t - -

Testing out WordPress for the iPhone. Now I can both tweet and post pointless things on the go.

I just bought a new scooter.  Well, technically I just bought another scooter.  Anyway, as I was cruising down the street at a roaring 37 mph, I started thinking about what it really was that I had paid for.

In this case, I had bought a time machine.  Now before you start giving me that “Jigga, what?” look, let me explain.

I use the scooter to commute to work.  It’s about a three mile journey each way.  I could certainly walk that distance in about an hour.  But with the scooter, it takes about ten minutes.  So I’ve bought myself 50 minutes each direction.

You could also argue that I’ve bought a jealousy machine based on the looks that all the cool people sitting in the outdoor cafes give me.  But that isn’t so much an argument as it is a tautology.

Craigslist is awesome.  It is simple, free (for most)  and well known.  It’s not only profitable, but also well known to most people in the US.  But is there any incentive to work there?

Since Craigslist is known for its simplicity and unwillingness to adopt "modern" looks and functionality, what does everyone do there?  It seems like the culture is designed to go out of the way to stifle innovation and adaptation (at least on the front end).

I’m sure that they are always streamlining code and trying to stay one step ahead of those who will abuse the system, but does it seems like there is much to do outside of daily maintenance?

Not only that, but if they did the other things, would it help or hurt them?  Marketing, R&D- Would these activities hurt the brand?

The moral of this story?

If everything is really crappy, you can just be mediocre.

…or are you just working on a project?

The idea of a “startup” has really moved into the mainstream in the past few years. The tech bubble added a level of mysticism and ownership to the term, and it has continued to move beyond an industry classification. The word now comes packaged with its own stereotypes, and it seems like everyone with a little coding knowledge, a garage, and a pair of flip flops is bootstrapping their very own startup.

But how do you know if you are truly working on a startup, and not a side project? I think that we need to trim some fat off of all the hype out there and redefine the term back to something meaningful.

First of all, let’s not undervalue the strengths of a “project.” This is not a derogatory term- it just happens to entail a different set of circumstances regarding the work that is being done.

True innovation usually stems from focused projects that are meant to excel in a focused area, and more complex solutions depend on stringing together multiple ideas. Projects can quickly evolve into startups, and startups can definitely shift to projects.

I think there are three areas that are important to consider when trying to classify something as a startup: Solution, Revenue Model, and Technology/Process.

1. The solution is the core result of your product or service. What problem are you solving? Does your product have a clear purpose and fill a need for some entity?
2. A viable revenue model is mostly self explanatory. Do you have a justifiable and realistic way to make money? It can be somewhat fuzzy, and occur later in the time line, but it’s a critical piece to consider.
3. Technology/Process is the internal functionality that your product or service utilizes. This represents a different way of solving a problem- either with technological innovation, or with an improved way of getting things done.

Of course, other factors will definitely contribute to the definition as well- funding, time dedication, personal priority- but these are more relevant to the environment of the work that is being done, rather than describing the work itself.

Ideally, a true startup would be strong in all three categories mentioned above. However, with the natural evolution of ideas and creativity, I think that it is possible to call something a startup if it is strong in at least two of these areas. The third will likely emerge anyway if the other two are well represented.

Take a minute to evaluate your favorite websites on each of these three areas. Then think about how your current endeavor stacks up. So what are you working on?

[Photo credit: hanabi]

This post beat me to everything I wanted to say before I could actually put it together in a coherent message.

The fact of the matter is advertising dollars don’t easily trickle down to the small time publishers.  Even medium sized services have trouble securing significant dollars.  Some that function on a really tight ship can probably make do - and maybe a few comfortably so - on dollars from networks or (ugh) adSense but in general unless you reach a significant volume you won’t grab the rich deals.

You need to carry a strong name that dominates a particular niche.  There are thousands of tech blogs out there, but only a few really clean up those $25+ CPMs.  This is why we’re seeing such a rapid rise in vertical ad networks that try to aggregate quality (or something approximating quality) content within clear niches.  The small site by itself won’t survive and teams up with others to try to reach a scale that will appear on the radars of major ad spenders.

And if you’re trying to be a generic play, it gets even tougher.  YouTube, Facebook, and MySpace are all huge sites with astounding amounts of traffic and recognition.  And they all have trouble monetizing their inventory.  Granted two of them were able to make an exit before too many people caught on (still maybe someone will find the trick to actually making them significantly profitable).   I can’t imagine what it’s like to sit in the middle of the pack as a social network or video portal.  How many exits remain that seem likely or attractive in those crowded spaces?

Ways to Potentially avoid the Abyss of the Deadpool:

First:

Don’t make another generic social network or video portal.  Don’t get me wrong, there’s always an opportunity for a new player to disrupt the field.  But the chances are extremely small.  If you have to do it, you better be sure you bring not just an innovative offering but a damn good monetization strategy (and some good connections).

Second:

Don’t go in with just a cool technology.  There are exceptions in certain fields, but I can’t think of very many web properties these days that have defensible technology.  Someone can always jump on eLance and pay $500 for a knock off of your site.   Hell, building Twitter is practically Chapter 3 in any Ruby on Rails book.

The days of running ahead with just the cool technology are likely coming to a close.  The barriers to entry are just way too low today.  You need to bring the whole package with you.  This means marketing, sales, quality customer service, unique advertising offerings, etc.  Alternative revenue strategies instead of advertising are great, but it doesn’t mean you need to give up on advertising as a possibility.  Just be smart about it.  Offer something new (from the advertiser’s perspective), partner where you can, actually put effort into sales, and identify openings in the advertising market.

Third:

Even if you’re not really, pretend you’re bootstrapping.  I know it’s crazy, but I’d suggest saving product launch parties for companies that actually already pull in revenue.  Focus on putting money more into what will actually see returns than cool crap for the office (and maybe consider not even bothering to have much of an office).

None of this is necessarily new advice, but a browse through CrunchBase quickly demonstrates how few people have bothered to learn it.  What’s more criminal is browsing the list of companies that have gained funding, and haven’t bothered to learn any of it.

The problem I believe is tunnel vision towards the success stories.  If they made it with a huge extravagant launch party and no clear plan to get to profit, clearly I can. But more than likely, they were in the right place at the right time.  Always leave the plan wide open for new opportunities and adaptation, but at least have a plan.

This post is inspired by an outburst from this classy gentleman on his blog (who I’ll refer to as EP for Epic Programmer). What was once a respectably honest yet strongly opinionated rant has since been replaced with a pg* suckling retraction <slash> tone-downification, but it still brings up some good points that I’d like to weigh in on. This has already been discussed to death on the YC News boards, but none of them were me, so I’ll continue.

Here are the major points that I have extracted from his now castrated message:

1; “Hackers” should only work on their own startup ideas

First of all, a disclaimer: I’m more of a business type than a coder. I do have a degree in computer science, but I don’t think it’s as big as that other guy’s, and I don’t feel obligated to keep it in my pants. This said, I think we should revisit Lord Graham’s essay on hackers and painters. Since he apparently wields enough power to reach through people’s souls to have blog posts rewritten and stricken from the grasps of the google, I thought he’d be a meaningful reference to call upon.

Graham compares “hackers” to painters because he feels like they are both creators. Well, business minded people (me included) are creators too. The only difference is that instead of making virtual objects, business people often create services and connections- which are just as useful in any healthy business. It is also worth pointing out that business minded people have been finding innovative ways to make real money for as long as there has been money to be made, whereas hackers are still trying to find some green in the grey zone of the Internet.

The point of all this is that there are people with creative ideas in all walks of life. I have no doubt that EP, who lexicon-hacked the original article is the nipple of all the boobs who can code out there- since he is sitting on piles of money and not currently enslaved with a day job. But even then, by labeling yourself a hacker, you’ve already introduced your highest function as someone who creates a beautiful solution to problems. Unfortunately, this doesn’t necessarily validate the problems that you’re solving.

Seriously. Have you seen the guys on “Beauty and the Geek?” These guys can probably hack Boba Fett’s spacesuit with nothing more than a piece of toast and their inhalers. And given the choice, there is a good chance that their web startup would aim to do just that. The issue here is that this service isn’t necessarily the best use of their time if they want to get a real user base and business. If that isn’t their goal, then I wish them the best of luck. But for people who want to work on some meaningful community problems and become more complete individuals, it helps to, I dunno, work with other types of people occasionally. And to talk to girls.

Are my ideas more valid than EP’s at solving a real world problem just because I consider myself a business guy first? I’d absolutely guarantee not necessarily. But to dismiss other options because I am the self proclaimed jesus of business hacking is close minded and self depriving. Problem is- when WE pass on a great role, we probably won’t miraculously be reinstated in that opportunity three days later.

2; Ownership of the project, and ideally being the originator of the product, is important for morale and motivation for working on the project.

This is definitely probably true. People will generally be more interested in something that they have created, and if this passion is going to take them through the rough patches of the startup life, then it is clearly a benefit. But just because we are more inclined to love our own creations does not mean that we cannot love other people’s creations. If this is the case, parent’s who adopt are fooling themselves if they think there is real love there. I propose an experiment- We should try to take a adopted baby wolverine away from it’s surrogate wolverine mom, and then try to take another baby wolverine from its biological wolverine mom- and see which mother mauls us more.

Yeah- the idea that ownership often leads to a strong passion is true, and that seems to be the primary buttress for the statement numbered 1;. Well, I submit that the issue is actually that people with really good ideas aren’t doing a good job of selling the concept to other potential team members. If they do, then the statement numbered 1; is much less valid.

If an idea is truly exemplary, and the originator is passionate about it, then there is a good chance that an outsider could become passionate about it too. As a matter of speculation, if you cannot get an outsider to be long-termed passionate about your project, you probably need to revisit the validity of your brilliant idea. This is true regardless of who approaches whom in the early stages- coders or business people.

I know of a lot more people who have adopted a kid and loved him than have dropped one on the hospital doorstep, and I think the same is true for business ideas. And let’s face it- MAKING the “idea” is the fun part- so those who adopt clearly know what they are skipping out on.

3; “beef-headed M.B.A.” types are only useful after the product is generating revenue.

Didn’t EP watch the Fedex commercials? M.B.A.s are NEVER useful. Moving on. Once again, not all Boba Fett jesus hackers come up with revenue generating ideas to begin with. One thing that you can count on by working with a qualified business mind is that they will present some great alternative or supplemental ideas for both the product and the business plan even at the beginning of the project. Even an unqualified business mind is at least a wallet that you can test your idea on. All the hacking talent in the world may still only get you a Twitter (but one that doesn’t crash.) So if your revenue stream is solely based on online advertising, and your exit strategy includes google, it might be worthwhile to spend some time with people who may have some alternate points of view.

The attitude of “if you build it- they will come” is a pretty poor plan for any web startup these days. The reality is that without a reasonable big picture, no one will come. And even if they do, you still need a business strategy at the core of your project- lest you be “uncov-ed.”

Bonus; “At the absolute beginning stages of a software startup, two things are needed: a hacker (or two, or three), and his (or their) idea. Anything else is just an impediment.”

Of course software startups will need hackers. But startups who wish to be “successful” need “validated” ideas- and that’s a huge assumption to make. I’m not trying to claim that only business minded people can bring validated ideas to the table, but business people can at least afford tables. And tables are usually a necessary impediment in any work environment- so I’d openly talk to that type of person if given the choice.

But of course, none of this applies to EP, the guy who wrote the referenced post. He is a hacker and layer of golden eggs. But for everyone else who may not be able to fertilize themselves, I suggest keeping an open mind, and exploring the contributions and creativity of other people that may approach you.

It’s simply a case of mental economics- we all have our strengths, and participants come out better by trading. Even if the ideas they present aren’t great, the least you can do is get a little bit of mental exercise while exploring the nuances of the concept, and then respectfully decline the pitch. After that, feel free to bash all those uncreative cretins on your blog. And then erase it when your Lord sheds a tear for you.

*does pg stand for “parental guidance” or “Paul Graham?” The world may never know.

We got pretty excited here at t– to start posting the various thoughts and issues that came up for us as we blaze our path to entrepreneurial fame (or at least mild recognition).  However, reality set in as we had a close deadline to apply to a local incubator.  A lot of work went into writing, editing, rewriting, and again editing the application - along with building a team to support us.

We now emerge a couple weeks later with no word (yet - but not ready to give up) from the incubator, and a few other setbacks.  That said, nothing has happened to compromise our vision or intent to follow through.  We may potentially end up approaching things slightly different, but nothing fundamental changes.

I have decided to start digging into Ruby on Rails some.  I’ve spent a little time looking into the language and how it flows and I think my biggest concern is that it’s almost too clear/easy.  I’m far too used to more cryptic languages - and I find it ironic that a language from Japan is so easily translatable to English.  Still it looks very interesting, and hopefully it will facilitate standing up some prototypes faster than planned.

Omnivore : Vegetarian : Vegan :: Atheist : Christian : Scientologist

Fair?

(Sorry about another Scientology post.  It’s not important enough to warrant complete thoughts, but it’s topical enough to generate musings.)

I just got out of a meeting with someone I met at a local new media/tech meet up a couple weeks back.  I had mentioned at the dinner with him that one of the (several) projects I was working on was based around the idea of local advertising and he was working on a similar site.

It reminded me that it’s always good to talk to people about the market and particular ideas as it helps to say out loud potential pitfalls and potential opportunities.  Everyone is tripping over themselves to talk about how big local advertising is going to grow, but there are still a number of problems to get around before it’ll truly be big.

He and I were taking fairly different approachs to our projects, and I’m not sure either solution is necessarily better.  My project is focused on providing a service as the primary function - with content that’s fairly simple to gather and produce.  The advantage here is that I can more easily expand to additional regions without having to get people on the ground producing original content for me.  The downside is that without any particular content I lack a defensible position.  The service is easily reproduced (and indeed exists in some areas already).  While I have a much greater focus on how to allow accessibility for small-time local advertisers, building and defending my user base will be extremely difficult.

His approach is obviously focused on creating unique content centered around the particular geographic area (primarily at the city level).  This creates a great edge if the content is quality.  People can only get that specific content in one spot, and he creates a strong means to defend his brand and property as long as the content quality remains high.  The downside being that expanding to additional markets becomes more difficult.  By requiring a high level of quality in content, he needs to find quality people in each new location.  This is assuming, of course, that one market is not ultimately enough to support significant growth.  I think you’ll find as you begin to build a brand respected in a local market, growth will come pretty strong for a while, especially as more and more people begin to be comfortable enough with exploring online advertising as such a small scale level.  But my concern is that even in a large metro the market tops out too soon to keep most people happy, and the real value is in actually being a national level operation but with content and properties existing at the hyper-local level.

Aside from the general strategy, we also discussed how to best go about building the advertising.  Part of the reason for the meeting was for me to share some knowledge of how the online advertising industry works.  Ultimately, in regards to the very focused local advertising, I don’t think the overall principles change.  I think the winning approach for either of our strategies is by providing two tiers of access.  On the one side, you will still need to maintain the traditional sales account exec that goes out to bring in substantial advertisers personally.  But you don’t want to that sales person to waste their time chasing $300/month deals constantly, so I think key will providing a very simple self-service system.  You want to create something so simple that the local Mom and Pop store owner can come on, easily create a banner ad, and easily choose who it targets and how much it runs.

But the biggest potential I think in really pulling these small businesses into a local platform to advertise is by providing as much transparency and reporting as possible to show just how well they reached specific users.  Online is a weird method of advertising to a lot of these local business who are used to at most putting a small ad in the local newspaper.  So you need to show them as in depth as you can that they reached people actively interested in their business and that these people responded in some way to the message.

All in all, it was an interesting conversation and left me with a lot to think about towards this problem/opportunity.