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October 10, 2011

How To Start a Daily Deals Site (Part 1)

The success of LivingSocial and GroupOn has garnered a lot of interest in their business model.  Almost every content site is evaluating whether they should add a daily deals component to their business.  This is a guide to decide whether or not you should start a daily deals business, and if so how to go about doing it.    I take a very metrics driven approach.  If you are evaluating this from a marketing and strategy perspective, I would refer to Yipit’s guide here.

As a metrics consultant, I have helped a number of companies in the daily deals space through this process. As a word of warning, this is EXTREMELY hard.  The simplicity of the user-facing software makes this business look deceptively easy.  All of the complexity is hidden behind the scenes.  That said, here we go.

Part 1: Should I Start a Daily Deals Business?

Read More

July 19, 2011

Life After Digital: Someday The Internet Will Disappear

It occurred to me today that my generation will leave little behind of the culture we created.

We won’t build anything like a Grand Central Station, cathedral, monument, or pyramid. Everything we build is temporary and will shortly disappear.

Our culture will be gone too. Written documents will go out of style with printed books to make way for cheaper and more efficient digital files. The day we make the full transition to the digital world will be the day that the cultural trail goes cold.

In the irony of being the most documented, over sharing generation ever to live, that digital information will be lost. Services will shut down, technology will change, and the electricity may one day go out. A hiccup in our civilization caused by war or worse will cause the network to crash. It wasn't arch

itected for the relentless erosion of time. It's built on a flimsy patchwork of services that barely work when given the constant attention of engineers.

If the system goes down, even for a brief time, all that data will be gone. It will be locked on magnetic disks and memory chips in ones and zeros, and we will lack the precise technology to decipher them. Our focus will be on getting the system and our civilization back up and running. The task of figuring out how to retrieve all of that data will be insurmountable. It will be stored on machines that no longer work, in software that no longer runs, written in languages that are no longer used.

It's already happening. The data and high quality footage from our first moon landing, a seminal event for our civilization, is locked on giant reels of magnetic film. There are no machines left to read their contents; it might as well not exist.

The digital representation of our culture will become dead bits, and instead of reviving them we'll start over. My blog seems like the perfect place to lament this eventuality. In a short time it will disappear, along with everything else posted here.

May 27, 2011

The End of the Social Network Era, the Rise of the Social Circle Era

Cross posted from my guest contribution on Business Insider.

Last week I was quoted as saying that this was the end of the Social Network Era. Then, as if on cue, Blippy went out of business.

Blippy failed because they didn't understand social. They built a product to broadcast credit card purchases.  They based their social features on the model, “Friend Everyone, Share Everything.”

This has been the mantra of social software since the rise of Facebook and that era is reaching its end.  Going forward, sites that follow this model will fail, just like Blippy, Apple's Ping, and Google's Buzz.

I'm not saying that people will stop sharing their every thought, photo, and link.  People love this freedom of expression. Facebook, Twitter, and LinkedIn will be fine because they form the foundation of the social web.  They are the proverbial phone book for our society, and that's a necessary function.  The last five years has been the rise of the Social Network as a utility platform.  Now that it’s created, the next five years will be about building on that foundation. New social apps will focus on sharing with select groups of people.  In that sense, The Era of The Social Network has ended, and we are now entering The Era of the Social Circle.

To illustrate how I see this flux happening, I turn to birthday parties.

When a pre-schooler has a birthday party they invite the entire class, which constitutes everyone they've ever met.  It's not until years later that they develop friendships and social circles that form the basis of inviting one person over the other.

Social Networks are like that pre-schooler’s party.  Rather then being made up of “friends”, they are repositories of people whose existence you acknowledge.  You connect with everyone you've ever met because the tools have not been developed to create more complex social circles that make up mature adult relationships. It makes sense that the evolution of digital social will follow the same developmental path we take as humans.

Social Networks are characterized by, “Friend Everyone, Share Everything.”  Social Circles will be characterized by “Group Dynamically, Share Selectively”.

Social Circles will focus on groups, automatically created based on a person’s real life social circles.  They will dynamically shift to include new close friends and remove those that become distant.  “Friends” will come to mea

n the same thing as it does in the real world, a group of people whom you share a close connection with. Content will be shared selectively with those that it’s most relevant to, mirroring the intimate sharing of real-life friendships.

I can already hear the arguments that Social Networks allow for this type of interaction.  They don't, and let me prove it you.

I've had this conversation again and again in the last year.

Me: Do you use a check-in service
Them: No
Me: Why?
Them: I don't want EVERYONE to know where I am
Me: But you don't have to let everyone know where you are, just add your closest contacts as friends
Them: That won't work.  I use Facbeook and I get friend requests from everyone I've ever met, I feel bad, and then I accept them.

When people talk about privacy concerns around check-ins, it's not that they don't want ANYONE to know where they are, they don't want EVERYONE to know where they are.  The problem is the lack of tools to create the dynamic, intimate groups of people they would be comfortable sharing with.  Once that problem is solved, this space will see a huge uptick from mainstream users.

Facebook has quite a few tools for managing groups of friends.  These fail because they rely on the user to manually curate these groups.  Users won’t do the manual work necessary to make a Social Circle work, just like they won't be selective with whom they friend on a check-in service.

Solving this problem is going to be very tricky.  If you want to know why Path and Color were able to raise so much money, it’s because they are tackling this problem, not because they solved it.   The investors were placing a bet that if anyone can solve something as difficult as this, it will be those teams.  As for me, I’ll place a bet on anyone that’s willing to put “Friend Everyone, Share Everything” aside to build software that “Groups Dynamically, and Shares Selectively”.  That’s what we’re doing with our app Matchbook, which is for bookmarking place recommendations.  If we take our cue from human development, it’s going to be hard, but it’s time to grow up.

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April 27, 2011

Matchbook Launches!

Today, Matchbook is available worldwide in the app store.  You can download it here.

Matchbook is a dead simple bookmarking application for places like bars, restaurants, and shops. The idea is akin to taking a matchbook from a restaurant or bar so you remember to return to that spot.

Lets say that a friend recommends that you should stop by the Ace Hotel:

  1. You search for Ace Hotel or click “I’m walking by it” if you’re nearby
  2. Matchbook pulls up Ace Hotel and you simply click “bookmark this place”
  3. At this point you can add a note or tags to describe the place
  4. Your bookmarked places are automatically organized by neighborhood and viewable on map
  5. You can run a search such as, “I'm looking for a place in the West Village that's good for a date”.  It will return the best places from your bookmarks, as well as the top saved places from all the other users.

That’s Matchbook in a nutshell, but there are a few other cool features we built in to make sure the experience is silky smooth.

  • There is a bookmarklet to instantly send places from your web browser to the app, similar to Instapaper.
  • Registration/Login is not required to use the app
  • All bookmarks are stored locally so the app works in the subway
  • You can share a place with a friend via text message.  It includes the name and address in the body of the text, automatically creates a Matchbook account for the your friend, adds the place to their account, and provides a link where they can retrieve it.

We believe in building software that has its roots in the already occurring behavior of people outside the tech industry.  Before we wrote a single

line of code, we did a lot of user research.   We knew that females have been slow to adopt location based services due to privacy concerns.   We wanted to find out what women would be willing to do doing around location.

After speaking with hundreds of women we found a very pervasive pattern.  A huge percentage of them already had some method of bookmarking places, such as emailing themselves or writing it in their notepad.   Despite doing this work, they explained that the result wasn’t useful because the places weren’t centralized or organized on a map.  Matchbook solves this problem.

Since privacy was the number one reason women shied away from other location services, we were very conservative with social features.  We see this as a growing trend with apps like Path, that are socially cautious until there are better solutions for the elastic social network problem.

As we move forward, “where you are now” is only going to be one part of the location-based space.  We are asking the question “where do you want to go in the future”.  Ultimately it's a different way to capture location data that will be used to tap the $140 billion dollar local ad market.

You can download Matchbook here

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April 14, 2011

Location Based Space: State Of The Union

Cross posted from the Matchbook blog.

Of all the emerging tech sectors, Local remains the one with the most potential.  This post is an overview of where we are, what we know and where the opportunity lies for the local market.

The $140 Billion Market

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March 22, 2011

Lean Startup Guide to Building Software For Normals

Help us win funding from AppSumo by tweeting this. Click to Tweet

Cross posted from Matchbook

Next week we’ll be releasing an app called Matchbook. Signup to be notified when it’s out.  We’re a proponent of the lean startup methodology, so we wanted to share the process we used to get this app out the door.

We like to build software that mimics real life.  The goal of software should be to make already occurring behavior easier, not to create new behavior. So, if you’ve ever taken a matchbook from a restaurant to remember it later, then you have an understanding of what this app does.  Matchbook is a dead simple bookmarking application for places. When someone gives you a recommendation about a bar, restaurant, or shop you can bookmark it. The app will organize those places so you can make a fast decision about where to go out.  We’ve heard it described as Delicious or Instapaper for places.

Step 1:  Problem Identification

I called up a buddy I often discuss tech with and said, “Something is nagging me about the location based space.  It doesn’t feel like mainstream America is quite ready for the check-in.” The question became, “What type of location based activities are normal people ready for?”

Step 2: How We Answered That Question

Mobile location research should be preformed in real locations, outside of the office.  To answer our question we sought out feedback from normal people instead of from the tech industry.

To achieve this we planted ourselves at a bar, approached groups of people, told them we were about to build an app, and asked some questions.  We also used the dating site HowAboutWe.com to go on dates so we had the undivided attention of a female for market research.  No judgment; we paid for dinner. This turned out to be a great place to do market research because:

  1. There was a high concentration of normal people in our target market, which we identified as 20s-30s.
  2. Groups of friends could more easily talk about how their real-life interactions work.
  3. It was easier to motivate ourselves to do market research since it involved going to a bar, drinking, and getting girls phone numbers.

This is what we found:

  • A very large percentage of urban women have some method of bookmarking places.  This includes emailing themselves, TXTing themselves, writing in the notepad app on their phone, adding an event in their calendar, and keeping a spreadsheet or google doc.
  • The percentage of women that did this increased when they were an iPhone owner.
  • Despite taking the time to remember places, most of them admitted that doing so was ultimately useless since the data was uncentralized and unorganized.
  • Restaurants, bars, and shops were the most commonly bookmarked places.
  • These same women were generally uncomfortable with the idea of broadcasting their location.  Sharing and social media in general did not seem to be something they were thrilled with.

Step 3: Prototyping

We started wireframing the app in Omnigraffle. We spent most of our time removing features until we had what we thought might be the minimum viable product. We went back out to the bars and tested them.  We rigged up a clickable prototype with a great app called Interface that allowed us to do our user testing. We would get a nights worth of feedback, re-do our wireframes, and then go back out.  We iterated through this process about 30 times.

We kept going until:

  • People stopped getting confused
  • They could get through the app without any friction
  • They stopped asking questions about how to use it
  • They started saying “Wow, I would use this!”  without prompting.

Step 4: Pivot 1

When we began, we thought that Matchbook would be a social app.  We envisioned it helping people make plans, share tips, or share bookmarked places.  As we talked to more women, we found that they were a little burned out on social and a more then a little concerned about sharing their location.   The number of women that perfectly articulated the social circles problem was amazing.  As a result, our wireframes pivoted away from social and became a personal app.  We will probably add in social in the future, but we need to rethink exactly how that should work for this market.

Step 5: Minimum Viable Product

The MVP is a bookmarking application for places.  The user can:

  • Search by text or click “I’m Walking By It” to find the place they want to bookmark.
  • The user can bookmark, add a note, and add tags.
  • Bookmarks are auto-organized by neighborhood and on a map
  • Users can run a search by tag. It will return places that match their search, as well as the top places from all the other users.
  • There is no social component at this time.

Step 6: Development

Once we had our MVP, we moved onto the development phase.  We outsourced the entire thing, which involved a good chunk of time spent iterating through developers instead of code.  That will be the subject of another post, but in the end we found a great team.  My co-founder and I developed the entire thing for about $10,000, paid for out of our savings.

Step 7: Launch

A key problem with building an iPhone app is that Apple only allows 100 slots for beta testers. This was rough as we tried to test our assumptions.  We needed to ASK all of our users to download it, which skews the data.

After some brainstorming we came up with an alternative.  We are going to launch in the Canadian app store first.  Since we can’t do a private beta, this will be our beta test.  People in the US can’t see the Canadian app store so we will localize things there.  We’ll use our Canadian launch to get feedback and gather metrics.

Once we’ve iterated based on that feedback we’ll launch a more polished product in the US app store.  The idea is to couple the download traffic from launch PR, with the iTunes Recently Released app list.  This concentration of downloads will hopefully bump us onto a Top Downloads list in our category.

These are the assumptions our lean process has yielded.  We will be testing these in Canada next week:

  • There is a ‘need’ to capture a recommendation made for a place.
  • A large population of women in urban areas currently saves place recommendations by some method.
  • There is a ‘need’ to consult a repository of past recommendations when making a decision on where to go out.
  • The output of the work currently being done to capture recommendations is not useful for making a decision on where to go out.
  • That pain-point is acute enough for people to change their current behavior for a better solution.

Step 8: Customer Development

We started with this step at the same time as Step 3.  We decided that offering local deals is the best bet for monetizing a location based startup.  Since we don’t have the money for a sales force we began our customer development process by speaking with group buying sites.  We found out that they:

  • Loved the idea of accessing users that have indicated where they want to go.
  • They want to send users deals for places that they have bookmarked.
  • They were willing to pay a fairly high cost-per lead or a reasonable flat fee for pushing a deal onto our platform.

To better understand the group buying market, we offered to help out a NY based group buying site with their metrics.  This gave us enormous insight into the types of challenges our customers face, and we learned great tactics for optimizing daily deal sales.

That’s it for now.  The app will be out in Canada in a week, and out in the US shortly after.

Thank for reading,

Help us win funding from AppSumo by tweeting this. Click to Tweet

This post is part of the Lean Startup Challenge at AppSumo. They have an amazing bundle of apps right now for $99. Check it out.

June 9, 2010

Course Catalog: Masters Degree in Internet Entrepreneurship

Every year I set out searching for a graduate degree suited to my career in the Internet industry.  I am looking for a combination of computer science classes in web development, design courses that focus on UI, and business courses that teach Internet entrepreneurship.

Disappointed by what universities are offering, I created my own course catalog.  It is aimed at entrepreneurial, non-developer, technology professionals that work in the Internet field.  There is a strong core of development courses, but they are designed for someone to understand web development as opposed to training students to be developers.  I hope to see something like this offered soon.

Please comment if you think a course is missing or disagree with my choices.

Semester 1

Introduction to Programming
An overview of programming that touches on PHP, Python, Ruby, Java, and Objective-C.

Internet Activity Theory and Psychology
What causes users to do the things they do?  This will be an in-depth look at the psychology of an Internet user.

Ideation for Web Startups
Students will learn the process of brainstorming and picking apart business ideas.  They will learn to spot indicators that an idea will work or not, and how to go about testing a thesis before heavy development begins.

Equity Financing
An in-depth course on equity financing where students and will learn about each step of the fund raising process with mock simulations at each stage.

Semester 2

Pick 1

Development in PHP
Learn the CakePHP framework and in-depth development in PHP.

Development in Python
Learn the Django framework and in-depth development in Python.

Development in Ruby
Learn the Rails framework and in-depth development in Ruby.

Development in Objective-C
Learn the iPhone SDK and in-depth development in Objective-C.

Development in Java
Learn the Android SDK and in-depth development in Java.

Frontend Development in Html5/CSS/Javascript
Students will learn to create frontend interfaces and clickable prototypes.

User Experience and User Interface Design
Students will learn the fundamentals of usab

ility, and how to design interaction and user interfaces.

Business Modeling and Current Events
A case-study driven course will break down successful web companies and their business models.  Emerging models will be discussed and students will brainstorm their own.  Current events in the tech world will be closely monitored and discussed. STUDENTS WILL NOT BE ASKED TO WRITE A TRADITONAL BUSINESS PLAN.

Semester 3

Launch an App Part 1
Students will work with pairs to develop their own app.  In Part 1 users will finish the semester with high-fidelity wireframes, a clickable prototype, and detailed tasks broken down for development. In Part 2 students will begin heavy development.

This course will focus on choosing the right set of tools. It will cover languages, hosting environments (Cloud vs Dedicated Hosting), and databases (SQL vs NoSql)

Product Management
In this course students will learn to create a product roadmap.  They will learn skills to conduct thorough requirements gathering and user testing.  Finally they will learn to break down features into tasks for developers.

Agile Project Management
Students will learn the agile project management methodology and will take part in multiple simulations.

Semester 4

Launch an App Part II
Students will continue their work from Part I and begin development of their application.   Professors will be available throughout the process for programming help.  Students will end the semester with the launch of their application.

Analytics and Performance Tracking
Students will become experts at setting up, managing, and gaining insight into analytics.

Startup Operations
Co-founders, hiring, compensation plans, benefits, management skills, company culture, and office space are all issues that entrepreneurs need to deal with.  While these are common to most businesses, startup operations requires a unique touch to create fast moving and innovative environments for your employees.

Internet Marketing and PR
Students will learn to conduct marketing and PR for their startup.  SEO, SEM, ad-buys, blog PR, and traditional media PR will be covered.  Marketing through your website, building a brand, community management and customer service will also be part of this course.

March 30, 2010

The Savior of Publishing is LexisNexis, Not Apple

There is a lot of talk about how the iPad will be the savior of magazine publishing.   The thought is that the iPad’s use as an eReader, combined with its accompanying content store, will revitalize the fading periodical industry. The implicit strategy is to get people to pay for online content. If periodicals can convince readers to buy subscriptions on the iPad, they can also require similar subscriptions on their website.

The music industry placed similar hopes in the hands of Apple with the iTunes store.  It didn't work out for them and it's not going to work out for print.  Instead of placing their hopes in a consumer electronics company, they need to look to a company that figured out the publishing industry’s business model years ago;  LexisNexis.

Asking someone to decide between an online subscription to the New York Times and the Washington Post is an absurd choice.  Years ago all news was pushed to readers by a single newspaper.  People didn't need to read about the same story from two different papers, nor did they have the time.  With the Internet, readers are pushed news by many sources (Twitter, Facebook, feed-reader, email), and they pull news from search engines and browsing.  Given these various channels, choosing a content source to subscribe to becomes impossible.  At any given moment a person can be sent an article from thousands of publications.  Without p

rior knowledge of where they will receive their content from, how can they decide which publication they should subscribe to?

What happens when a story breaks in real-time on the Washington Post, but I subscribe to the New York Times?  What happens when someone shares an article with me on a publication that I don't subscribe to?  What happens when I do a search for a topic and the top result is for a magazine I don't pay to access?  These are all common use cases and in each, the concept of paying for a single source of content breaks down.  The only logical way to move forward is to charge people for a better quality experience than the one they are currently comfortable with.   I’ve said this before; people are willing to pay for content, but it has to be instant, unlimited, comprehensive, and organized.

For the periodical industry, this means one-fee to access to all content across magazines and newspapers.  LexisNexis has been offering this to libraries for years and now it's time to bring that service to consumers.  The library is charged a single fee to access the digital version of thousands of publications.  Doesn't that make more sense for everyone?

Apple will eventually offer this for both publishing and music, but nothing is stopping these industries from acting now.   Maybe LexisNexis will step up to be publishing’s killer app.

December 5, 2009

The Value of a Captured Imagination

Neuschwanstein Castle

When I was traveling around Germany I visited Neuschwanstein.  The whimsical castle was never finished because its patron, King Ludwig the II, was declared insa

ne. The enormously expensive construction was halted in 1886.  Walt Disney went on to model his castle after this amazing building.

This story reminds me to never underestimate the value of capturing someone's imagination.  The people of Ludwig's time thought he was out of his mind to spend money on this castle, much like people think that it's crazy for VCs to invest in startups with no business model.  The next Walt Disney is out there, and she will turn that captured imagination into a fortune.