Offline - Where the Real Cheesecake Is

So we have FriendFeed, Twitter, Facebook, MySpace, Digg, Google and all sorts of other cool, fun and sometimes useful tools.

FriendFeed lets me know whenever one of my friends uploaded a new Flickr photo, Twitter keeps me up to date on whenever a handful of people I know are taking a dump, Facebook makes me a better friend (haven't forgotten to e-mail someone for their birthday in 2 years) and the list goes on. These tools are pretty damn amazing - I love them all. But while they've made a meaningful impact on my online life -- which is taking up the vast majority of my day lately, but that's another sad story -- they haven't done nearly as much for my off-line life.

I guess what I'm trying to say is that while these applications have changed the way I use the web, they have NOT changed the way I live my life. Facebook was coming close, in fact, while I was in College and the network was still closed, it was an integral part of my life...invaluable even.

And THAT is what I'm really looking for. I'm looking for a service that becomes indispensable to my REAL social life. Something that changes the way I live my off-line life!

Because that's what this is really all about - search engines, social networks, social news, etc....these aren't tools that are supposed to keep us locked into our chairs all day and our eyes fixed on a monitor. They're supposed to help us derive meaningful value for the other parts of our life: work, school, social, etc.

At the moment the only site that's truly integrating with my real life in a meaningful way is Meetup.com - mad props to Scott - I've met more people, learned more things and have gotten more value out of signing up for that site, than ALL of the other sites combined. And the kicker is, I don't even go on the site that often!

I see a link for a Meetup somewhere else, usually in a tweet or an email, and then I hit up Meetup for 2 seconds to RSVP for the event, and that's it! Brilliant!

So that's what I'm looking for - more "Meetup-like" sites. That's what I'm challenging the start-up community to put together.

Sites that change REAL LIVES and in doing so, will change the world.

Integrating user feedback...

Today we launched our new and improved TickerHound design!

Well, the design isn't very "new", it's just been updated a bit based on all the feedback we received from the TickerHound community over the last 10 weeks.

From the get go we told ourselves that we wanted to build a site that our users absolutely LOVED to visit. Our goal was to create the iPod of financial education sites - and no, I don't mean it would play music when you visited, I mean that we wanted the user experience to be so damned compelling and so pleasurable that every visitor felt like the site was built just for them.

So in order to do that we knew we'd have to be in constant communication with our members. We knew we'd have to actively solicit feedback from and actively LISTEN to what they were telling us.

Now, when requesting feedback, it's very easy to take the stuff you want to hear and throw out the rest. I believe it's what psychologists call the "confirmation bias" - you tend to only pay attention to the data that supports your predetermined hypotheses. Being that this predisposition is hardwired into our brains, we knew we had to be OVERLY conscious of it and integrate it into our decision making process on a regular basis.

So as we worked with our design team over at nclud, LLC. (great guys, super talented, I highly recommend them) we would constantly revisit older feedback surveys. We would reexamine data we originally tossed out and we'd revisit features we decided not to add - some of them stayed in the trash can, others ended up on the site.

The point being - while you can't take every single suggestion from every single member, you are doomed to failure if you don't actively examine and reexamine what your users are telling you. Those who fail to ACTIVELY LISTEN will die!

Ok fine, I'm being a little over dramatic here but the point is still the same - listen to your members and they will help you succeed.

The other thing we had to remember was that sometimes our members will tell us more through their actions than their words. For instance, when I saw that we were getting a higher percentage of user activity per day on older questions (questions not on the first page of the questions list), I knew we had to add more numbers to our pagination scheme (it used to be 3, now it's 9).

We also relied HEAVILY on our Google Analytics data - yes, we're cheap, we use Google Analytics. Here's a perfect example:

One of the goals with the redesign was to increase the amount of time visitors spent on the site. It's not particularly low or anything but it'd be great to get it higher (obviously). So I examined the pages that have gotten the highest exit rates over the last 8 weeks. Then I used Google Analytics to track the visitors' paths through the site until they hit the high-exit pages.

It turns out that the pages they exited on tended to only be the 2nd Question page they visited (these are the pages that contain the full question and the associated answers - if any). And they would tend to exit more often than not if it was a question page that didn't have an answer yet (seems intuitive but it just didn't occur to us until we examined the data).

So now we reworked the code for displaying the "Related Questions" in the right-column of the Question pages. Now, the top 2 "Related Questions" will be questions that have at least 1 answer.

While we don't have a lot of data yet, it's clear from early tests that our strategy is paying off in terms of "page views per visit" which I feel will ultimately translate into more time spent on the site.

We'll be adding more features throughout March and we've also made it a company mission to add 2 new features (that have been requested by our users of course) each and every month.

We might not be the sharpest tools in the shed, but we want to be the best LISTENERS on Wall Street!

A Personal Touch

I'm a big proponent of using Return on Invested Capital (ROIC) as a primary benchmark for business success. And not just at the end of the year when sizing up our P&L statements. ROIC has to be used for every business function in order to know if it was "worth" it or not...period.

That's why we use tools like email newsletters and blogs to communicate with our members at TickerHound. It's a "one to many" device - meaning, we write a message once and it reaches many people (at the same cost). It's what makes software and the web such a highly profitable medium.

But I think that in the search for increasing ROIC, we might lose that personal touch that helps build businesses. There's something to be said for appearing to be a "big company" - customers want to feel like they're part of something bigger than they are, they want a feeling of security, credibility and reliability that comes with being aligned with a large company.

But I can't help but feel like "being big" might not be an advantage sometimes - especially on the web. Striving for increasing ROIC in the short term might hurt a business over the long term. So I've been thinking a lot about the web and how it was supposed to "level the playing field" and put small companies on the same level as big companies...and it's certainly done that.

The other thing it's done is it has made this world a much smaller place to live in. I can chat with my friends in China, California and New York just as easily as the person next to me. I know what they're doing via their "Status" on Facebook. I know if and who they're dating, what bar they went to this weekend and I even get to see the tan they got on their latest vacation.

So with that being said, should web start-ups continue to adopt "big business" images or should we start to look at what makes "small businesses" work?

And I don't just mean "small" in terms of revenue or number of employees...I mean "small" in terms of the community the business serves. So the small businesses I'm thinking of are those that serve local communities - the pizzeria down the block from my house, or the dry cleaner at the corner - those small businesses.

Now, the most successful small business I know of was Tony's Deli - an Italian Deli owned by my friend's parents in my old neighborhood of Whitestone, Queens. Tony's was a typical Italian deli - fresh cold cuts, great hot food prepared by my friend's mother and every single time you'd walk in they'd shout your name from across the counter and ask how you were.

It didn't feel like you were walking into a store - you didn't feel like you were walking into a place of business. It felt like you were walking into a friend's place, grabbing some food and by coincidence leaving a little money on the counter. They knew your name, your family's names, the names of your pets. It was great.

But then one day this MONSTEROUS Italian Deli opened up just 3 doors down! They had more food, more selection, fresher produce, etc....AND, they were charging 50% less than Tony's.

So here you have a situation where a competitor enters the marketplace with a better product at a cheaper price - most "business strategists" would say that Tony's would be done for.

But that's not what happened - no sir.

Without Tony's asking for help or even bad mouthing the competition, the community rallied around the local deli. The lines got longer, people bought more things more often and whenever you would walk in you'd be able to hear at least one customer mention that they'd "never shop at the place down the block, hope they go outta business!". It was amazing - Tony's actually did better when the new competitor hit the markerplace because they had captured the loyalty of the community they served.

The "Tony's Community" became champions of Tony's success - the "bigger" company was considered a common enemy that the community could rally against. And boy oh boy did it work out well for Tony's...within 6 months the competing Deli was out of business and in the last 15 years not a single new Deli has tried to open in that community.

Tony's became the king because the community decided it should be so.

And that's what prompted me to do the first truly "small" business tactic that I've done since we decided to launch TickerHound last year.

I began to personally e-mail "thank you" letters to every TickerHound member...and not the standard, "Welcome to TickerHound" e-mails everybody gets. I e-mailed them thanking them for joining and for their contributions to the site. These aren't copy & paste, mass production e-mails either. These are letters I personally typed and sent, from my personal e-mail address, to our members.

This is obviously going to lower our ROIC in the short term, but over the long haul I have this belief that it'll help TickerHound become the "Tony's Deli" of the financial education market. And even if it doesn't, I know that at the very least I'll have made some friends, built some loyalty and have gotten some invaluable feedback on our product - so no matter what, it's a win-win for me, for TickerHound and for the community.

So here's my message to other entrepreneurs out there - "think small".

Yahoo! Rejects Microsoft's Bid

As I’m sure you know these companies have been making a ton of headlines this week. After both found themselves unable to successfully compete against the leader in internet search and advertising, Google (Nasdaq:GOOG), Microsoft (Nasdaq:MSFT) made a $44 billion unsolicited bid for Yahoo! (Nasdaq:YHOO) last week.

Yahoo!’s board was set to meet on Friday to decide what, if anything, they would do about the offer, about Google and just about Yahoo!’s overall problems in general.

Well, as of Saturday morning the Wall Street Journal was reporting that “someone familiar with the matter” (I love how there’s always one of those) stated that Yahoo! would reject the offer and wouldn’t consider anything lower than $40 per share. That would put Yahoo! at a $53.6 billion valuation – a 20% premium to the current offer and 35% premium over Yahoo!’s current stock price.

So that wasn’t an out-and-out, “No, we think this is a bad idea”. It was more of a, “This is a good idea, but only at the right price.”

But the question is, would that price be “right” for Microsoft?

Yahoo!’s stock hasn’t come anywhere near $40 per share in over 2 years which basically means that even though the company has been going on a software development spree – releasing new versions of its ad system, it still hasn’t been unable to come close to competing with Google.

And if I were Microsoft, I’d certainly take that into account. In fact, let’s pretend I am Steve Ballmer for a second (and thank the lord that I’m not), here’s my logic for evaluating the Yahoo! deal:

1. How much more money could we make in online ads by having Yahoo! on board?
2. How much could we save?
3. And most importantly, what would Yahoo! do if we didn’t buy them?

You may be wondering why number 3 is the most important – wouldn’t it be more logical to think of it all in dollars and cents? Well, yeah, I’m sure it would be more “convenient” but here’s my logic in putting so much emphasis on number 3.

Yahoo! as a standalone company cannot compete with Google, or Microsoft for that matter, in terms of capturing greater market share of the search advertising business – the crown jewel of online advertising. Which means the company is destined to become a laggard in this space (assuming lightning doesn’t strike) which will leave it ripe for picking at a later date.

Yahoo! could also decide to partner with Google for its search engine ad technology – which in the short run would definitely bolster the company’s financial situation, but longer term would leave it strategically vulnerable. I mean, what value would this company have as a technology company (one that thrives on innovation) if its most popular division was powered by somebody else? It would be like Budweiser putting Coors into its classic brown bottles and hoping no one would notice – certainly a tough hole to crawl out of.

Neither of these alternatives would give me a warm n’ fuzzy feeling if I were a Yahoo! shareholder.

So back to Microsoft – here’s a company that’s willing to give Yahoo! shareholders something for their patience. It would give both companies the ability to actually compete with Google for the first time and the scale they would gain in terms of traffic, reach to publishers, etc. would put the combined company in a prime position to increase ad rates and revenue across the board.

Granted Yahoo! employees might not be ecstatic about it, but Microsoft said they’d retain the Yahoo! brand and probably much of the culture. I don’t think regulators will have any problems due to the fact that the combined “Mahoo” (as it’s being called) still wouldn’t completely eclipse Google in terms of traffic or scale.

So if $31 is too low and $40 is too high – what do you say we split the difference, call up Ballmer and Yang and tell them to settle on $35.50? Then everybody’s happy and Google can finally get a run for its money!

Who’s with me?!

Mixed Feelings on Facebook's new Ad platform

So yesterday at ad:tech Facebook announced its long awaited ad platform. Here's a quick recap:

New services:

• 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.

I must say, it's a pretty comprehensive suite of features and it definitely shows some forward thinking on Facebook's part.

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.

Snackbyte: Google's Best Move Yet - OpenSocial

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."

Here's how:

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!

10 Wall Street Sales Secrets (Part I)

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.

Happy hunting!

fbFund - What does it really mean for Facebook?

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.

Conspiracy Theory

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.

Go Facebook!