Dato Daily

Cliff Notes: Contagious + Rework

I’ve been cranking through some startuppy/businessy books on the subway to and from the office the last few weeks. I like these sorts of books, but as a general rule I think they should all be about 1/3 as long - max. They usually have WAY too many real world examples. Here’s some cliff notes to Contagious and Rework to save you some time.

Contagious:

44 word synopsis:

Contagious throws science at virality. Berger has painstakingly analyzed viral spread, breaking the phenomenon into 6 core tenets – Social Currency, Triggers, Emotion, Public, Practical Value, Stories. He gives examples for each, breaking them down to make them easy to understand and hopefully incorporate.

My thoughts:

If you’re basing your product’s marketing plan on building viral content…stop. Unless you’re Dollar Shave Club, it’s probably not going to work. However, this book is valuable if you’re shaping your product’s marketing and public image. For example, incorporating triggers into the DNA of your product from day is a great practice.

Takeaways Power Rankings:

1.     Use Triggers: The viral video “Friday” got ridiculous amounts of traffic on Fridays, the campaign “Kit Kat and a Coffee” tripled Kit Kat sales, and telling students to associate their cafeteria tray with vegetables increased the chances they’d actually eat vegetables. Find something your audience does anyway and attach your product to that activity, whether it creates an interesting and slick campaign or not.

2.     Help People Look Interesting. People share things that make them look smart, interesting, or in the know. Help them do that.

3.    The strongest emotion is “Awe,” and viral isn’t good enough. People like to be awed. Make them aware of something amazing and they’ll share it. However, sharing and viral isn’t enough. If your product isn’t core to the campaign, it’s wasted eyeballs.

4.     7% … and track what you talk about. The amount of product sharing that occurs online/through social media is 7%. That’s absurdly low – focus your online sharing campaigns accordingly. A good exercise to drive this home is to track what you talk about for a few days. You could literally talk about anything in every single conversation you have. Why did you talk about what you did?

5.     Lots of people are reading this book. Not totally book related, but I brought it up in a few conversations and got responses like “oh my friends is reading that: or “my sister just read that.” It seems that Mr. Berger used some of his own medicine in his book. Well played, sir. Also, it means that your competitors will use a lot of these ideas.

Overall – 4/5:

Probably worth a read. Goes by quick, you can definitely get away with skimming the last few chapters.

 

Rework:

75 word synopsis + My Thoughts:

Probably one of my favorite “businessy” books ever written. Equal parts Godin and Ferris, Rework presents an actionable blueprint for startups and companies in 2013. I didn’t realize these were the Basecamp guys at first (my favorite online tool), so their words hold a ton of weight. Build what you want to use, stay small unless you need to, don’t waste time “planning,” don’t raise money, and sell your by-products. Brilliant advice described quickly and clearly. An Absolute must read.

Takeaway Power Rankings:

1. Pick a Fight. I loved this advice, and it may be very relevant for me at Find Your Lobster in the near future. Take a stand against the big competitor, even if they’re beloved. Under Armour established themselves as the next generation of Nike, forcing people to chose between the two. You create a passionate user base by taking stands. Which brings us to -

2. A few passionate is better than a bunch of lukewarm. It’s better to delight a few people than appease the masses. People who are somewhat satisfied will switch quickly and won’t pay. Passionate users will pay and won’t switch.

3. Solve one problem really well. Look at your product and find the one piece of functionality that the product absolutely couldn’t live without. Perfect that, and get rid of everything else.

4. Avoid outside money. Figure out a way to keep your bills hyper low to start, and plan your business so you cover the bills from day 1. Avoid taking money as long as possible.

5. Try it yourself first. Before you hire someone, try and handle whatever you’re hiring for yourself. If it’s something you don’t know how to do, try it until it’s abundantly clear you need someone. Then, you’ll realize what you’re hiring for and the type of person you’ll need to handle the job.

6. Sell your by-products. Find something interesting about what you’re doing that isn’t core, and sell it. Rework itself was a by-product, as are shows about trucking and catching crabs in Alaska (and really any reality show), DVD extras, etc. Make money from things you do anyway.

My favorite quote:

“A lot of companies post help-wanted ads seeking “rock stars” or “ninjas.” Lame. Unless your workplace is filled with groupies and throwing stars, these words have nothing to do with your business.”

Overall - 5/5

An absolute must-read, and I’m about to run it back to make sure I didn’t miss anything.

Fat is the new Lean

http://www.youtube.com/watch?v=ws66aAdthE0

Me (with Robin Williams beard): I thought about what you said to me the other day, about how I’m running my startup too fat. Stayed up half the night thinking about it. Something occurred to me…I fell into a deep, peaceful sleep, and haven’t thought about you since. Do you know what occurred to me?

Lean Startup: No

Me: You’re just a methodology. You don’t have the faintest idea what intangibles it’ll take to win my market. If I asked you about customer acquisition, you’d probably give me the skinny on every growth hack ever written. How to test, measure, validate, and repeat. But I’ll bet you can’t tell me how it feels to look a customer in the eye and have to explain why you’re different. You’re a genius, Lean Startup. No one denies that. You’ve fundamentally changed the way people bring products to market for the better. Entrepreneurs have no excuse for starting something people don’t want. But they’ve still got to build it. That’s where the fun starts. If you want to talk about Fat startups, then I’m fascinated. I’m in.

Lean to Fat

I couldn’t sleep the other night, and I stumbled upon the above scene. It struck a chord. I’ve been having a battle with myself and others as the Lean Startup commoditizes the process of building an MVP as to what the next step is. I may have been unable to sleep in the first place because I was rationalizing the enormous amount of time we are spending on non-Lean things at Find Your Lobster. But maybe that’s a good thing.  

Find Your Lobster is careening towards launch. Our beta product looks and acts amazing, my hilarious Michael Cera-like performance in our AppStori Video is generating Oscar buzz, and our team has gelled and is clicking on all cylinders. This is both great and terrifying - if FYL tanks I’ve got no one to blame but myself. 

The biggest inner-battle I’m having at the moment is how fat my startup is and should be. The Lean Methodology has commoditized MVP’s - there’s no excuse for an untested, unvalidated startup any longer. So… Now what? I think step one is tossing the Lean Startup in the garbage (or at least putting it back on your shelf for a bit). But first…

How to use Lean

I use the Lean Methodology to test and subsequently prove or disprove assumptions. It’s an effective way to make decisions that can save you months or even years of building something people don’t want. It forces founders to “hit the street;” engaging with customers to understand what the MVP should look like.

I’m helping a few startups where the founders haven’t yet left their jobs. It’s fantastic for this. I tell them to ask themselves: “How can I get this product in the hands of my ideal customer without leaving my company or spending a ton of money building anything intensive?” Once they do this, and the feedback is positive, leaving is part of the discussion. If it’s not, it’s out of the question.

Entrepreneurship isn’t about taking risks. It’s about mitigating them. Lean does a fantastic job of helping entrepreneurs mitigate startup risks, because leaving a paying job in a shitty economy is simply a bad idea. It becomes a less-bad idea if you’ve proved your product has a market without spending 30 grand and quitting. 

The Lean Methodology has dramatically raised the bar for MVPs, making a proven product with an accessible market table stakes. So what do you do now? How can you beat these companies now that have the Lean advantage has been erased?  

Be fat.

Ask yourself why you started this company in the first place.

You knew the market, were passionate about the problem and your product, and wanted desperately for your solution to exist. Table stakes.

You’ve got a talented team that is as passionate as you are. Now you’re getting somewhere. What do customers want that your team is uniquely equipped to knock out of the park? What are the things your team can do that aren’t in any Lean book?

This is where things get fat. And risky. As an example, here’s how we are being fat at Find Your Lobster: 

Find Your Lobster is a dating app. Perhaps you’ve heard that people are finicky when it comes to those. There’s stigma (whether there should be or not is a different blog), so we’ll need to be flawless and consistent in our marketing, design, and execution. Add in that I’m asking users to log in with their Facebook accounts, and they’ll be like gazelles in the Serengeti - ready to scatter.

My app can’t afford to look like an MVP when we launch. It can’t be marketed like a product built by a team of people with no experience marketing a dating app. It’s a serious challenge, and a big reason goliaths like Match.com still exist despite an inferior product. It’s tough to break into this space and build a user base with the existing market forces.

The differentiator for us comes in distribution and user experience.

I’d like to say I was planning this strategy from day 1, but truthfully it’s emerged as we’ve built the app, our team, and our audience. Another big factor was my ability (good fortune) to find two of the most talented UX/Marketing guys in the city who happen to be as passionate about the idea as I am. They also happen to be extremely talented behind a video camera. Videos featuring me in a giant lobster suit getting into the funny, awkward, and embarrassing situations that WILL happen when you join any dating site seems like a better way of attacking these parts of the site than ignoring them.

Our combined ability and willingness to spend enormous amounts of time giving our product a personality will hopefully pay off. Our developers dedication to a product that, while an MVP, looks and feels like something more is a risk. We’re being fat where we’re talented - if we’re going to be beat, I want it to be with our best pitch.

Conclusion

I think it’s necessary to take a hard look at whatever industry you’re entering and figure out what your unique, sustainable advantage is. This isn’t revolutionary but you should be able to answer immediately, and it shouldn’t be something vague. I believe we can win on the marketing / video  / funny front because our marketing team has made awesome, funny videos before. They’ve built a social presence with 10’s of thousands of engaged users before, my developers have built complicated, awesome apps before, and I’ve… well… I’ve got faith I can do it. Which is exactly what I just told people not to do. In all seriousness, I’ve got experience running the ship. And I’m the one making the decisions on where we spent our time, which is really the most important responsibility for any founder.

Don’t be afraid to be fat where you can differentiate - in this commoditized Lean world, it may be your best shot.

Email I sent to my investors re: Facebook Graph

Thought this may be interesting to anyone following Find Your Lobster (and 3degrees before that). Here’s what I emailed investors following the Facebook Graph announcement yesterday: 

Hi All,

Wanted to send a quick update based on Facebook’s announced “Graph” functionality. http://techcrunch.com/2013/01/15/facebook-announces-its-third-pillar-graph-search/

What it is: Facebook is in a never ending quest to monetize the enormous amount of information they have, and Graph is a big part of that plan. Facebook is billing Graph as an “answer engine” - basically a Google that includes people and places that are connected to your network. So, you can say “I want to play tennis in NYC this afternoon - which of my friends like tennis and are in NYC?” and get something actionable in return.

Sound familiar? It’s basically our pitch for the initial product, 3degrees. The main difference is this focuses on your friends, not your friends’ friends. This is where the soon-implemented $1 fee to Facebook users outside your network may come into play. Copycats.

What it means, broadly: To be honest, not much at all (though obviously I’ll need to play around with it before making any final decisions). I think Facebook is going to run into all the problems we did with 3degrees, namely the lack of focus. They’re hoping people will ambiguously search for everything - the same assumption that got us into trouble.

The problem is, there are focused products with meaningful traction that do everything Facebook’s graph will do. These products have the same info as Facebook (since users login with their Facebook accounts), and have years of data and experience with the specific industry. If someone wants to search for food in their area that their friends enjoy, they’ll go to Foursquare or Yelp. If they want to look at photos, they’ll go to Instagram (FB owned, but still), and so on. Since these products have been syphoning users from Facebook to their specific platforms over the past 2-3 years, they’re much better suited to provide a tailored experience.  
What it means to Find Your Lobster: Almost nothing. Our product offers specific functionality geared towards dating that Graph isn’t within miles of. I can’t imagine anyone deciding against joining an app that is based on matching people up with their friends’ friends in favor of an ambiguous search for their friends’ friends with no targeted functionality for reaching out / no ingrained service to create intros and make date and people suggestions.

In general, we’ve just got to keep our head down and push through to launch, which is right around the corner.

Where I think Graph has value: If I’m LinkedIn, I’m scared. This is where Facebook can make a splash. Since LinkedIn is a separate network, Facebook can add value by assuming they can provide information and contacts that LinkedIn simply doesn’t have access to. Most people my age have an average Facebook friend graph of ~1,000+, while their LinkedIn network is in the 400-500 range. This was another tenet we were building 3degrees on - rectifiying your Facebook and LinkedIn social graphs for job searches / networking. This part could work well, since the act of searching for a job or a contact is very much that - a search. You’ll sit at your computer and spend 15 minutes on it. People won’t do that for anything else Graph is offering.

Conclusion: This doesn’t affect FYL at all. In retrospect, it’s a really, really good thing we chose dating, as I think this is the part of Graph that will be impactful. Every great company needs a little luck….

Let me know of any questions -

Brian

Facebook, Snapchat and the Iverson vs. Jordan Implications of Mobile

What’s that old joke?

Over 1 billion people walk into a bar. No one buys anything. The bar is declared the defining success story of our generation.

The City with No Taxes

Facebook is a public company. The days of hyper-growth as the goal are over. Advertising on Facebook is targeted, effective, and profitable. But it’s not enough to support the company’s current valuation or to satisfy shareholders who see over 1 billion users and expect more. As Facebook continues to mature, it is exploring all the ways to get the smallest increments of cash from this enormous user base. This is a new trick for this old dog (in internet years, Facebook is a dinosaur).

I look at Facebook like a city. I live in Manhattan. When I toss the trash down the shoot in my apartment building, it disappears. When there’s a pothole in the street, it gets fixed (eventually). When the lady from the apartment below drops two bottles of wine on the sidewalk, curses at a nearby doorman, and then briskly walks away without cleaning it up – it’s gone by the next morning. I pay taxes for these luxuries.

Facebook is like a city without taxes.

Everyone benefits from the social infrastructure they’ve built. We can quickly learn about people we meet, keep in touch with old friends, build an engaged user base for our products, leverage the Facebook API to benefit from network effects, etc. It’s an absolute joke that this is all free. But it is, and that’s how we’ll demand it to stay.  

Mobile apps are providing targeted services that exist in Facebook’s suite of features, leveraging users’ social graphs and the viral channel Facebook posts provide, while charging users for these apps (something Facebook can’t do). Sure, Facebook Apps kick back a portion to Facebook, but the majority of apps that leverage the API are stand alone and pay nothing to Facebook. 

It’s an interesting problem: these apps wouldn’t exist without Facebook, yet they have a more sustainable business model solely because users are conditioned to pay for apps and not web products - and especially not Facebook.

Revenue streams from social companies are coming from mobile, and Facebook’s product simply doesn’t translate to the phone. 

The Internet’s Food Court

It’s no secret that mobile usage is growing at silly rates and is fast becoming the main way we consume the Internet. An app interface is more natural than a web browser, and devices are powerful enough to handle virtually all web-based services. 

Another way to put it: Facebook is like a mall food court. You’ll always go to the old standbys - McDonalds, Panda Express, Nathans, (i.e. Photos, Status Updates, Check-In’s, and updates) but only if you’re already at the mall (on your laptop). When’s the last time someone suggested the mall food court for dinner on a Friday? When I’m on my laptop, I instinctively check Facebook. When I’m on mobile, I literally never do. 

Facebook is like many pre-mobile products; it relies on a bunch of features. Viewing photos, posts, links, ads, likes, etc. Mobile products are different. They’re decision based. I’ve got 4 minutes on line at Starbucks and I want to see photos, because that’s more interesting than sifting through a messy news feed. Or, I’m at a red light and want to see if my friends have tweeted, so I check my Friends list on Twitter in the 10 seconds I’ve got.

One-stop shops don’t exist on mobile, and Facebook is the ultimate one stop shop.

The Keith Hernandez Moment

So here we are. Companies that wouldn’t exist without Facebook are systematically dismantling the social media giant. Creative destruction at its finest.

Facebook’s response has been interesting. We see them building their own versions of popular apps and attempting to monetize previously free functionality.

The Snapchat case is interesting, and was the impetus for this post. Snapchat is a service that allows users to send text, images or videos that self-destruct a few seconds after the other user has viewed them. SC grew insanely fast, allegedly turning their nose at an acquisition offer from Zuckerberg in the process.

 So, Facebook built a Snapchat clone in 12 days.

I absolutely loved this. It was as big of an “I’m Keith Hernandez” moment as you’ll find in tech (or anywhere). “We shut down the Harvard servers over night, damnit! We can do whatever we want to!” 

Don’t want us to acquire you? Fine, we’ll build the product you toiled on for a year in 12 days. Developers, you want to work for a startup? If you worked for us you’d see your products in front of a billion users in 2 weeks.

The press was all over Facebook for this. And I get where they’re coming from; squashing the little guy is never a good look. Also, copying a product rarely creates a better version. Most importantly, Facebook is a leopard that at this point cannot change its spots. No one is going to believe that the photos delete forever, no matter how many times Facebook says they do. No one is going to do scandalous things (which allegedly makes up a large portion of the 50 million photos shared on Snapchat daily) on a service that is built on sharing information.

Snapchat was built and rose to popularity on a Facebook deficiency: lack of privacy (as was described nicely in a post from Fred Wilson this morning). Facebook making the same app makes no sense.

A great TED talk discusses that people don’t buy what you sell, they buy why you sell it. That’s why Apple can sell computers and music players without anyone blinking. They are obsessed with product design and building something great—it’s there “why.” Facebook’s “why” has never been privacy – Snapchat’s is, and their product is built on that tenet. 

So if apps are being built using Facebook’s API and focusing on Facebook’s deficiencies… where does that leave Facebook?

 Facebook’s Niche: The Lean, Fast Follower

The battle between Facebook and “feature” apps remind me of this play. To non-basketball fanatics this doesn’t look like much. But at the time it was everything. The young, brash Iverson - the Iverson who grew up idolizing Jordan, wearing his sneakers, taping his games - had crossed over Jordan. The changing of the guard was clear. Jordan was no longer invincible. He’d been ‘vinced. This crossover opened the door for the Iverson generation to take the NBA by storm. Without Jordan, there wouldn’t have been an Iverson. Didn’t matter.   

I think this Snapchat / Poke situation could become the Iverson / Jordan moment for Facebook. Facebook broke the mold, showed a model for viral growth, then granted startups access to that growth through API’s that enabled companies to tap into users’ social graphs to grow at light speed. 

Facebook seems to have found it’s niche as a fast follower. They provide the infrastructure for apps to grow. They watch these apps succeed and fail, then cherry pick the top ones to build their own version. It’s the Lean approach without having to build the MVP. It actually makes a lot of sense. 

These apps may not measure up to originals, but the sheer enormity of Facebook almost guarantees success by some measure. It’s the Samsung approach – let Apple be creative, then leverage your efficiency advantage to create knockoffs that aren’t as good but are good enough for 1/2 the price. Let a million startups fail, then clone the one that succeeds. 

This is a proven business model, assuming Facebook charges for these apps outright or through in-app purchases (and they will). 

Facebook needs to become the Jordan of the late 90’s. The one who realized he needed to change to be successful. The one who added the turnaround jumper and tacked on another 4 years to his dominance. Facebook owns our social graph, and for that reason is in a unique position to monitor what apps resonate with early adopters, then speed up the learning curve for the masses. I’ve got no idea if it’ll work, but it’s an interesting (and potentially profitable) model.   

Now if you’ll excuse me, I’m off to build my mobile dating app that wouldn’t stand a chance without Facebook so I can organize how people meet their friends’ friends (now done mostly through…Facebook).

 

The Pivot: 3degrees Out (for now), Find Your Lobster In

*I’m pivoting 3degrees, and this post introduces our new direction. As I wrote this, I realized a quote from my Dad introduced each section nicely. This may double as his birthday present, as salaries for entrepreneurs not taking salaries are at an all-time low. 

The Version One:

“Dad, you don’t know social media. You just called it The Facebook and told me I had a typo in my email signature because there was an “@” symbol in front of “Dato.” This will work. Trust me.”

“Bri, all I know is that all anyone will want to do on your site is date. It’s not good or bad, it’s just the way it is.”   - Dad Quote #1

Today I’m opening the doors for early signups to the new app I’ve been building called Find Your Lobster.

As some of you may know, my first project was 3degrees. At its core, 3degrees was built to quickly and easily connect people with similar interests so they could meet offline and do fun activities together. Leveraging Facebook to exclusively show users friends of friends, each connection was at most an introduction away.  

I envisioned creating a platform for everyone from the guy on the business trip in Boulder looking for a temporary skiing partner to the recently relocated college grad looking to salsa dance. There were also, of course, romantic implications. There’s no better way to meet a potential significant other than through a mutual friend, right?

I purposely left the product open ended, encouraging both personal and professional connections. From an entrepreneurs perspective this was dangerous – I preach focus when I talk early stage startups, and I was doing the opposite.

I can’t tell you exactly why I didn’t focus – maybe I knew the activity portion of the site broke social paradigms, and I loved that challenge (and the potential implications of cracking that nut). Maybe I didn’t want to build a dating site. Maybe I just wanted the activity application to exist so I could use it. Sometimes it’s tough to have an unbiased opinion of your own work.

Entrepreneurs are desperate to instill their personality into their products. Whatever product we build feels like a direct reflection on who we are - if it’s not solving a big problem, or has boring implications, it’s tough to swallow. 

Whatever the reason, I launched 3degrees without a clear direction and waited for users to show us the way. I hoped the activity engine functionality would take off. Somewhere deep down I knew the true viral potential was dating.

We got some early press, which led to signups. We pored over the analytics and reached out to users. The data was too strong to ignore. Over 90% of searches were dating-based. In fact, 97% percent of the time the first thing people did was search for single, local, friends of friends. Stop the fight. My beloved activity engine had failed. 

You ain’t so bad, pivot! 3degrees didn’t work like I wanted it to, but it led me to something better.

The silver lining? People were using it for something.  It was time to reevaluate the immediate direction.

The Pivot:

“Only do it if you love it. That doesn’t mean it won’t be hard – you’ll need to work your ass off. But if you don’t love it, even if you work your ass off, you won’t do it well.”  - Dad Quote #2

The knowledge we gained from watching our users made it clear a dating-focused application was worth exploring. But since I’d consciously avoided that to start, I had to ask myself some important questions: Do I even want to build a dating site? What makes me qualified to build one? Do I understand the space?

I had conversations with people who’d built businesses before. NYC is great for this. If you reach out to someone thoughtful and influential in the NYC tech community, they’ll make time for you. Shifting operations to WeWork Labs has been helpful as well.

I spoke to our users. We discussed how dating on 3degrees worked, and how the process was taking place in real life. I joined every dating site I could to understand their flow. My nights out were interviews. Market research at bars isn’t the worst thing in the world, and tipsy people aren’t as polite as sober ones – they’ll let you know how they really feel about the idea.

The online dating world is fascinating. For years, dating sites have been viewed as something people either needed or didn’t. Thankfully, that ridiculous sentiment is changing. But that doesn’t mean the products can look the same they did before the Facebook / Twitter / mobile revolutions.  

There’s room for a product targeted towards people who have grown up inside the walls of social media. This is the group of people who don’t “need” a dating site, and may not be on one now. Maybe the majority of their friends are in a relationship, or they work long hours, or they recently moved to a new city, or they just got out of a relationship. Whatever the reason, they’re single and are interested in meeting new people. It’s a great position to be in. 

My gut, and my conversations, made it clear that if there was something casual, cheap, enjoyable, mobile, and low risk - that got people offline and out dating quickly – it would be popular. Leveraging social graphs built on Facebook the past ~7 years is a no brainer, but how exactly to interface is far from straightforward.

In the midst of all this research, a funny thing happened - I got passionate about the idea. Real passionate. 3degrees was alluring because it would make people happier. Find Your Lobster could do the same thing - but to a whole new degree. Playing basketball with friends made me happy, but my girlfriend made me something beyond that. I would now have the opportunity to provide that second feeling for people.

So in the end, what qualified me to make this site? Nothing and everything. I’ve got an opportunity to connect people and make them happier, and I know what I have to do to build a great product. I’m confident hard work will take care of the rest.  

The Product:

“95% of everything in life is just showing up” – Dad Quote #3

 

I tried to keep this blog free of random references, but I liked the idea of FYL during the Homeland credits so much I had to include it. 

Simple, simple, simple. I hate to come back to another thing my Dad says, but it’s too relevant to ignore: 95% of everything in life is just showing up.

My goal for Find Your Lobster is to remove every potential reason anyone could have for not showing up.

Don’t want to be on a dating site? It’s confidential until you match, no one will know if you don’t want him or her to.

Think people on dating sites are creeps? Don’t contact anyone before you’ve spoken to a mutual friend about the potential match. They can’t contact you unless you’re interested.

Nervous about the initial connection or that first date? We suggest awesome, local first dates that other users have enjoyed. It’s not foolproof, but it’s a start.

Don’t want to spend your time thinking up witty profile responses and playing the wink, poke, nudge game? You don’t have to. Setups a breeze – you’ll see your first match 30 seconds after you download the app.

Don’t like the feeling of being on a dating site? We’ve got a lobster logo that dresses up in top hats with flowers in his claws. ‘Nuff said.

The product itself isn’t anything mind blowing. It’s not even the most novel idea I’ve heard today (that would be Brad Pitt + Zombies). The devil is truly in the details. We want you to be able to complete the FYL experience while you’re in line at Starbucks. Or during the unreasonably long Homeland opening credits (we all remember what happened last week - get to Abu Nazir!).

I’m really excited for this product, as is everyone involved. I can’t wait to launch and make people happier. I’ve truly enjoyed the process of building something, getting feedback, tweaking it, and building something new. I’m upset that my first product didn’t garner the results I’d hoped, but I’m thrilled at the opportunity this second iteration provides.

I just wish I’d listened to my Dad a bit sooner…

The Details

Sign up here before 12/15 to keep the site (premium versions to come) free for life. NYC and iPhone to start, we’ll spread to other cities and platforms based on request.

Got an opinion on the product? Want to be on the team? Knicks/Yanks/UNC/Giants fan? Brian@findyourlobster.com is good, @Dato22 is better. Love to hear from you.

 

Quick Idea Mondays - Spotify for Books

If you’re a bored entrepreneur with no idea, build a Spotify for Books. Some may say, “Isn’t that just a library?” I’m not sure – maybe? That’s not what I’m getting at.

Why do people read books? Mostly, because they enjoy reading books. However, I’m now on year 3 with my Kindle, and my favorite part is seeing the little dots that show how much I’ve read.

Remember in 5^th grade when you had book reading contests, and the teacher would put a star next to your name every time you read a book? We all cheated on those things to show we read more books. Because what’s the good in reading a book if you don’t get credit for it?

There needs to be an online version of the 5^th grade book chart, so we can get credit for all the books we’ve read in front of our friends. Oh, and it would also create a far superior suggestion engine (I hate relying on the NYT book list), establish a platform to discuss books with friends, generate trending books in different subsets of your friend graph, and empower smaller budgeted authors to spread their work virally. I could even see this creating subscriptions to certain stories, where an author releases 50 pages of a book each week, almost like a sitcom. 

Here’s what I envision:

The actual product is the online storefront. It costs $9.99 a month (seems to be the Spotify/Rdio accepted price), and you get any 20 books on any device. Amazon probably wouldn’t let us utilize the Kindle app, but maybe there’s a partnership there somewhere. Downloading your 21^st means you swap it with an existing book. An online log shows books you’ve read, recommends books you’d like, and shows what your friends are currently reading. Essentially a giant book group composed of your friends. You can easily tweet books just as you would locations (page 221 in Hunger Games, tweeted from Bryant Park), share to Facebook, etc. 

There is a difference between the music and the book industry - People pay full price for big name books that come out. This means a clever revenue share model would need to be included, or else the John Grisham’s of the world would never go for it. Perhaps it’s something like the first 100k copies of any given release are included in the $9.99 price, and after that you need to download the book at full price. There’s a middle ground somewhere, as there simply aren’t that many John Grisham’s who hit the NYT top-10 with every book regardless of content. Find it and you’re golden. 

I think it’s a pretty obvious and natural step.

This is why I need a lifelong tech bromance (that blog is coming soon).

Name ideas that aren’t Bookify, anyone?

Acquiring Users: GA Class Notes

General Assemb.ly simply can’t exist many places. NYC holds a unique combination of experts willing to teach for cheap, people eager to spend their free time learning, and enough of both to support nightly classes on various interesting topics. I’ve written about it before, but the startup community in NYC genuinely understands that the rising startup tide will lift all boats.

I’ve started attending some of these classes, and I can’t decide if I get more value out of the class (always great), or my classmates (often greater). If you are trying to get into the NYC startup world and aren’t going to these, start.

Anyway, last nights class was on user acquisition. This post will act as both a way to share the info, and a way for me to store some notes.

Key Points:

Shelf Life. Tactics for user acquisition get stale quickly. What works now probably won’t work in 6 months. For example, last year the “share with 5 friends to get to the front of the line” was red hot. Now, it simply doesn’t work. I’m adjusting 3degrees login accordingly…

Understanding when certain techniques “jump the shark” is critical. How can you pinpoint when to change strategy?   

Analytics. A page from the Lean Startup handbook - measuring every campaign, interaction, and bit of engagement is not only possible, but necessary. Some tools suggested in the course are listed below. I haven’t used all of these, so I can’t vouch. I imagine that like most of these products, you get out what you put in. Setting these up is often tedious, but can have huge rewards.

• Unbounce
• Optimizely
• Chartbeat
• Go Squared
• Google Analytics

Leverage Human Nature. People are drawn to things that are free, yet exclusive. They react when there is a sense of urgency, but only if there is also an element of trust. It’s hard to effortlessly project all of these characteristics – those who do it successfully will enjoy rapid growth. Italians call this sprezzatura - “an easy facility in accomplishing difficult actions which hides the conscious effort that went into them.”

Be Creative. Free, exclusive, urgency and trust are no secret.  Everyone is trying to create the atmosphere described above. Creatively hitting these emotions is key. For example, getting keyed into a viral loop (fb post, tweet), where your brand is secondary is the Holy Grail.

A great example is a website that acts as a platform for artists to upload videos of themselves playing instruments. They encourage you to pick a friend who is, say, a great drummer, and post on their all that they are a great drummer. The website is referenced in the post as well, but it isn’t the focus. This is geared to get Like’s and comments, engaging users in a natural way.

Random tips I enjoyed:

-       Put a sign up link in your email signature

-       Email a TechCrunch, Mashable etc. writer with something helpful for them (story idea, tip) prior to asking them to publish your product.

-       Putting a phone number on your home page increases signups by 10%

-       Find a relevant Youtube channel with a large number of followers and ask them to review your product

-       Speak at various Meetup groups relevant to your product – pay for pizza to get in the door

All good stuff – nothing too revolutionary here, but good to keep in mind as you design and build your startups.

500 Startups

The new batch of 500 Startups was released the other day, and my immediate reaction was the same that most of my friends had: meh. Full disclosure: I applied to 500 Startups with 3degrees and didn’t get in. I see it as an awesome way to kick-start a user base, gain top-notch guidance, and grab some early headlines. I’d kill to be included. However, upon first glance, this group struck me as more of the same. 

It seemed like an exercise in It’s this for that – daily deals for XYZ, a blank platform for blankers in blank, Flipboard for ninjas. It felt like Groundhog Day going reading each 1 sentence description. It made me think that maybe we’re approaching the point of diminishing returns for this for that web apps (probably not a good thing for a guy making a this for that web app). And in general, saying you are the “simple, beautiful way” to do something doesn’t really mean anything. Maybe it was just sour grapes for not getting accepted. But if I learned anything from Aladdin, and I did, it’s that things aren’t always what they appear. 

After this initial digestion, I thought about it a bit more. I thought about 1 sentence descriptions, and what mine would look like. It’d be incredibly easy to dismiss. As would Instagrams, Etsy’s, even Foursquare’s. It’s a one sentence pitch. How profound can it be? Furthermore, I thought back to my business school days where we were coached to pitch companies as “it’s this for that,” simply so your audience immediately had some idea what you were trying to build. It’s a conversation starter, not the final word.

Fred Wilson discussed all the money being thrown at these types of companies in the wake of Facebook, LinkedIn, Instagram, etc. the other day when he spoke at a co-working place in NYC.  People spun it as a bad thing – all the money coming from VC’s, crowdsourced funding (Kickstarter), Angels, Y-Combinator clones, etc was going to crush the VC and startup industry, as crappy ideas would get funded, be crappy, and throw off the model. Sure people are going to chase what’s hot, but in the end, is there anything fundamentally wrong with giving smart people money to try and start things (assuming we are funding smart people)? If their web app fails, won’t their next one be better? I’ll take this over tossing money into the stock market any day of the week.

Anyway, while the “this for that” boom may seem played out, it’s kind of irrelevant. Teams are getting funded to do interesting things – it just so happens that the “interesting things” that get companies into 500 startups and other incubators happen to all look similar at this moment. Or at least their 1 sentence pitch does. Doesn’t mean they will be in 8 months or in 3 years when this smart founder applies all he’s learned to make the world better with a pivot or a different startup.

Just like being a lawyer is a skill, starting companies is a skill. It’s just, in my opinion, a far more useful one. Overpaying to groom a generation of starters and makers is OK in my book. Large amounts of money chasing what appears to be similar markets isn’t a bad thing either – it’ll make entrepreneurs focus on real problems – average companies simply won’t survive long. Those that do survive will be phenomenal.

So yeah, maybe a lot of the companies in 500 Startups look similar, and yeah, a one-line pitch isn’t ever going to blow you away. But the important takeaway is that these incubators and the increased funds available for early stage companies is creating a bunch of makers who will innovate and produce, rather than simply consume. It’s good for them, good for me as a founder, and good for you. I take back my “Meh.” Go get em, 500 Startups.  Even you, you wacky web-based neck tie company you.

#NYTM Review: May

I attended my first New York Tech Meetup Demo Day tonight, and I wanted to write about it for two reasons. First - to collect my thoughts on the demos. Second - to document something I noticed. When people look back at their lives they often discuss specific moments: “I saw the Pacific Ocean for the first time, and I knew.” This could be a marine biologist talking about when they were four years old and played in the water on vacation, or a 55 year old man who looked out over the Pacific and realized he wanted that view every morning for the rest of his life. Some moments provide clarity and plot your course for the foreseeable future. 

Tonight I watched 750 people crammed into a stuffed auditorium on a Wednesday evening passionately prod, question, push, and applaud their peers. There was a palpable excitement and a clear sense of pride. It was more than that though - it almost felt like momentum. In my previous life as a basketball player I remember the importance of momentum - make a few shots, get the ball rolling, and no deficit was insurmountable. The ball was rolling at NYTM.

That’s why I wanted to document this moment. Who knows if it’ll be a Pacific Ocean moment I look back at twenty years down the road, but it sure felt that way. It’s not every day you get to be a part of something special. 

On to the Demos:

There were some interesting companies, and I’ll touch on the ones I’ve got an opinion on.

Plum Perfect (http://beauty.colorpi.com/plumperfect/#): 

Idea:  An online marketplace that suggests makeup, products, home goods, based on matching color schemes. You upload a picture of your face, your outfit, or your living room furniture, and it suggests specific products that will maximize the beauty of your entity.

My Take: I liked this one. Great opportunity for specific product placement - opens up all sorts of revenue streams. I also like the idea of leveraging an “expert” (the algorithm) to maximize beauty. I think at some point everyone has looked in the mirror and wondered “how can I maximize what I’m working with.” Whether it’s a haircut, shirt, hat, glasses, or makeup, we can optimize everything else in our lives – why not looks?

It is a bit of a cluttered space, with Fashism taking the crowd-sourced approach to the outfit side of things. Also, it may be worthwhile to focus a bit – I’d feel better about their makeup suggestions (if I wore makeup) if that was ALL they did. Makeup is a big enough market that you can probably get away with it. Once you bring in couches and room color, as a customer I may think that you’re using the same algorithm across all three, and my face is not an ottoman.

Aereo (https://aereo.com/home):

Idea: Broadcast TV to your mobile devices with a cloud based “DVR” for $12 a month.

My Take: At first I wanted to run on stage and throw my wallet at the guy. He was a very good presenter and played the crowd like a fiddle. When I thought about it more, I still love it, but with only one “o.” First impression was I looooooved it.

Why don’t I looooove it: Everyone hates cable boxes and agrees they’ll be gone at some point. When, how, and to what hasn’t been decided. If it’s this, you’ll probably still need something else for the time being. That something else for me? The Yes Network. I watch the Yankees and they don’t play on broadcast TV. You can’t buy an app for the Yes network. Hopefully someday soon I’ll be able to, but for now, nope. If it’s not sports for you, it may be HBO or USA or whatever else. That means you’ll need a few solutions coupled with Aereo. I think it’s a better alternative than Hulu, as live TV (sports on basic cable, American Idol, Survivor, Saturday Night Live) are still popular. I just don’t see what it replaces RIGHT NOW. When HBO, TBS, YES, etc. are all apps you can buy for $2.99 a month? Absolutely.

Love this guys enthusiasm and his ability to bring a traditionally free service to people for free. If you don’t care about sports go get it now and never look back.

Launch.It (www.launch.it)

Not much to say – cool concept, I like the idea of the evolving press release. I’d have to try it to get a better feel (and I will).

Square, Disqus – Bigger companies that talked about specific product updates and launches. These were cool for giving a certain startuppy feel, but most people have already heard about Pay with Square and the Disqus updates aren’t live yet (though they sounded somewhat interesting).

Hacker Kids at the Beginning:

They had two winners of the Hackathon come up and present what they built in 24 hours. One was a pinterest-y platform where you could grab music in video form from various sites and keep in one locale. The other was a text edit autofill that finished sentences like Google’s autocomplete. Both cool. If either of you read this, email me - you’re hired. 

That was that. Let me know of any questions. Really dug everything and can’t wait ‘til next month.

The Instagram Myth

“I can’t believe Instagram got sold for $1bn - they didn’t really do anything - they just let people change their pictures to black and white or tinted or something.”

I’m sure you’ve heard variations of that since Facebook announced the acquisition, and you may think there’s a kernel of truth to it. I’m here to tell you there isn’t. Products that “don’t do anything” don’t sell for $1bn less than two years after they are created. Is that price too high? I’ve got no idea. MG doesn’t think so. But the people saying they don’t do anything and didn’t solve a problem couldn’t be more wrong.

Before Instagram, there was no good social network for quality pictures. Facebook had pictures, sure - but they were an unfocused, mish mash of images with varying quality. Vacation albums with 200 pics, 35 photos from one night, etc. All of these hidden in a feed with articles, comments, events, announcements.

That’s not to say Facebook’s photo capabilities aren’t wildly successful. Without Instagram, 70% of Facebook’s traffic revolves around photos. We’ve all browsed pictures for hours, but in a “I just worked for 10 hours, I’m sitting down and looking through 600 photos while I watch Dancing with the Stars” kind of way. You take the good with the bad. And there’s a lot of bad. That’s why it was so important for Facebook to get Instagram, and why they paid such a high price for it.

So what did Instagram do to make Facebook’s overpay (Instagram raised $50mn at a $500mn valuation last Thursday)?

First, they focused on mobile. It’s impossible to pick out interesting photos from 25 thumbnails on an iPhone, and bandwidth usually isn’t good enough to swipe through quickly. So, Instagram made it clear that every picture counts. It allowed you to make them pretty with various settings, and you posted your photo knowing all your friends would see it. These were the right friends, too, since you started from scratch and invited only people relevant to you. I guarantee your Instagram friend list looks more like your Path list than your Facebook friends.

What you end up with is a stream of quality, interesting pictures posted by your actual friends. Sprinkle in Twitter’s “following” functionality, and you can see your favorite celebs shots as well. “Who cares if you can see Justin Bieber’s photos?” Well, at least a million people. Tapping into rabid fan bases allows the product to grow lightning fast. And it did.

Users like and comment frequently, and it always seems intimate - somehow more private than Facebook - I think this is the reason for the outcry from some of Instagram’s most faithful.

All in all, anyone who says Instagram didn’t solve a problem is insane. A $1bn dollar problem? Time will tell. But they found an underserved niche, created a focused product, and engaged users in the right way.

In the social media game, content is king. Instagram created a product that made users want to create and share interesting content. Game changer.