My first month with Apple Watch. I like it.

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I’m not the kind of person that buys technology to see if it works and fits their lifestyle. I have to picture how I’ll use that tech and do an ROI in my mind if it’s worth it or not. Even though I consider myself an earlier adopter, I’m also one who doesn’t like to waste money. The Apple Watch was a big gamble for me. I wanted partially for the tech, partially for the fashion statement. I bent my rules of having clear tech-ROI and I don’t regret, it was worth it.

The good

A watch I can wear
It has been a while since I wore a real watch. I used the Basis B1 for a while when it came out. The Basis wasn’t a good watch. The Apple Watch is an excellent watch. It fits well in your arm; it’s easy to see the time, etc. It’s also very beautifully built, with rounded corners and the right balance of glass, metal and rubber (I have the black sports edition).

Notifications
I was worried the bloggers and reporters were whining about how distracting the notifications were, and they had to customize the crap out of it. Bullshit. These reporters/bloggers are absolutely outside of the norm and probably get notifications every minute from the many apps they use. The default notifications are enough. Not only that, but since I get my phone’s notification on my watch (for all apps on my phone), I don’t have to reach to my phone as often. This has increased my productivity since the notification is not actionable on the watch, but at least I see it, and that satisfy my dopamine needs.

Timer
timer-app-for-apple-watchWho would have thought that this is the killer feature for me? Well, it is. Although the Timer app is not very sophisticated, I use it a lot. Primarily when I’m cooking, but also when I give N-minute warnings to my kids to stop playing video games or to get ready to leave. If the Timer app supported multiple timers, it would be even better.

Battery
The “experts” were so paranoid about Battery life saying it would be a weak point, and you’d have to charge it during the day. Another piece of expert BS. I use it a lot throughout the day. I go running for an hour or more with it, I check my heart rate several times during the day and at the end of the day (after 12-16 hours of usage) the battery is never below 50%. More often than not, at the end of the day the battery is in the 60-65% range.

Neat features
I would not buy the watch just because of these features, but they add up to the value prop:

  • Remote control for the iPhone camera.
  • Weather app & current temperature on the watch face.
  • Heart Rate: I had very low expectations of this since I wore the Basis for so long, and the HR of the Basis wasn’t very accurate, particularly during physical activity. The Apple Watch HR is much, much better. I still haven’t abandoned my Wahoo HR strap, though.• Steps.
  • Steps.
  • Apple Pay. It’s neat. Neater than using Apple Pay on the phone. Plus people’s reaction is also priceless.
  • Water resistant.

The bad

Fitness App & functionality
Apple-Watch-FitnessWhat a piece of crap. Both, what happens in the watch and the companion mobile app. I probably have a higher bar for this since I’ve been in this industry for 4+ years, but the built-in fitness functionality is nearly useless (except for counting steps). I could give a two-page long list of problems with this. The bottom line is that it doesn’t compute even close your level of physical activity, and that’s a deal breaker.

Here are a few fun things: Even though I work at a standing desk the watch is constantly notifying me to stand. Any activity but running is not properly accounted in calories or the “minutes of activities” – I did paddle board for one hour, and the watch didn’t register at all. The way it measures calories is very wonky (that’s the technical term) – instead of going for all day calories burn they went to calories burn during exercise only, but since it doesn’t detect exercise well it also gets this wrong. The visualization of the data (in the watch, in the Activities app or in the Health app) is barely usable. On, and on, and on.

Third-party Apps
Please, someone, tell me an amazing and useful app that I can install, and it will make the watch experience better. I can’t find one! The apps are mostly useless. Twitter – useless. RunKeeper – useless. American Airlines – useless. Apple should have done what it did with the iPhone. Launch with only the built-in apps and that’s it. It takes time for app developers to understand fully the value of a new form factor and how to best build native experiences.

Wi-fi / LTE / 3G
The lack of any connection to the real-world without the phone is a problem. It would be the first problem I would fix if I were Apple. I have my phone with me nearly all the time, except when I’m at home and my phone is charging on my kitchen counter. If I’m more than 15 feet or so away from my phone, the watch loses connectivity. I also would like to be able to – once in a while – leave the home without the phone, using just the watch (and clothes, optionally), and be able to make calls, text and have GPS. These are particularly appealing scenarios if I’m going to the beach, running, biking, paddle-boarding, etc.

Small annoyances:

  • Another power adapter. Another thing for me to forget when I travel.
  • It will be stolen, broken, lost or become obsolete in the next 18 months. It means I’m paying $1 per day to use this thing. I’ve made peace with that feeling.
  • Lack of GPS.
  • The speaker is bad. Calls over the watch are of very low quality.

Bottomline

For me, the Apple Watch was worth the price and knowing what I know now I’d buy it again. That said, I’m having a hard time recommending it to people. Unless you are an early-adopter and you have $400 to dispose of, just skip it and wait for V2 or V3.

The Predictions for Apple Watch Apps Are Not Great

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I’m excited about the Apple Watch. I’m a lot more excited what the wearable tech will be like in 5 to 10 years, but now let’s focus on the first month of Apple Watch.

Today, hundreds of thousands of people will receive their newly minted Apple Watch, and they will play with it to their hearts content, and then they will install some apps. But for the vast majority of app developers this first month will be a disappointment.

The prospect

Let’s put aside the fact the watch is a new form factor. It requires new types of interactions. We’ll learn what’s interesting, what’s annoying and what’s critical to have on your wrist — Yes, there are plenty of other smart watches out there, but nothing has caught up yet.

Like most apps in any store, user adoption follows a power law curve. A few apps are in the “head” of the curve and get wide adoption while the rest have fewer and fewer users, also known as the long-tail.

Let’s assume the average user will install ten apps on the watch in the first month of usage. There are currently 2,300 approved apps. I’m guessing half of users will get their watch in April (based on the 1,000,000 sales estimate and rumors of a backlog extending to June) there will be 5,000,000 app installs during that period. Let’s also assume that out of that number, half will be flagship apps: Facebook, Instagram, Twitter, etc.

motivator233128d58c6b51e931a6c294b97859f1a4badab4That leaves 2,500,000 million installs to be battled by 2,300 apps. If this were a perfect distribution, the average app would get just about 1,000 installs in month 1.  But that’s not how it works, a few of the 2,300 apps will get most of the share. If we look at a simple power-law distribution, 1% of the apps will get 99% of the installs. That means 23 out of the 2,300 apps will have 100K installs or more while the remaining 2,270 will get about 11 installs.

Here is the equations for the app installs for the first month (assuming 500K activated units):

  • 0.2-Percenters Flagship apps (5): 90-99% adoption = 450K-500K installs
  • 1-Percenters: 500K Watches x ((10 – 5) x 99%) Installs / (2,300 Apps x 1%) = 108K installs / app
  • 99-Percenters: 500K Watches x ((10 -5) x 1%) Installs  / (2,300 Apps x 99%) = 11 installs / app (eleven!)

11 installs per app in the first month

Yeah, that’s crazy isn’t it. Well, what if we turn the expectation knob full on “optimistic”? Let’s say Apple will ship 1M watches in the first month and the average user will install 25 apps in the watch, not 10. That means most of the apps will get about a mindblowing 50 installs in the first month.

It will get worse before it gets better

Apple won’t sell as many watches in Q2/Q3 as they did with the pre-order. Most people were obsessed with the idea of having an Apple Watch already pre-ordered one. The next boost in Apple Watch adoption will be in the holiday season. If Apple can break 5M sold units in 2015, it’s 5X what this app installs looks like in this first month. The number of Apps available by the end of the year, it’s likely to be in the tens of thousands.  That changes the equation to something still unpalatable for the average app developer:

Here is what 2015 will look like, being optimistic about average number of installs (25 per Watch*), and 10K apps available in the App Store and 5M units activated:

  • 0.2-Percenters (20) Flagship Apps: 90-99% adoption = 4-5M installs
  • 1-Percenters: 5M Watches x ((25 – 20) x 99%)  Installs / (10K Apps X 1%) = 250K installs / app
  • 99-Percenters: 5M Watches x ((25 – 20) x 1%)  Installs / (10K Apps X 99%) = 25 installs / app (Twenty five!)

Maybe I’m a couple of orders of magnitude off on my math. Maybe the power-law is not as steep as I describe it here. Instead of top 1% of the apps getting 99% of the installs, maybe they get 80% of the installs, in which cases your average app would get 500 installs in 2015. Did you read that? Five-hundred installs for the whole year.

The Silver Lining

There are two big winners by my calculations. The first is that we’ll see about 20 apps that are not the flagship ones take off. It will be very interesting to see the categories they belong to (Payment? News? Messaging? Fitness? Game?) and the type of value they are adding. And, from a product perspective, the type of interaction and UI they implemented.

The second winner will be Facebook. No, I’m not talking about their Watch App, those won’t make a dent in their service usage or revenue. I’m talking about the 9,900 apps that cost tens of thousands to millions of dollars to implement, and they will spend enormous amounts of money to acquire users. Some of these apps will invest tens of thousands of dollars or more in customer acquisition. That could account for an extra $50-100M in ad revenue in 2015 alone.

There was a pattern in the early days of Mobile Apps: Spend above and beyond to acquire users to get the top ranking in your category. It was easier to maintain that position while the user base of the platform grew exponentially. Many Apps will take a similar approach expecting the watch to have hundreds of millions of users in the next five years. Spending $25-100K in the first few months to guarantee your future position is a “cheap” price to pay. This strategy will work for a handful of apps, it will fail for most.

* This Nielsen report indicate the average iPhone user has 27 apps installed so that number is not far off.

Seven Principles for a world of technology for all

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Bill Gates letter to Microsoft employees in commemoration of Microsoft’s 40th anniversary is brief, but it hints at what’s to come. If you look at the progression of technology in ten year blocks (2015, 2005, 1995, 1985, 1975) you get amazed by the decade-wide leaps we’ve made. Even the visionaries had a hard time describing what ten years in the future will look like, so 2025 is anyone’s guess.

That said, we are entering a new era in which technology is reaching a couple of extra billion people in the planet and it will make their lives significantly better. As we, technologists and entrepreneurs, build this future, we have to keep in mind a few things to make sure we are creating the “right” kind of future.

Here is a list of seven principles that we should live by as we build this future:

7star

One – Comfort

We take it for granted the form-factors we have today without thinking how we got here. A keyboard and a mouse were clearly designed to help the office worker, not the field worker, the farmer, the factory worker or even doctors and nurses at a hospital. Laptops and tablets came to broaden the spectrum of the computing form-factor some people can use to do their job, but what’s next? We still have long ways to go in terms of voice-recognition, wrist-based computing (watches or something else), gesture recognition, and things that are just embedded in our clothes, walls, glasses, floors, etc. Physical burden should be a consideration in everything we build. We are not talking about early adopters anymore.

Two – Ability

We all faced a piece of technology that had a terrible UI or required us to acquire knowledge that wasn’t worth for the value it delivered, thus never crossing the chasm into the hands of most people. Delivering products that doesn’t create a cognitive burden for the user and works as seamlessly as turning a light switch is critical for its success. Doing less at the cost of functionality is probably a good place to start, but doing the right thing and deliver on the expectation is what we should be aiming for.

Three – Access

If people can’t acquire a product it will impossible for them to adopt it and benefit from it. If the tool is available, but the energy to power it doesn’t exist, it’s the same thing as not having this tool. If we build something that requires Internet connectivity all the time, we limit where this can be used.

Four – Price

No matter how great the technology is if the people that would benefit from it can’t afford, it’s of no use. The good thing is that in technology prices always goes down. Part is the advancement of manufacturing process, part is the commoditization of shared components, and part is higher demand that improves production effectiveness.

Five – Privacy

We came long ways in improving our understanding of technology privacy and human beings’ desire. Certainly some companies pushed the boundaries and felt pushed back. Privacy is not a one size fits all. The same way in a pre-technology era some people might feel comfortable talking about a rash in their legs or a fight they had with a spouse, others don’t. We must create technology that can be widely adopted. Unfortunately that means more work for us, the builders, to make sure we provide the right privacy controls and knobs so that all can feel unthreatened and welcomed as they are.

Six – Security

We are definitely entering a dark moment for security – and consequently privacy. This goes well beyond someone stealing a social security number. It goes into threats that people receive in social media and force them to abandon (or not even getting started with) a piece of technology that could be beneficial for them, professionally and personally. This is about basic safety and eliminating the fear of physical, emotional or reputation threats.

Seven – Motivation

Finally, people need to want to have the technology because they see a clear value personally or professionally by adopting it. It’s going to help than have more fun, reduce pain, make more money or save more money, achieve personal goals, etc. It boils down to helping people live longer and better lives.

2025 here we come.

Delta wants $509,692 for a change of flight.

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This comes from the corners of airline’s absurdities. A friend of mine going on vacation to Europe tried to change his flight back to do a two-day stop in another city for a couple of businesses meetings. He went to Delta’s website and when he punched in the change, this is what Delta wanted to charge him:

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Yes, you read that right. The change of flight would cost $509,692.62 (USD)! Forget the typical $75 some airlines charge.

Three Unusual Sources of Startup Ideas

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I believe that any startup idea, even if it’s an obviously bad one, can be pivoted into a bigger and better idea, so getting started is probably the most important step in making an idea into a successful execution. Sometimes entrepreneurs spend way too much time dwelling on the idea – on a piece of paper, or in the name of the company.

While mentoring TechStars companies over the last five years, I’ve seen what I would consider bad starting points – small markets, bad value prop, high operational cost for low LTV – become billion dollar ideas. Executing them is the hard part, for big or small ideas, for good or bad ideas and that’s where you should focus. To help you find a better idea so you can spend your energy on execution, I’m listing three very unusual sources of idea generation:

The Built-In Apps

Big companies in charge of big platforms have a slower shipping cycle compared with startups. As much as Facebook, Google, Microsoft, Apple or Twitter claim to be entrepreneurial and fast moving, they are not (they were at some point). Steering a very large boat takes time. Here lies the opportunity for entrepreneurs. Anything that’s built into that platform that could be replaced is a great candidate for you to attack. It took Gmail 10 years to update their Contacts experience. iPhone’s calendar app is a joke. Amazon’s AWS cloud resources management took many years to get to an OK point. That gave the opportunity to many entrepreneurs to identify those opportunities and launch alternatives.

But there are more to be done. Each new iOS, Android, Windows, MacOS, AWS, Twitter or Facebook release that exposes new functionality and it has some “built-in” app/service/component, it won’t be updated for a year or two, maybe more. As a startup, you can learn what it does, understand pain points & feedback, and create features that address those problems. Of course you’ll be competing against the “default” app, so many people will tell you to go home. But if you truly create a much better product, people will notice, start using and telling their friends.

Recently Acquired Startups

startup-tombstoneThere are many reasons startups get acquired. Some get acquired for their talent, some for the customer base, some for the underlying technology and some for their revenue. It turns out that revenue is usually the least likely reason a startup is acquired. This presents an interesting dynamic. If a company bought a startup, not because of the prospective value of its business, what’s the buyer incentive to keep the direction of the product as is? Answer: very low.

Most of the acquisitions (guesswork here since I have no real data) lead to the acquired product being shut down in the first two years. Sometimes, pieces of the technology make their way through the main acquirer’s product. But rarely existing users are happy or satisfied with the results, and frequently previous users/customers are upset, angry and venting on social media. You probably had that feeling as well when a product you use often got acquired by a big company, and you just know that you’ll get screwed at some point.

Well, here is the opportunity for you, the entrepreneur. You can’t time the market, but odds are you can be close to timing when a product will decay in value or be shut down after their acquisition. So, the business idea is to start a competitor to product X as soon as X is bought by a big company. By the time your product is hitting the market, your previous bigger competitor will be slowly dying and once their customer revolt you come in as the savior.

Recently Shutdown Startups

Startups fail for reasons far and wide. From poor management to ops cost, from high burning rate to dead ends. Of course, sometimes they die for not finding product-market fit in time and investors or founders decide not to continue the chase. It doesn’t necessarily mean it was a bad idea. It doesn’t even mean there wasn’t a market for it. How many brilliant products go the way of the dodo because the execs didn’t understand a distribution strategy, marketing or customer acquisition?

If I were you, I’d pay special attention to startups that get some traction (press, users, partnerships, etc.) and failed. Or startups that shut down and caused lots of users on Twitter or social media to complain, bitch or whine about it. You are looking for passionate customers left in the rain. This means there is demand, but the supply failed to deliver.

A List of 120 Seattle Founders and Entrepreneurs

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There are many things that are very hard in an entrepreneurs’ journey. That said, finding out role models, mentors and advisors is not one of those anymore, primarily because of social media and new levels of acceptable transparency for founders.

I put together a list of 120+ founders in the Seattle region you might find it very valuable if you are just getting started. Some of these are successful serial entrepreneurs, and some are just in their first steps. Enjoy it.

Founder & CEO at Bizible
Co-Founder, CEO, & Night Janitor @bizible. Uniting marketing & sales one company at a time. We call it #pipelinemarketing
CEO & Founder at EnergySavvy
Co-founder EnergySavvy – If you’re not enjoying an energy efficient home, I personally invite you to join modernity!
CEO & Co-founder at Simply Measured
Co-founder/CEO @SimplyMeasured, trying to make analytics & reporting easy. Golfer, breakfast enthusiast, favorite Excel function is COUNTIFS.
CEO & Co-founder at Haiku Deck
Co-founder/CEO of Haiku Deck, hand-model, interpretive dancer. Committed to saving lives, one presentation at a time.
Founder at Play Work Studio
Founder @ Play Works Studio. I design fun science games for girls and boys.
CEO & Founder at Whitepages
Founder and CEO of @WhitePages
CMO & Co-founder at Meshfire
CMO and co-founder of @Meshfire. Destroyer of Boredom. SaaSassin. Forbes Top 50 Social CMO.
CEO & Founder at Infinut
Software Designer and Developer. Mother. Building educational apps for my daughters to teach them math concepts. Adjunct Faculty at U.W.
Co-founder & VP Engineering at Front Desk
Will travel for food #GoHawks
Founder & Product at Outreach
Head of Prouct at @Outreach_hq, founder. Dive in the deep end – if you want it bad enough, you’ll figure out how to swim.
Founder & CEO at BuddyTV
Entrepreneur
Co-founder & Head of Customer Success at Bizible
I feel more like I do now than I did when I got here. ATA: @bizible
Founder at Leah’s Kitchen
CEO & Co-founder at Wellpepper
CEO and co-founder @wellpepper, clinically validated to improve adherence to patient care plans, m-health blogger, skier, hiker, foster parent, dog lover
Founder & CEO at MangoSpring
Founder/CEO, MangoApps Inc.
Founder & CEO at ResolutionTube
Founder & CEO, ResolutionTube
Founder & CEO at Shippable
ceo @beshippable, wildlife photographer, scotch lover
Co-founder & CPO at Simply Measured
Co-founder of @simplymeasured. I build things that make people’s lives easier and do everything passionately.
Founder & CEO at Cheezburger Network
CEO of @Cheezburger. Co-founder of @Circa. (Sorry I yelled at you during Werewolf.)
Founder at Smartsheet
Founder/chairman of http://t.co/HxPCM7tFvv – coordinate anything with anyone.
Co-founder & CEO at Gratafy
Co-founder & CTO at BevyUp
Co-Founder & CTO at BevyUp
Co-founder & CTO at SquareHub
Entrepreneur . CTO . Co-Founder @SquareHub @BookieJar . French . Tech savvy . Geek . Snowboard/ski lover #startup #pnw
CEO & Co-founder at Glympse
Co-founder & CEO at Dato
CEO and Founder, GraphLab. Amazon Prof of Machine Learning, UW. Loves data, machine learning, biking, and long walks on the beach. @graphlabteam @UW
Founder & Chief Product Officer at LiquidPlanner
Co-founder and Chief Product Officer at @LiquidPlanner. Project manager, software designer, gamer, techie – you get the idea.
Founder & CTO at Simply Measured
Relentless creator. Co-founder of @simplymeasured. Crawls social graphs for fun.
CEO & Founder at Glowforge
CEO of @Glowforge and http://t.co/htzu9GtOsm. Formerly Google, Sparkbuy & Ontela. Author of forthcoming O’Reilly book on startup CEOs. Lucky dad.
CTO + Co-founder at DevHub
CTO and Co-founder at @devhub / EVO Media Group
Founder & CEO at Affinity.IS
Daniel Todd is an Internet Entreprenuer, CEO and Founder of Affinity.IS
Co-founder & COO at Lively
COO and Co-Founder, Lively
Founder & CEO at Tango Card
Tango Card Founder & CEO
Founder & CEO at TINYhr
Angel investor and serial entrepreneur who loves growing the people who he works with. Currently building http://t.co/efmtODgn and http://t.co/g2yPNxiL.
Co-founder & Product at Limeade
Listener/dreamer/doer. cofounder+product @limeade. cyclist; quantified self + car nerd.
Founder & CEO at Placed
Founder and CEO of Placed
CEO & Co-founder at Sensoria
Doing well by doing good
Co-founder & CEO at ReadyPulse
Lead ReadyPulse. Hack triathlete. Father of 3 Daughters
Founder & CEO at Tatango
I invented the text message… Also the founder of http://t.co/PMXghZNjZD
Founder & CEO at PhotoPad
PhotoPad~Your Story ,Your Design,Your PhotoAlbum Director, Founder Institute http://t.co/S5nO7sctja Ambassador To The Children Of Olive Crest!
CEO & Founder at Algorithmia
CEO and founder @algorithmia, ex- Program Manager @msexcel and @mspowerbi Business Intelligence., @techstars mentor. player @quakerugby
Designer & Co-founder at Skilljar
Founder & CEO at Meshfire
Founder & CEO of @meshfire. Serial entrepreneur. Built my first SaaS startup in ’02, took five SaaS products to market. Irredeemable @Audi fan.
CTO & Co-founder at Ada Developers Academy
software developer | founder of @brandworthy and @adaacademy
CEO & Co-founder at LendingRobot
27% financial quant, 25% entrepreneur, 20% designer, 18% in high tech toys, 12% in unconventional wisdom, at least 2% wrong.
Co-founder & CEO at NQuiry
Startup co-founder with too many interests. Food Nerd, Writer, Runner, Yogini, Shoe Addict, Wino.
Co-founder & VP of Customer Success at Auth0
Electrical engineer, software practitioner, amateur mechanic, builder. Co-Founder and VP of Customer Success at Auth0 (@auth0)
CEO & Founder at Estately
Founder and CEO of Estately. Mentor at 500 Startups. I ❤ customer acquisition, user experience and building companies.
Founder & CEO at BitTitan
Entrepreneur, Innovator, Inventor, CEO | Works at @BitTitan | Cloud enablement provider for Office 365, hosted Exchange, Identity Management, Security, and more
Co-founder at Glamhive
Founder @Glamhive & Founder @IMM (Intermundo Media). Growth hacker who hopes people on Twitter are more interesting than people on Facebook.
Founder at Code.org
Founder, http://t.co/5A38giBqk4. Entrepreneur, startup advisor/investor.
Co-founder at Jackson Fish Market
Co-Founder of Jackson Fish Market. Author of the Madrona Heroes books.
Co-founder & CEO at Lively
finance, technology, medicine/health
CEO & Founder at Julep
CEO & Founder of Julep @julepmaven. Entrepreneur, wife, mom, sister, daughter and girlfriend. http://t.co/0ZvDRJ7nmZ. Instagram: @janeparkjulep.
CTO & Co-founder at Skilljar
CTO and co-founder @skilljar
Founder & Chief Designer at Jackson Fish Market
Founder & Chief Designer of Seattle Software Studio: Jackson Fish – creators of http://t.co/ERmJ9ZNP, http://t.co/XELdVkBe, & dozens of other products/projects
Founder & CEO at Groundspeak
Jeremy is the President of Geocaching HQ
Founder & CEO at ExtraHop Networks
Founder & CEO at Rival IQ
Digital marketer, SEO & Co-founder @RivalIQ. To all marketers who follow me please give Rival IQ a try and tell me what you think. http://t.co/E16iwjBk8F
Founder & CEO at Zipwhip
CEO at Zipwhip.
Founder & CEO at API Science
Founder, API Science and ProgrammableWeb. Tracking how open APIs are changing everything.
Co-founder & Product at Remitly
Co-founder of Remitly. Product guy. Problem solver.
Co-founder at Booktrope
Books, business and the business of books. Mom. Marketer. Co-Founder of Booktrope. Submissions are open! http://t.co/q27HzqEMOH
CTO & Co-founder at Payboard
When I grow up, I want to be a theologian.
CTO & Founder at Algorithmia
Founder / CTO at Haiku Deck
I’m Kevin, co-founder and CTO of Haiku Deck. My life story is here: http://t.co/xGDiDwd27T
Founder & CEO at Socrata
Founder & CEO of Socrata. Passionate about Open Data.
Co-founder & CTO at Socedo
Co-founder & CTO of @socedoapp with the mission of bringing social #leadgen to every business in the world. Husband of 1, dad of 2, tech and sports junkie.
CEO & Co-founder at Koru
Koru ceo and co-founder. global citizen, rule-bender, connector, education innovation junkie, semi-reluctant urbanite with barely controllable skiing addiction.
Founder & CEO at MyFive
Cofounder/CEO of @Biznik; Founder/CEO of @My5. Crusader for small biz & indie workers.
CMO & Co-founder at PicMonkey
Spiel and SpinMaster. Co-Founder @PicMonkeyapp. Wife. Mom of boys. Dog, Cat, and Chicken feeder.
Co-founder at Wedding Happy
Co-founder @weddinghappyapp with @vizsladriver • the planning experience is as memorable as the event • lefty • INTP • math @NYU • opinionated
CEO & Co-founder at Jobaline
Cofounder and CEO @Jobaline | Investing and Executive advising, High Tech, Internet, Digital Media
Founder & CEO at Magicflix
Tech Entrepreneur, Founder @Magicflix (Techstars ’14), @InvestmentYogi, previously @travelocity
Founder & CEO at Moment
An entrepreneur, creator, and builder. Co-founded Contour + Moment (http://t.co/ivxaQ8jnLr)
Co-founder & CTO at EveryMove
Co-founder & CTO at @EveryMove; Seattle Startup Instigator.
CTO & Co-founder at Sensoria
I delivery positivity above every expectation, when you are nice to me! Tweets are my own.
Founder & CEO at Avvo
Avvo CEO. Orbitz board member. Gonzaga board member. Visit Avvo for *free* legal advice and ratings for 98% of U.S. lawyers.
CEO & Co-founder at Zealyst
Cofounder & CEO of @Zealyst. @WitSeattle Board Member. Enthusiastic about all things startups, mediating, Seattle, whiskey & running.
Co-founder & CTO at Auth0
CTO and Founder at Auth0 @auth0. Crypto geek. Culture maker.
Founder & CEO at Porch
CEO and Co-Founder, Porch (http://t.co/MIVvFikjcq)
Co-founder & CEO at Remitly
payments. digital currencies. startups. fintech. remittances. HBS. Dartmouth. Remitly CEO
Founder & CEO at Pro.com
Founder/CEO http://t.co/WApvMPBMKP. EIR at a16z. Former CEO of Digg. Founder of LiveBid. Amazonian for life.
VP of Dev & Co-founder at Sensoria
Founder & CEO at Geekology
Founder & CEO of http://t.co/RQ4O9MY2AB | http://t.co/5MvCPgVaoI. I love people, technology and startups. My universe centers around technology job market.
Co-founder & CEO at usermind
Co-Founder and CEO of usermind, inventing a new way to BizOps, having fun and dreaming
Co-founder & VP of Engineering at ReadyPulse
Entrepreneur, Technologist, V.P Engineering at @ReadyPulse, Geek, UX enthusiast, Husband of a Loving Wife, Father to two wonderful daughters
CTO, Co-founder at Apptentive
CTO @ Apptentive. Mobile, Ruby/Rails, MongoDB, APIs, Sailing, Skiing, Seattle, UW MBA, and Dad to Identical Twins
Founder & CEO at Reveal
Founder and CEO of Reveal. Optimist. http://t.co/4ZNeSXdk8Y, https://t.co/w6oY19sev3
CTO, COO & Founder at Leisure Loyalty
CTO, Web Architect, SaaS Loyalty Platform
CTO & Co-founder at Venuelabs
CTO @ Venuelabs, geek, do-er of things.
Founder & CEO at Distelli
Software Engineer and Entrepreneur. Founder @distelli – I’m not a pirate! rsingh was taken so arr…singh it is!
Founder at Moz
Founder of Moz, husband to @everywhereist, teeny tiny investor in Techstars Seattle, blogger, traveler, feminist, and evangelist of all things SEO & TAGFEE.
Founder & CEO at Blab
Blab Inc CEO, Porsche greaser, bike commuter & Mr. Happy
Founder & CEO at Runway2Street.com
Founder & CEO @runway2street1. Instagram: @Rathnas Past Lives: Microsoft, UPS
Founder & CEO at Health123
co-founder & CEO of a kick-butt startup; long-term technologist, fierce idealist
CEO & Co-founder at Apptentive
I like to build things. Co-founder, Apptentive (http://t.co/N3U4tOK5fm).
Founder & CEO at 9slides
Founder CEO @9slides, Chairman Shobhit University Alumni Network, Advisor @Byteridge, Ex-Microsoft PM. Let me know how i can help you.
Co-founder & CEO at EveryMove
Co-founder and CEO – EveryMove Healthcare entrepreneur; Dad; Crossfit fanatic, Trail Runner, UCLA Anderson, https://t.co/Eku1YkbheI
CEO & Co-founder at Skilljar
CEO and Co-founder @Skilljar. Helping instructors teach online. Stanford GSB, MIT, Amazon.
Co-founder & CTO at Avvo
CTO – http://t.co/4V1b4jh6Go, ex-Expedia, ex-Microsoft
Founder at Rival IQ
Founder @RivalIQ. proud father. husband to @munchkininchief. @SeatownCrossFit. Ph.D. from UW @csenews.
Founder & Product/Engineering at Rival IQ
Tech dude, photographer, climber, husband, father; co-founder of @RivalIQ; creator of @aviforecast
Co-founder & Engineering at Remitly
Co-founding Engineer @Remitly (Beamit), hands on guy with a Do-it attitude! #TechStarsSeattle Alum, @CarnegieMellon grad
Co-founder & CEO at Foodista.com
Co-Founder & CEO of http://t.co/2cvMdRsa (@foodista), the recipe, cooking, & food news source; and of the International Food Blogger Conference (@IFBC).
Co-founder & President at ReadyPulse
Co-founder & President @ReadyPulse. I tweet on Social media, non-profits, and politics.
Co-founder at Glamhive
Co-Founder, Glamhive
Co-founder & CTO at PushSpring
Geek & Founder
Co-founder & VP of Marketing at Magicflix
Mompreneur, Founder and VP Marketing @magicflix. Love tech, marketing, dogs; Obsessed with content and ad tech. Formerly @facebook, @weareaditi.
Co-founder & CTO at ReadyPulse
Co-founder, ReadyPulse. Find out how much your Twitter followers and Facebook fans are worth at http://t.co/JT6cQJ6umO
Founder at Rival IQ
Tech entrepreneur. Founder of http://t.co/M79y14CL51, Gist (sold to BBRY)…mentor at #techstars, #startupweekend. sailor, runner, biker, husband, father.
Co-founder & CEO at Fizzmint
CEO @Fizzmint, Director @hackthepeople, leader, keynote speaker, author Women In Tech fall 2015, webcaster, geeknerd, mentor, Trekkie, scientist, poker player
Co-founder & COO at Tagboard
Co-Founder and COO of @tagboard. Fan of disruption and innovation. Recovering M&A deal-doer. Lover of family. Obsessed with cars and F1.
Co-founder & CEO at Poachable
Co-Founder & CEO of @Poachable. Formerly @Google @HarvardHBS @BowdoinCollege.
Founder & CEO at RealSelf
realself is my everyday obsession.
Founder & Head of Product at Glowforge
Design founder at http://t.co/Vw2L6tMVcO (we’re hiring devs & designers!). Founder of @rescuetime (YC08 / True Ventures). Builds with pixels, code, & atoms.
Co-founder & CTO at CareZone
Co-Founder & Chief Technology Officer, CareZone
CEO & Co-founder at Bonanza
bonanza ceo, developer
Founder at WeLearnLive.com
Marketing Science Geek @Microsoft, Founder http://t.co/8u1aiKxNqc Business Model Junkie, Trendspotter, Lover of #Startups, Passionate about innovation

Note: This is not a list of all entrepreneurs/founders in Seattle. If you know more people you find interesting, just add as a comment below.

ClassDojo is an unethical and damaging product for Kids (& parents)

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[UPDATE: The comments sections of this post is full of astroturfing — fake comments by fake users. The all come from the IP address 104.244.24.92 pretending to be real teachers (Jarrett B, Jennifer Molak, Susan G, Caroline F., Tatiana H)]

I believe most organizations and people are positive to society even when they have a negative side to it (everything does). ClassDojo is negative, and I fear that if it becomes a reference model – due to its misunderstood success – it will have a dramatic negative ripple effect in early education. If you were concerned about Facebook’s Newsfeed manipulation study last year, you should be orders of magnitude more concerned about ClassDojo. It’s about manipulating kids!

Let me start by saying I’m not an education expert – neither are the founders of ClassDojo, by the way. However, due to the nature of my work around health, fitness and incentives, I’ve been immersed in the latest research on motivations, incentives, social behavior, behavior economics, compliance, etc. Human nature is one, so it doesn’t matter the application, the fundamentals are the same.

I also have no financial interest in the success or failure of ClassDojo, or any of it’s competitors. My only interest is to stand for what I believe, particularly when kids mental health is at stake, and I can’t be silent about it.

Learning about ClassDojo

I was driving to work listening to a podcast about teaching kids how to code. I got to the office and typed some keywords into Google and bumped into ClassDojo.com – I was looking for CoderDojo, actually. My first reaction to ClassDojo was what a great idea it is. As soon as I read what the product was about and watched a quick video on their website, my brain could not stop churning about the awful thing that ClassDojo is doing.

I found this New York Times article from a couple of months ago. It focuses on privacy, consent and ethics of collecting kids’ information, but as you can see, there are a gamut of issues with it.

What is ClassDojo?

Straight up, ClassDojo is a gamified reinforcement engine for elementary students, in which the teacher creates the rules, awards points and has full control over the “game”. In simple terms, students create an avatar to represent themselves and are awarded points for doing things the teacher thinks is “right”, or taken points away for what’s “wrong.” At the teacher’s discretion, that’s done in front of all other kids in the classroom so that all students can learn from the success and failures of others.

Parents can sign up to learn about their kids earned and lost points and reinforce the behavior or message even more at home.

What is the problem with ClassDojo?

Some of the problems with ClassDojo are very obvious, and some are more nuanced. I will go through a list of 7 of the most egregious problems.

With any technology, tool, process or methodology, its value is just as good as the people using it. Some teachers and parents will have a better understanding of it, and will work around the negative aspects of ClassDojo, but some won’t even realize these problems exist.

Here is why ClassDojo is unethical and dangerous:

#1 – It’s a compliance tool

Ignore every marketing gobbledygook from ClassDojo, what it boils down to is that ClassDojo is a compliance tool. Compliance tools are designed to get people to comply with a regimen. The dictionary defines compliance as: “The act or process of doing what you have been asked or ordered to do.” The opposite of compliance is disobedience, defiance, and deviance. We don’t want that in the classroom, do we? So what’s the problem with being a compliance tool?

First, it’s an easy way out. It’s much harder for a teacher to tell a student why she should or shouldn’t do something than to say “you get 1 extra point if you do it this way.” Second, compliance also focuses on uniformity. You can’t have different rules for different students depending on their needs. Either you have a rule that applies to all students or you have no rule at all, which means the last few decades of investing in different learning styles is going out of the drain. Third, and a little more subtle, is the fact that compliance punishes diversion (and failure) – more on that later.

#2 – It’s *NOT* about positive reinforcement

Here is their homepage claiming to be about positive behavior.

CLASSdojo-HP
A researcher named B.F. Skinner is the father of reinforcement behavior (positive and negative reinforcement). If you are up to it, go read about him on Wikipedia. His work, Operant Conditioning, has evolved tremendously since his time, and it defines this matrix:

Pleasant Stimulus Unpleasant Stimulus
Adding/Presenting Positive Reinforcement Positive Punishment
Removing/Taking Away Negative Punishment Negative Reinforcement

Here are a few of the tools at the disposal of teachers with ClassDojo:

  • Student does something good and earns points: Positive Reinforcement
  • Student doesn’t step up and doesn’t earn points: Negative Punishment
  • Student does something bad and loses points: Negative Reinforcement

There is more to it. Since teachers are doing this in front of other students, there are reinforcement and punishment being felt by all students. If you want to learn one strong case against it, read Alfie Khon’s book Unconditional Parenting: Moving from Rewards and Punishments to Love and Reason or some other of his books.

#3 – It Changes the focus from learning to earning

Having worked in the behavior/motivation “industry” for the last four years, I find it incredibly hard the act of creating motivation, but not so much the act of changing someone’s focus. Kids are naturally motivated by doing and achieving. By creating a classroom game, they will focus on, and optimize for, earning points, badges, and trophies while the focus should be on learning. The ultimate goal should be learning things, not to pass on tests or get points.

Don’t mistake this to the debate about grades and tests at schools. One thing is being rated by what a child has learned, another is being rated/rewarded for how a child behaves. You can pre-order Josh Stumpenhorst book The New Teacher Revolution that talks about the problem with current grade system.

#4 – It Kills Creativity & Independent Thinking

You know a great way to learn? Failing! You know a great way to create empathy for fellow kids in your classroom, saying something mean and having the other kid cry and feeling, deeply, awful about it. Listen to this video of Louis C.K at Conan O’Brien.

With a ClassDojo rule book of behavior, kids are less likely to deviate and try anything new. If it doesn’t seem I’ll get a point for it, I’ll do something that will give me a point. If I know a behavior will make me lose a point, I won’t even try it.

#5 – Zynga-effect, Dopamine & Endorphin Dependency

ClassDojo could create a drug-like dependency on kids, the same way that people who played Farmville felt. You need more and more of it until you can’t satisfy yourself anymore, and you can become obsessed. Seriously, do we need an unnatural dopamine and endorphin inducing experiences in the classroom? Has anyone even questioned this?!

It’s unethical! Don’t mess with kids brains. Read Nir Eyal’s post titled The Morality of Manipulation. Manipulating adults is one thing, and it could be quite unethical, manipulating kids without fully understanding the consequences is at a whole new sphere of irresponsibility.

You’ll get awesome short and near term results until the whole thing unravels. Here lies the danger, a short-term perception of success at the expense of dramatic long-term impact on these kids. Will they be more likely to be unhappy in life? Probably. More likely to have depression, drug dependencies, lack of satisfaction? Well, if science is your guide, yes, they will be more likely to all those things (research endorphin and dopamine addiction if you care).

#6 – It empowers the powerful

There are bad teachers out there. Some teachers are already abusive and overpowering. Some teachers pick on some students because they don’t like how they speak, or because of their religion, race or their parents. Some classrooms have this imbalance of power in which the teacher thinks he’s a God and the students are his minions. Yes, this is the minority of teachers, and this tool doesn’t create these problems but exacerbates them. And it also could exonerate those teachers’ decisions… “I was just using the tool.”

#7 – Lifelong Impact

If the above problems didn’t convince you that ClassDojo could have a long-term negative impact on your child’s future, how about this: This is not how college works (or high schools) and it’s not how the workplace works. There won’t be anyone telling young adults what’s appropriate and what’s not. They won’t learn how to read others people reaction and know how to adjust to it because they are waiting to get the +1 / -1 they were used to. They might be lacking or having underdeveloped emotional and social skills necessary to succeed in life

I know nothing, we know nothing!

I’ve been an avid consumer of behavior, education & parenting books and information on the web. I’ve been to seminars, conferences and talks by John Gottman, Jim Fay, Carol Dweck, Gordon Neufeld, Ashley Merryman, Nir Eyal, BJ Fogg, and many more. We – as a society – still know very little about child development, education, behavior science, and parenting. We have come long ways over the last two decades, but there are decades of research to be done for us to have a good grasp on it.

It’s not just because ClassDojo seems to be doing well as a business that it means it’s a good thing. Cigarettes and McDonald’s are good businesses. Product-Market Fit (a startup term to indicate a business that’s working) is not proof that this is meaningful, important, valuable or that it even should continue to exist.

So, you are saying that reinforcement & gamification is bad?

No, I’m not. Contrary to some educators and psychologists who take a hard stance against rewards, I’m not one of those, but I think ClassDojo for all the things I mentioned above did it completely wrong. Khan Academy, on the other hand, put the learning at the center and made the reinforcement the after the fact subtle praise. And there are other education-related services that are doing fantastic work with kids, like AltSchool, an amazing startup doing some amazing work in early education. Check them out.

What should I/we do?

My concerns is about a company and its philosophy. I’ll assume that ClassDojo founders and employees are well-intentioned, but they are either being ignorant about the very core of what they are doing or they are turning a blind-eye to these problems.

If you are a teacher, I take my hat off to you. Your work is incredibly hard, and I couldn’t do your work. However, I urge you to read the books, articles and authors that I mentioned on this post and make up your mind about it. Even if you want to use ClassDojo and address all the issues and concerns I mentioned above, you’ll be going against the grain of this tool. Just drop it and use something else. Heck, just tell me what something else you want and I’ll figure out how to build it for you.

If you are a parent, pressure your school and teacher to stop using ClassDojo.

Grab people’s attention by the symptom, not by the cure.

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We might think highly of what we’ve created. We might think we have a great, unique and revolutionary solution for a problem. We want the world to know about it. We speak in witty form, touting our approach, and… No one comes. Actually, no one listens. They don’t even know what you are talking about it.

You heard the famous quote attributed to Henry Ford: “If I had asked people what they wanted, they would have said faster horses”. He didn’t build a faster horse. He saw a completely unique and revolutionary approach to transportation and he solved it. However, if he had taken an ad in a newspaper and announced “Buy an automobile to go places” people might have totally missed the point. “Automobile” was such a foreign concept. You have to tie into what people are looking for and are familiar with, either an existing solution you’re competing with (“horses”), or the symptom of the problem they are trying to address (“go places faster”). Below is the first advertisement for a car, from 1898.

First US ad for an automobile, 1898.

Back to the Future

Here is a better example: Weight Loss. Weight Loss is the symptom of bad lifestyle choices. If you want to lose weight, you need to change the choices you make. But can you imagine someone advertising “Better lifestyle choices”? Unlikely. People look at a symptom they see or feel and go search for a cure for that symptom. They don’t know what the cure is most of the time.

Kurbo is an amazing startup focused on helping kids lose weight. Kurbo knows that weight is a consequence, in great part, of nutrition (and physical activity). So they need to help kids change their eating habits and the weight loss will happen as a consequence. If they took the high-road and never mentioned weight-loss in their advertising, the people looking for them might not find it. But they had a bigger problem, the symptom they are trying to cure (being overweight) carries a stigma with the user (kids), so they have to be even more careful about what they talk about in the description of their product.

If you build a product that people don’t want, it doesn’t matter what you do for marketing, you are screwed. But even if you build a product that people do want, you still have to get people to first find out you exist!

Resources for a Startup CTO in Seattle (+ 42 CTOs on Twitter)

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Let’s be honest, most developers, including yours truly, are more in the introvert side of the scale. Between going to a social gathering with strangers or cuddling with a complex software engineering challenge, we pick the latter nine out of ten times. So if you are an aspiring startup CTO or VP of Engineering, or you are just getting started and could use some mentoring and guidance, how do you do it?

First, there is a couple of lists on LinkedIn that are not specifically about startups, but about “CTO-ing” in general: the Seattle CTO Club and the Greater Seattle CIO/CTO Group. There are also several meetups that you can connect with other startups CTOs and the like, as the Dot Net Startup group (founded by yours truly, but I don’t run it anymore), Appy Hour (Mobile apps), and a plethora of tech-specific gatherings like Seattle JS, Seattle Scalability Meetup and Docker Seattle.

In addition, there is no better way to get connected than getting plugged into what other CTOs are doing and talking about, so I compiled a list of 42 startup CTOs in Seattle for you to follow and be up-to-date on events they attend, blogs they read and more.

VP of Engineering at Placed
Co-founder & VP Engineering at Front Desk
@frontdeskhq co-founder / vp engineering
VP of Engineering at RealSelf
I’m just a geek
Chief Engineering and Product at iSpot.TV
Chief of Engineering and Product at http://t.co/uXWVXgeD5n. Father of three wonderful boys. Husband to only one wonderful wife!
Co-founder & CTO at BevyUp
Co-Founder & CTO at BevyUp
Co-founder & CTO at SquareHub
Co-Founder/CTO @ SquareHub & BookieJar. Former CTO @ ValuValu & MotionBridge. Entrepreneur, tech savvy, early adopter & geek. Love snowboarding, France, PCNW
CTO at GreaterGood
CEO of http://t.co/eI90nyWSIS. Interest: faith, business, technology, adventure.
Founder & CTO at Simply Measured
Relentless creator. Co-founder of @simplymeasured.
CTO + Co-founder at DevHub
CTO and Co-founder at @devhub / EVO Media Group
CTO at Spare5
From startups to Amazon and back again. CTO and Co-Founder, Spare5.
CTO at FlexMinder
Founder & CTO of FlexMinder. @techstars Seattle 2011 Alumn. Cyclist. Golfer. Enjoyer of good beer.
CTO at AssureStart
Technologist, Porsche Enthusiast, Golfer
CTO & Co-founder at Ada Developers Academy
software developer | founder of @brandworthy and @adaacademy
CTO & VP of Product Development at Limeade
Entrepreneur, CTO, Enterprise SaaS, Dad
CTO & Co-founder at Skilljar
CTO and co-founder @skilljar
CTO at CloudKibo
Co-founder & COO Uhuru a PaaS Cloud, that bring the best of .NET and Open Source together. http://t.co/775h0EmcqV
VP of Engineering at Navigating Cancer
VP of Engineering at Navigating Cancer. Software development leader in Seattle.
CTO & Co-founder at Payboard
When I grow up, I want to be a theologian.
CTO & Founder at Algorithmia
VP of Engineering at AnswerDash
Seattle Tech Geek, Vespa Fan, English Shepherd Owner.
Founder / CTO at Haiku Deck
I’m Kevin, co-founder and CTO of Haiku Deck. My life story is here: http://t.co/xGDiDwd27T
Co-founder & CTO at Socedo
Co-founder & CTO of @socedoapp with the mission of bringing social #leadgen to every business in the world. Husband of 1, dad of 2, tech and sports junkie.
CTO at Zooppa
CTO @ZooppaUSA. Startups, Technology, Web, Design, Business, Teams, Ideas, Ruby on Rails and Entrepreneurship
Co-founder & CTO at EveryMove
Co-founder & CTO at @EveryMove; Seattle Startup Instigator.
CTO & Co-founder at Sensoria
I delivery positivity above every expectation, when you are nice to me!
Co-founder & CTO at Auth0
CTO and Founder at Auth0 @auth0. Crypto geek. Culture maker.
Co-founder & VP of Engineering at ReadyPulse
Entrepreneur, Technologist, V.P Engineering at @ReadyPulse, Geek, UX enthusiast, Husband of a Loving Wife, Father to two wonderful daughters
CTO, Co-founder at Apptentive
CTO @ Apptentive. Mobile, Ruby/Rails, MongoDB, APIs, Sailing, Skiing, Seattle, UW MBA, and Dad to Identical Twins
CTO, COO & Founder at Leisure Loyalty
CTO, Web Architect, SaaS Loyalty Platform
CTO & Co-founder at Venuelabs
CTO @ Venuelabs, geek, do-er of things.
CTO at Pathable
Haha made ya read!
CTO at Reveal Chat
Hacker, slacker, code cracker. … also CTO at Reveal.
Co-founder & CTO at Avvo
CTO – http://t.co/4V1b4jh6Go, ex-Expedia, ex-Microsoft
Founder & Product/Engineering at Rival IQ
Tech dude, photographer, climber, husband, father; co-founder of @RivalIQ; creator of @aviforecast
CTO at PlaceFull
CTO @myplacefull, Former @Google guy.
CTO at Buddy
CTO @ http://t.co/eGMAC3Gd4x. Train hard. Code happy.
Co-founder & Engineering at Remitly
Co-founding Engineer @Remitly (Beamit), hands on guy with a Do-it attitude! #TechStarsSeattle Alum, @CarnegieMellon grad
Co-founder & CTO at PushSpring
Geek & Founder
Co-founder & CTO at ReadyPulse
Co-founder, ReadyPulse. Find out how much your Twitter followers and Facebook fans are worth at http://t.co/JT6cQJ6umO
CTO at Experi
One of the infinite monkeys trying to type Shakespeare.
Co-founder & CTO at CareZone
Co-Founder & Chief Technology Officer, CareZone

[UPDATES]

Playing in the right business zone

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If you are a product manager, by title or role, you are probably familiar with the matrix describing where you should spend your resources. It states that features that are used by most users most of the time are worth spending more than features that are either used by just a few users or just a few times in the users journey through your product.

What if we superset this thinking into your whole business. What if instead of “your users” we use “all population” and instead of feature usage we replace it with an individual annual need for your product.

For example, buying a house is something that is done by about 60% of the US population, and they stay in their house for an average 13 years. That means between age 25 and 80, individuals that buy a home might go through that process only four times in their lifetime. Another example is reading the news. Approximately 80% of adult Americans read the news on a daily basis.

If you collect enough of these events and plot on a chart, you end up with something like this.

Freq-mock1

What’s not represented in this chart is the dollar value of the transaction. Although the average person might buy a new cellphone just about the same number of times that she takes a long vacation, one has a cost of a couple hundred dollars while the other is about a few thousand.

That line of thinking led me to the idea opportunity zones chart. It’s meant to represent opportunities for VC-scale business, not services business, not mom & pop business, not big business expansion, but startups that can become big business.

Freq-mock2

No startup zone: This is where you have people life events that happen just about once or twice in a lifetime and by very few people. It’s very hard to jump start a business in this segment.

Tough to scale zone: Even though it could happen somewhat often, the lack of mass demand means this is possibly a very fragmented target audience and unless you can have a high per-transaction profit, you can’t build a big business. Imagining serving very few customers, but making a lot of money from each.

I’m doing it for passion zone: It’s just like the Tough to scale zone, but you could build a decent business here. It probably is not a VC business because it doesn’t have the $100M in revenue potential (that’s the bar for some VCs to even consider your startup). However, if you can bootstrap or use some other form of capitalization you can have a good deal for yourself.

High ticket price zone: This is a very exciting zone if you are talking about transactions into the thousands, tens of thousands or hundreds of thousands of dollars. Even though is not super frequent transaction, it is frequent enough for the number of people doing it that you can reach revenue scale.

Only basic human needs zone: If you can figure one of the basic human needs that inhabit that zone — people must have it — then go for it, but the frequency is low enough that a nice-to-have would not survive in there. A few examples of events in this zone is picking a new school for your child or replacing the furnace in your home.

You need a big brand zone: Things that you do once every one to ten years, like buying a new car, a house or even a mobile phone. The reason you need a brand is because of discoverability. You won’t be top of mind for folks if they don’t do it that often. That’s why car companies spend so much money on brand awareness campaigns. BMW needs to create a very strong brand image over a long period in your mind for when you are ready to buy a luxury car to pick their product. You are better off playing the fat startup game, than the lean one if you want to play in this zone.

Finally, the last two zones on the top right are where you want to play. The “red ocean” zone is where you’ll see the highest number of competitors and unless you have something that’s a technology breakthrough or is a unique and clearly better (a.k.a. revolutionary) value proposition, your screams for attention will drown in the middle of a thousand others doing the same thing. The unicorns are here. There are riches, but it’s a winner takes it all game. This zone represents mobile gaming, photo sharing, social media, e-commerce/marketplaces, etc.

But the zone just below the red ocean is where the most opportunities exist for startups. Where people might do a task from a couple times a year to a couple times a week. Where it’s not a 100% penetration as to not be obvious to everyone this is a problem, but it’s not such a small segment of the population to make it unattractive. This is where gender-specific needs exist (like Dollar Shaving Club, Stitch Fix & Julep), or popular hobbies solutions (for fitness, cooking, book reading, blogging), or entertainment (video games, niche content sites).

If you are in the early days of your startup and building a big VC-backed business is your goal, I’d advise you to think how you can increase the frequency a customer transact/experiences your product and how you can create a broader appeal. It doesn’t mean you have to tackle the biggest market you can think of, but you have to be able to articulate how you’ll find a wedge into the market and expand from there.