Archive | Product RSS feed for this section

Tip for Startup Founders: It Isn’t 1999

by • LC-G+ • on March 8, 2012 • in Business, Product, Revenue, Strategy

Dot-com tech bubble chart 1994-2002

Dot-com tech bubble chart 1994-2002

I lived through the infamous Dot-com Bubble. I was at a startup in 1998, that went through the usual ups and downs and up again. Then I founded a design consultancy (for some stability, believe it or not) and advised a number of small and medium-sized startups in Silicon Valley for several years (before eventually joining eBay). Some had solid products with real business models and went on to IPOs or acquisitions (e.g., Uppercase was acquired by Microsoft in 2000). But, a few were remarkably resistant to my efforts to help them think through their business model (I won’t name names). They didn’t seem very concerned about revenue at all, which I found quite surprising (almost as surprised as they felt when their design consultant was pushing them to discuss a revenue model). Lo and behold, those startups did not survive and some collapsed so quickly that I sometimes was left standing in front of their empty building with an unpaid invoice in hand. I certainly learned a number of valuable lessons during those bubble years. I would hope that everyone in the Tech industry these days has learned from the sins of their tech startup fathers, but apparently that isn’t always the case (as evidenced at this year’s LAUNCH Festival).

The majority of serious investors who experienced the first bubble also learned their lesson. The advice they now provide to founders does include detailed discussions around sustainable revenue models, such as subscriptions and transactions instead of traditional advertising revenue. I do think that a lot of entrepreneurs have learned from the mistakes of their predecessors. Over the past few years, I have talked with many founders and witnessed smart thinking around product strategy, business strategy, and exploring early revenue models beyond that old model of “We’ll have a lot of users and sell ads.” But, I have also witnessed a unfortunate number of startups with a fun or “clever” concept that apparently haven’t spent any time thinking through their business model. A perfect example was highlighted today in an article on Business Insider that described the failed pitch by Zabbi. As bad as the pitch sounded, the website is even worse. There is nothing on that landing page that would compel me to try that app. In a world of app overload, you had better be crystal clear on your differentiation and value proposition.

Dave McClure of 500 Startups cut to the chase with his usual acerbic insight:

“I’m not convinced you have a real product. I didn’t get what the fuck you are doing at all. How many people in the room believe this shit? Playing ‘Don’t Worry Be Happy’ isn’t going to show me your business model.”

Source: Business Insider

So, startup founders, I hope you’re paying attention and taking notes. I know that many of you weren’t around for the first bubble, but that doesn’t mean that you can’t learn from it. You can certainly learn from the cornucopia of advice that so many angel investors, tech analysts, and other startup founders are sharing so freely these days. Hiten Shah, co-founder of KISSmetrics, has many useful posts on conversion and revenue on their blog, for example. Read, ask, discuss, learn. I am also more than happy to talk with you about your product strategy, your business model, and how surprisingly subtle design changes can make all the difference in your conversion flows and revenue. Just reach out to me.

Don’t ever walk onto a stage or into a pitch meeting without a clear and concise explanation of how your wonderful startup is going to wow and acquire new customers AND make money from them.

Read full story • Comments { 0 }

Why Do Businesses Fail to Successfully Adapt to Change?

by • LC-G+ • on September 20, 2011 • in Innovation, Leadership, Organization, Process, Product, Strategy, Vision

Interesting infographic on GigaOM on why businesses are failing to successfully deal with disruption, competition, and change. Many of the reported causal factors will be quite familiar to anyone who has worked in a larger corporation. Although this highlights some of those factors, there isn’t much offered in terms of potential solutions to overcome these issues.

Some of the factors affecting the pace of business change:

  • Volatile economic environment
  • Increased competition
  • Fast-changing regulatory environment
  • Rapid changes in customer preferences
  • Changing technologies

Barriers slowing business response to change:

  • Lack of resources to implement change
  • Lack of coordination across different functions
  • Inaccurate or incomplete data
  • Bureaucratic decision-making process
  • Reluctance among senior executives to change strategy
  • Lack of leadership
  • Lack of autonomy for managers/executives
  • Reluctance to admit that previous strategic decisions were wrong
  • Lack of innovation capability

There are certainly things that can be done by larger corporations to address these issues, but they require strong leadership, real vision, and bold execution.

First, it requires significant changes in how organizations hire, organize teams, encourage exploration, and reward success.

Second, it requires significant changes in business processes and product development processes to foster goal-directed innovation, weave it appropriately into the product process, and streamline decision-making so that products can be delivered more quickly to market.

Finally, it requires a clarity of vision and a focused strategy to engender passion, not only in your customers, but also in your employees. Without their passion and belief in your mission and what you are delivering to your customers, nothing of significance will ever be created.

Progress Software infographic based on research from the Economist Intelligence Unit

Credit: Progress Software’s infographic based on research from the Economist Intelligence Unit.

Read full story • Comments { 0 }

Optimizing Organizational Models to Foster Disruptive Innovation & Product Evolution

by • LC-G+ • on September 13, 2011 • in Design, Innovation, Leadership, Organization, Product

I feel a much longer post coming on about the topic of “optimizing organizational models”, but I wanted to share a few quick thoughts on the link between organizational models and innovation. Given the recent events at Yahoo, there has been much discussion about why the company continues to struggle and what can be done about it. The infamous Yahoo matrix organization is one point that is raised often.

From a recent post by Salim Ismail on GigaOM about Yahoo’s matrix:

But it is terrible for accountability or speed. Whenever you launch or change a product, you have to get clearance from legal, PR, branding, privacy etc, which inevitably takes time. The matrix structure also prevents any real risk taking. The legal department, for example, wants the same ToS across all the products. Brickhouse was created to circumvent this issue. Set up outside and away from the mother ship, we hoped to be the tugboat that pulled the big tanker around. It worked for a while, but the Microsoft bid pretty much derailed that effort. The company had to focus all its energies to fend off the bid, which was necessary but incredibly disruptive to morale and productivity.  In addition, the Matrix had woken up and was attacking our unit (the best analogy I’ve found for this is that whenever you do corporate incubation, the immune system of the company will come and attack you — but that’s a whole other post).

The matrix structure works great in older, slower industries, but on the Internet, the two attributes you must have are speed and risk. Very simply, Yahoo’s organizational structure is antithetical to the industry they’re in. Over time, that structure has calcified and today, Yahoo is a 14 year old dinosaur in the industry it helped form.

I agree that the matrix only makes sense for certain support functions that you really should centralize, usually due to policy and oversight (e.g., HR, Legal). But, pushing other functions like Design and Research into a matrix role tends to slow down execution and hinders innovation. Decision-making becomes fuzzy when different team members actually report into different organizations. Accountability and “loyalty” are also unclear when someone works day-to-day within one organization, but has a manager outside of that organization who may have goals that are not fully aligned with the goals of that product team. I know, because I have experienced this personally as organizations decentralized into a matrix role and then re-centralized again, several times over the period of just a few years in a number of corporations where I was employed. The cycles of reorganizations and changes in ownership, decision-making, and accountability all contributed to execution issues.

However, I’m not sure that I would characterize the Brickhouse team at Yahoo as executing successfully until the Matrix “attacked it”. Everyone within Product and Engineering organizations should be responsible and accountable for the innovation and evolution of their respective products. Creating a separate “innovation group” that exists somewhere else in an ivory tower only makes sense if that group is chartered with the creation of an entirely new product. There are historical examples of that having some mixed success. For example, Apple’s original Macintosh team delivered, but the rest of the company felt alienated. If the innovation is supposedly being applied to an existing product line, you can be certain that the core team will feel alienated and exhibit “organ rejection” when you try to inject that innovation back into the core product. Also, this separate innovation group typically does not have the deep knowledge and experience with a product that the dedicated team does, after years and years of design and development. Yes, yes. I know that a team can stagnate and fail to innovate their own product because they are too close to it. But, that can be fixed. There are many ways to remedy this through intelligent hiring, better organizational models, and sustainable changes to product process that help drive repeatable innovation. Thinking that you can create product innovation in a vacuum, without collaboration with the existing team, and have it succeed in the market is a myth.

It simply does not work.

More to come…

Read full story • Comments { 0 }

Social Networks and Blogs Dominate Time Spent Online With Tumblr at #3

by • LC-G+ • on September 12, 2011 • in Product

Tumblr reblog Y U NO GuyI was just reading the Nielsen Social Media Report: Q3 2011 and, while there are some findings that are not that surprising, there are some very interesting tidbits of data. Not surprising to see that social networks, blogs, and microblogs are dominating our time spent online, taking up nearly 1/4 of time spent on the internet in the U.S. But, did you know that Tumblr is #3 for time spent? It ranks behind #1 Facebook and #2 Blogger, but ahead of Twitter and Linkedin. Tumblr has also nearly tripled its unique U.S. audience in the last year. It had about 15 million unique visitors last month and users spend 623 million minutes per month on the site.

Over the years, I have experimented with dozens of platforms for blogging, microblogging, and social networks. I have long been a WordPress user for my own blogs. I have also used Facebook, Twitter, Google+, YouTube, Delicious, Stumbleupon, and Digg as distribution channels and connecting with followers. But, I had not used Tumblr until a few months ago. The experience has been enlightening and helps me understand the site’s popularity and growth. The engagement with my followers on Tumblr has been very different than Facebook and Twitter. The frequency of likes and comments is much greater on Tumblr. Posts are reblogged more often than the same content is retweeted on Twitter or shared on Facebook.

The ease of reblogging content on Tumblr has certainly been a huge part of its popularity and growth, but this is also creating one of Tumblr’s biggest issues: Copyright infringement. As I scroll through my Tumblr stream, it is clear that a large majority of the content is “borrowed” and modified. I can’t imagine that Tumblr won’t need to crack down on this at some point, just as YouTube did (which helps protect them from lawsuits). Some believe that Tumblr will only have serious success with large brands and advertisers once it deals with this issue plus its “porn issue“. Regardless, the increases in time spent and users that Tumblr has been enjoying makes it a player that everyone needs to keep an eye on.

Highlights of Nielsen’s “State of the Media: The Social Media Report”

  • Social networks and blogs continue to dominate Americans’ time online, now accounting for nearly a quarter of total time spent on the Internet
  • At over 53 billion total minutes during May 2011, Americans spend more time on Facebook than they do on any other website
  • Tumblr is an emerging player in social media, nearly tripling its audience from a year ago
  • Nearly 40 percent of social media users access social media content from their mobile phone
  • Internet users over the age of 55 are driving the growth of social networking through the Mobile Internet
  • 70 percent of active online adult social networkers shop online, 12 percent more likely than the average adult Internet user
  • Across a sample of 10 global markets, social networks and blogs are the top online destination in each country, accounting for the majority of time spent online and reaching at least 60 percent of active Internet users
  • From the Nielsen Social Media Report: Q3 2011
Read full story • Comments { 2 }

Larry Cornett Joins Primal Board of Advisors

by • LC-G+ • on September 13, 2010 • in Product, Strategy, Vision

I’m proud to announce that I have joined the board of advisors at Primal; a very interesting startup that is developing powerful semantic technology to enable smart automation of the tasks you do daily on the Web. Imagine a smart assistant that better understands how you think and what you want. Very interesting indeed.

I will be working with Primal to help tune its business strategy and support its product development to ensure that they are offering consumers the most productive and convenient online experience. I’m really looking forward to working with Yvan, Peter, and their team to define a whole new way to experience a more personalized and useful consumer Internet.

Read full story • Comments { 0 }

Another Facebook Privacy Breach Today

by • LC-G+ • on July 14, 2010 • in Process, Product

Facebook PrivacyUpdate: Special thanks to the folks over at Facebook. I talked with a couple of people there who looked into the issue. Turns out that this case was actually not a privacy bug. Rather it most likely a case of an unintentional “reply all” and some sort of synching fluke, so that a threaded conversation that seemed like a private conversation suddenly appeared in my inbox. My apologies to the Facebook team and thank you again for looking into it.

I guess I’ve become a little paranoid given the previous privacy breaches that have happened. This May there was a bug that exposed “private” chat messages. And Mark Zuckerberg (CEO of Facebook) has acknowledged that they have “made a bunch of mistakes” on this front.

Traditional email has been getting this right for quite some time now. And, I think this highlights how many decades of development have gone into something that seems “simple” on the surface, but actually is pretty complex when you think about maintaining your inbox (privately), handling an incomprehensible volume of spam, scaling to billions and billions of messages, etc.

I have noticed that more and more conversations that would have taken place via traditional email in the past are now instead happening on Facebook, Linkedin, etc. I’m doing it too. But, with the privacy breaches that have occurred on Facebook, some believe that it is time to revisit that decision and probably slow that trend.

There are a few critical failures that can drive customers away from your product permanently. Data loss is one and can kill a product. Privacy breaches are another, especially when it comes to your personal life. One slip and people may forgive you. Multiple, ongoing slips and customers delete their account and leave you.

Read full story • Comments { 0 }

Twitter is the World’s Fastest Growing Search Engine? Highly Unlikely.

by • LC-G+ • on July 8, 2010 • in Product, Search

Twitter LogoWell, as reported by Fast Company today, Twitter cofounder Biz Stone stated they have now reached ~800 million search queries per day. That supposedly puts them above the combined query volume of Yahoo plus Bing. This story has spread like wildfire across the web, with everyone jumping on and claiming that Twitter is now “the World’s Fastest Growing Search Engine”. Really? Only if you don’t dig deeper into how those searches are counted. Only if you don’t really understand Search and the difference between a query a human being enters into a search box and an automated query that updates tweet results on a topic every few seconds.

Some facts shared at Twitter’s Chirp developer conference in April this year (as reported on TechCrunch) help set the stage for how this volume is happening:

  • 75% of all traffic to Twitter comes from third party clients
  • 60% of tweets come from third party clients
  • Over 100,000 registered apps on Twitter

This data is key to a “reality check” on Twitter’s search numbers, as Nicholas Carlson reported on Business Insider today. The majority of Twitter’s activity is being driven from these 3rd party apps and the majority of these “searches” are most likely coming from these apps as well. These are not “pure”, intent-driven searches in the Twitter.com search box.

As Carlson states:

Twitter’s search query numbers include “searches” from Twitter apps such as TweetDeck and Seesmic that are actually just automated calls those apps send out every few minutes to populate columns users have set up to see tweets on certain topics.”

I also use TweetDeck and have it configured to update on different topics every few seconds. Are these real searches? No. Most of the time I am not even looking at the TweetDeck window. It is up and running even when I’m away from the computer. That is a large number of so-called “searches” taking place with no eyeballs involved. If an automated query updates “search results” and no one is around to see it, does it count? I’m not saying that Twitter isn’t driving a huge amount of engagement and activity. It certainly is and I love using it. But, let’s not kid ourselves that these searches are the same as a real search query entered by a human being, who then looks at the results AND can be presented with relevant advertising mapped to that intent.

At the end of the day, the search volume that matters is the volume that can convert into traffic and conversion for publishers and advertisers, which drives revenue for the Search engine. Advertisers want those active eyeballs and intent. It would be much more interesting for Twitter to share their “real” search volume, which is probably still significant, but nowhere near 800 million search queries per day.

Read full story • Comments { 4 }

eBay Acquires RedLaser iPhone Barcode-scanner Application

by • LC-G+ • on June 24, 2010 • in Product, Strategy

RedLaser iPhone App screenshot

Capturing a barcode

eBay just announced today that they are acquiring RedLaser, an iPhone application that lets you scan barcodes on products in stores and do immediate price comparisons online. Product search on mobile devices has dramatically increased recently as a result of consumers being more price conscious and the improvements in smartphone technology. Buying RedLaser is a great move that will make it even faster and easier for shoppers to see if they can get a better deal on a product if they buy it on eBay (something we’ve all done). This allows eBay to grab even more of those retail dollars that might have been spent in brick and mortar stores.

They are also talking about integrating the RedLaser technology into the eBay Selling application for the iPhone. Again, this will reduce the friction of conducting selling research, entering product information, and increase the velocity of listings. Faster listings + More listings = More revenue

eBay has already been investing seriously in mobile experiences, which has paid off tremendously. The CEO of eBay, John Donahoe, announced last month that they expect their app to “bring in $1.5 billion to $2 billion in transactions” this year. Pretty impressive and proof that investing in mobile is a smart move.

From eBay’s press release:

“With RedLaser’s innovative technology, eBay is continuing to help shoppers quickly find the best deals online, and eBay sellers will be able to list their items faster.”

You can download the free RedLaser iPhone app here. The video below shows the barcode scanning app in action.

YouTube – RedLaser 2.0: Realtime iPhone UPC barcode scanning

Read full story • Comments { 4 }