MintMoola

Google Wave vs. Cc:Betty: Group communication & collaboration

If you’ve been keeping track of innovative products on the web than you probably saw the pre-launch of Google Wave last week at the Google I/O conference. If you didn’t see the demo take a look because it’s slick.

If you don’t have time for the demo (it's over 1+hours) let me wrap up Google Wave in a nutshell (explained by Google):

• A wave is equal parts conversation and document. People can communicate and work together with richly formatted text, photos, videos, maps, and more.
• A wave is shared. Any participant can reply anywhere in the message, edit the content and add participants at any point in the process. Then playback lets anyone rewind the wave to see who said what and when.
• A wave is live. With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time. 

Here is a Wave in action:

Cc:Betty's 'Mailspace' concept is like a Wave
One drawback to this innovation is that Google Wave won’t be launched for the next year. But, you don’t have to wait if you’re looking for a better way to communicate and collaborate with groups. Instead, you’ll want to look at Cc:Betty which is available today. Here is the demo.
Watch for the similarities between Google Wave and Cc:Betty.

In a nutshell, Cc:Betty’s ‘Mailspace’ concept focuses on many of the same use cases as Google Wave. They both are focused on the fact that email hasn’t innovated to accommodate group interactions. Here is a Mailspace in action:

What’s surprising to me is that these solutions haven’t come along earlier. Regardless, both of these projects are ambitious. But if they weren’t, what would be the point;)

Get your credit score for free? Mint money? Get a personal loan?

 

What do all of these questions have in common? Well, I spent yesterday attending the Finovate conference finding that out. The conference has a similar format to DEMO but for the ‘financial technology’ space. Overall, 30+ companies presented for 7 minutes each. While there were more ‘features’ than companies there were some intriguing services. Interestingly, there was a void of companies in the B2B payment space and vertical payments space.

In case you're interested, here were the highlights:
-There were 3 types of companies that presented at the conference (personal finance, p2p lending and lead gen variants).
-There were several personal finance companies that have sprung up over the last year after Mint received so much publicity. Other companies in the space include Wesabe, Rudder and Green Sherpa. Basically, this space seems overly crowded at this point. Mint says they are signing up 25k users per week purely on word of mouth. Will it last without some major distribution partnership?
-The P2P lending space (Lending Club, Pertuity Direct, Prosper) is also crowded. The big news at the conference was that Prosper emerged after a six-month quiet period to register their platform with the SEC. Prosper has re-opened to borrowers in all 50 states and lenders in California. Currently, Lending Club and Pertuity Direct are the only two p2p lending platforms available to most investors throughout the United States. Prosper's model is different because, among other things, loan rates are determined by an auction among lenders.
-Lead gen models were prolific amongst this crowd. Interesting companies using this model include Mint, Credit Karma, and BillShrink. The interesting thing  is that these companies have created products that offer value to the user. They have turned the slimy lead gen model on it’s head by thinking about the user first.

The Nugget:
One of the most difficult problems amongst all of these startups continues to be distribution. In a space that isn’t viral and SEO/SEM is very difficult, startups are looking at ways to build traffic. Hence, there were several announcements of white label solutions and integrations with larger players. I doubt most of these companies will be able to build up enough traffic...fast enough...without these traffic partnerships.

Demos that Stick!

You're looking to change the world. But, you need to get people to take notice and inspire them into telling others. Whether you're talking at TechCrunch, DEMO, to investors or customers you need a demo that sticks.

If you're looking for basic tactics behind great demos you'll want to read GuyKawasaki's blog, 'How to be A Demo God' or Michael Arrington's TechCrunch post, 'How to Demo your Startup'.

But a great demo is more than just tactics, it's an artform that when done well leaves your audience in awe. Don't get me wrong, tactics are incredibly important. In fact, one of the most important tactics is often screwed up. Namely, people do the demo last when it should be done upfront. Jeff Bonforte outlines some great thoughts on the necessities of doing a demo upfront on his blog post, 'Boom, Demo First'.

But to really reach your audience, your idea needs to stick. With this in mind, I'd suggest taking a read of Made to Stick because the same principles Chip and Dan Heath discuss apply to demoing your product. Here are their 6 principles:

PRINCIPLE 1: SIMPLICITY - How do you find the essential core of your ideas?

“It’s hard to make ideas stick in a noisy, unpredictable, chaotic environment. If we’re to succeed, the first step is this: Be simple. Not simple in terms of ‘dumbing down’ or ’sound bites.’ What we mean by ’simple’ is finding the core of the idea. ‘Finding the core’ means stripping an idea down to its most critical essence.” (pgs. 27, 28)

PRINCIPLE 2: UNEXPECTEDNESS - How do you get our audience to pay attention to our ideas, and how do you maintain their interest when you need time to get the ideas across?

“The most basic way to get someone’s attention is this: Break a pattern. Humans adapt incredibly quickly to consistent patterns. Figure out what is counterintuitive about the message-i.e., What are the unexpected implications of your core message? Communicate your message in a way that breaks your audiences’ guessing machines.” (pgs. 64, 72)

PRINCIPLE 3: CONCRETENESS - How do you make your ideas clear?  

“Abstraction makes it harder to understand an idea and to remember it. It also makes it harder to coordinate our activities with others, who may interpret the abstraction in very different ways. Concreteness helps us avoid these problems.” (pg. 100)

PRINCIPLE 4: CREDIBILITY - How do you make people believe your ideas?

“How do we get people to believe our ideas? We’ve got to find a source of credibility to draw on. A person’s knowledge of details is often a good proxy for her expertise. Think of how a history buff can quickly establish her credibility by telling an interesting Civil War anecdote. But concrete details don’t just lend credibility to the authorities who provide them; they lend credibility to the idea itself.” (pgs. 138, 163)

PRINCIPLE 5: EMOTIONS - How do you get people to care about your ideas?

“How can we make people care about our ideas? We get them to take off their Analytical Hats. We create empathy for specific individuals. We show how our ideas are associated with things that people already care about. We appeal to their self-interest, but we also appeal to their identities-not only to the people they are right now but also to the people they would like to be.” (pg. 203)

PRINCIPLE 6: STORIES - How do you get people to act on your ideas?

“A story is powerful because it provides the context missing from abstract prose. This is the role that stories play-putting knowledge into a framework that is more lifelike, more true to our day-to-day existence. Stories are almost always CONCRETE. Most of them have EMOTIONAL and UNEXPECTED elements. The hardest part of using stories effectively is make sure they’re SIMPLE-that they reflect your core message. It’s not enough to tell a great story; the story has to reflect your agenda.” (pgs. 214, 237)

So, now all you have to do is pull all of these principles together;) If you're looking for someone who has mastered the skill look at some of the demo's by Steve Jobs...a master in my mind. Here is his demo of the IPhone (IPod capabilities) at MacWorld. Notice how he captures his audience by sticking to most of these principles.

Ad Based Startups -- Bad Idea?

CPM rates have been falling. That's no surprise. What's been a surprise is the depth of the decline for remnant inventory.

An August study from the Interactive Advertising Bureau and Bain Capital found on average, CPMs on remnant ads ranged from $0.60 to $1.10. In my own recent informal poll, CPMs seemed to have cratered. Untargeted, non-search CPMs are around $0.10-0.15 and targeted ads are around $0.15-0.25.

If you're a startup focused on ad based revenue streams this is shocking news. A quick back of the envelope says it all:

Suppose you have a userbase of 1 mil users that visit your site 5 times a month and view 10 pages per visit. Even if a publisher were to sell 100% of it's inventory at $0.15 CPM the publisher would earn $90k per year in revenue. Maybe enough to pay 1 FTE.

What Factors Determine Your Adverstising CPM Rates?

Andrew Chen wrote a great blog post about 5 Factors that Determine your Advertising CPM Rates...here is the big takeaway:

Sites that are easier to monetize have high click thru rates because people are in a "transactional mode". Characteristics of these sites include an evergreen userbase, focus on a particular category, US based and significant traffic through SEO.

What about More Targeted Ads with Unique Formats?

Remnant inventory has been hit hard but have advertisers fled to quality? The IAB report suggests that better targeted ads have not been as hard hit as remnant ads. This means high quality vertical ad networks like Martini Media (which is an affluent based ad network) may be where some of the flight to quality action ends up. If you're a publisher you'll want to look at vertical ad networks that align with your userbase...they could provide a significant lift.

Ad Based Startup?

With the supply of remnant inventory so high it's hard to see rates increasing in the foreseeable future. So, unless you have a quality userbase that fit's Andrew Chen's mold you really need to look at alternative business models. In a nutshell, most ad based startups are bad ideas in today's market.

What's your distribution, distribution, distribution?

You've heard the age old marketing adage from brick and mortar entrepreneurs that getting traffic is about location, location and location. Well, getting web traffic is about distribution, distribution and distribution. So what product strategies make a difference? Make sure you have one of these product distribution accelerators:

1. A viral product that turns 1 user into 1+ additional users
2. A product whose SEO content benefits from usage thus driving users from organic search
3. A product where you can buy traffic (SEM) with a quick return...again driving users from search
4. A product widget that is valuable to publishers and drives awareness or users back to your site

There are some products on the web that have developed significant amounts of traffic without one of theses element...growing through word of mouth...but these cases have become extremely difficult in an environment with so much noise. What's been most effective for your product?

How Will Cc:Betty Change the Way You Communicate?

As many of you know, I work with entrepreneurs to help turn their ideas into funded companies. I love the art of the start and working with great people. Beyond my 3 boys, it's what gets me up in the mornings.

So what's the latest project I'm working on? Take a look at Cc:Betty which is being masterminded by Michael Cerda and Ben Dean, who were co-founders at Jangl (now Live Universe).

If you stay tuned I'll be sure to give you the first heads up when things go live. But for now, feel free to go to the Cc:Betty splash page and add your email to the Beta list.

I'm certainly excited about Cc:Betty and think you'll find it useful as well.

Stay tuned for more!

Mary Meeker's Lesson for Startups

If you study trends on the Internet you've probably run across Morgan Stanley's Internet analyst Mary Meeker. Every year at the Web 2.0 Summit, she gives her view of the Web, and the technology industry. There's always a lot of meaty stuff in her thoughts.

This year she focuses on the potential impact of the economic downturn and singles out the mobile industry as the one area with the most opportunity in the short term.

However, it's her closing thoughts that should resonate the most for startups because it identifies a key mega-trend in what consumers will be looking for on the web. Specifically,

"Companies with cogent business models that provide consumer value should survive/thrive -- consumers need value more than they have needed it in a long time...and the Internet should be the best place to find it" (Mary Meeker, 2008)

She further identifies that the Internet (commerce, ads, search) has a ton of growth left...the current situation will slow down the growth but the trends are all in the right direction.

So what are the problem areas that will drive consumers to the web in search of value? I'd be interested in your thoughts.
Mary Meeker Web 2.0 Presentation

View SlideShare presentation or Upload your own. (tags: trends web)

Did you notice? Some Web Lead Gen isn't Slimy Anymore...

If you are like me and millions of other internet users you've receive a ton of spam from services like Myluvcrush.com. It starts with an e-mail that tells you "There are (4) people who have a crush on you. Click here to find out who". The service then takes you through a series of tactics that strips you of your name and cell phone #...all while charging your cell phone bill $9.99/month for a service you really never understood you were buying. Going through the process feels and is slimy.

Slimy Lead Gen Tactics were the Norm

Many online services have survived on these debatable tactics for a long time because it was enough to just bring consumers to the buyer. The problem with pure traffic arbitrage models, though, is that the focus of the solution isn't on what's best for the user. Instead, the affiliate focuses on what's best for themselves...even to the detriment of the service provider.

New Breed of Lead Gen delivers to the Whole Value Chain

Over the past few years I've seen the emergence of several Web 2.0 lead gen players that deliver value to the whole value chain (user, affiliate and service provider). The sites aren't the usual hit and run sites. They are well thought out services that strive for repeat users by building trust. In essence, these sites have added efficiency to the matching of consumer and companies by focusing on building real services for consumer. Here are a few examples:

Mint.com
Mint has built an online Quicken competitor that provides suggestions on financial services based on your actual household spending, saving and investment habits. Their design is slick and intuitive. Most interestingly, the lead gen is a component but not the primary objective of the service.

Billshrink.com
Billshrink is an online personalized financial advice engine for mobile phone and credit card service. By linking it to your services you get feedback telling you if there are less expensive alternatives. Again, simplified information for the consumer that can drive decisions. Billshrink gets paid to enable the decision.

In the end, I believe services like Mint and Billshrink are changing the face of lead gen and will be the ones that survive. I'd be interested in any thoughts you have in this area.

Exporting American Sex and Rock and Roll?

Have you ever wondered why its so difficult for U.S. web services to succeed overseas? I've had the opportunity to work on several global web products over the years and it was always a learning experience to see the ones that succeeded and the ones that failed. What were the necessary requirements around building a web success? Obviously, even the necessary requirements won't ensure success, but at least it gives your web service a shot.

I decided to jot a few notes on the subject after reading a Techcrunch article on "Why Yahoo Japan Is Worth Nearly As Much As Yahoo" Specifically, "Yahoo Japan’s market cap at the Tokyo stock exchange is hovering at around $22 billion, compared to Yahoo’s current $27 billion." Let me repeat that, a single Yahoo! international presence in a country with less than half the U.S. population matches Yahoo's entire U.S. market cap!

To be clear, there are many U.S. sites that get international traffic. This is mostly because there are a group of people around the world that speak English and the U.S. still launches a majority of the innovative web services. But, it's that rare product or service that actually reaches and engages a local audience. 

Let me stop here and just say that not every startup should try to be successful internationally. To really do it a business needs to make a commitment that costs time and money...two things most startups don't have. But, if you're interested in the fight there could be a large opportunity if you pick the international territories carefully (i.e. countries with large ad markets).

So what are some of the necessary requirements to long term success? Here are a few that I've experienced. I'd be interested in hearing your thoughts as well.

Think international from the start
Without a doubt a company needs to prioritize international. This mindset needs to come from the top down and needs to be shared with product and engineering.

Product globalization
The product needs to be internationalized. In fact, product teams should also go one step further and determine if additional features or a different design is necessary. Interestingly, for most of the products I've worked on there are typically very few feature additions. The largest request typically is a local design update.

Local presence
In addition to a globalized product, web services also need local people presence. You may call them GMs, community managers, or product marketers. Initially, you will need people hitting the pavement and getting the ear of local bloggers and reaching out to your local user base to provide the authenticity necessary to drive success.

What's the risk of not pulling together an international strategy quickly? Well, you just have to look at the recent local clones of Twitter and Facebook to see the alternative.

Shhh...The top 8 ways to develop your Next big idea

Over the last year I’ve worked with many early stage startups develop their initial concepts. This has led many people to ask, ‘Where do your ideas come from and how are they formed?’  That’s the million dollar question;)

There has been considerable research on how an individual can put themselves in the right frame of mind to have an aha moment. I think the literature is interesting but focuses too much on the individual. Great ideas typically come from a dynamic, iterative approach. But ‘the idea’ always starts with some kernel of thought that leads to a broader opportunity. I call it the ‘wedge’ approach to ideation. So how does one get to that wedge? I’ve compiled my top list and would be interested in hearing your thoughts.

Recognize that ideas come from everywhere
It’s important to recognize that ideas come from everywhere. In fact, the best ideas usually come through the cross-pollination between different industries or disciplines. The academic world has been innovating like this for years. For example, the Stanford Graduate School of Business has long worked with many other disciplines to mix business school students with other disciplines like the engineering school to foster ideation. Once you leave the academic world you might find some of the most interesting ideas emerge from your personal network that resides outside your industry network.

Surround yourself with idea advisors

There are really very few unique ideas out there, so it's important to surround yourself with advisors who can validate your idea and help shape it. You want to find a group of individuals who can provide feedback from all angles (market, business, technology). Don't be shy in reaching out...you'll be surprised how helpful people are when you tap them around new ideas.

Share everything with your idea advisors

Getting feedback during your idea stage is critical so share everything with the people you've recruited to help. Sharing just the product idea is not enough. Identify the problem, its differentiators, competitors, the risks, and identify open questions. BTW, you'll also find it's a great exercise pitching friendly advisors before approaching other key stakeholders.

Give yourself free time to create

Developing new ideas takes time. There are certainly examples of aha moments but most ideas take time to explore. Google has often talked about how valuable to innovation their 20% free policy has been. While people may debate how effective the 20% free policy really is, there is no debate that developing an idea takes time. So make sure to give yourself plenty of it.

Look to innovate in one key area then simplify, simplify, simplify

Most ideas evolve out of other existing concepts. But, most people just add more features to the existing solution and think they've got something that is even better. That's rarely worked. In fact, that approach often turns users off. Instead, take the core essence of your idea and simplify it. I often point to the Stanford Facebook class as the most interesting example of this lesson. The students reached 10 mil Facebook users in 10 weeks by creating very simple applications  evolved from the Facebook's poke application. One of the most successful apps (i.e. Hugs) took the original poke concept and narrowed in on the key problem while also reaching a broad audience.

You rarely hit your big idea the first time so iterate quickly

The fact is, most startups end up nothing like the initial idea. The main value of your initial idea is that, in the process of discovering it's broken, you'll come up with your real idea. A story I like to tell to elaborate on this is one that I ran across during my days at Yahoo!. Caterina Fake, one of the founders of Flickr, originally was working on a gaming project before she ended up creating Flickr. After seeing some initial success on Flickr she quickly changed her vision. So, think of the the initial idea as just a starting point-- not a blueprint.

Constrain the megatrend to avoid the entrepreneur 'writers block'

For many entrepreneurs the hardest part is where to focus their idea generation. Let's face it, there are an infinite number of business ideas out there. For some this becomes overwhelming and creates a kind of entrepreneur 'writers block'. To get out of this slump it's best to reevaluate what you're passionate about and then focus on the megatrends that are developing around your passions. Next, focus on exercises that elicit the problems you see that are not being addressed around those megatrends. Ta-da...your back! Well, it's never that easy but you get the picture.

Don’t kill projects, morph them

Finally, every project you take on is a learning experience. Don't bury your failures, learn from them. Many times you can take those learnings and morph the project. Other times you can take the learnings and apply them to other projects. Either way, some of your greatest successes may be sitting in your failures.