QH: Twitter: Enable Communities, that's a cash-worthy asset

I'm not going to speculate on Twitter's plans for making money or how they could do it. Except for one idea that struck me today.

One of the "people" that I follow is a cafe in #yyc (Calgary) called @kawacalgary (I'm not sure what "Kawa" means, but it is a cool coffee shop). Looking at Kawa's twitter account, I noticed that it didn't really have that many followers: only 44.

But I know something about each of those followers:

• I know that those people like Kawa Coffee (why else would they follow it on twitter?)

For Kawa, this is a permission asset1. Certainly Kawa could continue the conversation they have with each of these people.

But what about me?

I'm not sure what the right system would be, but I think that it would be good if twitter allowed for some measure of interaction between "followers" of a business.

I don't want to spam them all and twitter's interaction is different from a comment board or Facebook-style "wall." (I'm also not advocating for spamming the followers.)

My point is that there must be some what to better organize the system (twitter) around the facts:

• There is a permission asset2 there: people have expressed interest in the product and having a conversation with it.
• There is a communal feeling around shared knowledge: meeting people (in person) who frequent my favorite coffee shops has a serendipitous effect. Why not create that feeling online?
• Any given person knows some of that community, but not most of it.
• Enabling relationships would increase the perception of the brand.

It seems to me that if companies spend lots of money on "micro-sites" for various brands, they'd be willing to engage people in a similar, but different, fashion via twitter.

Links & Notes

Links: @kawacalgary on Twitter. Kawa Calgary's website (currently under construction, recently was online).

1. It's a permission asset in the sense that Kawa's followers are saying: "I want to know more about your service, you have permission to tell me more." This bodes well for the rumor that Twitter would charge businesses to use the service: if it means that customers can express interest in and give some permission to a business, that has some value.
2. The current "permission asset" in twitter is hard to gauge: a "follow" means different levels of engagement to different people (arguably Facebook friends and LinkedIn connections are also vague in a similar way). But there is a definite permission asset there.

Obscure Links #1: Introduction & December 2007 design, internet, computing & economics links

Maybe it was my recent re-read of "Mr. Google's Guidebook" where the author portrays Google as a butler who only shows you select portions of the mansion: and ignores the rest.

To some extent, this is true. But, as I wander through my delicious.com links looking for a previously bookmarked gem, I notice that lots of my links are actually not well known. Sure there are some that another 8,000 or 10,000 people have bookmarked. But some have fewer than 10 or 20 duplicates.

Here then, is a selection of some of my obscure bookmarks. Things that I think are interesting and worth reading, but have clearly not been found my many people yet (taking delicious users as a representative sampling).

The number in parentheses is the number of people, besides me, who have bookmarked the link.

1. (23) Technology & Internet: Nick Carr (author of The Big Switch & Does IT Matter?) summarizes an algorithm written by Carnegie-Mellon researchers that gives you which 100 blogs to read if you want to get the most bang for your reading. They do this by comparing the internet to a water distribution network.
   http://www.roughtype.com/archives/2007/10/the_science_of.php
   
   
2. (6) Economics, Startups, & Venture Capital: Fred Wilson (venture capitalist at Union Square Ventures) gives some graphs & background information on the returns of VC investment from 1969-1997.
   VC Fund Performance - Some History: http://www.avc.com/a_vc/2007/11/vc-fund-perform.html
   
   
3. (4) Internet & Marketing: Darren Barefoot (Vancouver-based technologist & social media consultant) summarizes 14 trends of marketing that he got from a Seth Godin webinar.
   Notes from a Seth Godin Webinar: http://www.darrenbarefoot.com/archives/2007/11/notes-from-a-seth-godin-webinar.html
   
   
4. (1) Design: Slideshow in Wired Magazine shows some industrial design from concept to prototype.
   Birth of a Gadget: Inside the Industrial Design Process: http://www.wired.com/gadgets/miscellaneous/multimedia/2007/11/gallery_gadget_birth?slide=1&slideView=2
   
   
5. (4) Animation: A clock comprised of hand-written numbers. (I've had to track this down over the years as the URL has changed.)
   http://fun.drno.de/flash/hand.swf
   
   
6. (12) Design & Color: Some took the time to reproduce the 2007 IKEA catalog: but with no images, just the overall color.
   Color averaged IKEA catalogue: http://infosthetics.com/archives/2007/11/salavon_color_averaging_ikea_catalogue.html
   
   
7. (5) Innovation & Creativity: Bob Sutton quotes his book "Weird Ideas that Work" about how difficult it can be to live with innovation.
   "The terms creativity, innovation, and fun are often used in the same breath. But before you rush ahead to build or join an innovative company, I feel obliged to warn you about the hazards. Working in an innovative place can be annoying and frustrating, or worse."
   Why Creativity and Innovation Suck: http://bobsutton.typepad.com/my_weblog/2007/12/why-creativity.html
   
   
8. (19) Unusual Computers: Lifehacker shows us a tiny computer that is completely solar-powered.
   "E1 runs on 8 watts of power, has no moving parts and is completely silent. E1 looks like the James Bond of low priced Linux computers. It runs Puppy Linux, comes with an optional solar panel and an optional 10.4 inch monitor."
   Tiny Solar-Powered Linux Computer: http://lifehacker.com/software/stuff-we-like/tiny-solar-powered-linux-computer-328777.php
   
   
9. (11) Design: 37signals talks about where their designs have gotten ugly around the edges and why they think so.
   "Software can get crufty quick — especially around the edges. We work hard to keep the cruft out, but we can’t win ‘em all.
   "We’re currently digging through Basecamp looking for those dusty corners so we can clean them up."
   When cruft creeps in: http://www.37signals.com/svn/posts/730-when-cruft-creeps-in
   
   
10. (4) Food: Wired Magazine talks about Louis Rossetto launching a new line of Chocolate:
    "Rossetto and his business partner, Timothy Childs, have launched Tcho, a startup that aims to do for cacao beans what Starbucks did for those other beans. To them, chocolate isn't just a processed food; it's an agricultural product with its own terroir."
    http://www.wired.com/techbiz/media/magazine/16-02/st_15rossetto
    

2000 failed prototypes? Quit and move on.

I love the James Dyson story (of Dyson vacuum cleaner fame). He didn't fail 5127 to make his vacuum cleaner times, he found 5127 ways to not make a better vacuum cleaner1.

Bob Sutton talks about this story and points out that often people want to hang it up before they make something work:

"It is an interesting case because it shows how difficult it is to make rational decisions in the innovation process.  Certainly, say 4000 prototypes and 4 years into the adventure, any reasonable person would have assumed that this was a failure, an extreme case of escalating commitment to a failed course of action."

And, while I love the story of someone who didn't give up and eventually succeeded, I think giving up after 4000 prototypes would have been a good action.

In fact, maybe he should have given up after 2000 prototypes. About the only bad place to stop is 5127 (since 5128 was the magic number in this case).

And this is Sutton's point: you don't know the cost of the innovation that you are undertaking. Just as Dyson didn't know that 5128 was the number.

It's easy, with the successful product complete and money in the bank, to look back and think Dyson made the right choice. But I wonder if quitting faster isn't another right choice.

What would Dyson have invented had he thrown in the towel on vacuum cleaners after 2000 attempts? What's the opportunity cost of the Dyson vacuum cleaner? None of these had been invented when he invented his first vacuum cleaner:

This is an exercise in thought, not a comment on what Dyson might have done instead (since his invention biography shows a tendency towards mechanical improvements and finding better, not new, ways to do things). But what might you invent if you give up after 2000 attempts instead of finding a better vacuum cleaner?

Links

1. I'm mashing-up the quote attributed to Thomas Edison: "I haven't failed, I've found 10,000 ways that don't work." Concerning inventing his version of the lightbulb (before succeeding).
   Other fun innovation / invention quotes:
• "To invent, you need a good imagination and a pile of junk."
  -Thomas A. Edison
• "No fine work can be done without concentration and self-sacrifice and toil and doubt."
  -Max Beerbohm
• "The core skill of innovators is error recovery not failure avoidance."
  -Randy Nelson, HR @ Pixar
2. Bob Sutton Blog Post: http://bobsutton.typepad.com/my_weblog/2009/02/5127-failed-prototypes-james-dyson-and-his-vacuum-cleaner.html

Event Write-up: Richard Stallman on Copyright at the University of Calgary

Richard Stallman (of the Free Software Foundation & GNU fame) spoke at the University of Calgary this past week. It was great.

He gave an overview some of the history of copyright (including its original purpose) as well as outlining his position on copyright. My write-up here a roundup of some points that I found interesting (not much in the way of a synthesized point).

Free: when speaking about beer

First off, I'll start at the same place that he did: free as in speech vs. free as in beer. He's talking about free (as in speech) software.

Free as in speech, refers to the public's right to do something without being hindered to do so.

Free as in beer, simply refers to the price: as in, you give me beer without charge.

Despite this explanation, some people at the lecture, still managed to fuddle the two (as have I also done in my previous post on copyleft: http://jeffreypriebe.blogspot.com/2008/04/copyleft-why-gpl-isn-free.html). It's confusing when we are bound by the language that we speak. Stallman also noted the language problem, wishing we have 2 words for "free" as they do in latin1. One = "no cost" and the other = "freedom."

Copyright for the public good

One of his main arguments for copyright reform is that copyright was brought in to promote progress. That is, if you can be assured that you can own something you make (& then be the only seller) you are more likely to make something (I'm simplifying here).

But this suggestions was made in a day when copying was rather limited: you had to copy by hand. So the public wasn't really trading in much value - since they weren't going to go out and copy it themselves. In today's world, particularly with the advent of computers, copying is trivial. Because of this, the public is giving up value in not being allowed to copy something.

And his argument is that maybe we aren't promoting progress any more by having copyright.

Examples: Copy-free and working

The real-world examples of things that weren't copyrighted and still worked (both those specifically mentioned, and those that simply came to my mind) is interesting.

He mentioned Radiohead & Nine Inch Nails - both musical groups with recently albums that were released using non-standard distribution mechanisms that were more free2.

This issue is particularly interesting to me, as a good friend is a professional musician: Keith Kitchen. While bands with large followings have shown new methods of distribution to be commercially-viable, I wonder if it is possible for small and upcoming bands.

SaaS = bad

Stallman also took a shot at Software-as-a-Service (things like Basecamp & Salesforce.com): alleging it to be worse than non-free software. With SaaS, you don't even get the source code to run, never mind being able to share it. (Update: witness all the current uproar about Facebook ToS: http://scobleizer.com/2009/02/17/ownership_facebook/ - it isn't only Stallman that wants control over how software works to ensure they can use it in the future just as they do in the present.)

The fun preachy bits

As someone who is trying to persuade people, Stallman makes a point of using language to his advantage. His choice of words can be a bit slanted at times (but, of course, his opponents are also using loaded & slanted words).

• DRM = Digital Restrictions Management
  As opposed to the more common "Digital Rights Management" - Stallman used the "restrictions" which, IMO, is a more accurate description of such technology.
• "Defective by design"
  This is a reference to things that have DRM. They are "defective" by design. There is also a website: defectivebydesign.org. And fun stickers that he gave out freely (as in beer).
• "Non-free users are 'subjugated users'."

Notes & Links

1. He is referring to the distinction mentioned here: http://www.nationmaster.com/encyclopedia/Libre
   Unfortunately, my second language is Spanish which also only has 1 word for "free," so a second language in this case, doesn't help me.
2. Nine Inch Nails release their work under a Creative Commons non-commercial, share alike license and also had a portion of it as a free digital download. There also HD videos available via Torrent download & multi-track downloads for easier remixing.
   http://en.wikipedia.org/wiki/Nine_Inch_Nails#Ghosts_I.E2.80.93IV_and_The_Slip_.282008.E2.80.93present.29
   Radiohead had a digital download that allowed fans to pay whatever price they saw fit: $0+
   http://en.wikipedia.org/wiki/Radiohead#In_Rainbows_and_independent_work_.282005.E2.80.93present.29
   Stallman also specifically mentioned Jane Sibbery. While previously known as Jane Siberry and now known as Issa, albums are available at a "pay what 'your gut' says" price via digital download: http://www.sheeba.ca/store/help.php#sdp
3. For more on Richard Stallman's thoughts on copyleft: http://www.gnu.org/philosophy/x.html
4. Note: I wanted to change the license on the image to CC-PublicDomain (from my default CC-BY), alas, that option is not present in Flickr.

QH: Great Demo & Howto

37signals (makers of Basecamp), filmed a customer story for one of their products: Highrise (a CRM).

They then did a blog post on how they did the video. It's a great explanation of how to do a demo. For me, it is interesting from a video perspective, but I think it can work for other demos as well. Particularly useful: that they didn't just tell the story, but they included the video as well - to see the points in action.

http://www.37signals.com/svn/posts/1554-how-to-film-customer-case-study-videos

QH: It's about the people - understand them and act appropriately

In a recent meeting, I found myself saying "it's about people" a lot. I actually felt a bit silly repeating myself, but it was appropriate.

Today, I read an HBR article: "How to Manage People in 15 Minutes a Day" (http://blogs.harvardbusiness.org/cs/2009/02/the_31_coach.html).

I found it helpful. I zipped off 2 activities that it brought to my mind and I think will make a difference in work this week. Nice quick tips.

That was reading it in my RSS reader - just reading the article alone. I clicked over to the link above to leave some thankful feedback: "Thanks. Inspired me to do a few helpful things today." I was unprepared for the deluge of comments already there.

Their content particular surprised me. Several people complaining about the ideas, others, like me, completely on board.

It's great. It's not good.

Why the discrepancy?

It's about people. I think any management advice can be dangerous since all people - the people managing & those "being managed" are different.

I don't necessarily agree with the specifics of her tips, but the general concept made a lot of sense:

Take little snippets of time to build into employees. That is at least as effective as a comprehensive "Development Methodology."

Again, this is a generic concept and I think that is why it is applicable - you have to create the final 40% of the idea by relevantly applying it to your specific situation.

It is up to you to understand your people. What does/doesn't work for them. For example, I'd agree that it's not a good idea to continually interrupt knowledge workers - you sap productivity. You have to find a balance. But there is truth in the general principal outlined: you need to have face-to-face contact with people and give direct feedback.

Everybody's different and business & work are about the people.

Event Write-up: 4 Lessons from Entrepreneurs: STIRR Canada & U of Calgary Comp Sci Event

Great STIRR event on Wednesday evening. It came at the end of a long day for me, but it was well worth the time. It was subtitled "from the trenches" and was presented by two of the key people in iStockPhoto.com (Patrick Lor & Kelly Thompson). (In case you don't know, iStockPhoto.com is a Calgary-based company, sold to Getty in 2006 for $50 million2.)

I'm always interested in hearing back-room stories of ventures. For example, did you know that iStockPhoto originally was a non-commercial forum-type online photo swap? Me neither. Patrick Lor brought in the notion of selling images for $0.25. But there was some great points, beyond the stories.

My top 4 takeaways:

1. Spend your marketing dollars somewhere that you're competitors aren't. Ideally, somewhere they can't even access.
2. Business ideas need to be simple enough to be explained to get people to explain them on your behalf
3. Timing of being a venture: good = longer, bad = too long.
4. Cash-flow: timing of payments 

Marketing Spend: don't compete with your competitors

This idea hit me as the newest - I hadn't really thought about it before. If you spend your marketing dollars in the same place (Google AdWords, TV, Radio, Print, Outdoor) and you have a similar budget - how are you going to do better?

You might have slightly better marketing: better mix, better targeting. But that's going to be marginal or minimal. If you want outperform your competition you need to be using places that they aren't using.

Even better: use places that your competitors have no access to.

In iStockPhoto's case, they made business cards for photographers who delivered exclusive photos to them. On the back of the business card was a coupon code for iStockPhoto. For all their marketing dollars, Getty & Corbis didn't have access to the same places that those photographers did: handing out advertising business cards at networking events, when meeting clients, etc..

For startups this seems even more critical: startups likely have less money than your competitor's to spend on marketing: not the same amount - so if you compete in the same places, you're starting off with one arm behind your back.

This idea seems simple, yet lots of people don't necessarily execute in this manner.

Simplicity of Business Concepts

If you want people to talk about your business, the story has to be simple enough to repeat. I've talked about this before, but it is always nice to hear re-iterated (and from an external source).

iStockPhoto: affordable royalty-free images2

Make sense? Easy to explain? Yup.

For people to spread your message, the following needs to be true:

1. It needs to be easy to spread (my previous post on this)
2. They need to want to talk about it
3. *It solves other people's problems
4. *People get a benefit when more people know about it
   (in this case, more buyers for their photos)

The final two are not required, but they do help.

iStockPhoto has all these things. No wonder people spread the word about/for them.

Do you wish you had started earlier?

This was a question from the audience. Kelly Thompson had apparently been asked (and re-asked) on a regular basis to join iStockPhoto. Bruce Livingston pestered him for 2 years before Kelly joined.

So, when asked, Kelly - standing on this side of the event - naturally said that he wished had joined earlier (apparently there was an offer of a 50% stake at one point).

There was also some mention that they may have gotten a better deal from Getty had they waited longer.

Which lead me to think:

If you have a good venture, you'll always wish you started earlier and left later.
If you are in a bad venture, it can't be short enough.

Unfortunately, when starting, you don't know which way it'll go. Which is, in my opinion, why it's so important to have the ability to test early and often and then you can make an decision to quit if needed, spending only enough time to give yourself a real chance3. But this could be the topic of another post.

Cash-flow Timing

This is a minor thing but I found it very interesting how Patrick laid out three cash-flow systems (labels mine):

1. Consulting: you get paid 60, 90, or 120 days after your work
2. Retail: you get paid the moment that you hand over the goods
3. Pre-paid: you get paid and, at some future point, you deliver the goods.

iStockPhoto is category4. This is due in part to the small price charged: instead of charging for photos when bought, customers pre-pay because charging $0.25 (photo price when it started, I think $3-5 is current price) is unfeasible, so you spend $15, $20+ at the outset, but only receive $1-4 of goods at that time - you get more goods later.

Nice model if it fits your business. In this case, it fit perfectly.

iStock has now added subscriptions as well - this is also pre-paid, but is slightly different: you have a steady revenue (always a nice thing).

Notes & Links

1. I'm breaking my norm of using a Creative-Commons Licensed photo from Flickr in this blog post and using a royalty-free image I bought on iStock: http://www.istockphoto.com/file_closeup/concepts-and-ideas/6080713-businessman-and-transparency-sheet.php?id=6080713.
2. Press Release: http://www.marketwire.com/press-release/Istockphoto-Inc-NYSE-GYI-579577.html
3. This is likely more true for a "serial entrepreneur." Those that are in it for the idea of it (not just starting a business, but they are most likely only interested in ever starting 1 single business), this may not be as important: you're going to stick it out for 5, 10, 20 years before it succeeds, because it is a cause, not just a business opportunity.
4. This wasn't the way that they described it, but it works (and I can't remember the words that they used). Point is: you (and their audience) can think of a short phrase to sum up iStockPhoto.
   More on that in a previous blog post here: http://jeffreypriebe.blogspot.com/2008/05/make-it-easy-to-share.html
5. More info on the Getty buyout: http://www.flickr.com/photos/thomashawk/279288683/
6. Interview with iStock CEO Bruce Livingstone: http://decker.typepad.com/welcome/2005/01/interview_bruce.html
7. Previous posts on making ideas easy to share:
   • Remember the milk: better tasking than writing on your hand: http://jeffreypriebe.blogspot.com/2008/09/qh-tasking-in-2-words-bad.html
   • The balancing of things that are hard to explain, but interesting to do: http://jeffreypriebe.blogspot.com/2008/07/qh-differentiation-demos.html