Bryan Starbuck

7 Fatal Mistakes of SaaS sales

7 Fatal Sales Mistakes CEOs and VP Sales Make -

Avro -- Format for scaled out data on massively parallelized systems (Hadoop)

Avro -- format for scaled out data on massively parallelized systems (Hadoop)

This blog post is interesting covering Avro.

Phone Sales Strategies for new Startups

Seattle Tech Startups is a local group that helps advise new startups on how to get started.  I gave a beginner talk there recently for the earliest stage companies.  This was specific to phone sales, known as "inside sales".

My talk was on:

• Is the best sales strategy for your specific company a) phone sales or b) eCommerce
• How to build out phone sales in a newly founded company
• How to manage long-term growth in an inside sales company

Here are the slides for the talk:

Phone sales / Inside Sales for Startups

View more presentations from Bryan Starbuck.

Here is the video for the talk:  (My talk starts 24 minutes into this video)

http://www.ustream.tv/channel/seattle-tech-startups

There is much more information verbally in the talk than in the slides.

Kabir Shahani was nice enough to also make his slides available.

10 Immutable Laws Of Sales

View more presentations from Bryan Starbuck.

Startup Monetization in the Trenches

Tony Wright's talk on Monetization in the Trenches is too good for me not to share.

Tony's blog is here: Blog Post

Startup Monetization in the Trenches

View more presentations from Tony Wright.

The Four Steps to the Epiphany

The book "The Four Steps to the Epiphany" is a great technique when building companies to use customer feedback before launch to iterate and improve the business model from day one.

Here is the talk from Steve Blank:

 

The Four Steps to the Epiphany book is here.   Steve Bank's blog is also great.

Qwest Blocks ports of their Customers

Our building at work uses Qwest for internet access. Qwest is now blocking some of our ports in the 9000 and 3000 range to the internet. 

This blocked our engineering team from using our bug tracking software, which is a real pain. 

I wish ISPs would have to publish when they block their customer's traffic before the customers buy, so customers can instead purchase a competing ISP service that doesn't block traffic.

Brilliant Website Design Philosophies

I'm passionate about the process of product design for website based products.   Many or most of today's mass market products and services are now web based: Online banking, online shopping, as well as many used in the work place.

Smashing Magazine has a great blog post here that lists philosophies in designing these kinds of web sites.

Legacy Locker is an example of great web design:

Zappos CEO's guide to Company Growth & Happiness

I'm in a life long persuit of building and refining my philosophies in life.  This includes for my personal life and professionally (building companies, building products, success for customers, etc.).

Tony Hsieh, the CEO of Zappos has his presentation below on his philosophy.  He has wonderful ideas so I'm sharing them below...

Zappos - Startup2Startup - 03-26-09

View more presentations from zappos.

Notes from AngelConf

Steve Poland's blog post covering AngelConf was good enough that I wanted to post it here.

My apologies for any typos, etc. These are some blurbs I made notes of from the AngelConf conference put on by Paul Graham of Y Combinator. 

Ron Conway

• “have to have a portfolio, to have hits”
• “it’s not fun; it’s hugely interesting to talk to entrepreneurs who literally in front of you are telling you the future”.
• “spend 25% of my time in philanthropy”
• Need to be very dedicated to angel investing.
• Don’t invest in someone you don’t really like; life is too short. Have personal chemistry.
• You have to have value to add; you won’t get into the great deals [they have allocation problems; you have to fight your way in].
• Be patient;
• I recommend investing in a bunch of companies. [he invests 50k-100k]
• 10k-25k to get your feet wet.
• 1/3 of them will go out of business. Failure is part of learning process.
• Pick a sector you like; I like sectors that are Internet and have massive growth. Invest in several companies in that sector.
• Great deal flow (respect for entrepreneurs to get the access) and due diligence = great portfolio.
• Build a referral network of entrepreneurs that you can invest in with, etc.
• Reputation is very important – screw 1 entrepreneur, you’re screwed.
• As lead angel, you need to take the entrepreneur to Sand Hill Road and you help them get funded.

Dave McClure

• 13 deals personally in 4 years.
• Plan to screw up the first 10 investments.
• If goal is making money, this isn’t your thing.
• How does an entrepreneur define success

Paul Bucheit

• No signing of an NDA; if an entrepreneur requests one, they probably don’t have a clue.
• Assume the money you invest is gone; it’s like lottery tickets.

Andrea Zurich

• SGVentures
• Do I like the product? Would I be proud to speak about it at thanksgiving or to my parents?
• Can you explain it quickly?

Page Mailliard [Page Mailliard is a partner at Wilson Sonsini Goodrich & Rosati, where she specializes in corporate, securities, and venture capital law.]

• Who are clients? Do they have contracts with them?
• Is there a provision on change of control they can terminate?

Paul Graham

• You buy either stock [shares like preferred stock] or convertible debt; either works; don’t worry about it.
• Pick the right startups. When they talk about you, it’ll be, “He invested in Google!”
• You care about valuation and amount of money you put in. 
• Dilution occurs next.
• Invest 10k – 2mm; how much? If startup raising 1mm, 50k is OK – 10k isn’t worth the work for them.
• Valuation – no rational way; no answer.
• If the idea doesn’t seem a bit crazy, then you’re probably too late to the deal. It’s ok for it to be a bit crazy.

Naval Ravikant

• Need tons of deal flow
• Use time efficiently; yours, the entrepreneurs.
• Deals from social friends;
• High quality deals come from other angels [they are putting their money in it].
• Don’t forward deals to other investors unless you’re investing in it.
• What’s your brand as an angel? [I’m the VentureHacks guy; I’m of Y Combinator]
• 2-3 founders.
• Don’t take board seats – waste of time.
• Very risky business

Michael Dearing

• Orbiting the giant hairball – book.

Mike Maples Jr.

• #12 – minimum number for statistical diversification.
• Met with 100 investors in 100 days
• $25k per quarter; 1 deal per quarter.
• Lived in Austin; moved to valley 4 years ago.
• If the startup cant be one of the big billion dollar businesses, not worthy of your time. We want the big deals in the end, be apart of the excitement.
• Book by ‘talo’ – ‘fooled by randomness’

Ariel Poler

• Balance your time – might spend 1 day a week with a company at first; then every other week; now at 500 people, hardly ever.
• Once a quarter, organize a lunch for 4-5 entrepreneurs; choose a topic. Get them to help one another.
• Connecting entrepreneurs with the right people is a big piece.
• Panel of Dave Hornik and Greg Mcadoo from Sequoia:
• Must tell the story efficiently as an entrepreneur
• Big business opportunity.

Aydin Senkut

• Don’t do convertibles.
• “how do you differentiate and add value to something?”, so that others can talk about you and recommend you.
• You need to be a connector; you need to meet people 1on1, and that’s how you meet really great people and companies.
• 40 investments; 4 exits.

Jeff Clavier

• 32 investments in 18 months; 250k each.
• Big weights: founders, market scale, etc. Eventually scale tips.
• Not being sure it’s a sure shot, but taking the shot anyway.
• 74 deals in one year.
• Don’t write the first check; don’t lead the investments as a new angel. [you need a syndicate of others that’ll join you]
• Be content dealing with shit 24 hours a day.

Jim Young

• Why should a good entrepreneur pick you?
• There’s more money, than possible investments.
• Takes less money now to do a startup.
• Will the company benefit from your advice? [not money] If no, it’s likely a bad deal.
• Contacts, experience, advice.
• Only invest in things you know about, otherwise you’re a spectator buying a lottery ticket.
• Find people to invest with.
• “why you want to do this?”
• You’re at bleeding edge of technologies.
• Very very high chance you’ll never see the money back.

Michael Arrington

• It’s “co-opetition” – they are all competitors in the crowd, but helping you to become another new competitor.
• “More than a hobby, than a job”
• If you enjoy doing what you do, you’ll have better access to deals, and firmer friendships with other investors.
• Have to be nice.
• As an angel, you’re shepherding the entrepreneur through a process.

Recruiting is my passion

Anyone who knows me, knows that my passion is in recruiting. I have a separate blog where I cover my work in recruiting or work my company does.

That blog is: blog.TalentSpring.com

Here is a good overview of our work at TalentSpring:

-Bryan

Video on Economic Collapse root causes

Here is a good video on the root causes in the economic collapse.   Details here on CDOs an Credit Default Swaps.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Microsoft video paints a picture of the future

This video is definitely worth watching.

One thing Microsoft can do very well is pull in the future directions across all of the product teams, and paint a picture of what is likely to happen in 2019.

Here are a few points worth calling out:

• Your cell phone (or mobile device) could be your "key".  It doesn't have to carry all of your information, but merely "unlock" your information.
• You could walk up to a "surfaces" (walls in a room, computer screens, etc.) that can act as a computer monitor
• Your mobile device would take over the screen and "unlock" your private information to be viewable there, until you walk away.
• This prevents having to sign-in, transfer information around, and allows the benefit of large viewing areas.
• Having all of your photos, email, news updates, and everything else available anywhere within 2 seconds would be nice.  All of it tailored specifically for you. 
• Geeks worldwide (myself included) have always been fascinated by a StarTrek type of teleporter.  The power to interact with new places can feed the imagination.
• The use of large wall sized monitors with video cameras can enable remote conferencing that could feel like a teleporter.  A school kid in Atlanta Georgia can talk to someone in Osaka Japan and feel like they are 10 feet away.

The wonderful thing is that all it takes to make this a reality is writing more software.  (And moderate hardware refinements)

This is the area that Michael Marlett loves to cover in his Cloud Recruiting blog.

Startups: Managing the Company & Marketing

I gave a talk at the December Seattle Tech Startups event. The talk was on: Analysing your business model, fund raising, managing a company, and how marketing is handled in a startup.

The video is here:

Slide Deck:

Evaluating a Startup's business model by "10x" technique

View more presentations from Bryan Starbuck.

Dave McClure has the master slide deck on marketing for Startups:

Startup Metrics for Pirates (SeedCamp 2008)

View SlideShare presentation or Upload your own. (tags: metrics startup)

I have built the "10x" philosophy by liberally copying the work of Guy Kawasaki's 'Art of the Start' book, Positioning work in marketing, Branding work in marketing, and Seth Godin's book 'The Purple Cow'.

Here are the higher level points I would make between my slides and Dave's slides.

Point #1: CPC Marketing is a Base-Line
CPC gives you a) Qualified visitors, b) A reasonably low cost, and c) traffic at scale. Trying to acquire customers less expensively will often cause a problem in the scale of the traffic, the visitors not being qualified, or require too much human labor to accomplish.

Point #2: Business Model Planning
When you are planning a business model for a concept of a company, use CPC as a guideline. If you can be profitable with CPC costs, then that will be your marketing solution. (Until later when you can slowly build out alternatives)

Most B2C companies need a much lower CAC (Customer Acquisition Cost) than CPC can provide. The impact is that when going into such a business, the founders should worry heavily on how they will acquire the quantity of customers at the CAC levels need to make a profitable business.

Point #3: SEO
In my model, SEO is part of organic traffic. SEO for most companies has a ceiling. All companies should get as much milage out of SEO as possible, but after a while you are likely to reach a ceiling. It can't be scaled on demand to solve all customer acquisition needs.

Point #4: Viral, Widgets, etc.
Some companies try these advanced methods. These are a long shot for them to make up the bulk of acquiring customers. It is great for the few companies that can make these work.

Point #5: Email Nurture Campaigns
Email Nurture campaigns are very important. Often free accounts will convert into paying accounts after an email nurture campaign in month two or three. All marketing (especially CPC) should use these campaigns to close sales from their marketing spend.

Point #6: Small & Early Startups
Dave McClure's slide deck will show every possible method of marketing. Companies that are small and early often don't have one or more dedicated people who can perform these extensive marketing campaigns. These companies should see CPC plus email nurture campaigns as their mostly automated marketing solution. This will enable them to focus on the product and serving their customers. It will also give them scale as long as the business model supports the CPC acquisition costs.

I could give another entire talk on marketing, however the above points are a good summary for very small companies who don't have the people to do the full range of Dave McClure marketing.

Video on the cause of the current economic issues

Here is an excellent video of causes of the economic issues going on.

Juan Enriquez (2008) Pop!Tech Pop!Cast from PopTech on Vimeo.

Entrepreneurs receiving Advisor Feedback

Seattle is a hotbed of really smart people creating companies.   It is exciting to see all of the support in Seattle to add structure to shaping an entrepreneur’s business model, market research, marketing, and other aspects of these companies.

I found the following interesting pattern that is worth a blog post.  This shows how entrepreneurs that I’ve seen go from a PROPOSED PLAN for a business to a plan VETTED by experienced business leaders and industry experts.  The following is what I see other people doing, and what I have seen work most efficiently.

Step #1: Pitch Deck version of Business Plan
A “Pitch Deck” is the PowerPoint slide deck that covers all parts of the business.  Business Plans often take 200 hours (or about 3-months) to complete.  Then they quickly become obsolete and nobody will ever read them.

Pitch Decks cover the CRUX of each vital part of the business.  They are in a form that will be reviewed by EVERYONE of importance: a) prospective employees, b) advisors, c) prospective investors, and d) the CEO as he/she constant reviews the direction of the company.

I found that the Alliance of Angel’s pitch deck template is the ultimate template:

This is exactly what VC investors and Angel investors will need.  It also covers the CRUX of each important part of the company.

NOTE: The AoA template has great advice in the notes of each slide.

HUMOROUS SIDE NOTE:  All new entrepreneurs come with strengths in some areas and little experience in other areas.  For example, an engineer will often lack marketing or sales experience.  I’ve seen that new entrepreneurs get frustrated with some slides, and those are pointing out their weak areas (often that they didn’t realize).  Those slides are hard because they don’t have experience doing business analysis in that area.  For example, a “channel” for an internet company is how they can acquire traffic at scale at the traffic costs needed to scale their business profitably.

A pitch deck should only take a few days to fill out.  So instead of spending 3-months on a business plan on your first draft of your business, instead you spend that time getting feedback from industry experts.  That will shape and change your business to remove the problem areas and more deeply engage in areas to make your business succeed.

Step #2: Picking Reviewers
The next step is to pick people to review your business, which are often in these categories:

a)    Great CEOs who created a company and grew it to a successful exit.  They will point out if your company isn’t “balanced” because the business is weak in one area.  They will also give advice on how to get over the “hump” to profitability. 
b)    Vice Presidents in Successful companies:  This is useful to get feedback in areas new to a new entrepreneur (Marketing/Sales if the founder came from engineering.  Engineering if the founder came from Marketing, etc.)
c)    Industry Experts:  Getting feedback from industry experts is very important.  They will flush out important issues that are non-intuitive.
d)    Customers: This feedback will bring real world issues to the front.  The data from these meetings will shape the product, sales approach, positioning, and issues that will block sales.

Entrepreneurs should challenge themselves to get access to people who are the TOP in their area.  This includes getting a meeting with a VP of a fortune 1000 company, or CEO of a company with $100MM in revenue, or the top industry expert that lives across the country.  It will be a challenge to do the networking, but the payoff will be worth it.

HUMOURS NOTE: Most first time founders are VERY worried about someone copying their idea.  Great people won’t sign NDAs (it’s insulting to ask).  I found there are 3 kinds of people: a) some people will never leave their big company job, so they can’t steal your idea, b) they are entrepreneurial but are fully engaged taking their company to success, or c) they are entrepreneurs looking for the idea for their next company.  Detecting if someone is in the C category is pretty easy to identify and avoid, so this becomes a non-issue.

Step #3: Time Constraints
After getting a meeting with someone exceptional, you will be limited to a 1-hour meeting.  The best approach is:

a)    The founder has 10-minutes to present the ENTIRE company with the PITCH DECK.  This requires a succinct pitch deck with very clear communication.
b)    This leaves 50-minutes for the advisor.  The advisor will then direct the 50 minutes into the biggest problems of the company.  This will best benefit the company and utilize their IQ and experience.

Step #4: Email Vet of Pitch Deck
When you get someone to agree to meet, send them the pitch deck a week before the meeting.  They will ask the obvious questions before hand.

Step #5: Tough Questions before Meeting
These are tough questions that I personally think should be answered in the pitch deck before meeting:

10x Questions:

• “10x” means 10-times, as in you need to provide a 10x better product than the competition.  Otherwise you won’t be able to standout in a busy market.
• The four “10x” questions are:
• What is the 10x Pain Point the customer has?
• How does your product FULLY address this 10x pain point?
• Will this kind of customer pay?
• Can you get enough of these customers to reach your revenue and market share projections?

Transaction Metrics:

• What is the transaction of the company?
• How much revenue comes from each transaction?
• What is the cost for the company to complete the transaction?
• How much money in Marketing or Sales does it cost to acquire and close this sale?

Marketing / Sales / Biz Dev Strategy:

• What are the strategies in these areas?
• What kind of sales team will be built up?
• What strategy is used to acquire the internet traffic?  (Biz Dev, Viral, CPA/CPC/CPM, etc.)

Internet Marketing Costs & Conversion Rates:

• What are projected costs to acquire traffic to the landing page?
• What is the projected COST-PER-FREE-ACCOUNT?   (This includes the marketing cost to drive the traffic to the landing page)
• What is the projected COST-PER-PAYING-CUSTOMER?   (This includes the marketing cost to drive the traffic to the landing page)

Step #6: The Meeting
The meeting is all about diving into the problem areas of the company.  After the 10-minute mark, the person advising is in charge of directing the meeting.  This will be a very dynamic meeting moving into the hardest parts of the company.  The entrepreneur should be frantically take notes.  (Capture the questions to work on answer later)

Entrepreneurs should know that advisors will often hold back on feedback, not wanting to be harsh.  Entrepreneurs should very actively request as much feedback as possible.  It is very easy for everyone around an entrepreneur to not want to give them negative feedback.

Step #7: Communication in the Pitch Deck
Often a meeting doesn’t go as well as an entrepreneur wants.  Sometimes it is because the presentation needs to communicate better, and other times it points out real problems in the business plans.

All of the feedback that goes into making a clearer presentation is just as valuable as problems in the business plan.  A clear presentation is required to have success with investors.  It will also shape how to position and communicate the product in the product’s marketing.

Once the presentation is made clear, the entrepreneur then needs to trust that advisors being pessimistic will indicate serious problems in the company.

Step #8: Next Steps
Entrepreneurs normally receive feedback from a wide range of people.  Over time, they can pick formal Board of Advisors from the people they have met.  They can find someone that fits the needs of their company and someone that they work well with.

Here are some other great links for startup companies: Startup School, Startup Company Documents.

Engineering Building Blocks for a Startup Company

The following are important engineering building blocks for internet companies.

I've had a friend who has worked on Win32 applications for about 10 years and is going to an internet company.  I was telling him that these are the computer science advances that people at internet companies consider as core competencies.  They are a must read for people who have not been working at an internet company.

Internet companies are quick to build because they use these open source components, and then they build "callbacks" or "plugins" to make them solve the problems for their customers.  These are stable because they have had years or a decade of improvements from large companies like Yahoo, etc.

• Rails: I consider this the 4^th generation of programming languages. (Generation #1 is assembly, Generation #2 is C/C++, Generation #3 is Java/C#)   Creating an internet company is all about speed. That means drop the time building UI to as close to zero as you can.  The real value is building the content driving the company (YouTube, Flickr, eBay) or the algorithms adding value to the customer (TalentSpring, Zillow, Farecast, PayScale, PayPal) or customer service (Craigslist, Zappos).   Rails gets the development efficiencies that you need to compete.
• Hadoop: This is a common framework to submit a task and it can be completed across a farm of servers.  Each server picking up the task, sends it across a series of servers.  Each server runs the task scoped to solve a partition of the problem.  This is used so often that it feeds into MapReduce (see below).  People who want to write an internet crawler run Nutch tasks as the task.  Each task is a JAR file (a bundled batch of Java files). This is similar to the OS thread scheduler where each server is a thread, except it helps coordinate as the problem is partitioned to be completed separately.   Also see here and here.
• Nutch: This is the web crawler open source component.
• HBase: When you need a database, and the database doesn’t need to scale beyond one machine – then MySQL/Postgres/MS SQL is fine.  When you need a database that scales across a series of machines, then HBase is a good solution. This is like Google’s BigTable as one database to drive all of their products, or Amazon’s SimpleDB to drive all of their products.  Also see here.
• PageRank: Google uses this as their core to drive the quality in their search.  We here at TalentSpring use this in powerful ways.  Also see here.
• MapReduce: MapReduce is a core competency for internet companies (Google, Amazon, Yahoo, Windows Live Search, etc.).  This is like window messages for Win32 programmers or CLR framework for MSFT server programmers.   This is also useful.
• Carrot2: Google is a keyword search engine (with PageRank helping weightings).  The generation of search beyond keyword search is Semantic search.  Carrot2 is a search engine using clustering to generate the results.  Also see the demo here.
• Lucene: This is the open source search component.  It is a search engine for a local database of content.  (You need to add nutch to create an internet search engine)
• SOLR: This goes along with Lucene.
• Drupal: This is a framework to build a website immediately.  Building internet companies is about not re-inventing the wheel.  This gives the web site sign-in/user pictures, and all of the basic support.  A WIKI takes a web page to the next level with instant editability and low-cost-of-ownership. The parallel is DRUPAL is to a WEB SITE what WIKI is to a single page. Drupal gives you the toolbars, pages that you can create when in edit mode, and plug-in modules to give you features similar to: DIGG, FLICKR, YouTube, etc.  If you create a web site, it is ridiculous to do so without seriously considering starting it with Drupal.  If you create an internet company, you should seriously consider starting it on top of Drupal.  Why re-invent a toolbar & navigation system, help system, simple pages for marketing, sign-on support with User Pictures and forget password emails, and search that works across the entire site.
• EC2: Do you want a server farm of 300 computers for 2 days?  And only pay a few dollars since you only need it for a few days?  EC2 is the solution from Amazon.  We built an internet crawler very quickly using Hadoop+Nutch+EC2.  Crawling a significant part of the internet is easy with a hundred servers and it only takes a day or so.  EC2 makes it very inexpensive.  Envision thinking about having EC2 available, and your horizons of creativity expand.
• And of course everyone knows about WordPress, MySQL, Postres.
• These are also interesting but lower priority: Google Analytics, OpenID, Mechanical Turk, oDesk, S3, OpenSocial, JOONE, GRETL, and Ning.

Great Startups: WetPaint Wiki, Blist, Zillow, RedFin

I wanted to post about a few startups that I love to use in town.  (Other than our own)

 

WetPaint:

WetPaint has to be the easiest way to create a free website.  With just a few clicks, it will create a group of wiki pages that let the owner and their friends quickly type in the website contents.  This is as easy as using Microsoft Word.

Here is an example, the Seattle Lunch 2.0 meetings are coordinated on a WetPaint wiki page as seen here.  That makes it trivial to update, and subscribe to changes.

Zillow:

They are a well known place to easily get an estimate on your house's estimated market value at going market rates.

RedFin:
They can be used as a realtor and end up saving around $10k in fees for Sellers.  Buyers also save thousands.  If you are selling your house, you must catch up with what they are doing.

Blist:
Blist.com is a place to store lists.  They are much more powerful than excel because of the features to make working with lists is much more natural than a generic spreadsheet.

-Bryan

The Best Mashup: Tafiti

Newly launched Tafiit may be one of the best mashups out there.  People often talk about mashups but I haven't been impressed with many that I have seen so far.

Estately.com is the only one that has impressed me.  After looking at a house, you can see photos and interesting places nearby, which comes from 43places.

Tafiti.com was just launched.  Tafiti is a search engine on top of Windows Live Search.  They greatly improve the user interface by using Silverlight.

Do a simple search for your name or something else specific.  You can then easily view everything on the internet related to that issue.

Linux Development Radically Increasing

A great article came out with the title "Are top Linux developers losing the will to code?".  I think the title is 100% incorrect -- the truth is that Linux development is radically increasing.

Kernel release 2.6.11 of March 2005 had 475 developers, and the upcoming 2.6.22 release this month has 920 developers, Kroah-Hartman said.

Previously the top 20 developers wrote 80% of the code.  Now the top 30 developers write 30% of the code.  The shift is that there was a large increase in the long-tail of developers writing code for the linux kernel.

This forced the top developers into code review and management mode simply to keep up with this large rate of development.

A 100% increase in the number of developers on Linux over one or two years period is significant.  This is all focused on the kernel and it will help the kernel.  This is definitely significant at the kernel level.  I wonder what is happening in the GUI and other parts of Linux.

The full article is here.

Seattle Mind Camp is tomorrow

Seattle Mind Camp is tomorrow:

• Seattle Mind Camp site

-Bryan

RecruitingBlogs.com will remain

It is great to hear that Jobster will allow RecruitingBlogs.com to exist.  They have recalled their Cease and Desist letter.

Details here

More coverage on: Recruiting Animal, STL Recruiting.

Guess the Price: Zenter

The MappingTheWeb blog is doing a series of posts asking to estimate the purchase price of companies when the public information is "Bought for an undisclosed amount".

Here is the blog post: http://www.mappingtheweb.com/2007/06/23/guess-the-price-zenter/

That is a great idea for a series of blog posts.

-Bryan

We Launch TalentSpring: Marketplace Ranks Resumes by Merit

We launched today, and here is our article on TechCrunch about our company TalentSpring.com.

TalentSpring ranks resumes within their industry.  This allows employers to go directly to the strongest candidates in an industry.  The resumes are ranked by peers who are voting against others.

Learn more: blog.TalentSpring.com
Or go to: TalentSpring.com

Other press coverage:

• Seattle PI: "Venture Capital: Startup Puts Resumes Side by Side"
  

Web 2.0 vs Applications

InstaCalc.com is a very creative startup that contrasts how web sites can be much better then a legacy Software Application.

InstaCalc chose to be better than Excel by doing less.  They focus on the scenario of getting a quick calculation accomplished.  This contrasts Excel that is a general purpose tool that scales to large spreadsheet.

InstaCalc.com's focus allows their user interface to be easier to use in these quick calculation scenarios that Excel.

When I want a quick calculation accomplished, I'll go to InstaCalc.  In the less frequent cases of creating an extensive spreadsheet, I'll go to Excel.

Example: http://InstaCalc.com/

Beyond HTML: Microsoft Silverlight vs Adobe Apollo

The internet is getting ready to advance to a better platform beyond traditional HTML.  It is likely going to take 3 to 5 years to complete, however the technology is now getting ready.  Microsoft Silverlight joins Adobe's Apollo among others to compete to become a new higher level platform beyond HTML.

In the past, innovation to directly help consumers most often happened in software products written on top of an a platform like Windows Win32.  This platform was important to allow applications to take advantage of the full capabilities of the computer, such as sound, video, networking, printing, etc.   The mac and Linux had equivalent but incompatible platforms.

With the internet, the web used HTML as a new platform to provided many benefits beyond the legacy Win32 platform.  It is no coincidence that almost all consumer facing innovation has happened on the web HTML platform over the last 4 years.  Examples include Google Maps, Gmail, Zillow, FareCast, MySpace, Facebook, Linked-In, Wikipedia, Digg, YouTube, Flickr, etc.

I'm a big believer that the playing field changes when an innovation provides an improvement 10-times better than the previous solution.  The 10-times or 10x improvement with HTML was that users could use their data on any computer (any type windows/mac/linux and without installing software) since their data was always stored on the server.  The second 10x improvement was that if the user had any problems, they could always close the web browser and all problems went away (crashes, security, etc.).

As a programmer, the inclination is to said that "win32 could be a little faster" but the truth is that users have a much stronger preference for access anywhere and with no fuss.

The internet is now getting ready for the next generation platform.  The 10x improvement this time is in: a) better graphics, and b) faster user interface.  A few innovations occurred over the last 4 years on legacy platforms (Win32 / DirectX / OpenGL) because they provided better graphics and faster user interfaces.  Examples included SecondLife, World-of-Warcraft, and other games.

Microsoft just released Silverlight to join the existing next generation platforms, such as Adobe Flash and Adobe Apollo.  I believe it will take 3 to 5 years until most web sites can benefit from the next generation with amazing graphics and speed.  The primary challenging being that users still demand that their information is available everywhere, so these platforms will only succeed if and when they because available on as many platforms as possible.  They also must provide a level of openness so that niche platforms can also implement support.

YouTube was the first mass market site to make this transition and depend upon flash.  Flash gave them the advantage of starting movies before they finished downloading without requiring a movie player.  YouTube greatly increased the percentage of computers with flash installed, which will make it easier for the next wave of sites.

Microsoft Silverlight: http://blogs.msdn.com/tims/archive/2007/04/15/introducing-microsoft-silverlight.aspx

Adobe Apollo: http://www.adobe.com/devnet/videos/apollo_demo07/index.html

Kaneva = SecondLife + MySpace

Kaneva is one of the most amazing companies I've seen recently.  Kaneva is like SecondLife combined with MySpace.

It creates a social network like MySpace.  It lets users go into a SecondLife like environment when they want to get more involved.  It then allows the user's photo and video content inside of that 3-D environment.

In hindsight it is an obvious idea.  Congratulations to the Kaneva guys.

This is a great video that explains Kaneva:  http://www.kaneva.com/channel/crad30.people

It will be very difficult for them to be as good as MySpace + Flickr + YouTube + SecondLife.  However allowing users to bridge between each is a powerful advantage.  I think long-term, each of the individual services will either need to compete, integrate, or loose to a service like Kaneva.

It is currently invite only to use Kaneva.  You can email me or post your email address in the comments if you want to receive an invite.

-Bryan

PR for Internet Startups

PR is very important for the launch plan for internet startups.  Every month, a group of founders of internet startups get together here in Seattle to discuss issues we all face at Seattle Tech Startups. 

I'm bringing together a speaker and a panel of PR experts that specialize in working with internet startups during their launch.  The meeting will be on February 22nd.

I will facilitate the panel discussion. 

Speakers:

Paul Forecki

Paul Forecki is founder and president of VOXUS PR, a fast growing boutique
agency targeting emerging high tech companies.  Paul has over 15 years of
experience in launching and building campaigns for 120+ companies, from
boot-strap startups to high-growth venture-fueled rockets to global,
publicly traded market leaders.  More information is available at
www.voxuspr.com.

Panelists:

Panelists include Paul Forecki and Deanna Leung.

Deanna Leung:

Deanna Leung has over 15 years of corporate marketing experience and is a
partner at Buzz Builders, a boutique PR firm that specializes in early stage
companies. Prior to Buzz Builders, Deanna was the marketing director at
Aventail, where she defined a new product category and positioned the
company as an industry leader with positive analyst recommendations,
extensive press coverage, and more than 22 major industry awards. In the
early-90’s, she drove the PR initiatives at SPRY with the successful
introduction of Internet In A Box and later at CompuServe launching their
Internet service business, SPRYNET.

I may have more people on the panel discussion.

Is Linked-In a new source of Nigerian Scams?

Linked-In's new feature to ask questions can enable a new attack forum for scams.  Here is an example:

"How can I raise money to Gold/Diamond projects in Africa?"   View here.

The classic Nigerian scam is to email the victim saying that the victim had a rich relative that died and has millions of dollars to be claimed.  It requests the victim to send money to release the millions that the victim will receive.

This scam can now happen on Linked-In by using the new Answers feature.

The problem happens with "Super Connectors" that accept an invite from anyone who asked to connect in Linked-In.  These Super Connectors often have 1 thousand to 20 thousand links in Linked-In.  This allows a scammer to connect to a Super Connector and then scam everyone who is connected to the Super Connector.

Linked-In has a way to rank answers.  We need a way to tag questions that appear to be scams.

You would hope that the people who use linked-in are sophisticated enough to identify these scams, but that may not happen.

The feature I really want is to block questions that come from Super Connectors.  Each account could set a threshold for the number of connections that constitute a Super Connector to block.  There can also be thumbs-up and thumbs-down icons next to each question to vote away the spam-like questions.

-Bryan

Tags: Linked-In, LinkedIn, Scams, Scam

NimbleBee in the Seattle PI

John Cook wrote about NimbleBee today.

For anyone who doesn't know about John Cook's Venture Blog, it is the closest we have to a Settle version of TechCrunch.  John reviews many startups in Seattle.  His blog is also a great place to find out about events going on in Seattle.

NimbleBee is our code name until we launch with our branded site.  You can sign-up if you want to be notified when we launch.

-Bryan

Zillow will Replace some Real Estate Agents

I think Zillow will try to replace the MLS and create an efficient market to sell houses (In my humble opinion).  Zillow's CEO and leadership built Expedia and they replaced travel agents with Expedia.  I think they may end up displacing some Real Estate agents.

I think their first step is to make Zillow become the MLS replacement (by being a competitor first).  Then create an efficient market place to bid and negotiate house sales.

What remains will be a need for "advisers" or real estate agents to give tours of homes and giving advice.

This is extremely exciting news.  The MLS system has been about locking certain people out of using it and using it as leverage to increase fees.  I think that has built up a lot of ill-will and pent up demand.  If the MLS organizations want to exist in 10 years, I think they need to create a plan now on how to convert to open system.  Otherwise they will be replaced.

Zillow: The "eBay" for the real estate market.

This post is based on the new news from Zillow: TechCrunch, GigaOM.

-Bryan

First Time CEO important steps

I gave a talk yesterday at the Seattle Tech Startups meeting.  The talk includes the steps I believe are important for first time CEOs of internet companies.  The meeting is mainly ex-Microsoft ex-Amazon developers who are founders of internet companies here in Seattle.

Several people asked me to post my slide deck so here it is.

Most of the content was verbal.  I put some of the verbal content in the notes at the bottom of each slide.

-Bryan

Tags: Seattle Tech Startups, Keiretsu, Keiretsu Forum, Seattle Keiretsu Forum, Alliance of Angels, AoA, Wilson Sonsini Goodrich Rosati, Funding, startups, internet startups.

Seattle Tech Startups Meeting

This coming Tuesday (12/5/2006) is the Seattle Tech Startups meeting (link here).  This is a meeting for founders and other people interested in internet start-ups.

Most of the people who come are ex-Amazon, ex-Microsoft, ex-RealNetworks developers.  The talks include everything from funding to technical issues with growing your internet start-up.

In this Tuesday's meeting, I'll give a talk on growing a company from the founding stage through launch and post-launch.

Where: Seattle Public Library, Capitol Hill branch, upstairs meeting room.
When: 6pm - 7:45pm

Last month Dennis Lee (VP of Technical Operations at MarchEx) gave a talk on the operations side of running a company.

Gaurav Oberoi from BillMonk.com started the Seattle Tech Startups meetings.  Another good blog for the Seattle Startup environment are Bill Monk's blog and Andy Sack's blog A Sack of Seattle.

Another up coming event is Seattle Ignite.

-Bryan

Tags: [Seattle Tech Startups, MarchEx, Seattle Public Library, Capital Hill, Internet Startups, Seattle Startups, Startups]

Windows Live Spaces vs TypePad

I previously used Windows Live Spaces for my blog. I've decided to switch to TypePad. Windows Live Spaces is a great turn-key blog. I'm switching to TypePad because it's a bit more advanced and gives a much more professional blog.

My new TypePad blog is: blog.BryanStarbuck.com

Windows Live Spaces Advantages:

    * Messenger Gleams / ContactCards: The gleam feature in Windows Live Messenger is great. Your friends love to hear when something new is happening with you, and this brings it to their attention.  [CRITICAL]
    * Faster to get started: There are few easier blog services that let you get started more quickly. It's great for novice users.  [CRITICAL]
    * Live Friends: Windows Live Spaces has turned into a simple social network. I think this feature is better than TypePad equivalents.  [NICE]
    * Better Photo Support: I love the photo viewer. It has many limitations but it's better than TypePad.   [NICE]

TypePad Advantages:

    * Blog Promotion: They have features and integration that will drive more traffic to your blog.  [CRITICAL]
    * Domain Name: I have blog.BryanStarbuck.com for my new blog.  [CRITICAL]
    * CSS & Design Customization: I want to customize the design and make it professional. I also want to optimize for wider than 800x600.  [CRITICAL]
    * Professional Fonts: The default fonts make TypePad appear more professional.  [CRITICAL]
    * Comment Control: Anyone who spends 3 hours hand deleting spam comments knows how important this is.  [CRITICAL]
    * Subscribe per Service: Many people use different types of readers. Having a simple "Click to Add" will increase readers.  [CRITICAL]
    * Professional Widgets: The TypePad widgets are more customized for professional blogs.  [NICE]
    * Less bugs: I've been bitten by bugs every so often on Windows Live Spaces. I've hit 3 bugs composing this blog post alone and it leaves me very frustrated.  [MEANINGFUL]

I will make all new posts on both blogs. There is one KILLER feature that Windows Live Spaces has that prevents me from only using TypePad -- and that is the gleams that appear in Windows Live Messenger and on other Spaces pages that light up when changes happen. This tells your friends when to visit your site.

In the end, I've decided to pay to receive the features I needed.

-Bryan

Tags: [TypePad, Windows Live Spaces, Blogging, Windows Live Messenger]

Boot Camp for Internet Startup CEOs

"Entrepreneur University" is effectively a boot camp for first time CEOs of startups.  It is held once a year in Seattle and was on November 2nd of this year.  It started at 7:30am and ended at 8:30pm.

It was fun to meet many early stage founders and CEOs as they were shaping their companies.  I felt like it was an entrepreneur class of 2007 and it will be interesting to see the companies that come from this set of people in the next 5 years.

This was a 13 hour long day with class after class.  There were two tracks, one called "Start your Engines" for early founders.  The second track was "Petal to the Medal" and focused on established companies that looked for the next stage of growth.

Each person who attended could pick which classes to attend during the day.  During lunch, they had CEOs or area experts host each table.  This let early founders pick a table by expertise (marketing, sales, fund raising, etc.) and then bring up their issues and have a table discussion.

I met several other Microsoft alumni who were starting their own companies.  Many of the VCs and CEO speakers also previously worked for Microsoft.

Speakers included CostCo CEO (Jim Sinegal), QPass founder (Chase Franklin), aQuantive co-founder (Nick Hanauer), and many other current CEOs.  It also included the opportunity to speak to VCs from several VC firms: Madrona Venture Partners, Ignition Partners, OVP Venture Partners, among many others*.

The evening ended with food in the evening and a chat to network with other founders and members of the start-up community (lawyers, etc.).

This was a great event because it brought some of the most influential members of the Puget Sound startup community and they were very accessible by early founders.  This include Craig Sherman, Joe Whitford, Dan Rosen, and the other VCs and successful CEOs.

* Frazier Venture Partners, Fluke Venture Partners, Second Avenue Partners, SeaPoint Ventures, Cascadia Capital, Buerk Dale Victor, Maveron LLC, Dan Rosen & Associates, and WRF Capital.

-Bryan

Tags: [Entrepreneur University, NWEN, Internet Startups, Seattle Startups, Startups, Dan Rosen, Craig Sherman, Joe Whitford, Madrona Venture Partners, Ignition Partners, OVP Venture Partners, Frazier Venture Partners, Fluke Venture Partners, Second Avenue Partners, SeaPoint Ventures, Cascadia Capital, Buerk Dale Victor, Maveron LLC, and WRF Capital]

Hated Pre-Launch sign-up Pages
Our start-up will launch in a few months and we have a signup screen.

People often hate these sign-up screens, but they are necessary part of launch.  Don't "hate on" us too much.

Our Sign-up Page: www.nimblebee.com

Tags: [Internet Startups, Seattle Startups, Startups]

Pitching your Start-up to VCs & Angel Investors

There is an art to creating the pitch and presenting it to VCs and Angels.

Most CEO of a start-ups have a slide deck to "pitch" or explain their company.  This is used when raising money from VCs or Angel investors.  It is also often used when hiring people, because people won't join the company unless they truly believe in your business model.

The rule of thumb is that you need to communicate your company completely in 10 minutes.  Here is a common flow for pitching to Angels or VCs.

Recently I reviewed my company and my deck with Dan Rosen to get his feedback.  Dan is the chairman of the Alliance of Angels and was a VC at Frazier.  People in Seattle know Dan because he is a hub in the Seattle start-up scene and has amazing advice for new companies.  Dan's feedback gave me and my co-founder the confidence that we are on the right track.  We also receive a lot of good input.

The Alliance of Angels has a web site walking through the steps to refine a pitch slide deck.  This is critical for any entrepreneur, even when they aren't raising money.  This process will force the CEO to flush out their business model in-depth.

The Alliance of Angels web site has a sample slide deck available for download.  A secret is that the notes in the sample deck have great tips that are important for the financial planning when generating the deck or topics that are important to to include in the verbal walk through of the deck.

I've attended Alliance of Angels and Keiretsu events where I watched other CEOs pitch their companies.  Here is what I learned from their pitches and having to write the pitch myself.

1. Audience has No Context: The audience will have no context for your business.  The entrepreneur will often only have 2 1/2 minutes to describe the problem/solution/product.  The audience must have a clean understanding on how to partition the market between your solution (fix to the problem) and the other products in the market.  Asking yourself, "Will they see a clean partitioning of the market" will help point out areas of the deck to improve.  The audience will project their background knowledge onto the framing you present.  You will succeed if it clearly partitions the market across existing solutions, the core problem, and your fix.

2. One Point each Slide: The audience is only able to digest one idea per slide.  The time constraints will only allow them to process that much.  It is often best have the entire problem and solution (including product) be communicated on 3 to 5 slides.  Each slide only makes one point.  This lets the text and an graphics clearly communicate the one main idea.  If the slide has a few sub-bullets, expect the audience to only catch a few of them.

3. One or Two verbal sentences per slide:  If there is more talking on one slide, then smaller audiences will often interrupt.  Show one slide with one or two verbal sentences, and then move on before they loose their attention span.  This has the added benefit of keeping the communication balanced between text/graphics/verbal.  The CEO needs to frame the problem across slides to communicate clearly.  Each slide should scope in on the market's optimal fix for the problem which turns into the business model for the company.

Tags: [Angels, Angel Investors, Seattle Angel Investors, Internet Startups, Seattle Startups, Alliance of Angels, AoA, Seattle VCs, Dan Rosen]

Pitching to VCs and Angels

I recently attended a Keiretsu deal screening meeting.  This is where entrepreneurs pitch their company to a group angel investors to receive funding.

Many entrepreneurs wonder what kind of information VCs or Angel groups need in order to fund a company.  The entrepreneur often needs to keep their pitch to 20 minutes for VCs and 10 minutes for angels.  For that reason, it is vital that the pitch be focused and include all vital information.

Here is a slide deck that covers the data entrepreneurs need to include in their VC or Angel pitches.

Full Deck -- Web Version

Ron Wiener is the CEO of DocumentCommand.  He has created a series of internet start-ups, many of which were eventually acquired.  He has given a talk and has a slide deck on how being a CEO is very similar to flying.  The slide deck below points out the critical tasks for an CEO to successfully grow this company.

Full Deck -- Web Version 

Earth Class Mail Online Postal Mail Forwarding Service

-Bryan

Tags: [Angels, Angel Investors, Seattle Angel Investors, Internet Startups, Seattle Startups, DocumentCommand, Seattle VCs, Keiretsu, Seattle Keiretsu]

NWEN -- Northwest Entrepreneur Network

Northwest Entrepreneur Network (NWEN) is an amazing resource for the entrepreneurs in the Seattle and Puget Sound area.

Breakfasts:
NWEN is a non-profit organization for Angel investors and entrepreneurs.  The main event is the monthly breakfast in Bellevue which starts with time for entrepreneurs and others to network.  Breakfast is then served while one entrepreneur pitches their business idea to raise angel money.

After that, a successful CEO, VC, or similarly person gives a talk on a subject.  This coming friday (10/13/2006) Mike O'Donnell will give a talk on strategies for starting and building successful companies.  He has raised over $50 million for new ventures.   He founded several companies, including iCopyright which he later sold.

Previous breakfasts included Redfin CEO and Zillow CEO (who previously was the CEO of Expedia).

Each breakfast is $25 for members and $40 for non-members.  More information is available here.

Pub Night:
NWEN also hosts "Pub Night".  This includes more opportunities for entrepreneurs to talk to each other.  It's also a great chance to talk to other smart people.  Examples of really smart people who I had a chance to talk to included Joe Whitford of Davis Wright Tramaine and Alan Mattamana of Polaris Ventures.

Classes:
NWEN also hosts classes for entrepreneurs to learn topics that will impact them.  Entrepreneurs who don't have an MBA can use these classes to learn the topics that will impact them.

-Bryan

Tags: [Northwest Entrepreneur Network, NWEN, Angels, Angel Investors, Seattle Angel Investors, Internet Startups, Seattle Startups, Zillow, FareCast, Polaris Ventures, Davis Wright Tramaine, Seattle VCs]

Seattle Start-up Party at Redfin

Last night Redfin held a Startupalooza networking event for Start-ups at their offices.  Redfin, FareCast, GridNetworks, Mpire, Blue Dot, and several other companies where there.

Redfin looks like a great company and it's great to see that they are hiring and growing.  Aimee Cook is their main recruiting contact.

This event reminded me of the Seattle TechCrunch party last May.  Everyone came from VCs, start-up employees, to other interesting people in the industry.  The attendance included: Zillow, FareCast, Redfin, WetPaint, Ontela, Pluggd, TripHub, Newsvine, Business 2.0, MarchEx, Vulcan Capital, Perkins Coie, Waggener Edstrom, KING5, Microsoft, Google, and Amazon.   Full List...

These events are great ways for people to share ideas and to maximize innovation.

Seattle is really a great place for start-ups and Seattle has quite a few (Full List).  The number of VCs in Seattle is also quite extensive (List).

-Bryan

Tags: [Internet Startups, Web 2.0, Seattle Startups, Zillow, FareCast, VCs, Seattle VCs]

Microsoftie joining the Start-up World

I worked for Microsoft for a little over ten years.  I left last week to create an internet company.

Microsoft is an amazing company.  It has evolved quite a bit since I’ve been there, but it still has the strong pull for engineers interested in some of the hardest problems in computer science.

Google has had strong growth over the last several years, which has caused many Microsoft employees have asked “Is Microsoft still the best company?”  This is a natural question for a bunch of Type A employees that strive to be the best.

I’ve seen only a small number of my MSFT friends jump ship to Google (Jon Perlow, Oliver Fisher, Bob Day, Joe Beda, Wyvern, etc.); which is a very low rate for a 60,000 person company.

What keeps the best and brightest at Microsoft is that this company is still a place that is doing some of the most exciting and challenging engineering work in the computer industry.

These are the teams I would have loved to work on:

• DirectX APIs: Shader models or whatever the next wave in 3-D graphics engines
• MS SQL Server data mining algorithms: Naive Bayes, neural networks, and clustering would be fun to work on.  Building the platform to make them available and scalable to the masses always looked like a blast.  I’ve always wanted to create a Zillow.com sample on SQL Server 2005 with very little code (linear regression is built in).  With the OLAP architecture, it could scale quite well.
• DRM: Boy everyone hates this feature.  However, there are few more challenging tasks than running code on the machine that will conditionally unlock features without being able to be bypassed.  It’s a great chance to work with ex-NSA coworkers.
• OS Crypto Algorithms: Pushing forward mass market encryption always looked fun, such as Elliptical Curve, biometric login, or Bitlocker.

Microsoft is also one of the few places taking on many large scale engineering projects.  These are the kinds of challenging products that have 100+ programmer teams:

• Xbox & Xbox Live
• Operating Systems
• CRM
• Internet Explorer
• Mobile OSs
• Avalon
• Many more…

For engineers looking to focus 100% on the biggest engineering problems, it’s hard to beat Microsoft.

I’ve reached a stage in my life where I want to become heavily involved in the entrepreneurial side of business.  This is what has led me to leave and try my hand at creating my own company.

I’ll blog more on the Seattle Start-up scene in my future blog posts.

-Bryan

Tags: [Microsoft, Internet Startups, Internet Start-ups, Seattle Startups, Leaving Microsoft]

Guy Kawasaki on Distribution

Guy Kawasaki hosted the Startups 2006 Panel which discussed important issues to creating innovative internet companies.

I found distribution to be an especially interesting topic.  See details in my blog post below.  Guy just blogged giving his thoughts on the subject.

-Bryan

Tags: [Guy Kawasaki, Churchill Club, Startups, Reid Hoffman, Distribution]

Start-up School (With Fixed Links)

Startup School is an interesting source of data.  The links on this site are broken so here are a version with fixed links.

Presentations:

• Langley Steinert: TripAdvisor Journey, Lessons Learned: Slides, MP3
• Hutch Fishman: Startup Finance: Slides, MP3
• Dave Cavanaugh: Intellectual Property for Start-Ups: Slides, MP3
• Michael Mandel: Economics for Startups: No slides, MP3
• Mark Macenka: The Great Value of Avoided Mistakes: Slides, MP3
• Stan Reiss: What's VC All About?  Slides, MP3
• Stephen Wolfram: On Starting A Long-Term Company: Slides, MP3
• Olin Shivers: A Random Walk Through Startup Space: Slides, MP3
• SFP: What We Did this Summer:  No slides, MP3
• Marc Hedlund:  Slides, No MP3
• Paul Graham: Ideas for Startups: Slides, MP3
• Steve Wozniak: The Early Days of Apple: No slides, MP3
• Qi Lu: Yahoo! and Startups: No slides, MP3

-Bryan

Tags: [Start-up School, Startup School]

Distribution, Distribution, Distribution

Guy Kawasaki posted a video from the Churchill Club's annual look at startups.  It's a good look at the issues start-ups need to handle as they try to turn their idea and turn it into a product and a company.

Reid Hoffman made an important point that Distribution is a critical factor to success.  The distribution channel of wholesalers and retailers is well known for traditional businesses.

For internet companies, the methods of distribution become more challenging.

I'd love to see a definitive list of distribution channels for internet companies.

Here is my starter list:
1. Partnering with companies that can provide high traffic
2. Partnering with companies with adjacent business models. (eBay & PayPal, Linked-In & Simply Hired, etc.)
2. PR
3. Company or Product Blog.  This was worked very well for us in Windows Live.  Each team has a blog for their product which allows us to have a conversation directly with our customers.  We have links between the products so customers can learn about other products from Microsoft.  (Examples: Windows Live Mail Desktop, Windows Live Messenger).
3. Community (Discussion boards & other people's blogs)
4. Invites: This works when users inviting other users will increase the value provided by the site.  (Social Networks, Photo Sharing, etc.)
5. Brand: MySpace has become a brand with their controversy.  The passionate users of social networks may migrate to other versions as they come out (Bebo?).  However the brand will bring in people unfamiliar with the pros/cons of the different sites.  Brand can bring more companies to MySpace than their competitors when they want to create promotional pages.  Zillow.com is becoming a powerful brand resulting in few people realizing that they have competitors.
6. Advertising on Social Networking sites: Companies are creating MySpaces promotional pages in place of advertising.  I wonder if this will die soon after being rejected by the community.
7. Buying Ads in Search Engines: This is a traditional way of acquiring customers.

The goal is to avoid a linear correlation between acquiring customers and costs.  #7 is an example of linear costs, which is the downside of traditional marketing.  #1 through #6 are leveraged ways to acquire customers compared to the costs.

I know there are more ideas out there.  I'd love to hear other people's ideas of what I'm missing.

-Bryan

Tags: [Guy Kawasaki, Churchill Club, Startups, Reid Hoffman, Distribution, Distribution Channel, PR, Public Relations, Blogs, Advertising, Partnering]

Channel 9 Video on Active Search for Windows Live Mail Desktop

We released a Channel 9 video on the Active Search for Windows Live Mail Desktop feature.  See video...

Here is the link to the blog post giving the details about the feature.

-Bryan

Bryan Starbuck

Tags: [Windows Live Mail Desktop, ActiveSearch, Ads, Contextual Ads]

Unifying Address Books

At Gnomedex, Marc Canter explained his work on PeopleAggregator, which is a platform to enable interop between social networks.

The problem today is that very few people reply on a computer based address book because no one address book includes all of their contacts.  The lesson is that an address book won’t be replied upon until it includes your entire address book, which will require interop between various address books.  Social Networks have a similar problem in that their value is limited when they can’t connect to each other.

PeopleAggregator is working on server side interop and focusing on social networks.  My team is working on Windows Vista and has been focusing on interop between address books on the user’s OS.

Coincidentally, Marc and I had a long conversation on this topic at PDC 2003 when we were each early in our work.

Marc with PeopleAggregator is taking an aggressive approach to accomplish server side interop with his company by using open standards.  Some companies view network effect or controlled content as needed for their business model.  It will likely take time and be a challenge to build critical mass on this technology because of these business model concerns.  It can easily start with companies that don’t need this control.  Companies that start with locking in their content and don’t hit critical mass are likely to change models and see if growth increases when they interop with a wider community.

Marc has the details about PeopleAggregator on http://peopleaggregator.org/.  Here are good pointers in this area:

• i-names: An absolute way to identify a person.
• Windows CardSpace: Based on Kim Cameron’s work, his idea is that there is a “metasystem” which utilizes WS-Trust to translate tokens, so that all identity systems can interact with each other.  Windows Live IDs will support WS-Trust, WS-Federation, CardSpace and ADFS (active directory federation server).
• Identity Woman has more information about open standards on her blog.

My team at Microsoft is passionate about the narrower issue of unifying address books on the client.  Below I’ll go into details for anyone working in this area.

The “WAB” (Windows AddressBook) shows its age in Windows XP and some of the code dates back to 1989.  In Windows Vista we replaced it – and it can be used by external software, such as Marc’s PeopleAggregator.
The goals for “Windows Contacts” are:

1. Extensible schema: We knew we couldn’t come up with one schema to solve all needs.  For that reason, our platform uses layered schema by using XML namespaces.  The base namespace comes from vCard properties along with traditional WAB fields.  3rd party apps can add their custom schema by using separate XML namespaces in our APIs.
   
   Contacts are no longer stored in a “.wab” file.  We now store contacts as separate “.contact” xml files. 
2. Integration with the Windows Vista explorer UI & search: In order to improve the UI for the address book list, we decided to use the windows explorer.  This enables consistent views, search, sorting, and the new preview reading window.  My favorite feature is the ability to open the start menu, type a few characters in the start menu’s textbox and it will filter to show contacts, files, and other matching items in the start menu.  This is a great way to quickly jump to where you want to go.
3. User Picture support & integration with the login user picture: Our address book now has support for user pictures.  This feature personalizes working with the address book, especially when contacts come from internet sites.  Our address book has the concept of the “me” contact so applications can find the contact that represents the user.  In Windows Vista, we will automatically create the “me” contact that starts with the same name as the login name and use the same user picture as the windows sign-in screen.
4. Better Synchronization support: An address book will never unify across different stores, devices, and internet sites unless it has strong built-in support to enable synchronization.  In order to accomplish this, we have added:
   • A unique ID called a ContactID that tracks a contact within the local computer.  This is our database’s Primary Key that external applications can store as a foreign key.  It will resolve to the contact even as the contact file is moved or renamed.
   • The vCard UID field exists for an unique ID across computers.  The RFC for vCards doesn’t define the behavior for this property as exactly as I would like and our platform doesn’t impose any behavior beyond the RFC.  I’m thinking that an i-name system may be a better way to canonically identify users across systems, with UID being a fallback when i-name information is not provided.
   • Version numbers / Time-Date Stamps: These are tracked on a per property basis for per property granularity sync.  The schema supports a list of properties, where lists are phone numbers, web sites, mailing addresses, e-mail addresses, etc.   Unique IDs are stored on items in lists to support all sync situations (re-ordering, etc.).
5. App compat with the existing WAB APIs: Existing applications that call the existing WAB APIs will route into the new contact store.
6. Support External Features: Often a product will need to interact with security or identity.  The address book is a user level address book and don’t include these features for security reasons.  External components can be created to implement this support, and later link into the address book by using the ContactID to find user level properties after security has been completed. 

The full APIs are documented on MSDN under IContactManager and IContact.

-Bryan

Tags: [Windows Vista, Windows Contacts, PeopleAggregator, Marc Canter, AddressBook]

Dave Winer's strong words to Blake Ross @ Gnomedex 6.0

There was some pretty heated feedback from Dave Winer to Blake Ross after Blake talked about Firefox at Gnomedex 6.0.

Blake started by saying that people are likely to ask about the amount of memory Firefox consumes, and that they already know about it and are working on that issue -- so no need to bring it up during Q&A.

Blake expressed that he wanted the focus of his talk to be about the way Firefox grew in the community.  During the talk he spoke about how a grass roots community was created and worked.  They created logos, flyers, and effectively got the word out.

I saw the first hand effect of this community because my wife came home after working at the local library.  Everyone that worked there was talking about how important it was to switch from Internet Explorer to Firefox.  I was curious on why and the focus was on: a) the tabbed feature and b) perception that security was better in firefox.  (I won't touch the security issue, that would deserve it's own blog post.  Not simple...)

His entire talk was about the efforts of the community to grow the user base.  He then showed this video as one of the many used by the community.

Steve Gillmor gave strong feedback at this point.  Here is my interpretation...

#1 Steve Gillmor did not like the approach of going negative and growing the user base by using the bashing technique.

#2 Steve's wanted to know why community communication didn't focus on what makes Firefox a better product.

At various points in the talk Blake didn't want to talk about features of Firefox but wanted to focus on the work of the community to grow the user base.

Steve asked what new features will be included in future versions and Blake said he didn't want the talk to focus the product and rather the community.  Steve said Blake should be listening to the people at Gnomedex to receive the user feedback on the product.

I think half of the disagreement was confusion about why Blake narrowed his talk.  Blake later explained on his blog why and how he narrowed the conversation.

I believe the other half of the feedback was a preference to not go negative.  Instead, the focus of communication with end users should be on the specific product benefits.

Full Disclosure: I work at Microsoft.  I no longer work on IE but did during IE v3 thru v5.5, and I have many friends working on v7.  Even so, I always try to be as impartial on the subject as possible.

-Bryan

Amazing People at Gnomedex 6.0

Gnomedex just completed and it was amazing to be able to talk to so many great people.

Here are my photos: http://flickr.com/photos/22934632@N00/

I was lucky enough to have great discussion with some smart people:
Marc Canter, Chris Pirillo, Robert Scoble, Michael Arrington, Dave Winer, Niall Kennedy, Ben Elowitz, Clay Cook, Richard Giles, Kevin Keating, Beth Goza, Matthew Bookspan, Tom Conrad, Doug Leeds, Todd Cochrane, Ethan Kaplan, Thomas Newman, Colin Daniels, Greg Reinacker, Robert McLaws, Ofer Ben-Shachar, Hans Omli, Ryan Haveson, Aidan Henry, Michael Pate, Brian Cantoni, John Anthony Hartman, Ace Bhattacharjya, and many others.

Chris Pirillo gave me some good feedback on my product and when I'm back at work I'll send out that feedback to the team.

-Bryan

Tags: [Gnomedex, Gnomedex 6.0]

Relevance is everything

Anyone who creates products or works at internet companies definitely needs to watch this video.

Seth Godin is a leader in creating a connection between a company and it's customers.  I don't want to call it marketing, but a replacement for marketing.  At it's heart, this is a way to:

a) Be able to get information to customers who are normally jaded and closed to companies.
b) A methodical way to turn customers into die-hard fans.

http://video.google.com/videoplay?docid=-6909078385965257294

He has a silly little book called The Big Red Fez.  It's a very insightful view on creating UI, especially for web sites.

-Bryan

Tags: [Seth Godin, Marketing, The Big Red Fez]

Unified RSS Feed Store on the client

I’m attending gnomedex for the first time and it is very eye opening.

Marc Canter from PeopleAggregator is pushing hard to unify services, which I’ll discuss in my next blog post.

One technology that already exists is the RSS Feedstore that IE7 will install on Windows XP.  (It is included in Windows Vista)  This will allow any application to read and write the feed list and read/unread state of each blog post.

A shared feed store is useful to bring together RSS clients.  Currently IE7, Windows Live Mail Desktop, the sidebar, and the next version of Outlook will use the feedstore.  Many more Microsoft products will use it in the future.

I talked to one medium sized company at gnomdex and I asked if they would find value in synchronizing with the feedstore.  Their response was “maybe just export”, which I can understand when they are worried about their business model.  Export is a good start, but I think down the road they will see that two way synchronization will bring real value to their customers and won’t be the lynch pin to their business model.

Tags: [RSS, Gnomedex, IE7, Windows Live Mail Desktop, Windows Vista]

Channel 9 Video for Windows Live Mail Desktop beta

Our team has published a Channel 9 video listing the new features in Windows Live Mail Desktop beta.  This is a great chance to get a tour of the features that are being released.

This video covers most of our current features.  A few are not shown, such as Active Search (see blog post on that feature).

The WLDM Channel 9 video is available here: http://channel9.msdn.com/Showpost.aspx?postid=200389

Tags: [Channel 9, Channel9, Windows Live Mail Desktop]