mavericks owner Mark Cuban to the guys over at Read/Write Web have been talking about where we are in the evolution of the web as both a technology and a media platform.
They both raise interesting issues - Read/Write Web focuses more on where we are in the "technology cycle" and Cuban focuses more the entertainment value of the web with respect to its current infrastructure.
The argument that Read/Write Web puts forth is interesting in that they try to map the standard "business cycle" to an underlying phenomenon they view as a "technology cycle". Joseph Schumpeter and other Austrian economists would definitely find this to be a compelling case for their theories with respect to business cycles and economic fluctuations.
Cuban looks even deeper into the technology by arguing that it's not the software that needs innovating but rather the infrastructure (or internet access speeds into the home) is what needs to be upgraded before we'll see another wave of innovation on the web.
I'm not sure who (if any) I agree with yet. I'm still pondering these issues myself but it's definitely forcing my brain to think in a different direction (which I always enjoy).
That's about it for me today, but expect more posts about the "state of the web" throughout the rest of this week/month/year. :)
Wednesday, August 22, 2007
Just saw a TechCrunch post about Playboy launching a social network - smart move Hef!
1. The way most adult content sites work is through a network model. They'll start with one site, build others and use them all to cross promote the other. It's what enables the smart companies to earn 30%+ margins and the dumb companies to earn under 10%.
Building a social network around a brand will allow Playboy to create a great funnel effect to their "pay for" services and sites.
2. On top of a reality show (which they already have) a social network is the next logical step for Playboy to hit the mainstream audience that might not otherwise get exposed to the Playboy brand or content. This is primarily due to the fact that as a paper magazine Playboy has lost a bit of its luster amongst the millions of online destinations that offer more raw, real and free content.
I think this puts them right back in the game.
3. They now have a HUGE talent pool to scout from.
Before, young girls aspiring to visual "deposits" in many a young man's "spank bank", had to submit photos and ID information directly to the magazine in order to be accepted for consideration.
Now they just post a few provocative profile pictures and their on their way!
To what? I don't know - as long as it's not my daughter or girlfriend I could care less.
All in all, well done Hef -- you've combined two of my favorite topics into one: Tech and Porn!
Gotta love a guy that can date 5 women at once while in his 80's.
Tuesday, August 21, 2007
In my personal opinion - which, in the grand scheme of things, doesn't amount to much - one of the most important things one can do as an entrepreneur is to learn from past mistakes. Not mistakes of one's own doing, but rather from the mistakes of the countless entrepreneurs that came before us.
"Standing on the shoulders of giants" is a phrase that comes to mind.
Now we all know of the well documented technology problems over at Friendster, along with the internal VC and management conflicts - lessons to be learned from those two issues alone but we need to dig deeper here.
Here was one of the very first large scale social networks - this company had the world in the palm of its hands but somehow watched it all slip away (like my shot at becoming a professional basketball player when I never grew taller than 5'11'').
And while this company is starting to pick itself up by its boot straps it still has never manged to "get it right" -- what are they doing wrong?
Here are some of my thoughts:
1. Poor Information Architecture and Usability
I've brought this up to a number of people and while some agreed, there were many who didn't. But I really stand behind this one and I'll talk about why.
First off, why do ads take up almost a third of the profile screen? They have a massive leader board at the very top and then two big boxes on the right. I can see how that may benefit the bottom line but how does it add value to a user's social networking experience?
And have you ever tried using Friendster's photo feature? Forget the fact that you still can't tag other people in photos, click on a photo to go to the next one, etc... those things are annoying enough, but have you ever noticed this:
If you hit the back button in your browser while looking at an individual photo it'll take you right back to the gallery view of all of the photos (usually causing me to lose my place, say "Oh fuck it" and go elsewhere). The site is essentially forcing us to go against conventional wisdom in favor of Friendster's desire to use AJAX in their code - sorry guys, big "no no".
The list goes on but I'll stop here.
2. Day Late and a Dollar Short
Contrary to popular belief, Facebook didn't originate the idea of a news feed in a social network. The originator of social networks did - that's right, in case you forgot, Friendster was the first to offer users a peek at what their contacts had been up to on the site.
However, until recently the social news feed wasn't very "social". Let me explain...
When Friendster first released this feature it would simply tell me that one of my friends added a new friend, but it wouldn't say who. It would tell me my friend added a new photo, but it wouldn't show it to me. It would tell me they got a new comment but not tell who wrote it and what it said.
Essentially, the system was designed to promote click-throughs, page views and revenue. It wasn't designed to increase the utility of the site - again, another big "no no".
They did finally started to head in the right direction recently - now I can at least see who my friends are becoming friends with - the comments and photos are still off the mark though.
By releasing a half-assed feature that was meant to increase revenue and not utility, Friendster was once again passed over and Facebook reaped all the glory and benefits of the social news feed.
3. No Platform, No Traction
My friends are probably sick of hearing this one but history has proven that the companies who help other companies make money are dramatically more likely to succeed than those who don't.
Microsoft, Wal-Mart, Google, MySpace, Facebook - what do they have in common?
They all created a platform that allowed other individuals and companies to make money.
Microsoft allowed software vendors to create software that could be marketed and sold to millions of users on a standard operating system.
Wal-Mart made it so people from all walks of life could afford to buy DVD players and TV sets.
Google helped start-ups monetize their traffic and gave marketers the ability to advertise in every corner of the web.
MySpace and Facebook both allowed application developers to piggy-back their networks and market their wares in a viral manner - Facebook is unarguably doing a better job at this than MySpace which is why I think they'll eventually "win" but I'll save this argument for another time.
Friendster just hasn't caught onto this concept - they're operating a closed social network (which is mediocre at best) and not allowing for the third "C" in Hagel's "3 C's" of the web. They have the Content, they have the Community but they just don't have the Commerce!
And the moral of the story kids: Don't be a "Friendster"... j/k ;)
But in all seriousness, these are the things that go through my head as I toil away in my crappy office space building my latest company.
How can I make my web application as easy to use as possible? How can I reduce friction, clutter, excess, etc.? How can I make this site as elegant as the iPod?
How can I use the technology I'm building to solve a real problem for people - how can it become a utility for my target audience?
How can I give other people the opportunity to benefit from this service monetarily?
Tough questions - but I think if we keep them in mind we'll at least avoid many of the mistakes made by those that came before us.
And those are my two pennies for the day!
Monday, August 20, 2007
I've always done "corporate blogging" and while it was fun - it always had a purpose or agenda behind it. I never felt like I gained anything from doing it and therefore it was ineffective as both a creative outlet and as a "corporate communications platform".
So I said to "hell with it"...from now on, when I blog, I'm blogging for me and for me alone.
Well, obviously not "alone" - I do hope people read what I write and gain something from it.
I've been in the tech space since I was 15 years old - definitely not a "seasoned veteran" but I have my share of battle scars...
Did the whole 90's dot-bomb thing - started a web consultancy, raised money, went outta business...yeah, you know the story.
Then for some strange reason I decided to work on Wall Street - my timing couldn't have been worse. Trade center went down 2 days after I started and I was on the phone pitching people to open new stock trading accounts.
Wanna talk about beating you head against a wall?
But I did learn a thing or two about a thing or two. And I finally smartened up and went back to school.
Now, I'm a Columbia University graduate and instead of doing the "safe, smart thing" like my parents hoped, I'm back in tech business!
I'm grinding it out on a new start-up here in my hometown of New York City. I'm having the time of my life and I'm really enjoying this new wave of web based businesses cropping up. I really dislike the term "Web 2.0", especially when applied to social media, but for the sake of simplicity and continuity you'll hear me use the term quite often.
So that's my first post....most of my writing will have to do with technology, finance, the current state of hip hop music, my favorite adult actress of the moment and whatever else enters into my head at any given moment.
So I hope you read, enjoy, discuss and give me honest and candid feedback whenever possible.