A breakdown of EveryMove technology costs in 2014

Standard

It’s very hard to predict how much it will cost to run a startup or all the services we’ll need to use. When we get started, we make very basic assumptions of the R&D and operational services we’ll use, but we lack comparables to know if we are off. Even if this is not your first startup, so many new and better services come to exist. I thought it would be useful for many entrepreneurs out there to share what year 4 of EveryMove was like so others can use as a reference. Each startup is distinctly unique. I haven’t seen this level of breakdown, and I’m sticking my neck out there writing this post.

First and foremost, I’m not doing this from an accounting perspective, meaning that I’m not helping CFOs as much as I’m helping CTOs. And by sharing this information I also hope to learn and improve on how we develop and operate EveryMove.

The tables have information on how much we paid in 2014, how many months we have used the service and what was the monthly average cost of the subscription (if it’s a Saas product). They also have a short description of what we are using it for, and what are the plans for 2015 (Y = continue to use).

Some services have a setup or other one-time costs that doesn’t necessarily reflect the real monthly subscription cost. For example, our subscription for The Resumator is $159 a month, but we bought Job Listings directly from the service. Other products we’ve made a one-time purchase (like PRTG) or we are using a free tier (like App Annie).

Day-to-day

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
Atlassian $8,699 D2D 12 $725 Jira, Confluence, Gliffy Y
Dropbox $2,439 D2D 12 $203 File sharing Y
Google Services $1,950 D2D 12 $163 Google Apps (email, calendar, docs, etc.) Y
HipChat $522 D2D 12 $44 Internal IM service Probably replacing with Slack
Microsoft $3,016 D2D 12 $251 Office 365 subscriptions, Azure & software licenses Y

HR

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
The Resumator $4,354 HR 9 $484 Job applicant track system Y
TheMuse $1,494 HR 6 $249 Company page for job applicants Maybe (we cancelled our subscription, but if we have 3-4 openings for devs I would do it again)
TinyPulse $1,038 HR 12 $87 Company culture feedback tool Y

Marketing

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
App Annie $0 Marketing 12 Mobile ranking, competitive marketing & API Y (probably moving into the paid plan)
Hubspot $1,280 Marketing 3 $427 Landing page, conversion & messaging testing Y
Mailchimp $725 Marketing 12 $60 Marketing emails Y
SurveyMonkey $240 Marketing 12 $20 Y
Vimeo $109 Marketing 12 $9 Video hosting Y

Operations

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
Amazon Web Services $780 Ops 12 $65 S3 & other services Y
Bitly $0 Ops URL shortening service N (we replaced with in-house solution)
DataDog $1,731 Ops 12 $144 Code Performance diagnostic Probably retiring and using NewRelic only.
Desk.com $1,157 Ops 12 $96 Customer support management tool Y
DNSimple $322 Ops 12 $27 Domains management Maybe (considering Google Domains)
Eligible API $30 Ops 12 $2 Health Insurance APIs Y
Full Contact $397 Ops 12 $33 Help identify a person authority over a company Y
KeePass $0 Ops - - Password management Probably replacing with LastPass
Mixpanel $328 Ops 3 $109 Feature analysis, retention, etc. Y
Moz $0 Ops 6 Moz API to get domain information Y (we used it for a while and we’ll use it again in 2015)
Neustar $6,922 Ops 12 $577 IP Geolocation Maybe, due to high price we are considering alternatives
New Relic $3,942 Ops 12 $329 Performance & QoS monitoring Y
Pingdom $479 Ops 12 $40 Service monitoring & alerts Y
PRTG $0 Ops Low-level monitoring of servers & services Y
SendGrid $6,510 Ops 12 $543 Transactional email service Y
Softlayer $95,810 Ops 12 $7,984 Cloud & server hosting Y
Splunk $171 Ops 12 $14 Bugsense: Mobile error tracking Y
Stripe $0 Ops Payment processing Y
Twilio $50 Ops 12 $4 SMS/Phone hacks here and there Y
UrbainAirship Ops 12 $0 Push Notification Y (although they have really tighten up the screws in revenue, so it’s becoming quite expensive)

Product Development

There are a lot of dev tools not included here either because they were free or because we already paid for them previously.

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
Adobe Systems $5,342 R&D 12 $445 Subscription to Adobe Cloud for Photoshop, Illustrator, etc. Y
Balsamiq $79 R&D - Design mocks Y
Github Social coding $600 R&D 12 $50 Source code management Y
Jetbrains $498 R&D - Licenses to ReSharper & TeamCity Y
Lucid Software $59 R&D 12 $5 Diagram/chart tool N (replacing with Gliffy)
Specctr $25 R&D - Adobe PS/AI extension for redlining Y

Sales

Company/Product TOTAL Category Months Avg. Monthly What for Continue in 2015?
DocuSign $1,086 Sales Contract management Y
Go To Meeting $644 Sales 12 $54 Videoconferencing service N (Join.me does a great job)
LogMeIn $860 Sales 12 $72 Join.me: For presentation screen sharing Y
Salesforce $2,210 Sales 12 $184 CRM Y
Salesloft $650 Sales 6 $108 Sales prospecting automation Y
Toutapp $2,610 Sales 12 $218 Email template & tracking for sales N

32 Founders & CEOs of Tech Startups in Seattle Who Are Also Women

Standard

There is a lot of great talent in Seattle who are building tech startups. Sometimes it can be laborious to find them, and if you are looking for advisors, mentors or role models, or if you want to be plugged in with what great entrepreneurs are building – who are also women – I compiled the Twitter list below in an easy to follow format. Go ahead, get plugged in.

I’m sure I missed some, so feel free to add a comment and I’ll try to update the list. This list is not a comprehensive list of women-in-tech, women-in-business or even great inspiring women, it’s only of founders or CEOs of tech startups in Seattle who also have a Twitter account.

CEO at Formotus
Mother, wife, entrepreneur, geek, Romanian, mentor, mentee, leader, pilates, skier, healthy cooking
CMO & Co-founder at Meshfire
CMO and co-founder of @Meshfire. Destroyer of Boredom. SaaSassin. Forbes Top 50 Social CMO.
Co-founder & CEO at ChattingCat
We got one last chance to make it real || God is not dead || the beatles really love jenifer
CEO at GiftStarter
@GiftStarter #CEO #Founder @Cornell | #Blogs #Design #Strategy | Collector of shiny people + ideas. Welcome to my world of #love, tech & #women. Tweets r mine.
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!
CTO & Co-founder at Ada Developers Academy
software developer | founder of @brandworthy and @adaacademy
Co-founder & CEO at NQuiry
Startup co-founder with too many interests. Food Nerd, Writer, Runner, Yogini, Shoe Addict, Wino.
Co-founder at Glamhive
Founder @Glamhive & Founder @IMM (Intermundo Media). Growth hacker who hopes people on Twitter are more interesting than people on Facebook.
CEO at Hopela
Founder & CEO of Hopela. @HopelaTweets. Building happy products that people love.
CEO & Founder at Julep
CEO & Founder of Julep @julepmaven. Entrepreneur, wife, mom, sister, daughter and girlfriend. http://t.co/0ZvDRJ7nmZ. Instagram: @janeparkjulep.
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
Co-founder at Booktrope
Books, business and the business of books. Mom. Marketer. Co-Founder of Booktrope. Submissions are open! http://t.co/q27HzqEMOH
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.
CEO at LiquidPlanner
CEO at @LiquidPlanner. Entrepreneur, marketer, neat-freak, mom.
Founder & CEO at Magicflix
Tech Entrepreneur, Founder @Magicflix (Techstars ’14), @InvestmentYogi, previously @travelocity
CEO & Co-founder at Zealyst
Cofounder & CEO of @Zealyst. @WitSeattle Board Member. Enthusiastic about all things startups, mediating, Seattle, whiskey & running.
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.
Founder & CEO at Runway2Street.com
Founder & CEO @runway2street1 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 Skilljar
CEO and Co-founder @Skilljar. Helping instructors teach online. Stanford GSB, MIT, Amazon.
CEO at Moz
CEO of Moz. She likes baked goods, reading, goofing around with her son, and bad music.
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 at Glamhive
Co-Founder, Glamhive
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.
CEO at OfficeSpace.com
CEO, http://t.co/drOgx38wum. Passionate about entrepreneurship, education and living healthy. I’m always on the move. I like to laugh.
CEO at Keylime Toolbox
I tweet a lot about being stuck behind trains. I’ve ramped up tweeting about digital marketing at @keylimetoolbox, if you’re more into that.
Founder at WeLearnLive.com
Marketing Science Geek @Microsoft, http://t.co/KvC46fWVXv Business Model Junkie, Trendspotter, Lover of #Startups, Passionate about innovation in #Africarising
CEO & Founder at Fleetfit
(UPDATE: This account has been deleted since I did the list last week)
UPDATE: More accounts…

Couch to Marathon

Standard

The science of physical activity is exceptionally good — particularly if you compare to less understood lifestyle sciences, like sleep, stress, addiction, behavior, and nutrition – so there isn’t much that a non-expert like me can add to the conversation. But since I’ve done it, I went from zero to running a Marathon, I can share my own experience, talk about my own mistakes and the mistakes I’ve seen done by people around me who tried and failed.

It’s worse if you are physically fit

I can’t tell you the number of times I heard a story of a fit person who never ran and get badly injured after start running. The worse case I know of is an acquaintance that broke a bone. These people share a common trait, they have been exercising for a long time, so their heart and muscles are in top shape. They start running and don’t get tired as a typical new runner would, so they push themselves. But their biomechanics is not accustomed to running, so they get bones, ligaments or tendons injuries.

It happened to me to a certain extent. I started running in 2011, but I was a couch potato. I wasn’t overweight, but I didn’t exercise more than playing sports once in a while. I signed up for a half-marathon to find motivation – it worked – and went to do a first test run. I was able to run 5K (walking + running) so I was excited that I could start my training at that point. Two weeks in (after 5 or 6 runs), I had a foot injury. I could barely walk, and after going to the doctor I was put on run-rest for two weeks and get orthotics.

One of the things training plans designed to get you started on your first 5K do is to make sure you start super slow. It can take easily six to eight weeks for you to adjust to running, even if you are super fit, so taking it slow is critical.

Knee pain

Nine out of ten friends who tried to run and quit tell me the same story: my knee hurts. It actually happened to me. Halfway my four month training to my first half-marathon, I was crossing the 6-mile long runs and I started feeling knee pain, in just one knee. Every weekend would be the same thing after that, run 7 miles, have knee pain, limp back to the house, ice it, put Icy Hot and be OK in a couple of days. I had no problem during the 3 or 4-miles run during the week, but after 6 or 7, it was always bad. When I run my first half in June 2011, after mile 10.5, my knee was in so much pain that I had to walk the rest of the race. It was incredibly painful, disappointing and unsatisfying!

Running is a repetition sport. You do the same movement 60-100 times per minute. Each minute adds up a little. A slightly unbalance in a muscle strength or posture, even if just a millimeter after a while starts to create inflammation. This is not different than carpel tunnel / tendonitis in your hand if you use a mouse or keyboard for too long. Personal trainers, physical therapists, massage therapists and chiropractic, particularly the ones who specialize in sports medicine, are exceptionally good at identifying biomechanical problems and prescribing a set of exercises or stretches that will address your need.

For me, like for a lot of runners, it was a weakness of the IT band, a muscle that connects from the hip to below your knee. It’s the muscle that becomes weaker and weaker the more you sit. Guess what? We sit a lot in our lives. Knee pain, the vast majority of the time, it’s nothing else than an indication of an IT or hip muscles problems. Train those muscles and you are good. A few typical exercises are very good for those muscles, including squats, rollers, monster walk (yeah, that’s a thing), etc. Search for IT band or hip muscles stretches and you’ll find excellent tips online. I also started using a standing desk. Hard in the first few weeks, but then you get used to it.

Finally, posture during running makes all the difference. When I registered for the Chicago Marathon in 2013, I knew that I needed to step up. The knee pain – still present but less so – and everything that I didn’t know about running wouldn’t take me to the finish line. So I’ve got a personal trainer. Among the many things, he pushed me to see a physical therapist.

My first visit to the physical therapist, she did a gait and posture analysis in a treadmill setup with laser sensors and camcorder. Holy shit, it was bad. They showed me all the wrong things I was doing, from raising my feet too much to turning my feet outwards on each step, and from leaning a little to the left to hitting the ground with my heels.

I won’t go into too much detail, but the secret that worked for me is to run leaning forward (as if you are about to fall forward), hitting the ground with the middle or front of your feet, never with your heel, and having short strides so you don’t spend too much energy lifting your heels at each step.

Holy shit! It worked amazingly well. In July 2013, it was the first time in two years that I ran more than 7 miles and had no knee pain. Zero. Not only that, but because of my better posture and new running style, I felt a lot less tired because I was spending a lot less energy. It worked!

My training to the Chicago Marathon was exceptionally motivating because I was able to focus on endurance and training the parts of my body that needed training – lung, heart, circulatory system, liver, etc. – instead of worrying about muscles, bones, ligaments and tendons.

Endurance is different

I had done three half-marathons before I decided to do a full marathon. Turns out there is a huge difference between a half and a full. Going from a 5K to a half-marathon is just about more of the same. I believe almost any person can run a half-marathon if they train for it. For some people, it will be harder if they are obese, but it can be done. A full marathon, on the other hand, it’s a different sport in my view. It’s about endurance.

Having muscles, bones, ligaments and tendons in top shape is just table stake. It won’t take you to the finish line. To train for a full marathon, you’ll need to learn a lot more about nutrition (before, during and after runs), about hydration, about electrolytes and lactate. Marathon training is about training your liver, lungs, heart, kidneys and many other systems of your body so that it’s using energy and producing/consuming lactate in the most efficient way possible.

There is a common expression in endurance running called “hitting the wall”. In colloquial usage, hitting the wall means that you are really tired and can’t continue anymore, but in sports medicine hitting the wall is a lot more scientific than that and it’s explained by the amount of energy and lactate in the body. I’m not qualified to talk about this, but you can read about it or get an endurance personal trainer that will help you to identify the best training program for you.

The Art of Forgetting Your Own Product

Standard

File this under “Ignorance is Bliss” – As product builders we have a deep understanding of how our product works, from a functional point of view (i.e. how to get a task done) to the value proposition (how to use it right and get the right value out of it). And there lies two big problems: If you (& your team) know it so well a) how you explain to users, and b) how do you identify blind spots on your UX.

This is scientifically known as the Curse of Knowledge. Although the research that identified it is from 40 years ago, the first time I heard about it was in the book Made to Stick. Even the Wikipedia page for this cognitive bias is only two years old. So, more likely than not, you have not put a name to it, but you know it well because you certainly experienced it. It’s when you try to explain something to someone and they don’t get it and you think they are stupid, when in reality you are missing steps that you assumed they know about it.

Product Education

Nowhere in your product the Curse of Knowledge shows up more often than on your product own documentation, marketing material, tooltips and hints. It might be obvious to you that “Connections” should mean People (if you work at LinkedIn), but for others that might be confusing as hell because there are other meanings, particularly in the context software and social network.

It’s not unusual for people to read the content of your product homepage (or app description) and still not get it. Actually, when I review and screen companies who submit to TechStars, SXSW Accelerator or other programs, I always feel like writing a blog post on how not to create a homepage. It takes a while for me to unpack all that language in what it’s actually trying to say.

Turns out that a video is worth a thousand words (not an image, a video). I really like the short videos that many companies create to describe their product. It’s usually done by a third-party company which makes the language a lot more accessible and colloquial. Yes, there is research proving that videos reduce homepage conversions, but that’s probably because people got it once they watched the video and learned the product wasn’t what they were looking for, instead of signing up to find out later.

And since we mentioned about third-party doing your video, that’s a great way to get out of the Curse of Knowledge. Get some consultant, copywriter, friend or even a new user to describe it back to you the things they did, how they would tell another person, etc.

Product Experience

Yes, learning about the product should not be a separate experience, but for this post I’m talking about it in two pieces. Although product education is where the Curse of Knowledge is the most obvious, your product experience is where it creates the biggest negative impact. When we know too much about how things are interconnected on our product, how changing a setting affects the downstream experience, or what connecting a third-party service will do to the experience, we have a problem.

We think these tasks are easy and people will get it. And then we add more features, make the product more awesome and the users who have been with your product for months or years have no problem, because they are into the Curse as well and they don’t complain.

No product, in my opinion, represents this best than Google Adwords. I used Adwords as soon as it came out and it was incredibly trivial and great product. There wasn’t much to learn and getting maximum value for your investment of time was easy. If you have never used Google Adwords, or if you haven’t used it for a while, go check it out. It’s a clusterf*ck of concepts, layers of indirection and ad lingo, that for the average small business advertiser it’s absolutely daunting. You know why it’s this way? Because the people working on it knows too much! They can’t unlearn. They have the Curse.

The spell to break the Curse

Sorry, there is not magic spell. But there are two workarounds.

Let me acknowledge there are a few people who are special. They were born storytellers and having more depth of knowledge about a product doesn’t seem to affect on how they tell the story to newbies. I’m not a storyteller, so I had to find workarounds the Curse.

My primary go to strategy is to take a half-day off. Not from work, but from my previous knowledge on how my product works. I open my browser in incognito mode or uninstall my app, and start as if I was a new user. First, by finding it on Google or in the App/Play Store, reading the copy, going through sign up and on-boarding, following all the instructions and trying to understand the concepts as if I didn’t know them. This exercise alone allows me to produce 20-page long documents of what’s wrong with the product, from miniscule things around the copy (“we use the word Add App here but Add Device there”), to big problems in the information architecture and the value prop we are trying to create. Sometimes this exercise is devastating because you find so many problems with your product, but it’s better for you to find it and take the time to fix it than to just be ignorant and failing.

A second technique is to get someone who is not part of the Curse but committed at spending the time and giving you an in-depth look at your product. You can buy that, like a consultant. You can get a friend or family member to do it for a couple of hours – but you can only do it once. Or, you can get new employees to do it as well. It’s actually a mandatory part of my employees to provide with a “first impressions” document at the end of their first week, which includes a list of problems or questions about the product.

The Unmet & Unspoken Needs of Customers

Standard

Identifying big opportunities is part science, part art. If someone pitched you in 1999 that we need to create a fully open micro-blogging platform that each person can post up to 140 characters for anyone to see, your reaction might be the typical “What problem are you trying to solve?”. If you think about the great tech companies of the last four decades, like Microsoft, Apple, Google, Facebook and Amazon, they all share the same start. They solved a problem that either people felt was solved already or they solved a problem people would have been incredulous it was a problem worth solving.

That’s what is so hard in identifying great opportunities. If you use typical research strategy by asking customers what problem they have, through modern customer development tactics or traditional market research, you get pigeon-holed into a very strict view of the world. And the more you hear the same need, the more it validates to you that it’s a real need and you know the customers who will buy it. You go, you build and you start selling. Then you realize there are dozens and dozens of competitors popping up everywhere. It’s exactly because that need was identified and verbalized by potential customers.

We heard this famous quote from Henry Ford many times: “If I had asked people what they wanted, they would have said faster horses”. And that’s the problem. People have a hard time imagining a radical different future. Even entrepreneurs. Even “innovators”! When many customers can verbalize their exact need, the time to start solving that problem has passed because the solutions are already hitting the market.

I’m not opposed to Lean Startup and Customer Development, but it leads to a very narrow view of what’s possible and what should be done.

It’s a lot more powerful when you hit a problem that you have identified and you don’t believe people are solving it because the market doesn’t need it yet. This is how Yahoo got started. Or, when an entrepreneur can paint a picture of a future that’s so unique that you believe she’s crazy, or that she’ll fail, or that the market will not exist for it.

The reason building Unicorns are hard it’s because they go against conventional wisdom. It requires a lot of conviction from an entrepreneur and the necessary resources and skills to go after it.

Open Letter to Larry Page: Let’s spin-off Blogger!

Standard

Dear Larry,

I remember using Blogger for the first time just a couple of years after Ev’s launch. I remember me working at Microsoft and pitching to the EVP at MSN the idea of building a blogging platform – to which I got a response they were already building MSN Spaces. I actually left Microsoft in 2004 to build a blogging platform called Sampa. It was more than a blogging platform. It was a sharing platform. After my startup shutdown I took my blog to Blogger and I have used it since 2009. Last year I gave up. I gave up hitting my head against the screen to try to have even a very simple blogging tool that worked.

Blogger has a tremendous brand, and blogging is alive and well. We went through a peak of inflated expectations in the 2002-2006 period in which every person believed they should have a blog, and a subsequent dramatic drop to the disillusionment period. We are finally entering the era of enlightenment in which blogging is being used by the right people for the right reasons. The hype is over. Reality is here. This tweet storm by Chris Dixon encapsulates some of that sentiment. I feel — as technologists — we are not giving the everyday experts the best opportunity for them to share their knowledge and make the world a better place.

Medium is doing a tremendous job at making incredibly easy for people to share thoughts. I like Medium and I think they will do great, but there is still a missing component of calling something “home”. Medium is not me. Medium is not mine. A blog is. I want my place. My brand in the web. Millions of people want that too.

I’m a big fan of Matt Mullenweg and WordPress as well, but WordPress is not it. WordPress is not a blogging platform anymore. It’s a multi-purpose website builder with incredible power and customization. That’s not what I want, either. I’ve been using WordPress.com for the last 2 months and I don’t feel I found what I want.

Clearly, Google is not investing in Blogger. It hasn’t for a while. It’s probably running on old infrastructure, with old codebase and there is a tremendous technical debt that doesn’t excite the brightest minds from Google to go work on it. Its iOS app has not been updated since June 2013! In 2014, the official blog of Blogger has had only 1 blog post! Even on Android, blogger had one release in 2014 which includes the following comprehensive list of what was released: “Minor bug fixes”.

I believe that blogging as whole will have a renaissance. It’s a place that’s a better fit for things that you want out in the open. That you want people to find. It’s for both, the evergreen thought and the public opinions about of what’s happening now. Facebook, Twitter or Google Plus don’t address this need.

As an industry, we could build a much better way for people to create content, for people to find content and for people to build community around that content.

I’m absolutely sure I’m not the only person that feels this way about blogging and about Blogger. Don’t let a good thing die or rot. Blogger has impacted the lives of hundreds of millions of people. Why not make a multi-billion people opportunity. Let’s create this opportunity.

Yours truly,
-Marcelo

Attention Cannibalization

Standard

If you come from a business or marketing background, revenue cannibalization is something you are familiar with. It’s the concept of a business launching a new product line that is creating revenue by taking revenue away from another product line in the same business but not growing the revenue/profit pie. If you are an engineer or designer and you haven’t heard about revenue cannibalization, you just did.

There are good reasons to do this. You can do it because you know one type of business is dying and a new model is becoming more prevalent (e.g., people are subscribing to Office 365 in lieu of buying a full license of MS Office). Another reason is to convert users from an older version of a product to a newer version (e.g., Gillette blades), either to prevent customers jumping ship or because the new product will present newer revenue opportunities in the future.

There are bad reasons to do it, and that’s most common than not. It’s when a company is too big and lacks upper management coordination, so many units are building similar or substitutes products and competing against each other, or the same product has multiple add-ons that compete for the same dollar. In those cases no new value is being created for the company as a whole, just revenue is moved from one product to another.

What if we think of the products as business, and the features as products?

Let’s take this a level down. Imagine now that you are talking about a single product and instead of revenue you change the metric to attention. This is attention cannibalization. The idea that a new feature might be cannibalizing the attention of an existing feature, without creating any new attention to the product as a whole.

This is dangerous and I’m going to give away the conclusion first! It’s dangerous because you are led to believe what you are doing is improving the product and the overall experience and it to “validate” decisions made months ago, at the cost of not moving the product forward at all — you are actually moving it sideways.

Product Managers, Designers or Developers, might talk about their success in terms of usage of their feature. Maybe there was a feature that didn’t exist before, and after they launch they see that 30% of users use it right after sign up. Pop the champagne! Or, they change how a feature work, and they see that the usage for that feature went from 2 times per visit to 3 times per visit. Holy crap, a 50% improvement in usage!

The reality is that in a system, looking at the production value of a single component is worthless to understand the value of the whole system. But wait, it could be worse than that. It could be a new feature took attention away from a higher value feature. Maybe you added a new way for users to customize their avatar and that choice was enough to justify some folks from not upgrading to the premium version of the product. Revenue starts to dip, slowly and given the noise in the revenue signal and the fast speed in which new features are released, it can become quite harder to figure out the root cause of a drop in revenue, or a drop in overall conversion, engagement, virality or retention.

Another problem to pay attention to is when the attention cannibalization has a delayed impact. You add new feature X and you see a 25% usage on that feature on a daily basis and no drop in revenue or any other feature usage, so you might say to yourself that was worth it, but then a couple of weeks later you start experiencing a drop in retention. For example, when Twitter decided to auto-follow accounts for new users, and it seemed like it was a good idea because there was a jump in initial engagement with the product, but overall was a bad idea since retention was affected by it. This is the short-term gain for long-term loss strategy that you might not even know about it.

At this point you might be asking how to identify this problem. First and foremost, you must look at the product as whole. Did conversion, engagement, virality and retention went up or down for the product as a whole? Second, you must look at cohorts of data and see what’s the longitudinal impact of each feature launch? Third — and this might go against all the new trends in Lean Startup — don’t ship too fast. Making dramatic changes to your product without understanding the impact of previous changes is the sure way to lose track of what’s working and what’s not — clearly this is much easier said than done in this day and age.

Are you the user or the product? The tale of Parents Night Out vs. Kids Night Out.

Standard

You might have heard the phrase “If you are not paying for the product, you are the product” as a way to describe tech consumer companies where their business model is advertising. It’s a very limited — and wrong — way to explain the relationship between businesses, who they serve and who pays for it.

As much as we believe tech entrepreneurs are trail blazing new paths, mostly we are just mimicking paths previously traveled by other industries. My own business matches the description I stated above. The buyer is employers, but the user is the employee (a.k.a., a person). So who are we serving? Employers or employees?

When a parent goes to the supermarket and buy yogurt for their kids, there are two customers being served. The parent who is paying for it, and the child who will actually use (eat) the product. So who is the primary customer? The parent or the child? The answer is pretty obvious to me. It’s the child. If you can’t satisfy their demands/needs the buyer (parent) won’t buy it. They might even buy it once, but it won’t be a repeat buy (no retention).

From the parent (buyer) perspective, the question they are asking is not “is this the best?” or “is this the one I want?” — Even though they are asking those questions out loud, but not necessarily using it to make their purchase decision — they are implicitly focused on “is this safe enough to try?” If parents think a brand of yogurt is “safe to try” (based on whatever parameters are important to them) and kids like that yogurt (it serves the customers’ needs), you have a winning combo. Now you need to create awareness and generate demand, and that’s another topic.

Which brings me to the tale of two elementary schools I’ve been exposed too. Both of them have this “product” in which they will babysit kids so parents can have the night out for a few hours. They both provide activities to kids while they are there, they both have about the same quality of service, but one school gets who is the customer and the other doesn’t. That clearly shows on the number of participants in those programs. By focusing on the interested customers (the kids) and making it safe (for parents), one of the schools made a better product and it’s clearly more successful.

The bottom line is that you should focus on the user of the product first and foremost, and make it safe enough for the buyer. If you are making product decisions to benefit the buyer in detriment of the user you’ll lose because either the buyer won’t buy or they won’t renew. Obviously, it’s better when you deliver win-win to buyers and end-users, but if it’s not possible, stick with the end-users. You might lose business over the short term, but it’s the only way to create a sustainable business.

Helping More Women (& Men) in 2015: Open Office Hours

Standard

Last year I held Open Office Hours to meet with anyone who was interested in meeting with me, and it was a very successful endeavor. I don’t know if I was helpful/useful to all the people I met with, but for a few of them I’m sure it was. So this year I’m bring the idea back with a small twist: I’ll reserve at least 50% of my time to meet with women.

I’m not trying to get anything out of it personally (or professionally), just good karma by helping you. I’ll meet with anyone who wants to meet with me. We can talk about anything that you think it will be useful to you, but given my background I can probably add more value on topics around Startup, Technology, Career, Seattle, Business, etc.

The idea of reserving at least 50% of my time to meet with women came from Jason Preston, who wrote a great post on reaching out across the gender-divider, inspired by a conversation with his wife, Monica Guzman (both Jason & Monica are great friends of mine). I wish more men would do this, but for now I’ll do my part lead by example.

Here are the details of the Open Office Hours with me:

Where: Row House Café, Seattle

When: Two slots every Tuesday:

10:00 AM: Reserved for women
10:30 AM: Anyone

Who: Me & You

Why: Because you need help or just talk it out loud.

How: Find & book it here: www.meetme.so/calbucci

There are a caveat though. I won’t talk or help you with these three things: Finding a CTO or a co-founder, finding investors for your startup, and buy any product or service from you. In other words, don’t come to pitch me! Come to learn something new. I might not have the answers, but I’m sure I can give you some food for thoughts.

The M-Shaped Brain

Standard

Recently I decided to re-brand my blog the “M-Shaped Brain”. It’s a concept I’ve been thinking about for a year. This is about a skill trait most commonly found on entrepreneurs and it’s clear when you see someone that fits into this pattern.
You probably heard the concept of T-shaped persons (or skills). That’s a metaphor to indicate someone who has a breadth of knowledge, but they are deep in one field. For example, a designer who understand well about software development, marketing and sales, and she’s fundamentally a great designer. Being T-shaped helps her do her job better and have empathy for other areas of the business.
But there is a more unusual type of person that’s M-shaped. More like this M:

m-shapped_03

Not only M-shaped skills have depth, but they have multiple incongruent areas of depth. This person can write back-end code, create a marketing tactical plan and strategize SaaS pricing. Or, she can create front-end CSS, write copy for the newsletter, pull data from a database into Excel to analyze variables correlation, and be at a board room talking about capitalization strategy.
Different from T-shaped — something everyone should aim to achieve in a professional setting (you can’t be a great chef without having some understanding of food production or the food business) — the M-shaped personality is rare because it only creates value in very specific settings, like entrepreneurship.
I can easily point many folks who are M-shaped: Drew Houston (Dropbox), Elon Musk (SpaceX/Tesla), Larry Page (Google), Marc Andreessen (a16z), Danielle Morrill (Mattermark), Hadi Partovi (Code.org) and many others. But these are the mostly successful cases. There are many, many more out there, including myself.
This concept solidified in my mind after this tweet storm by Marc Andreessen. He quotes a CS professor talking about developers who shift effortlessly between abstraction layers, but I think the same can be applied to entrepreneurs who are M-shaped. The quicker you brain can abstract low and high level concepts and how they intertwine and impact each other and the business, the more likely you are to quickly make good business decisions that have complex repercussions.