Guided Discovery in E-commerce, Curating for Serendipity

May 21, 2012 By 3 Comments

Relevance

a venn diagram

Relevance is one of the most sought after qualities for any kind of content presented to a user. Clicks are a user’s declaration of relevance within our conventional browser UX for presenting content, media, news, and information. Relevance becomes a critical tool for navigating information as the amount of information available on the Internet grows every second. Measured in terms of physical size, we are approaching ‘Nebula‘ scale, measured in lightyears for the amount of information available on the internet today.

Presented with this interstellar scale of information, the challenge in navigating the mass of information is no less daunting than figuring out information-entropy (Shannon entropy) of online content filtered/ranked by relevance. Put another way, all information is high entropy (high uncertainty) unless sorted, presented by relevance to each user.

Ideally, all content should be customized such that the presented content is relevant to that particular user and more likely to engage the user without requiring inefficient actions (searching, clicking, scrolling) on the part of the user or requiring a constant declaration of relevance on every tab and every site.

In this post, I attempt to understand how relevance works for content recommendations on some of the big sites and examine applying this model of determining relevance to commerce online.

In the context of relevancy, the 2D wall of content at Pinterest is very conducive to more browsing but not necessarily deeper engagement as content is not sorted (or sortable) by relevance. While categories help, they are not personalized and presentation of content does not sense any other evanescent declaration of user interest on their site or other sites. Thus, it is clear that:

Relevance ! = Social Proof

Quora’s UX surfaces high quality but not necessarily high relevance by relying on democratic votes (1 vote per user regardless of their Quora-ranking/clout/points). As their product evolves, I hope we will see more relevance – perhaps by picking topics as well people of interest. This is a form of declared relevance relying on declaration made by the user, not necessarily determined by a user’s ongoing interaction with content on the site. The takeaway:

Relevance ! = Quality of Content

Twitter’s #Discover tab is the most advanced relevance-filter yet with its mix of tweets by people you follow as well as people who share your interests as determined by cookie tracking on sites you visit + interests of people you follow. I think this is the closest determination (ongoing) of relevance in an online product.

Relevance = A mix of [Social Proof + Quality + Personalized-Interest matched Content + ...]

Relevance and Commerce: curating for serendipity

While Google, Twitter, and to some extent Quora address relevance for the world’s entire corpus of information, e-commerce companies can and should apply similar techniques to determine the right products for the right buyers. While narrowing down choices presented to a potential buyer or browser, the content selection should permit some amount of delightful discovery. This need for counterbalancing narrow, algorithmic selection speaks to the emotional part of a user’s browsing experience.

Paraphrasing Tufte, all design is choice – and a failure to engineer the correct information flow results in clutter and confusion. The balancing act for narrow relevance in commerce is serendipity – let the user discover adjacent information/products albeit in a delightful way. And thats where I think we’re headed in commerce – augmenting relevance with sufficient serendipity to deliver the right user experience. While algorithms do well with determination and tracking social proof, quality, personalization using user-interests, serendipity requires blending in a measure of user and domain-expert curation. And, therefore

Relevance + Serendipity = Algorithms & Machine Learning + User curation + Expert Curation

Within online commerce, there have been three broad waves of innovation:

Wave 1: Digitization of product information, browsing, and fulfilment

Amazon is clearly the best example of this class of innovation with its broadly horizontal digitization of product information followed by a simple layer of product-interest matching and recommendations. If you saw product X, you may also be interested in product Y where Y may be the most viewed/purchased item along with X. There are no social or other user-level connections that Amazon seems to use other than the user’s history on its site. Currently it presents six items in at least six categories if I visit the homepage (logged in). It hasn’t even asked me a Hunch.com style wizard to narrow down ‘recommendations’ or increase relevance to me.

Wave 2: Propelling discovery by economic compulsion (ok, by surfing the curves of indifference)

Groupon and other daily-deal sites induce discovery by providing an economic compulsion for users. These intermediaries harvest a user at their point of indifference in the face of compelling economic value for the presented product. With enough data points, Groupon et al will have their own version of consumer demand curves. I expect they will move beyond offering a single daily-deal towards a smorgasbord of carefully chosen goods that are seen as acceptable substitutes given a certain budget constraint. They certainly have vast consumer purchase data to do so within local commerce – a valuable dataset vs. Amazon which is purely online. Groupon Goods, I hope is the first move in this direction. If I was at Groupon, I would hire Economists as well as statisticians and data-scientists to figure out indifference curves and match it to a variety of local commerce.

Wave 3: Guided discovery – engineering serendipity

Faced with an unprecedented data storm, consumers need/want fewer choices but the right choices. Balancing this need for narrow personalization is serendipity. Serendipity is pleasant and welcome because it helps users make a useful discovery even though they were not explicitly not looking for it. This middle ground is guided discovery. Lets examine how information/content sites deal with engineering for serendipity.

Serendipity doesn’t happen on a Google search results page as a user (and PageRank) explicitly rules it out in favor of surfacing the information users are searching for from a sea of information.

Amazon recommendations hint at some serendipity but is strictly dependent on user’s previous purchases, items browsed, and most popular items related to a user’s purchases. The form of guided discovery on Amazon doesn’t leverage a user’s behavior or interest-profiles that exist elsewhere.

Pinterest at this point (May 2012) is random serendipity which is not very time-efficient pursuit for the user though it yields great time-on-site and other vanity metrics for Pinterest. In effect, there is no incentive for Pinterest (yet) to boost relevance vs. pageviews. Guided discovery only takes place along canned categories or along content classified by the users in various boards.

Quora in some ways is guided-serendipity by walking the user along the axis of quality content. The only axis of serendipitous discovery is following people and their Questions/Answers/Boards/Posts. If one could do Quora score/votes based recommendations for products/brands and integrate some level of sentiment analysis of Quora answers, it could become a compelling front-end for products with better insights vs. Consumer Reports.

Twitter brings together some nice elements of guided discovery by mapping interests, people, and recent events/topics of interest to your chosen geography at city/national levels of the twitterverse. I think Twitter is ideally placed to guide users towards all kinds of media in addition to news and discussions. It can help me find media, content, news, and information based on:

  • Interests I follow (on/off Twitter)
  • People I follow
  • Interests of People I follow
  • Activities of People I follow (people followed by them, their retweets, favorites, …)

As far as I know, there are no equivalent efforts in online commerce applying data mining based recommendations to guide the users towards the right mix of guided and serendipitous discovery. Merely suggesting some ‘recommendations’ in a side-bar don’t suffice. What we need is a relevance based content-display and navigation system.

This I believe is the next big wave of commerce – data curated commerce to help the users browse less, find more.

Filed Under: Daily Deal Blog, Team Blogs

Weekly Online Shopping News – March 21

March 21, 2012 By Leave a Comment

Apple as the Ultimate Company and Ultimate Stock

Very few companies come along and have an affect on hundreds of millions of people in a positive way like Apple Computer has. The company yesterday announced that not only will it begin to pay dividends, but it is also buying back shares of its own stock. The company is planning on spending $10 billion alone for share buybacks which will equate to only about 1.5% of all the outstanding shares and it will take place over a three year time frame.

For the rest of the article from Daily Deal Media, click here:

Amazon’s Key to Beating Groupon in the Daily Deals Space Is Its 164 Million Paying Customers

Amazon’s online catalog offers millions of everyday items for sale, but how many consumers think of visiting Amazon to buy a meal in a restaurant or a haircut at the local salon?

Over the past year, Amazon has slowly been entering that space, aiming to go up against industry-leading Groupon.

So far, it has done fairly well. For example, Amazon is the fourth-largest daily deal provider in the U.S., following Groupon, LivingSocial and Travelzoo, according to Yipit, a deal aggregator that closely tracks the major players.

For the rest of the article from All Things Digital, click here:

Apple’s Record iPad Sales Provide Clues About Today’s Consumers

On Monday morning, CEO Tim Cook announced that Apple will begin paying a quarterly dividend of $2.65 per share starting in July. Apple also announced plans to buy back nearly $10 billion worth of the company’s shares.

Despite this major announcement regarding Apple’s plans for its $100 billion in cash reserves, Wall Street watchers were interested in another subject that Cook refused to discuss in detail. Referring to last Friday’s iPad launch as a monumentally successful one, the Apple chief failed to provide any sales data.

Not surprisingly, this lack of information irked a multitude of Apple fans who suspected sales history was indeed made over the weekend – history that they helped to make as new iPad owners.

For the rest of the article from Daily Deal Media, click here:

Wal-Mart Gears Up Online as Customers Defect to Amazon

Wal-Mart Stores Inc.’s (WMT) customers were latecomers to online shopping. Now increasingly they’re trolling for deals at Amazon.com Inc., (AMZN) putting pressure on Wal- Mart to fix its lagging e-commerce operation.

Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. After all, only about a quarter of Wal-Mart customers shopped at Amazon, according to data from the research firm Kantar Retail. Now half say they do.

For the rest of the article from Bloomberg Business, click here:

Ebates Is The Easiest, Most Foolproof Way To Get Paid To Shop

I recently deposited a check for $31.07 I got for shopping. And I didn’t even leave the house.

I earn extra money just about every time I shop online. A company called Ebates cuts me a check every few months. Ebates is what’s known as a “cash-back website,” and there are many of them.

(More on that later.) The checks they cut are similar to mail-in rebate checks, except I don’t have to fill out a rebate form, photocopy a UPC, and spend 45 cents to snail-mail it all to the manufacturer. All I have to do is visit Ebates.com and log in before making a purchase.

For the rest of the article from Business Insider, click here:

Online Shopping Twitter Accounts To Follow:

 

 

 

 

 

Filed Under: Uncategorized

Weekend Online Shopping News Round Up – March 11

March 11, 2012 By Leave a Comment

Women Driving Online Shopping, Profit Growth

Women, who spend more time online than men, are such powerful drivers of Internet shopping and other commerce on the Web that their loyalty is crucial to consumer company profits, according to a new report.

While they make up 51 per cent of the population in the United States, women control or influence 85 per cent of all buying decisions, giving them clout as business moves increasingly into the virtual world, analysts with New York-based Needham & said in the report

For the rest of the article from Times of Man, click here:

What Your Business Can Learn From Online Shoppers [Infographic]

Invesp has put out an interesting infographic providing analysis of online consumer behavior. The company says it should help businesses answer questions about online shopper demographics, why people buy online, common reasons why they don’t and various spending trends in different sectors of retail.

The infographic compiles data from eMarketer and InternetRetailer.com. According to the data they’re working with, the e-tail market in the U.S. will reach $279 Billion by 2015. Mobile commerce, the firm says, will reach $28.7 Billion. A bolder prediction yet, social media commerce sales will reach $30 Billion. We’ll see.

For the rest of the article from Web Pro News, click here:

Living Social Is the First of Daily Dealers with a Branded Credit Card

When you consider that the daily dealing industry as we know it is still in it’s infancy, you have to believe that the companies involved will follow similar tracks that other successful Fortune 500 companies have traveled to build brand name recognition. So don’t be surprised when you see ‘special package deals’, ‘VIP’ memberships or even daily deal branded credit cards.

For the rest of the article from Daily Deal Media, click here:

Aisle50 Hopes to Bring Daily Dealing Discounts to Grocery Store Shoppers

One of the newest companies to merge onto the daily deal highway is Aisle50. The founders hope they will be able to save consumers money on groceries by offering similar discounts of 30% to 60% that seems to have become the norm in the daily dealing industry.

Pittsburgh’s own Target 11 Consumer Investigative reporter Robin Taylor broke the story and explained how the company works and featured a real time consumer taking advantage of one of the deals. So far, Aisle50 has landed Shop ‘n Save as a partner and is featuring Kleenex facial tissue.

For the rest of the article from Yahoo!, click here:

Online Shopping Twitter Account You Should Follow

Filed Under: Uncategorized

Weekend Online Shopping News Round Up – March 4

March 4, 2012 By Leave a Comment

10 Reasons I No Longer Shop in Stores

Online shopping is nothing new and neither are LTOs (Limited Time Offers). Even social media is becoming the norm. But combine the three? Now your have a recipe that’s as hot and mouth watering as the taste of fresh foie gras at your favorite french restaurant.

Here are 10 examples of this deadly triple treat, leading to why brick and mortar is becoming a distant memory.

For the rest of the article from Business 2 Community, click here:

Merchants Like Macy’s Herald Square Store, React to Rise in Online Retail

Gilt Groupe CEO Kevin Ryan argues that bricks-and-mortar retail shops are severely threatened by Amazon and other online-only retailers, telling The Economist that he sees “no evidence that there are big opportunities for traditional retailers in online retail.” Retail sales in America are relatively stagnant, so the double-digit growth of online sellers is coming at the expense of physical shops, The Economist notes.

For the rest of the article from NY Convergence, click here:

Tesco and Rivals Turn Against Stores as internet Shopping Takes Over

If you don’t already shop online, we think it’s time you took the plunge. Shopping online means you get variety at the touch of a button, and fashion at your fingertips has never been more appealing. From jumpers to the jumpsuit, t-shirts to tops and trainers, online shopping is a girl’s best friend. Shopping online is a little like dashing from shop to shop – without all the effort. You can find fashion you love, compare it and even find it cheaper elsewhere setting foot outside your home.

For the rest of the article from getreading, click here:

Facebook, Twitter Influence Psychology of Shopping

If you’ve shopped on sites like Amazon or eBay in recent memory, you’ve likely noticed the appearance of Twitter or Facebook icons on the webpage encouraging you to share the product info with your online social networks. Given the presence of those icons on the product page, though, have you ever found yourself second-guessing the privacy of your purchase as a wave of unchecked paranoia swept over you because maybe, just maybe you had accidentally linked to your Facebook or Twitter account and news of your purchase would soon be broadcast to your friends and colleagues?

For the rest of the article from Yahoo!, click here:

Online Shopping Twitter Account You Should Follow

 

 

 

 

 

Filed Under: Uncategorized

Weekend Online Shopping News Round Up – February 19

February 19, 2012 By Leave a Comment

Facial recognition – marketing of the future

Online shopping and advertising already do it, take information based on the pages or products that a person had looked at and provide advertisements, or links to other products that may also interest that person.

In just a few years shops could use facial recognition technology to do the same.A Perth professor is working on research that he hopes could play a role in creating this technology.

Associate Professor Ajmal Mian from the University of Western Australia first became interested in facial recognition technology when doing his PHD which he completed in 2006.

For the rest of the article from WA Today, click here:

Fab.com and the Fetish for Design

If Ayn Rand planted the seed of the power of the individual theoretically, Steve Jobs took it to the level of demonstration. In the matter of “design”, there may be a general acceptance or trust factor associated with an individual. Jason Goldberg and Bradford Shellhammer, co-founders of the flash sales site, Fab.com, seem to have picked up the threads from where Jobs left off. They are riding on that wave of trust they have been able to start by showing they know what people want. So, they pick up the stuff that we don’t know we want until they show it to us. The vision, if at all, is only to be the world’s greatest source of design.

For the rest of the article from Daily Deal Media, click here:

LivingSocial is Evolving: Opening a New Brick and Mortar Store

Welcome to LivingSocial’s very first Brick and Mortar Store.

This new facility, a 28,000-square-foot six-story building located on 918 F Street, boasts a number of amenities including a kitchen, a demonstration kitchen for up to 36 people, three flex spaces that can be turned into dining rooms, dance studios, classes, craft workshops, and a basement bar for mixology classes or tastings.

For the rest of the article from InTheCapital, click here:

Take the plunge and learn to love online shopping

If you don’t already shop online, we think it’s time you took the plunge. Shopping online means you get variety at the touch of a button, and fashion at your fingertips has never been more appealing. From jumpers to the jumpsuit, t-shirts to tops and trainers, online shopping is a girl’s best friend. Shopping online is a little like dashing from shop to shop – without all the effort. You can find fashion you love, compare it and even find it cheaper elsewhere setting foot outside your home.

For the rest of the article from getreading, click here:

The Latest Trend In Online Shopping

Online retail is exploding in Australia, and we’re still only at the starting blocks. 59% of Australians now actively participate in online shopping, which accounted for around $13 Billion of sales last year. Even the big, traditional bricks and mortar outlets as big as Woolworths and David Jones are experiencing huge growth in their online sales.

As the online retail community grows by the day, so does the range of customisable products available. Tattoo’s and t-shirts, sure, but since when can you design your own jewellery, mix your own muesli, tailor your own suit and cobble your own shoes? It’s the newest craze in the online retailing phenomenon, combining the best of the internet’s ability for businesses and shoppers.

For the rest of the article from Yahoo!, click here:

Online Shopping Twitter Accounts to Follow:

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Weekend Online Shopping News Round Up – February 12

February 12, 2012 By Leave a Comment

Tim O’Shaughnessy on LivingSocial’s Revenues and the 5 Controversies that Surround Daily Deals

Following the daily deal industry is enjoyable yet challenging. I had hoped to get an idea how Groupon may fare by finding out how LivingSocial was doing. Sometimes you have to listen to one conference call in order to gain insight into another’s business. Such was the case with Amazon and LivingSocial. In order to find out how LivingSocial was doing, I had to listen in on the Amazon quarterly conference call. This is where problems can arise and information, although accurate, may not paint an accurate picture.

For the rest of the article from DailyDealMedia, click here:

Groupon Hires Former Hill & Knowlton CEO Paul Taaffe

Groupon has hired PR executive Paul Taaffe to run communications for the daily-deal site.

He succeeds Brad Williams, the veteran of eBay and Yahoo who came to Groupon last year and stayed just a few months before leaving. Mr. Taaffe, 50, was previously chairman and CEO of WPP-owned PR shop Hill & Knowlton, before he resigned from the post in January 2011. The native Australian was named president of the firm in 1998, then promoted to chairman-CEO in 2002.

For the rest of the article from Ad Age Digital, click here:

Touch-screens create online shopping experiences at stores

Tablet users in the U.K. are more likely to buy products online via their device, and to remember and respond to advertising, than smartphone users, market research firm Nielsen revealed on Wednesday.

“The connected device is moving from the discovery phase to the purchase phase,” David Gosen, European managing director of telecoms practice at Nielsen told Total Telecom earlier this week.

“The smartphone we know was the first step in changing the consumer behaviour,” he said. But the tablet “got the user interface absolutely right.”

For the rest of the article from Total Telecom, click here:

Real Amazon Store ‘Would Make Perfect Sense’

Amazon is apparently planning to open a high street shop before the end of the year – and analysts have said such a move would make “perfect sense”.

The successful online business will open the store in Seattle, which is where Amazon has its headquarters, according to the Good E Reader blog.

Analysts said the rumoured move may be inspired by the success of Apple Inc, which has hundreds of its own glitzy stores to show off iPhones, iPads and other gadgets.

The shop is expected to concentrate on selling books from Amazon’s own growing line of publishing, as well as Kindles and other e-readers, the report suggests.

For the rest of the article from Sky News, click here:

PayPal rolls out in-store payment at Bay Area Home Depot stores

In its first test of an ambitious effort to change how people make purchases, online payments giant PayPal has set up in-store checkout systems at every Home Depot store in the Bay Area that give customers the option of paying with just their mobile phone number and a special code.

“You don’t need to even bring your wallet,” said Anuj Nayar, a spokesman for PayPal, which announced earlier it plans to introduce a similar system in 20 brand-name national retailers by the end of the year. Home Depot is the first.

For the rest of the article from Mercury News, click here:

Online Shopping Twitter Accounts to Follow:

 

Syfto is the new way to find, follow, and buy deals

Connect with me on Google, Twitter, or Victor[at]syfto[dot]com

Filed Under: Uncategorized

Weekend Online Shopping News Round Up – February 3

February 3, 2012 By Leave a Comment

Tech company shares jump, riding on Facebook’s coattails

Groupon Inc shares jumped to their highest level of 2012 today as the daily deal company got a boost from social networking euphoria sparked by Facebook’s IPO filing. Facebook filed to raise about $5 billion yesterday in what would be the largest Internet IPO ever.

A possible valuation of $75 billion to $100 billion for the world’s largest social networking company encouraged some investors to lift valuation estimates on other companies in the sector, according to Sameet Sinha, an analyst at B. Riley & Co.

For the rest of the article from TVNZ, click here:

Marc Andresseen More Than Doubles His Firm’s Assets

At a time when the largest firms are getting larger, and the mid-size ones are shrinking, Andreessen Horowitz is claiming its spot in the winner’s circle.

The venture capital firm, founded by Marc Andreessen, Netscape’s co-founder, confirmed on Tuesday that it had raised $1.5 billion for its third overall fund, its largest fund to date. As previously reported by DealBook, the fund consists of a $900 million main fund and a $600 million parallel fund. Like its previous funds, Andreessen Horowitz will be focused on consumer and enterprise technology businesses.

For the rest of the article from NY Times, click here:

Google Acquires 79 Companies in 2011 for Under $2 Billion

Last year was a busy year for Google in the acquisition department. The mega internet information provider forked out $1.97 billion in cash and stock in 2011 to acquire 79 companies. The largest that was added to the Google portfolio was ITA Software, a bargain at only $676 million.

It turns out that Google had to jump through some hoops for the Department of Justice (DOJ) in order to get the ITA Software deal closed. There was concern that Google might monopolize the travel search arena. Kayak, Expedia, Microsoft and several others protested the acquisition to no avail. The DOJ cleared the venture in April 2011.

For the rest of the article from Daily Deal Media, click here:

Zappos Hacked: What You Need to Know

Zappos.com – the online source for shoes – was the victim of an attack that compromised account information for millions of customers. Zappos customers need to understand what is at stake, and be on alert for suspicious or malicious activity resulting from the attack.

In a letter to Zappos customers, CEO Tony Hsieh explains that the site was hacked, and that information including names, email addresses, billing and shipping addresses, phone numbers, the last four digits of credit card numbers, and encrypted passwords may have been exposed. The good news, according to Hsieh, is that the database storing actual credit card and payment data was not breached.

For the rest of the article from PCWorld, click here:

Super Bowl Tech Advertisers Re-Up Despite $3.5 Mil Price

The Super Bowl continues to draw a small group of game tech companies willing to pay escalating prices to run ads during the big TV event.

At least four tech companies have confirmed they’ll be advertising on Sunday, and it’s at least the fifth straight year for each of these advertisers: CareerBuilder.com, Cars.com, E-Trade Financial (ETFC) and GoDaddy.com.

But other tech firms that advertised last year or in earlier years have opted to stay on the sidelines. Daily deal company LivingSocial is out after appearing for the first time last year. Monster Worldwide (MWW), which last advertised in the Super Bowl in 2009, also will pass. And smartphone maker Motorola Mobility Holdings (MMI), which is in the process of being acquired by search leader Google (GOOG), is out this year after backing the game for the past two years.

For the rest of the article from INVESTORS.com, click here:

Online Shopping Twitter Accounts to Follow:

 

Syfto is the new way to find, follow, and buy deals

Connect with me on Google, Twitter, or Victor[at]syfto[dot]com

Filed Under: Daily Deal Blog Tagged With: , , , ,

Facebook Lessons for Startups & Founders

February 3, 2012 By Leave a Comment

Facebook filed their S-1 with SEC on February 1, 2012 and triggered yet another round of discussions in the valley digirati and digirazzi alike.  From computations of founder stakes to opinions on investment, tech and popular media made sure no one missed it any aspects of the filing.

So what does it mean (If anything) for current and future founders of tech startups? Success at this scale – adoption, financial success, and pioneering a new segment of communications is rare and deserves much praise. The founders in this case – from Zuckerberg to Parker, Moskovitz, and even the Winklevii deserve all the praise they get for playing a role in the success.

Your first few employee matter a lot more than you think

I would also like to point out the critical role played by the first tens of engineers (hackers if you will) in building Facebook. Less heralded and often ignored all together by the media, this corps of engineers in my opinion deserves as much praise as the ones grabbing headlines in the press. Without the efforts of this group, Facebook could not have made it – founder foresight/passion/skills notwithstanding. Referred to as ‘employees’ this group is as much of a co-founder as ‘the founder’ himself. They took nearly the same risks, likely contributed as much to product, platform, and technology, and helped it get from its early success to a product whose expansion beyond .edu domain was one of the most eagerly awaited consumer product introductions ever.

For founders, the aspects worth emulating aren’t the ones highlighted by blogs and media today – try and focus on the early parts of the arc of Facebook’s success. You will find many of the traits espoused by Eric Ries and Steve Blank when you examine the first year or so at Facebook (2004-2006). Some of the ones that stood out for me:

Build fast, release early, Find your Market-fit.

Famous for putting out the first iteration of the kernel of ‘TheFacebook’ in a week, this is a great example of lean development and testing market-fit. It wasn’t the first iteration either – Facemash which was a hot-or-not style site/application that Zuckerberg built prior to Facebook at Harvard and saw immediate adoption. Remember that hot-or-not was a circa 2000 phenomenon and Facebook’s first iteration was in 2004.

Focus on Users; user-adoption, user-experience.

In 2005, the valley was hearing whispers about Facebook and how Accel “went and got the deal” at an unheard of valuation (remember we were just coming off the dark years of 2002-2003), no one talked about Facebook’s technology or its platform or how it may one day be the dominant social-connector and app-platform.  But the first line one heard about Facebook was how many users they had, how much time these users were spending on Facebook, and the rapid growth rate that was easily the highest for any consumer app. This was a dramatic contrast with Google where the talk was about the outstanding infrastructure and how that gives them a unique advantage vs. everyone else in search and advertising. Unless you are building an application that needs to invent new systems and infrastructure, stay focused on users. Adoption will enable you to invent a platform and plenty of technology once you’re successful.

Surround yourself with people smarter than you

Graduating from a Harvard dorm room to University Avenue in Palo Alto, Facebook continued to find and learn from some of the best in their domain – whether it was Zuckerberg learning from Don Graham (Washington Post) or the stellar list of its board members and investors, it didn’t just happen by accident. I am not saying Zuckerberg is not smart, I am saying one of his smartest moves was to find people smarter than him at that point in time about an aspect of his startup. For founders, the clear lesson is find and pitch the smartest people you can find. I suggest a simple approach to accomplishing it:

When you meet prospective VCs (Partners or Associates) or Advisors, ask them to introduce you to two other people that they think are the smartest in the business.  Be persistent and chase down these introductions, turn them in to meetings, and ask them to introduce you to two more in turn.  In a few months you should be able to meet with enough people to learn from and who can be potential investors, advisors, or informal-advisors to your startup.

Think long term

This one is the easiest point to state and the hardest to follow. I believe there is a fair value at every step for a startup and the founders if they have taken angel/venture money. And  they must be responsible in considering any offers that come their way. I also believe there is much (realizable) value in finding a way not to take that offer. Each such situation is unique but do consider that if you can find a way to build more value, you will have a chance to deliver life-changing rewards for yourself, your team, and your investors.

You know what’s cool? A Billion users. 

Building a startup that delivers a Billion+ in profits eight years after starting is Cool. But do you know what’s really cool – that Zuckerberg’s efforts changed and enriched the lives of thousands of employees and millions of users. A founder’s measure isn’t the capital they return or create, it is the number of lives they touch, improve, and change.

If all you wanted to make was money, there are easier paths to realize that goal. Be a founder if you want to make a difference. Money will follow.

//

Filed Under: Startups, Team Blogs Tagged With: , , ,

On Startup Values

January 30, 2012 By Leave a Comment

In Silicon Valley, ‘startup’ is one of the most common and the most valuable word one hears about town. Freely bandied about by those who were once in a startup, are currently in a startup or want to start one, the word is a badge of pride for those who have experienced it.

Less understood is what goes in to creating, sustaining, and growing a startup.  Founders, money, employees, investors, technology and products are necessary but not sufficient ingredients for startup success. One of the crucial ingredients one rarely hears about and is usually not understood by most is Startup Values.

Values is not capital you can raise from VCs. Values are reflected by a few critical qualities founders and startup employees must either have or recognize and cultivate. Values are not transplantable a few months or years in to the journey. More than a few (very smart) founders I know dismiss it by saying “We will focus on values once we’re successful”. Wrong! Startup values are like a seed you plant on day one alongside your ideas and it needs the same care and nurture as your technology and products.

I have always felt that the key startup values are:

Honesty

Honesty in a startup primarily means interpersonal honesty between all the employees. Honesty is also the fabric that links objective measurement of a startup’s progress along chosen metrics and the startup’s stated goals.  In between founders and employees and between multiple founders in the case of cofounders, honesty is the only way to sustain a working relationship.

How to get it right: Communications is a key component of honesty. Founders and CEOs must ensure everyone understands where they are, where they are going, and how they are going to get there. You can never communicate enough and email is perhaps the poorest mode of such communication. In a small team, a 5 minute sync meeting every day or 15 minutes every week should suffice.

How do you know its not working: When you find yourself ‘marketing’ or spinning the truth to your coworkers, you must have the courage to admit you’re not being honest. In a startup context, some typical phrases that should serve as warning signs include “It will be easy to raise money”, “Hockey stick growth is just a couple of features away” or “We can always acquire users through advertising” or “There will be lots of buyers for the company if you get to X number of users”. When employees hear such things from their CEO or founders, ask questions. If startups hear such words from their investors, take a long hard look at their track record and at your balance sheet.

Flexibility

In a startup, you often recruit friends, referrals from friends, and those you respect to the mission at hand. Flexibility doesn’t just apply to founders/CEOs but to everyone. Venturing in to areas adjacent to your area-of-comfort as far as your skills go will be often required. A good startup team at work is like an ongoing game of 3D twister. Flexibility, once it becomes part of your startup’s DNA, makes it better at evolution as well as adapting to challenges.

How to get it right: Be open when CEOs/founders ask you to do something beyond your area of expertise or experience. Voice your fears openly, express your challenges clearly. Ask for help when you need it, offer help when you see someone needing it.

How do you know its not working: When you hear CEOs/founders/employees express “Thats not what I was hired for”, it should serve as an early warning sign. If your startup is not good at handling failure (see below), it will be hard to build a culture of flexibility.

Creativity

A startup is (most of the time) an irrational pursuit with a high probability of not following its initial trajectory. Creativity, exercised at all levels from infrastructure/technology to design & delivery, is the most powerful value you can have to combat existing products you compete with or to highlight the one thing you excel at versus all others. It is an essential part that improves flexibility and helps a startup to navigate competition that may be better capitalized or entrenched. At a personal level, creativity is an everyday expression of how things get done in a startup with limited resources and money.

How to get it right: If a startup, prior to success (users or revenue) can point to something unique that they do that others do not, it is likely creativity that is at work.

How do you know its not working: If your coworkers, founders or CEOs talk too much about “This is how I did things at company XYZ” when it comes to talking technology, products, or your market, you should fear that your startup lacks creativity. More than any other area, past work is really not a good indicator of the future in startup.

Failure with grace

This is perhaps the most talked about ‘lean’ (e.g. smart) aspect of a startup’s journey from idea to success and may be the most misunderstood. No one likes to fail even though fail-fast, fail-often, fail-early is an easy set of words to say. I believe failure with grace is not just for complex systems. Seemingly trivial interactions between team members are often predicated on success, not failure and unless everyone in the team in a startup can freely (and honestly) express failure, re-calibrate, and have a chance of re-delivering, each failure will be costly in an interpersonal sense.

How to get it right: All employees must be comfortable in saying “I failed at XYZ and here’s how I am going to get it right”. When there is no interpersonal unease or ‘cost’ to saying/hearing it, you will know your team is on the right path to integrate failure as a navigational mechanism to find the right direction.

How do you know its not working: When someone in the team fails ‘silently’ at a task or two and begins to find excuses vs. ‘claiming the failure’ is a dependable sign of lack of this startup value. Silent failures are deadly in all kinds of systems, and deadlier in a startup.  A failure not owned at the first sign of it is a toxic seed that will threaten startup success.

Measurable heuristics

Every startup is based on a few early ideas about how their world ought to be. Startups must be honest with themselves to figure out the right measurements for their heuristics about how their product will evolve.  Measurement and heuristics are the yin and yang of startup ideas.  One cannot exist without the other or has no meaning without the other.  A right balance between these two is often the hardest value to get right in a startup.  Too much heuristics to guide you may mean unconstrained wander before you find your market while too much measurement will surely constrain good thinking with possible false positives and negatives. Measurement confirms innovation, but rarely initiates it.

How to get it right: Teams must have the discipline to listen to measurements for determining growth and listen to heuristic thinking to set the first vectors for experimentation.

How do you know its not working: Each discussion of a new feature, product, or change must be accompanied by “how will we know its working” discussion. Success is not pornography that you will know it when you see it. If you cannot measure success, it is likely you do not yet know how to go to there.

I hope you found something worth thinking about in this post and I’d love to hear from you (comments below or tweet  @rohit_x_).

In a related post, I will be writing about working with VCs that share these values and help your startup enhance them.

Filed Under: Startups, Team Blogs

Weekly Online Shopping News Round Up – January 27

January 27, 2012 By Leave a Comment

Daily Deals Take Australia by Storm

Since January 26th is Australia Day, also know as the national day of Australia (ANA) it is a good time to take a quick look at daily deals in Australia. The daily deal phenomenon has taken Australia by storm. There are more than a 100 daily deal sites based in Australia and more than 31 companies that aggregate their choices of the best Australian daily deals. Like us, our neighbors ”down under” love to save money and find daily deals to be an ideal way to stretch the family budget.

Leisure and business travelers to Australia discover Aussie daily deal sites to be handy money saving tools when planning a trip. Smart travel planners find discounted daily deals for car rentals, hotels, restaurants, bed and breakfast establishments, cultural events, theater and movies.

For the rest of the article from Daily Deal Media, click here:

This Two-Year-Old Startup Is Already Generating $80 Million Off … Coupons?

Whaleshark Media, a giant conglomeration of sites that offer free deals to shoppers, has raised a whopping $300 million and it’s bringing in more than $80 million in revenue each year.

It’s not like a Groupon through — this company specializes in sites that have coupon codes and promotional codes for sites like Walmart.com and Target.com. Whaleshark Media focuses on huge retailers instead of coupons for services like Groupon.

For the rest of the article from Business Insider, click here:

Peixe Urbano Boosts Cash and Hiring to Beat Groupon in Brazil

Peixe Urbano, the largest Brazilian online daily-deal provider, is loading up on capital, recruiting U.S. engineers and investing in new products to fend off Groupon Inc.’s expansion on its home turf.

Following an investment from Morgan Stanley and T. Rowe Price Group Inc. earlier this month, co-founder Alex Tabor is spending this week in California, looking for talented computer scientists interested in moving to Brazil. He’s recruiting at Stanford University, the University of California, Berkeley, and the California Institute of Technology.

For more on this article from Bloomberg, click here:

PulseTV.com Inks Deal with Kgbdeals

E-commerce and daily deal company, PulseTV.com and New York based Kgbdeals.com announced plans to offer selected products from PulseTV’s inventory to Kgbdeal’s national daily deal customer base. PulseTV’s co-founder and General Manager, Anisa Ali said, “We have been selling to consumers via the Internet since 1998 and offering daily deals to our customer base since 2007. Expanding our product distribution through relationships with companies like Kgbdeals allows us to reach new consumers. Since we ship from our own warehouse, we can utilize our existing infrastructure to accommodate the influx of new orders.”

For the rest of the article from PRWeb, click here:

LivingSocial Now At 5,000 Employees, Half The Size Of Groupon

A few days ago, at the DLD conference, Groupon CEO Andrew Mason revealed that his three-year-old daily deal company now has 10,000 employees, with about 70 percent overseas. What about LivingSocial, the No. 2 daily deal company? Tim O’Shaughnessy told me yesterday the company is now at 5,000 employees worldwide, with “just under half” in the U.S.

While he won’t reveal LivingSocial’s revenues (the company is still private, and just raised another $176 million in December), he says: “We’ve grown very significantly in the last 12 months. We entered 2011 with 3 countries,, now we are at more than 20, with 60 million members worldwide, and just around 5,000 employees worldwide. We have been able to aggressively grow the business.”

For the rest of the article from Tech Crunch, click here:

Online Shopping Twitter Accounts to Follow:

Syfto is the new way to find, follow, and buy deals

Connect with me on Google, Twitter, or Victor[at]syfto[dot]com

Filed Under: Uncategorized
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