Archive for May, 2007

Blog monetization

May 31, 2007

Content publishing via blogs is being produced at a voracious pace. But advertising revenue probably can’t sustain blog businesses except for the hottest blogs, and even then, they seem to be paths to other revenue or profit. Small time bloggers tend to profit from the notoriety, network, and access their efforts produce. Some hope to be picked up by larger media outlets. Others build service businesses around their expertise as demonstrated by their blogging.

What about micropayments? Micropayments for content seems to have failed online. Why is that? Is no one willing to pay for content any more? Is it that no one is willing to pay for text, picture, audio, and video that is not packaged in physical media? Perhaps, is it that no one is willing to do so unless it is bought through a place like iTunes? Or maybe they are only willing to do so when it’s relatively expensive, such as a market research report.

If a blogger charged for a portion of their content–such as the analysis portion of a given blog article, would readers simply ignore it?

If a credible blogger consistently wrote fairly lengthy, quality content and charged 5-10 cents for certain article portions, would this die right out of the gate? I suppose today it would, since their is no model for it (at least none that has taken hold), nor is there a trusted facilitator/infrastructure for this.

Why is that? It would be relatively simple to create the payment platform. How about “MicroPay”? Maybe MicroPay only bills you when you’ve accrued $3 of charges accessing content from member blogs. Maybe MicroPay is smart about timing so it can group microcharges (say weekly) to minimize per transaction charges from the payment processors. iTunes does this.

It seems to me at some point, supply and demand has to work. As a blog reader, if I am willing to consume piles of free content, but unwilling to pay for ANY, what am I saying about the value of the content I am consuming? Am I consuming worthless content?

Maybe most bloggers value getting as much readership as possible so far above monetization that they can’t consider anything that would reduce their audience. Curious what percentage of bloggers (say with over 250 daily readers) fall into this category. Obviously if “everybody was doing it” (microcharging), this issue would be mitigated. There are 5-10 blogs out of 150 I subscribe to for which I would REGULARLY pay 5-10 cents for various content. Probably another 50 for which I might occasionally pay. The rest I probably would only rarely or never. But even for these, as long as a sizable and still valuable portion of their content was free, I would still subscribe to their feed.

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Suspension of disbelief

May 30, 2007

Seth Godin has an interesting post here about how pundits (experts in general) get it wrong trying to predict hits. In reference to startups, this is my reasoning why this seems to be the case.

Suspension of disbelief is a key skill you need to predict the future. Otherwise, you are having to use today’s assumptions to predict tomorrow’s hits. Suspension of disbelief requires effort because disbelief is generally a survival instinct. We tend to not believe something that doesn’t jive with what exists today. What exists today, in totality, is the environment in which we must survive. I guess I can get even more Darwinian and say, back in time, our environment was just nature. Nature doesn’t change at the pace of society. The technology within a society changes even faster. Thus, to predict the future, you have to suspend disbelief.

Suspension of disbelief is only one piece. You also have to understand trends and especially the “butterfly in China” effect.

Big hits in startups change industries. If you don’t start with the assumption that an industry can be bent, you automatically rule out hits. If you don’t have a sound understanding of how an industry can be bent, but can suspend disbelief, you don’t have a way to predict success. So you rule everything in, especially ‘big ideas’ that fit with what’s talked about on CNBC. Then, you rule out things that don’t ‘feel’ right. Nothing ‘feels’ right unless you can take credit for a piece of the idea. So, again, most hits get ruled out.

I think there’s a lot more written out there about industry understanding, so the main theme here is suspension of disbelief. I would say if you don’t have to suspend disbelief a little bit to see a startup as a hit, it’s a red flag. It might be a profitable venture, but probably not a hit.

Also, young people are better at suspension of disbelief. I mean this in the best possible way — they pretend better. This is the key to understanding the generalization of why young people tend to catalyze hits (MS, Google, Apple, Facebook etc etc)

Thoughts on the increasing popularity of online worlds

May 29, 2007

Online worlds continue to be an emerging space. Second Life gets the most press lately, but there are several others that enjoy even larger followings. This post is about just one (of many) reasons somebody might spend time in one of these worlds: escape from their reality.

I came up with three primary escape motives — 1. To be someone else (to try on a different hat, if you will), 2. To be who you actually are, and 3. escape, or work out, some kind of fear.

I think there are some predictions that can spill out of these different motives.

The motive to be someone else is more likely to result in trying on many different hats…inconsistency and variety in the persona you assume online. The pleasure is in getting to pretend. But, since we ultimately tire of pretending when it becomes repetitive, interest tends to wane. There’s no sustaining meaning.

The motive to be who you really are might sound a little odd, but I think we’re being innocent if we assume there aren’t lots of people who need an escape from their ‘real’ world to be who they really think they are. This motive would lead to persistent or evolutionary behavior with the assumed persona. This is because with this motive, you’re aiming to become someone specific. While there might be a process for getting to be that person, there is a steady aim. If someone gets to achieve this type of escape, interest could become intense. Imagine if the only place you could be yourself was in a virtual world. The virtual world then becomes home. The alternative path is a sharp decline in interest, as a result of either the experiment failing (not turning out to be the expected alter ego) or it succeeding too well and being too scary to handle.

The escape from a fear is different from the others and more practical. I mainly mention it to distinguish from the other two. In the first two, the motive is to assume a different persona. Here, the motive is to maintain the same basic persona, but benefit from escape from a fear. A basic example might be a shy person just working on some social skills. Learning, experimentation, and experience are the primary goals.

The most sticky would seem to be the second. If an online world becomes home for somebody, they stay…intriguing and scary at the same time.

Self management for right brained people

May 24, 2007

I have thought about the topic of self management for right brained people a lot, as I am quite right brained and I have to spend an inordinate amount of energy on things like time management and organization. I do these things (fairly well, I like to think!) because I’ve learned I have to, but I don’t enjoy them. I get psychic brain drain doing these things…in fact, the reason I think I’m good at project management with technical people is a lot of technical people (especially the designer/architects) are right brained and I can empathize with them. Empathy is a great source of productivity with a team.

Enough about me. Productivity tools are generally designed for left brained people. Why? Because they love them. They need them far less than right brained people, but they are the ones that actually purchase/demand/use such products. This is a perpetual cycle. (This is true with many products. The cook book market is a great example. You would think people with few cook books would be a healthy market. It’s actually the people with 100 cook books that will buy their 101st that is the bigger source of demand. Even though they already know how to cook for themselves and don’t need it. I digress again. Maybe I’m letting myself be especially right brained for this post!)

Even books or tools that suggest they are “for right brained people” are not. They are the same thing packaged with empathy. “Try harder, we know you’re different and that’s ok. Place the calendar by your pillow.”

What I am currently thinking about are right brained tools and instruction for productivity designed by and for right brained people that take advantage of the strengths of right brained people.

One area I think has legs is monitoring. The goal — follow through — review loop (i.e. execution) for right brained people is tough to depend on because it is so linear. Right brained people tend to set goals they then forget about ten minutes later. And if they set up an oppressive regimen of some kind, it will get jettisoned. Finally if review requires measurement and if measurement requires reporting, there won’t be much to review. Reporting is a right-brain black hole.

A right brained approach would be to start with the review part and set up some kind of passive, automated monitoring and reporting method.

For a wacky example…let’s say the area is weight. Someone wants to lose weight. The normal (left brain) approach is to set a goal ( go from 200 to 175 in six weeks ), execute ( diet and exercise ), and monitor ( check weight, perhaps other stats routinely ).

The first thing to break for Mr. Right Brain is the last part. No reporting. Then with no reporting, the goal kind of goes out of sight, out of mind. Then with no goal in mind, the execution crumbles.

So we need to fix reporting. Mr. Right Brain cannot rely on himself to report. Period. (Normally, here the left brain authored manual would effectively say, “don’t be irresponsible.” Thus, it would also be a useless manual.) Mr. Right Brain, however, can be relied upon to go to great lengths to craft a way to automate such reporting. Perhaps he would actually invent a scale that would feed his nearby computer any non-zero measurements. Perhaps the scale would begin beeping once every thirty seconds after any 24 hour period of no non-zero measurements. Just a non-obtrusive beep. The next time Mr. Right Brain goes to the bathroom to brush his teeth (or anything else), the beep is audible. Reporting is automated.

The goal, weight loss, will still be forgotten if it is not kept in mind by an outside force. Mr. Right Brain cannot be relied upon to remember a commitment. That’s why the reporting feed should somehow interrupt (not too much!) Mr. Right Brain’s attention at least once a day.

I actually think those two areas are more critical for the Right Brainers, but the follow through/meat of the execution also has plenty of opportunity for getting Right-Brain juicy. One thing Right Brainers like is accomplishing two or more things at once. So with our example, a diet (preferrably provided by way of a periodic feed of recipes) that explores unusual foods could be a winner. Is it more inconvenient to have to go get unusual ingredients? Yes. Does it maintain Mr. Right Brain’s interest? Yes. Is it worth it? I don’t know. Mr. Right Brainer will find out from his automated weight report data. In fact, as long as the automated goal and monitoring system stays in place, Mr. Right Brain is free to explore other execution solutions at will.

We would not design machines to be right brainish, would we? We would want to design machines that are nice and logical with rigid instructions. So sometimes, we might ask, why would designing anything like the above make any sense? We might think we’re catering to unnecessary whims of Mr. Right Brain. We might think we’re being inefficient. It’s this “we” that is the curse of the left brain instruction manual. Right brain solutions accept the right brain reality as a given. The key is to know it’s not “just a workaround.” It is leveraging the right brain strengths. Did you notice in the above example, the automated scale thing would be valuable to a left brain person too? It’s just they wouldn’t bother with the trouble of making it because they are left-brain reliable enough to remember to check their weight daily on their own. But, Mr. Right Brain gets a psychic supercharge from the opportunity to craft the solution, and he probably has the ability and creativity to actually do it. Leverage right brain strength to compensate for right brain weakness.

Push mobile applications

May 23, 2007

Push mobile applications are questionable. Why? Because they are almost always oriented around push to facilitate push advertising. Don’t play games…squeezing in a little push advertising is still intrusive, interruption-oriented advertising.

If you have a push concept, try to turn some or all of it into a pull model. Try to make your revenue model tied to the pull part. Advertising around content that I have chosen to access is ok, as long as you don’t take advantage of the tradeoff I’m making.

Give me reasons to go to your mobile-optimized site or regularly use your mobile application on my own volition.

“Pinging” me is less and less acceptable on the web and email. It never was or will be acceptable on the mobile.

Also, if I were the voice of a mobile phone user, I would whisper in your ear, “Let me download things (mostly content) instead of stream. Feed data or content to me in the background, if I let you. My Internet connection is not very reliable.”

okcupid

May 22, 2007

OKCupid looks to me like a winner. I am unaffiliated with them in anyway, other than my profile exists on there somewhere.

I find it hard to formulate why my gut is screaming that OKCupid is going to work. I think it has the flickr appeal for one.

A little more…

First, and most importantly, it is free. The proportion of girls who will pay for a dating site and guys who will is way imbalanced. Something that facilitates dating is just more valuable for a guy because the responsibility is incumbent on the guy. Perhaps this logic is sexist, but it is the reality in most cultures. Guys know that they have to do the uncomfortable work of the approach. They are the ones being judged. Except for the minority that have some scarce value (such as model looks, wealth, or fame), men know the costs of dating, and most are psychological. Women do, too, but the psychological costs for them are not as centered around the beginning. So, they do not have the same concept of value associated with a system that facilitates the beginning of a dating relationship.

There are other skews to pay sites. The question of capability is tied to ego. Almost everyone is irrationally protective of their own ego. (As in, “Man, I should really be able to do this on my own. Why do I need a dating site? Am I that much of a loser?”) A guy joins a dating site because the ego ding of doing so is less than the potential return (because of their acute knowledge of the psychological costs above). I’ll go out on a limb and say most guys can get over this hurdle. Those that don’t, don’t need to. Girls, on the other hand, less frequently get over the ego ding. Those that do have more motivation to do so. The following is stereotypical, but the economic forces at play suggest strongly that those that are motivated to get over this ego ding do because they are less attractive in some way than those that don’t. The ego factor is stronger with girls in this area. First, they may “trial.” But then, the ego hurdles of signing up, then paying, then using the site, then meeting someone, are all additional hurdles, each one of which may prove too high to get over. Since just being a little flirtier probably can have the same result, the ego hurdles just don’t make sense.

A free site doesn’t have this problem. With a free site, the trial is effectively everything except actually meeting someone. Can’t do much about that hurdle!

The question is, does being free introduce other problems? Hmm, let’s see. Common “bad things” with dating sites are:

Guys that flood girls with emails
Guys being unpleasant in some way
Selectivity biases more attractive people (and lots of correllary problems)
The attempted communication versus actual date ratio is weak

I’m sure there are others, but the point of my brainstorm is to say that none of these problems get worse by making a dating site free, and may in fact improve. For example, the first point is probably helped by making the site free. Why? If a guy pays for a dating site, he is going to be compelled to use it. A lot. Too much. Mass mail! Why? Because he just absorbed an ego ding by paying for a dating site. He wants results! This is Newton at work here. Action causing equal and opposite reaction. This is throttled down on a free site.

What about other problems?

Exclusivity is lost. It’s open.

Is this a problem? Exclusivity is an illusion, anyway. Again, for the guys, there is competition no matter what because of the well known ratio problem. The illusion that “now that I’m paying for this, my job is easier” does not jive with reality. In a free environment, this becomes obvious. (By the way, I think small features in the site that suggest this reality would be a good thing. For example, if a guy sends a girl an email, why not say, “This girl just received her 50th email of the day.”)

What’s the point of a free dating site? Myspace has millions of singles.

In the early days, Myspace did have lots of dating interaction. This went down as interacting with strangers just became very secondary to the primary use of Myspace as a social network for existing friends. Online communities are kind of singular in purpose. Myspace is a place for friends. I think the social networks will still be places for dating, too, but that will always be secondary. I think the biggest reason why a free site specific to dating is better is that dating is, in fact, time sensitive and purpose specific. The approach is time sensitive. What makes the approach less psychologically costly is knowing the other person is interested in dating (purpose), right now (time). Myspace users are not always interested in dating someone new. An OKCupid user that visited the site yesterday, is much more likely to be interested in dating someone new. I realize this is subtle, but it’s the bulls eye.

Truths about mobile applications

May 22, 2007

If the primary function’s equivalent is on the web or software application: cutting back on the features to make it “mobile-friendly” is probably a bad solution.

Repurposing a computer screen application for a mobile screen is a bad mental place to start. But if you are in that situation, never assume that just because users use a feature online, they will want it to on their mobile. Assuming the won’t want it is almost as dangerous.

People’s expectations of mobile applications are still very new. Thus mismatched expectations are likely, which is perhaps the most common source of user frustration and abandonment.

If you can do the same thing on a laptop or even desktop, you probably will.

Time and location sensitivity are critical questions in measuring usefulness of a function for a mobile application.

The logic structure you can hold to is: In less than one hour, I will be in front of my computer, with an Internet connection. Is there a typical reason why I need to use a function, now, where I am?

Someone that would want or use a mobile application very likely has a laptop and is very likely adept at finding Internet connections.

If you can do something on your laptop or desktop an hour later, you probably will, instead of trying to use a mobile application.

Most people are procrastinators. It doesn’t take much for them to convince themselves to put off a task. If they aren’t this type, they are probably the “efficiency expert” type. This means they are very good at prioritizing and optimizing their schedule. Either type will conclude that they will wait to complete the task.

Mobile banking example: it is not very valuable to me to be able to do online banking on my mobile because

1. It is much better done in a standard screen browser
2. Most online banking tasks are not time sensitive enough for me to bother with mobile handset access. (I can do it later on my laptop.)

A valuable, easier to deliver service is a great “nearest ATM” finder. Psychology: an email marketing message promoting mobile banking will elicit from most people the “eyes-glazed-over” response. An email marketing message promoting a nearest ATM widget for your phone will elicit a decision…either “Cool” or “Lame.” Marketing 101: Eyes-glazed-over causes indifference, which causes apathy, thus indecision. No matter what, you want a decision.

Simple is better on the mobile. But the caveat is if you are providing an application on the mobile that has a commonly used web- or software-based equivalent, you have to provide all the functions of said application on the mobile or you risk a mismatch in expectation — or even an outright disappointment. The simplicity imperative and the above caveat are opposing forces.

The Dip by Seth Godin

May 20, 2007

I just read The Dip a couple days ago. Briefly, most of the book had to do with the idea that there is an extended period of struggle along the path to achieving great success. You might have some initial success, but to really get to the top, you have to go through the dip first.

I liked the book more than I thought I would, but it left me with some of the big questions unanswered. Mainly, how do we know we’re going to get past the dip? If it’s a career, how do we know? If it’s a startup, how can you tell?

The second question I was left with had to do with “is it worth it?” but somehow the question is tied to, and maybe the same as, the first.

We all can relate to relationships, so let’s use the dating analogy. Most long term relationships go through a dip at some point. Knowing whether you’re going to get to the other side is almost the same as knowing it’s worth it. Obviously, if you’re not sure it’s worth it, you’re probably in the dip or maybe haven’t even gotten to the dip. Then again, maybe you can’t know it’s worth it until you’re well into the dip.

To me, an early stage startup mirrors this. How do you know if a market is going to emerge that will make the dip worth it? Many startups begin based on an optimistic view of an uncertain future.

The part of the book that stuck with me was the well presented arguments around being the very best at something in particular. (which, typically requires progressing through a dip — thus the relevance to the book’s name.) Indeed there is a very significant multiplier effect when you get to the status of “best.” Why? The best are in very high demand and by definition, the “best” is a scarce bunch. I think over time, this may get even more extreme because in many areas, with technology, the best can be spread further and further, negating the need and demand for second best.

Snappages … another Austin bootstrap!

May 16, 2007

Snappages is a new site by Steve Testone’s Test 1 Studios here in Austin.

It looks like an online iPhoto/flickr, Myspace, and Calendarhub in one. The UI looks pretty slick for all the functions. The calendar looks pretty good and I might give it a try. It doesn’t look like there are too many users yet, but I can’t tell for sure because it doesn’t let you see the community. Maybe that is planned in the future.

I’m curious what the angle is. I still think there is a lot of opportunity online for basic toolset combinations, but without any angle or focus, I don’t know where all the users will come from.

Also, I was surprised to see it all looks built in PHP. Not that there’s anything wrong with that, but it just seems a new generation of this type of web app would be in Ruby on Rails.

The UI also feels like the beginnings of a nice Web desktop.

Breath of fresh air: elevator pitches are for creeps

May 16, 2007

I came across this article Lose the Elevator Pitch and it’s one of the best pieces of business advice I’ve read recently.

I’ve never thought much of the “elevator pitch.” I don’t like the culture that promotes it, nor the consulting/marketing/advice givers that proselytize this sound-byte packaging.

At it’s best, it is mere showmanship. At it’s worst, it is dehumanizing. Usually, it is just obnoxious. Now, I do understand that many people can learn how to discuss themselves, or their business, or product, or whatever, in a more engaging way. They can learn to read their audience. They can be more animated. They can learn to weave in a good story. But the cure for dull, underwhelming communication is not sound byte lingo.

There is a lot of business press about selling yourself. About positioning yourself. And getting comfortable spewing contrived messaging about what an asset you are. It’s rampant. Plus, people of influence encourage it. In sales, pre-rehearsal is a way of life. Today’s popular networking and career advice is to do the same. So we ought to intentionally sound canned and contrived? Please spare me.

And you don’t need to read much advice about startups before coming across the advice that you should be able to pitch your investor by the time he steps off the elevator. Many investors are the ones promoting this. I think it’s a joke. I found a consulting company Elevator Speech (yes, I guess the company is actually called that) and while I’m sure these guys are well intentioned, my head hurts imagining what their newly trained robot clients sound like. The bottom line is, all this elevator pitch business is about being the fastest bull**it slinger in the room.

Ironically, companies claim that people are their most important asset…and that they seek out the best talent. Is it really that they seek out the people that can sling you know what the fastest?

And of course, investors are interested in teams. “We invest in teams” might as well be a battle cry. Is it really, we invest in teams that can deliver…ahem, ahem… faster than you can say “due diligence is for wimps”?

Obviously, this topic is a pet peeve of mine. And I can be guilty of sound byte thinking, too. But let’s just be honest: the smartest and most interesting folks in the room probably don’t speak in sound bytes.