Dropbox Is MySpace, Box Is Facebook
I was having a deep conversation about puppies and socks with Box CEO Aaron Levie in the BoxWorks press room Tuesday afternoon when, as Levie is wont to do, he said something true.
"It's about the platform. It's always about the platform."
See also: How Facebook Beat MySpace: From College Dorm To Platform
This came as a punchline to a string of vaguely off-color jokes about memes (Levie's brain is a cloud-storage service for Millennial Internet arcana). Nonetheless, it's serious business.
Enter The Platform
This year's BoxWorks user conference was something of a coming-out party for the Box Platform, the distilled set of storage-and-collaboration services meant for developers to embed in their apps. Box first teased us with what would become the Platform in April at its BoxDev conference, and in the subsequent months, it was available only as a closed beta.
That changes in October, when a free developer version and a paid enterprise version of the Platform become generally available. When that happens, Box will go from a business that charges companies a fee per employee who uses its service to a business that charges developers a fee per user.
It takes Box out of the business of competing with Dropbox and Google Drive, in other words, and puts them in a category more like Amazon Web Services—or Salesforce, Stripe, and Twilio, three platform businesses Levie compared Box to in his keynote.
Box took its first steps towards this model in 2014, when it started charging developers for its content-storage service based on "API actions"—views, shares, etc. But this is a more decisive move towards profiting from apps developers build on top of Box.
Box Platform Enterprise Edition has a pricing structure loosely similar to the older Content API, with a free developer tier for building and testing, and a paid tier starting at $500 a month for 100 app users.
Jeetu Patel, who recently joined Box as its chief strategy officer and senior vice president of platform, told me that the per-user price will fall rapidly with volume and that "pricing will not be the reason people don’t do business with us."
The risk for Box will be that developers will go straight to, say, Amazon or Microsoft, buy storage in bulk, and build apps on their own. Levie and Patel are betting that customers like Raymond James Financial—which demonstrated a feature for viewing mutual-fund prospectuses and other brokerage documents at BoxWorks—will find it cheaper to use Box.
Why Box's Platform Could Make Dropbox Irrelevant
It's no secret that Dropbox is floundering when it comes to its product direction—particularly with respect to developers. At the TechCrunch Disrupt conference earlier this month, Dropbox CEO Drew Houston barely talked about the company's platform.
Dropbox hasn't held a big developer conference since its first (and so far only) DBX event in 2013. And the Dropbox platform advertises itself as primarily a way to access files in users' Dropbox accounts.
Contrast that to Box, which sees Platform as a way to get past the idea of making users sign up for accounts in the first place. Instead, app users get the features of Box's storage and collaboration services within whatever Box-enabled app they're using.
Remember MySpace? It, too, touted the number of users it had. It took years for Facebook to surpass it in raw numbers. When Facebook rolled out its platform, however, it was game over. Facebook had an army of developers at its back, and MySpace's belated effort to catch up in the platform race never caught up.
Social networks are very different beasts than enterprise services. If they share anything, it's the power of platforms. Dropbox's API lets developers access Dropbox. Box lets them build apps we can't imagine. If Dropbox doesn't get its developer story together, and soon, it will look like many a service that had a heyday of popularity—and then faded.
Photo by Owen Thomas for ReadWrite
from ReadWrite http://ift.tt/1YNbfub
via
How To Scale A Service-Based Business
Guest author Scott Gerber is the founder of the Young Entrepreneur Council.
Scaling any business takes time, money, and often, a lot more effort than you think. Scaling a service-based business in particular is tricky—we've seen many try to scale and then crash as they outpace their own growth.
So how can you make sure not to follow in their footsteps? I asked 9 entrepreneurs from YEC for their best advice on scaling service-based businesses. Here, they share what strategies worked for them, and what they would suggest others do.
1. Outsource, Then Hire
When growing rapidly, the knee-jerk reaction is to hire to meet the increasing demand. But before hiring staff, determine if any of the roles and services could be performed by a robust pool of freelancers or contractors. These resources not being on staff would be seamless to the client or end user, but allow the company flexibility if business slows or if someone doesn't work out. You can always hire, but using outside resources first allows the owner to think about long-term growth strategy versus growing out of reaction to the immediate workload. And you may be able to get expertise and experience from contractors that you couldn't afford to hire as full-time employees. —Angela Harless, AcrobatAnt
2. Remember You Can't Do It All
When my business first starting growing, I spread myself too thin by trying to still be involved in everything. Once I learned that I didn't have to feel guilty about not being involved in every task, I became less stressed, and Crowd Surf started to flourish even more. It's important to surround yourself with team members who are amazing, because you're going to have to delegate projects to them. We established a great system of weekly calls and reports to monitor the success of our team members, so I can be knowledgable about everything that's happening and not become overwhelmed with a massive workload. —Cassie Petrey, Crowd Surf
3. Surround Yourself With the Right People and Right Attitudes
As much as you want to be in multiple places at once, it is imperative that instead you find enthusiastic people who share your brand's mission to help you scale. The right or wrong person can make all the difference. Trust your gut when interviewing and recruiting. If it doesn't feel right, or if they don't share your passion, they are not the right person. Have a manual in place and a training process ready to go before you start looking for the people. Once you find the right people, train them on your brand's guiding principles so that when they expand your service it is as if you are doing it yourself. The person you hire needs to be competent in the service they are providing, as well as knowledgeable of the market they are serving (both location and demographic). —Lindsay Pinchuk, Bump Club and Beyond
4. Develop In-House Tools
To scale effectively without having to drastically increase payroll costs, identify tasks that could be handled more effectively and find a developer to create your own set of in-house tools to expedite them. At one of my startups we found that hiring more people for blogger outreach made the cost of training and HR too high, which limited our growth. Instead, we brought in a programming team to automate many of the tasks specific to outreach. The tool connected email messages to projects, enabled us to create and send out templates, allowed us to create reminders for tasks, and much more. Using this tool, we were able to double capacity for each employee, thus reducing the need to hire in order to grow. —Marcela DeVivo, National Debt Relief
5. Create Detailed Training Materials
Scaling a service-based business means you need to be able to have other people deliver your service as good or better than you would yourself. The only way to do this is to establish an extremely efficient and thorough training program. You will need a manual that explains in detail how to perform every aspect of the service so it can be executed the same way every time. Create accompanying videos, classes and training seminars. Even though people are delivering the service, it needs to be as automated as a factory-made product would be. Make sure to provide significant training time on professionalism and manors, as service-based businesses are about relationships. —Thomas Minieri, Planet Ballroom International
6. Focus on Your Core Strengths
Maintain intense focus on the things only you can do, like strategy and business development. Prioritize those things above all else and build processes so you can see your vision through the work of someone else's hands. —Lindsay Mullen, Prosper Strategies
7. Use a Professional-Services Management System
Having a proper system in place is critical to scaling up a service-based business. For example, if your work requires time tracking, look for a system that supports time logging and resource management. On the other hand, if your work is more production-based, look for a project-management system that supports milestones and deadlines. With both options, you can see at a glance how every client engagement is doing. Ultimately, a proper system should give you a sense of control by knowing how many projects are active, who is working on a what and which resources will become available when. These, and many more questions, can only be answered if you build on the foundation of a solid professional services management system. —David Ciccarelli, Voices.com
8. Build Partnerships
Chances are, your customer in a specific industry buys multiple products or services from different vendors. A strategic partnership can be a very powerful weapon to scale your business. Look for those complementing vendors (products or services) who your customers are buying from, leverage an opportunity where your service can integrate into their product or service and vice versa through a revenue share arrangement. For instance, if you're a mobile app consultancy, you can partner with a web development or a creative agency. —Rahul Varshneya, Arkenea
9. Build a Tech Platform
Even if a business is service-based, a founder should build a tech platform to scale his or her business. The platform should be able to help the business streamline operations and improve efficiencies. For example, my company built a proprietary customer-relationship-management system to help ourselves efficiently and effectively manage our customers in a service-focused industry. —Jason Thanh La, Merchant Service Group and K5 Ventures
Photo by plantronicsgermany
from ReadWrite http://ift.tt/1MUZqy0
via
BlackBerry Embraces Android, But Promises Not To Leave Developers In The Cold
After months of rumors, BlackBerry CEO John Chen confirmed rumors that the Canadian smartphone maker was releasing a keyboard-equipped phone running the Android operating system. It's called the Priv, for "privilege" and "privacy."
"What’s unique about our Android phone is that we are collaborating with Google to bring the best of BlackBerry security and productivity to the Android ecosystem," Chen wrote in a post on BlackBerry's company blog.
Fork You, Developers
With this move, BlackBerry is making an already mixed message to developers more muddled. Chen said BlackBerry would continue to support and develop the BB 10 operating system. Yet BlackBerry has also been encouraging developers to write apps for Android and then adapt them for newer BlackBerry devices. The result is a lot of low-quality apps.
BlackBerry's most devoted developers haven't been excited by Android. One developer, who goes by the username helex on BlackBerry's developer forums, wrote in August:
I personally use BlackBerry because it is not Android and a lot more advanced and "more open" than iOS. So from this personal aspect I'm not interested in Android and in case BlackBerry10 goes "END OF LIFE" (which I don't belive since many enterprise and gouvernment customers are relying on it) I would need to search a new platform to play with, to use and to target my own apps on. But we're still far away from there, yet.
That's BlackBerry's challenge in a nutshell. The Priv won't appeal to its most loyal developers—a small but vocal group, who are often creating special-purpose business apps for customers who standardized on BlackBerrys in their workplaces.
See also: Why Android Won't Save BlackBerry, And BlackBerry Can't Help Android
The Priv will, however, have access to the far larger pool of Android developers, who won't have to learn a new set of tools for adapting their Android apps to run on BlackBerry's proprietary BB 10 operating system.
It all seems too little, too late. BlackBerry's trading on the affections of consumers who cherish the BlackBerry brand and physical features like the keyboard, while confusing developers who make the apps on which smartphones live or die.
Screenshot via BNN.ca
from ReadWrite http://ift.tt/1WnUW4R
via
What's Different For Women In Tech Now: They're Taking Action
In two weeks, the industry's seen two very different panels discussing women in tech. One was a setback—while the other pointed the way forward.
I'm not sure if I should even count the Salesforce-sponsored Women's Innovation Panel at last week's Dreamforce conference as an occasion where people discussed women in technology. Lauren Hockenson from the Next Web has already deftly eviscerated the event, which included the weird, insulting scene of Oprah sidekick Gayle King questioning the paternity of YouTube CEO Susan Wojcicki's children.
A very different panel unfolded at TechCrunch Disrupt in San Francisco Wednesday, where the publication's former coeditor Alexia Tsotsis spoke with Pinterest engineer Tracy Chou, who pushed the tech industry to publish statistics about the gender and race of its workforce; Joyus CEO Sukhinder Singh Cassidy, who created Boardlist as a "marketplace" to find qualified women to join corporate boards; and Isis Anchalee Wenger, a platform engineer at OneLogin whose appearance on a recruiting billboard prompted her to start the "#ILookLikeAnEngineer" movement.
Changing The Picture
The reality is that women still face an unwelcoming environment at many tech companies; many choose not to pursue careers in tech in the first place, apply for tech jobs, or stay in them once they get there. Even companies embracing new policies, like Chou's employer, Pinterest, are finding it exceedingly hard to make progress on improving their diversity picture.
“Before, I took it for granted that things wouldn’t be equal," Chou said of her awakening. That changed as Chou began speaking up—and taking concrete action, like publishing tech companies' gender ratios in engineering departments.
Cassidy, too, was spurred to create the Boardlist in an effort to eliminate the "pipeline" excuse, arguing that the problem in boards isn't a lack of women—it's a lack of women in the personal networks of overwhelmingly male tech founders and venture capitalists. In other words—to use the popular tech parlance—it's a "discovery" problem.
Wenger's story was more personal: Her company asked her to be photographed for a recruiting billboard, which resulted in a lot of abusive online commentary directed at her by people who felt her picture somehow didn't "represent" engineers. Her response was to start a movement around a hashtag, #ILookLikeAnEngineer.
In a Medium post discussing the episode, Wenger noted the online commenters' lack of empathy. At TechCrunch Disrupt, she repeated the call for empathy as a way to solve the problem of women leaving the tech workforce.
"Helping to create community and a culture that fosters empathy are incredibly important at creating retention," she said.
Cassidy agreed that retention was key: "One large opportunity is for companies to keep women in the workforce, to keep that talent as opposed to losing it."
Action Against Sexism
What was compelling for me about the Disrupt panel—in contrast to the Dreamforce disaster—was that Cassidy, Chou, and Wenger have all taken action using the tech industry's own tools and language to change things. Those efforts—and not a 20-minute chat—are what will have lasting impact on the industry.
The numbers are still bad, and the stories that women share about their contemporary experiences in the workplace are still depressing. But there's a lot of reasons for hope—and reasons to think there may be a day, sooner than we expect, when we don't need to discuss diversity in tech, because it's just a welcome reality.
from ReadWrite http://ift.tt/1VaNV4R
via
Dropbox Must Avoid The Fate Of Your Fax Machine
Dropbox CEO Drew Houston, long cast in the role of upstart, found himself in the odd position of defending the technological status quo.
At the TechCrunch Disrupt conference in San Francisco Monday, TechCrunch editor-in-chief Matthew Panzarino asked Houston if Dropbox was poised to thrive in a world where conversations are replacing files.
File This Away With Your Faxes
Dropbox, in essence, replaces your laptop's local file system with a file system in the cloud. But on mobile devices, we generally don't worry about arranging files in folders. Instead, we accomplish tasks with apps, which abstract away the idea of files.
"We're a company that embraces new ways of doing business—we still have a fax machine," Houston said.
Houston's point was that technology accrues in sedimentary layers. The new layers over the old. For tax forms, real-estate transactions, and other obscure bureaucratic processes, you still need to fax.
A concrete example of that in-with-the-old strategy is Dropbox's increasing integration with Microsoft Office, including a "badge" feature it rolled out last week which lets you see who's editing a Word, Excel, or PowerPoint file and allows you to update to the latest version.
The risk to Dropbox is that it gets left behind as people increasingly move past files. Think of a Zendesk ticket, an Evernote note, or a Quip chat thread. In August, technology entrepreneur Alex Danco predicted that Dropbox might "die at the hands of Slack," as workers solve problems by communicating, not creating documents.
Free To Share With You And Me
A few hours before Houston took the stage, Dropbox announced new team-collaboration features, centered around the idea of a shared team folder—there's that old file-system metaphor again.
Notably, Dropbox made a feature that lets users link personal and business accounts, previously reserved for paying business customers, available to free Dropbox Basic users.
That seems to me like a move made out of weakness, not strength. Slack and many other workplace tools have free versions that allow teams to get started using the service—and then lock those teams in to paid versions later, a strategy often called "freemium," short for "free plus premium."
Dropbox Basic is free, of course—a way to get people hooked on storing their files online. But Dropbox hasn't had a free version of its business service. That—and not the details of the team feature—seems to be what's key about the new announcement. Dropbox, for better or worse, now has to give something away to draw in new business customers.
Otherwise, it risks being the next fax machine—something you have to keep around, but not a tool you love.
Photo by Matt Jiggins
from ReadWrite http://ift.tt/1V6cOE7
via
User Acquisition Is So Over, Focus On Engagement
Guest author Farzana Nasser is the co-founder of Gallop, an audience intelligence marketing platform. She is also a member of Young Entrepreneur Council (YEC).
Mobile app advertising is a complex and incredibly fragmented space. Marketers are under pressure to grow a business, build a valuable user base and prove a return on their ad spend. Having worked with hundreds of app publishers, the most common question I hear is: how do I measure the success of my marketing efforts?
See also: Want To Keep Customers? Integrate Tech With A Personal Touch
With hundreds of metrics available today to mobile app marketers from clicks and impressions to installs and logins—what is the metric to optimize for? Should you care about growing your number of users and just drive efficient growth for as low a cost as possible? Are you measuring whether or not these users engage with your app, retain over time or purchase?
Avoid The Race To The Bottom
It doesn’t matter how low the cost of your install, click or impression is if the user isn’t active on your app. Installs don’t drive a return on investment (ROI); only in-app monetization provides a return.
If you are only optimizing for an install, you’ll get installs that are incredibly inexpensive and achieve short-term success. However, if this is all you are doing and not measuring downstream user actions and optimizing for that, you’re in trouble.
Here are five reasons why:
- 25% of new app users leave after the first day they install an app, leading to a significant loss to their entire user base within the first few months (Google).
- On average, app users who retain for at least seven days tend to remain much longer, making the first three- to seven-day period a critical one (Quettra).
- 38% of people are more likely to download an app when it's required to complete a purchase. However, over half will uninstall this app once they have made their purchase (Google).
- 60% of app users are turning off notifications, signifying that more may need to be done by developers to reach those who download their apps (Pymnts).
- Repeat customers tend to spend 33% more than existing ones (CMO).
The Solution: Leverage Your User Data
You hold the keys to a untapped marketing gold mine: your user data. Use it to target people in an intelligent manner, so you can reach the right user at the right time with the right message. Recent advances in mobile app technology have now made this possible in unprecedented ways.
A new user is only as good as the actions they take to interact and/or complete a purchase in your app. Focusing on the first week a user installs your app to understand what actions you need them to take can help you mitigate the drop-off and potential loss of valuable users.
Consider these key metrics when measuring user value by acquisition channel:
- Customer lifetime value: Understand how much the average customer will spend in your app over their lifetime, and use this understanding to create a benchmark for an acceptable user acquisition cost.
- Cost per monetization: Identify the key behaviors in your application that drive value, and determine what your acquisition cost is for that specific behavior (ad click, in-app purchase, etc.).
- Retention rate by day: Review retention rates by channel to understand where you are deriving users who stay engaged in your application. At a minimum, review day one retention (as this is where the highest drop-off normally occurs) and day seven retention (another key user drop-off point).
Depending on your industry category and the user experience of your app, you will want to get very granular with the approach you take to measure these key metrics and then take action. For example, if you have an e-commerce app, you can optimize for in-app purchases or even users who add items to the cart and then re-target them to purchase. In the publishing space, optimize for subscriptions or in-app advertising clicks. Gaming companies tend to optimize for day one and day two retention, as well as in-app purchases.
Long-term, high-quality users are more valuable than inexpensive users, so figure out what drives value for your business and measure that. If marketers start thinking more like product people and leverage user data to drive action for new and current users, it would improve the user experience for us all—and possibly save millions of ad dollars on targeting the wrong people.
Lead photo by AFS USA
from ReadWrite http://ift.tt/1OAgj0r
via
Uber CEO Spells Out His Endgame
This post appears courtesy of the Ferenstein Wire, a syndicated news service. Publishing partners may edit posts. For inquiries, please email author and publisher Gregory Ferenstein.
Since Uber began getting regularly hammered in the press for its aggressive political tactics and potential legal violations, its once outspoken leader hasn't given the public much direction about the future of his multibillionaire ride-sharing company.
But CEO Travis Kalanick gave a rare interview in San Francisco today at the mega Dreamforce conference. Among the morsels he doled out, two quotes stood out, largely because they reveal how Uber might see itself changing public life.
See also: Taxicab Industry Has A New App To Compete With Uber
Traffic Stop
Street congestion may be one of the most annoying aspects of city life, but Kalanick thinks his company has the remedy for it:
If every car in San Francisco was Ubered, there'd be no traffic.
In the short term, Kalanick says he basically wants to replace every car on the road. Where Uber and Lyft have saturated the market with on-demand drivers, this is actually a realistic goal in the near term. A number of commentators have done the calculations, and it's cheaper to replace one's car in San Francisco with ride-sharing. As a Bay Area resident, the availability of cheap transportation is why I sold my car.
It's really nice never to worry about parking tickets, drunk driving, gas or maintenance. Not owning a car saves me a ton of time every month. This will be more difficult to achieve in midwestern states and suburban environments, but perhaps Uber can figure out a solution for less urbanized citizens.
Put another way, Uber is looking to fully privatize the transportation industry.
Transportation Fix
Broadly speaking, Uber seems intent on overhauling the transportation industry.
We want transportation to be as reliable as running water for everyone, in every city in the world.
Instead of a complicated and unreliable system of transit unions, car ownership and delivery services, Uber would try to make getting something from point A to point B much more seamless.
People spend (a lot) of time buying different services and figuring out how to navigate delivery and transportation. Uber imagines a world where all the complicated logistics are taken care of. All that a user would have to do is press a button. Seems like it would be a less frustrating world, if he—or others—can build it.
Kalanick's full interview should be available later on the Dreamforce website.
*For more stories like this, subscribe to the Ferenstein Wire newsletter here.
Lead photo courtesy of Shutterstock
from ReadWrite http://ift.tt/1NxItrX
via
API Of The Week: Dweet.io
Guest author Kurt Collins is a developer evangelist for Built.io.
With Salesforce taking over the streets of San Francisco for its massive Dreamforce conference this week, it's hard to remember that 15 years ago, Salesforce was just another startup scrapping for attention at tech conferences. At the Demo conference in February 2000, Salesforce demonstrated what was then a novel feature: a public Web API, or application programming interface.
On the strength of that open accessibility, Salesforce attracted other developers and customers who wanted to build software, not just buy it. It changed the world: Now it seems strange when a company doesn't offer a public API.
The number of APIs has exploded. ProgrammableWeb is currently tracking almost 14,000 public APIs and sites like OneStack are making it easier to figure out which technologies integrate together.
Welcome Back To API Of The Week
With all of these APIs out there, it’s time to restart an old ReadWrite tradition: the API of the Week. Where to start? Years ago, as this site explored the growing boundaries of the two-way Web, ReadWrite covered APIs from companies like UserVoice and Quora. Now machine-to-machine communication is hot—so it's a good time to look at Dweet.io's API.
In Twitter's early days, people explored the idea of using it for machine-to-machine communications. But as its focus became a real-time media business, it's proven less and less suitable for that purpose, with rules and guidelines that actively discourage automation.
See also: My Fish Just Sent Me A Text Message
Dweet.io addresses that gap in the market. Its stated purpose is to make it easy for your devices to communicate; what they communicate is up to you. Instead of sending tweets, each device (referred to as “things") sends “dweets” to the cloud. Your dweet is public and it can contain any information you want by either passing a key/value pair in the query string or sending valid JSON data in the request body.
There’s no need to create a "thing" in the system before dweeting from it; the API will automatically register a thing the first time it dweets.
In the following example, we will send a dweet from a thing named “builtio_dweets”. The content of the dweet will be four variables: hello, readwrite, builtio_lat, and builtio_long. You can create this dweet by calling the API hook: http://ift.tt/1KRNlJQ
Every dweet automatically gets a timestamp attached to it. Every time you dweet, Dweet.io returns a simple response:
{ "this" : "succeeded", "by" : "dweeting", "the" : "dweet", "with" : { "thing" : "builtio_dweets", "created" : "2015-09-08T22:30:24.712Z", "content" : { "hello" : "world", "readwrite" : "isawesome", "builtio_lat" : 37.7844062, "builtio_long" : -122.4079684 } }}
In order to get the most recent dweet from builtio_dweets programmatically, all you have to do is make a simple call to this URL: http://ift.tt/1gqICjY
If you want a more visual representation of the most recent dweet, Dweet.io has set up a Web page for you to follow any public thing. What’s more, if there’s a lat/long pair in your dweet indicating its location, then the follow page will automatically update with a map.
Why Dweets Are Neat
You can also subscribe to dweets for your things. And finally, you can lock your things (thus reserving the name and making its dweets private), and also can set up email alerts so that Dweet.io can watch for any condition in the data and notify you of changes and status failures.
Every public thing is free. However, Dweet.io makes money by charging 99 cents to lock a thing. You can only set an alert on a locked thing. Dweet.io is the status update for your IoT devices. It’s a dead simple publish-subscribe API that allows you to get status updates running on the IoT device you’re building in your garage.
The incredible thing about Dweet.io is the simplicity. It’s simple to register a new thing to the network. It’s simple to have a thing report any data via query string parameters or JSON in the request body of an API call. You can get the 500 most recent dweets in the last 24-hour time period by making a simple API call. It’s clear that Dweet.io put a lot of thought into how developers use its API. Well done!
What do you think? Would you use Dweet.io? Tell us the things you'd like to have dweet, and why, in the comments.
Photo by JD Hancock
Editor's note: While Built.io is currently a sponsor of ReadWrite's Code section, Collins submitted this post independently through ReadWrite's established guest-post program. Editorial is separate from advertising.
from ReadWrite http://ift.tt/1NwUPAw
via
Treat Fundraising Like Enterprise Sales (And Glengarry Glen Ross)
Guest author Edith Harbaugh is the CEO and cofounder of LaunchDarkly, a service that helps software teams launch, measure, and control their features.
As I was going through my fundraising for LaunchDarkly, I was surprised by my friends reactions of “Oh, it’s just like Shark Tank; you pitch four VCs on live TV and they make a snap decision.”
This isn’t true. Seed fundraising isn’t like Shark Tank. It’s much more like enterprise sales.
Survival Of The Fit
Fundraising is about finding a good fit between a company that wants money to grow faster and investors who want to put their money to work with a high return. Enterprise sales is similar—a company is investing in a vendor that will help them achieve high returns for their own business.
In both cases, there’s a funnel with leads, a champion, a sales process, and a close.
Below is the sales process I used to raise raising $2.6 million, with bonus help from ’90s classic movie Glengarry Glen Ross.
Hollywood mythology has the CEO drive down to Sand Hill Road, pitch a partner meeting, and walk out with a check for millions. Actually, the partner meeting is the very last step in the process.
You start out with all your leads—VCs you think might be interested in buying what you’re selling. But wait, I’m not selling anything! I hear you thinking. Oh, but you are! VCs are buying a chunk of your company in the hopes that you will return their investment by 10x or more. Not every buyer persona matches what you’re selling; you are looking for a VC who understands your market and your vision, and buys into the possibility that you will make them look prescient and rich.
Qualifying Leads
“The leads aren’t weak—you’re weak.”
Pro tip: Know your target market and look for VCs who know your market well. My screen was having investors with experience working in software development.
Make a lead list of everyone you know who fits your ideal lead profile. Define your target market for leads—investors who have a thesis that matches your space and its size. AngelList, CrunchBase and funds’ own websites are very helpful for knowing what investors invest in. For example, if they usually invest in hardware router makers that need a Series D—a big-dollar, late-stage investment—they’re unlikely to invest in your seed-stage home-decorating consumer app.
Next, make your email pitch with a short blurb of who you are, what you’re doing, and why it’s interesting. The goal of the email pitch is not to have someone drop you a check (only a Sith Lord does that), but to get a meeting with the investor.
Once you’re in the pitch meeting, it’s a two-way street. The investor is assessing whether you have a quality pitch, team, interesting market, and product demo. At the seed stage, the VCs are looking for promise and something that excites them personally.
As the CEO, you are looking for the right fit to take your company forward. Mike Beebe, a Jedi fundraiser, told me, “You will get the money—you’re assessing if this is the person you want to get money from.”
I had a pitch meeting where the partner had never heard of Stack Overflow. My own product is a developer tool that helps with getting features to real users faster, and the partner hadn’t heard of one of the most popular developer sites. Not a fit.
Another said they loved me and my story personally, but didn’t understand B2B and would invest if I was doing a B2C company.
The Art Of The Follow-Up
“A guy don’t walk on the lot lest he want to buy."
Pro tip: Always ask. Always. You don’t know if someone is a yes unless you ask.
The first pitch meeting went well, there’s mutual interest, now what?
Now comes the follow-up. Tom Drummond, Heavybit managing director, told me that “VCs take 20–30 meetings a week and have hundreds of emails. You need to force your way to be top of mind. Email them, follow up.”
Once I knew it wasn’t a negative signal to follow up, I used TalentBin founder Peter Kazanjy's advice:“Touch a lead six times before they’re cold.” After the pitch meeting, send a follow-up. Mine reiterated key points, expanded on anything I felt I hadn’t covered well, and included a customer case study. I asked for next steps. Sometimes the response was “We don’t want to continue.” Sometimes it was “Here’s what we need to move forward,” but at least I knew.
Dave McClure, founding partner at 500 Startups, only invested after I followed up. I’ve known Dave since 2008, when I worked at an Internet of Things startup. He said, “If you ever start a company, I’d invest.” My response was, “I don’t even have an idea, much less a company.” But he said, “The person is more important than the idea.”
When I exhibited at WebSummit Dublin in 2014, I tweeted him to come by the LaunchDarkly booth. He came by, dropped a card, and jetted off. I was disappointed—now I had a company, shouldn’t he have offered to invest? Then I reframed it. He’d taken the time to come see me, and I hadn’t made the ask.
I emailed him, “Are you ready to make your bet on me?” He responded instantly, saying yes, he was interested, and he’d assumed I wasn’t fundraising because I hadn’t asked him.
Do Due Diligence
“Always be closing."
Pro tip: Ask a VC to walk you through their due-diligence process. If the VC can’t answer, this is a huge red flag. If they ask for 50 different documents including SEC filings and you’re raising seed, it’s not a good match. If they start to ask for things not in the original plan, ask them why. Usually, it’s cold feet.
Due diligence is often the most confusing phase for entrepreneurs.. As VCs are parting with a significant amount of money, they want to vet you. Angels who are investing $10,000–$50,000 can go on gut, but the more money is at stake, the more vetting will take place.
Every investor has an ever-amorphous idea of what due diligence they need to feel comfortable with you. Some will want to talk to your customers, some will want you to talk to their portfolio companies to see what they think, some will want you to talk to industry experts, some will want to talk to all your old bosses, and some will want to see five years of financial statements, board meeting notes, and your seven-year business plan. Match the amount of vetting with the size of investment, and push back on unusual requests.
If a VC asks you to meet with someone before they’ve invested, treat these meetings as what they are—sales calls. The investor will not invest until due diligence is complete, so do not blow these meetings off or treat them casually. They are not a time to let it all hang out and expose the warts of your business. They are steps in a sales process. Impress the due-diligence people as much as you impressed the original VC. Bring your A-game as to why your company is important and valuable. Due diligence can drag out, mislead, give false hope, and be harmful.
I had an investor who wanted to talk to two customers. He missed both meetings because he was late. When he did eventually show up, he wanted to meet with more customers to “feel convinced.” I didn’t want to burn my customers with a flaky VC who would miss meetings. He never did end up investing.
Another startup CEO had six separate meetings with one VC firm. He didn't meet with other firms, as in his mind, this firm was about to invest. Startup advisor Sean Byrnes gave him a cold dose of reality: “If after that many meetings they haven’t invested, they won’t. They’re using you to educate themselves on the market.”
To reframe this in enterprise sales terms, if you’re spending all your time on bad leads, you’re not making good leads work.
The Close
“Coffee is for closers."
Pro tip: Always know who your champion is. If you don’t know who it is, you are fighting solo, as no one has an incentive to help you.
You’ve made it through your initial pitch meetings, due diligence, and now it’s time for the final hurdle—the partner meeting. Many think this is the first step, but it is actually the last one. This is the meeting where you pitch to the entire partnership.
The most important person in the pitch meeting isn’t actually you, but your champion. The champion is the partner who heard your pitch and has the reports back from due diligence. They are trying to get the deal done as they think you’re a killer investment that will make them look good.
Andy McLoughlin, a venture partner at SoftTech VC, says, “If I’m the champion of an investment deal, I’m even more invested than in vendor selection at an enterprise. The companies I invest in are my product.”
The champions are there to help you. Use them! They want you to look good, as otherwise they get razzed for backing a loser company. Most firms invest in less than half of companies that pitch the partnership, and it’s not expected everyone will be in favor.
Ask the champion what you should show in the partner meeting. Let the VC run interference on objections. Without a champion, meetings are at best neutral and at worst openly hostile.
In sum, fundraising is hard, but it shouldn’t be a mystery. It’s a sales process, so treat it like that. The goal is that both parties should feel like they’ve found a partner who will help them win.
Screenshot via Glengarry Glen Ross
from ReadWrite http://ift.tt/1idUas1
via
LinkedIn Cofounder Wants To Teach You How To "Blitzscale” Your Company
This post appears courtesy of the Ferenstein Wire, a syndicated news service. Publishing partners may edit posts. For inquiries, please email author and publisher Gregory Ferenstein.
Stanford is continuing its ultra-popular course series on creating tech startups. Starting this month, LinkedIn billionaire Reid Hoffman will be teaching a specialized version of the course on scaling businesses from small product ideas to large companies (or what he calls "blitzscaling”).
"When you examine the history of iconic Silicon Valley companies, they quickly grew their customers, revenue, and organizational scale to fit a global market," he explained in a company blog post. "Most of the impact and value creation that Silicon Valley companies produce actually occurs during this scaleup phase."
See also: Why Silicon Valley's Tech Talent Worked For Free Over The Holiday
Interestingly, Hoffman is permitting select non-Stanford students to apply for the class. Interested parties can fill out the application form here. (Warning: It’s lengthy.) For those who don't get in, or can't fly to the Bay Area, lectures will be placed online for Course CS183C.
A Novel Approach (At Least For Stanford)
It's not very often that world-class schools allow non-matriculating students to walk into their halls and intermingle with students. They usually keep outsiders at arm's length with online lectures. But much of the value of a university comes with the networks between students and professors—such as former Stanford grad students Larry Page and Sergey Brin (who, I'm told, went into the search business).
Unfortunately, this gated philosophy can also perpetuate insular networks that exclude the most needy students. Opening up the course to public application is one way (albeit small) to break down these barriers.
The lectures themselves will cover everything from hiring an executive team to managing through an analytics dashboard. You can learn more about the course here.
*For more stories like this, subscribe to the Ferenstein Wire newsletter here.
Lead photo by Sheila Scarborough
from ReadWrite http://ift.tt/1gmXSyb
via
For Nontechnical Hires, How Much Stock Is Enough?
Guest author Scott Gerber is the founder of the Young Entrepreneur Council.
In an early-stage startup, you may not have much in the way of cash to offer new hires. While you'll often hear advice about how to structure equity for technical hires, deciding how to compensate other key hires—from cofounders to sales staff—isn't as clear-cut.
To help you figure it out, I asked founders from YEC how they figured out what to offer early-stage, nontechnical hires. Their best advice—from considerations to make to equations to use—is below.
1. Base It on the Number of Employees You Have
Early hires are more critical than late hires. Think of your company hires in terms of stages: 1–2 employees, 3–6, 7–15, 16–30, 31–60, 61–150, etc. The amount of equity an employee gets should go down with each stage, because the company is getting less risky to work for, and because you just can't keep issuing large amounts of equity to everyone at the company. Here's one system to follow: Employees 1-2 (cofounders) should split the company either 50/50, 67/33, 75/25, or some other reasonable amount. Employees 3-6 should get between 1 and 5 percent of the company in equity, while employees 7–15 should get 0.5–1 percent. Employees 16–30 should get between 0.25–0.5 percent, and so on. A great company to look to for guidance on this is Buffer, which opened up all its salary and equity calculations. —Mattan Griffel, One Month
2. Calculate Based on Your Capital Considerations
Assuming you're starting with no capital, you're going to grant pieces of your company in order to give incentives to early-stage employees. In my experience, sales and marketing is most often handled by stakeholders when there's no capital. If sales staff is a requirement of your particular company, revenue-share models can be more conducive with the startup economy so you're not forced to give away critical pieces of your business before seeking subsequent investment. —Blair Thomas, EMerchantBroker
3. Decide on What You Want Everyone to Know
We make all compensation, salary, and equity based on the expectation that everyone eventually finds out each other's numbers. This means that people with similar positions and responsibilities should have the same compensation. Even if a candidate asks for lower equity than their peers, give them the same amount. When they find out that you gave them less equity than a peer, you'll lose their trust. When we give out offers, we tell candidates that we don't negotiate because what we offer is prioritizing fairness for the candidate and the rest of the team. New hires have been appreciative of this approach. —Nanxi Liu, Enplug
4. Use AngelList to Decide
AngelList is a great resource for determining early-stage compensation for non-founders. It shows you how much equity companies like yours in your geographical area are offering employees of various titles, and takes the guesswork out of the process. —Brennan White, Cortex
5. Start With an Option Pool
The best way to manage equity for key and strategic hires is through an option pool. Most option pools include total equity in the amount of 10–15 percent, which you'll need to allocate based on projected hires over the next 24 to 36 months. Once you establish your intended list of hires, you can allocate up to 75 percent of the option pool (leaving wiggle room for negotiation). Generally speaking, technical hires should get more equity than nontechnical hires. However, you may want to break the "technical-hire" rule for superstar nontechnical hires, especially if the hire fills a needed executive or senior-level position. Once you think through your hiring, you'll be in a better position to allocate your option pool. Note: setting up an option pool will also be helpful should you raise venture capital. —Kristopher Jones, LSEO.com
6. Tie It to Performance
Using equity in lieu of capital compensation until you are cash-flow positive is normal. The shares should be on a vesting schedule and should be tied to performance and agreed upon by both parties. —Lane Campbell, June
7. Keep a Vesting Period in Mind
In general, sales and marketing staff tend to get less equity than technical hires with the exception of nontechnical managers and executives. In my opinion, how much equity you give is less important than how the equity will vest. In general, most vesting periods are four years long, though people are experimenting with longer and shorter periods. This means that regardless of how much equity the non-technical hire is given, they will have to stay with the company (not get fired or quit) in order to achieve the full amount of equity given. For instance, if you provide a nontechnical hire with 0.5 percent equity over 4 years, the stock will vest in equal installments of 0.125 percent each year. Vesting periods are critical because they protect the company and create better alignment between the hire and his or her performance over time. —Obinna Ekezie, Wakanow.com
8. Base It on How Critical the Hire Is
It's a two-step process. First, do some research to find the industry benchmark (try AngelList.) Second, you should think critically about how important this particular hire is going to be. For example, in enterprise companies, sales positions becomes very critical for the success of the company. If it is like that, you want to sweeten the deal further. Overall, good companies tend to be more generous with their stock options. —Ashu Dubey, 12 Labs
9. Use Equity to Keep Everyone in the Game
Compensating those on your team with the success of your business will add extra motivation and drive. Especially early on, you need all hands on deck and everyone moving in the same direction. This includes all aspects of your business, not just technical team members. I leveraged AngelList frequently to assess how much equity to give. Putting in a one-year cliff and a vesting schedule has been critical to keep the team motivated, and gives something to really celebrate when we hit those key milestones. —Kristi Zuhlke, KnowledgeHound
10. Quantify and Be Flexible
It's a very tricky question with many different answers, depending on who you ask; there's no single answer, but there are ways to tailor compensation to your company and industry that will serve you exponentially better than listening to general advice. Keep in mind several factors:
- How big is your equity compensation pool (15 percent, 20 percent, etc.)?
- How many hires will you be making in the next six months with the current equity comp pool, and what types of hires will these people be (low-level, high-level)?
- How early is this employee and what kind of salary is this employee getting relative to their industry?
- How important or unique is this employee compared to other hires?
Keep these things in mind relative to your equity pool, and also compare to industry what you come up with as a guideline. —Alec Bowers, Abraxas Biosystems
11. Think in Terms of Dollars, Not Shares or Percentages
You should have a reasonable expectation of how much your business is worth today and might be worth in a year or two. You can also estimate what additional upside a new hire will need to either compensate for below market comp today, or take on the risk of joining a startup. For example, if the market for a sales person is $65,000 and commission is 10 percent, you can decide how much additional bonus per year they need to join your team ($25,000, $50,000, $100,000). Consider what that might grow into based on your valuation growth (2x, 5x, 10x) to get them to join. Then you can decide if it's worth giving that up for what they bring in terms of sales growth or lead generation. —Avi Levine, Digital Professional Institute
12. Make Sure Total Compensation Hits Market Value
There are market rates established for all levels and roles. Target a compensation package within 20 percent of market rate. We've had success by offering a menu of three choices, which allows each candidate to choose their mix of cash and equity. Just remember that a well-rounded startup has strong technical and nontechnical people, so don't treat anyone like a lower-class employee. —Aaron Schwartz, Modify Watches
13. Do the Math
Slicing up equity should come down to a math equation. Instead of reinventing the wheel, you should use math that other people have invented to figure it out. Y Combinator cofounder Paul Graham puts it together in this simple equation: 1/(1 - n). What it breaks down to is that if "n" is the equity you're giving up, it's worth it if it makes the company worth more than 1/(1 - n). Beyond that, I stick to the basics: Have a one-year cliff and four-year vesting for all equity employees. —John Rampton, Due
from ReadWrite http://ift.tt/1MmBS55
via
California Shoots Down Drone Bill
This post appears courtesy of the Ferenstein Wire, a syndicated news service. Publishing partners may edit posts. For inquiries, please email author and publisher Gregory Ferenstein.
California Governor Jerry Brown vetoed a controversial drone privacy bill Wednesday, declaring that it would expose hobbyists to excessive litigation. Senate Bill 142 would have put anyone flying a drone less than 350 above someone's property on the hook for trespassing.
"This bill, however, while well-intentioned, could expose the occasional hobbyist and the FAA-approved commercial user alike to burdensome litigation," he wrote in a veto statement [PDF]. With legislation like Bill 142, it would be easy for a hobbyist flying a drone around his neighborhood or local park to accidentally run afoul of trespassing laws.
Drone proponents have been carefully watching as lawmakers attempt to figure out the nuances of these airborne devices. Unchecked, an overly zealous approach to protecting public safety and privacy, could have deep implications for the drone tech industry. Threat of legal action or even criminal penalty may dampen interest in the gadgets. Here, tech makers may have just dodged a bullet.
The Trouble With Laying Down The Drone Lines
PC Magazine found that the popular DJI Phantom 3 drone lost communication when it hit 400 feet in altitude and 1,200 feet in distance. In other words, hobbyist and toy drones really aren't meant to go much beyond 350 feet.
So if residents see drones hovering over their yards, they may have just as easily come from hapless users who lost control of their devices as from tech-savvy "peeping toms." Drones are the equivalent of baseballs that occasionally end up on the neighbor's property—except, this baseball is equipped with a 12-megapixel camera.
Brown’s veto had the support of the Consumer Electronics Association, a powerful tech electronics lobby that tends to side against measures that it sees as hampering emerging technologies. The group obviously was pleased with the decision.
California isn't alone. In total, the National Conference of State Legislators counts 19 states with drone laws on the books, many of which prohibit voyeurism.
Mississippi's law literally calls it "peeping Tom" activities [PDF]. Certainly, unless a litigious neighbor catches the drone operator, it's difficult to discern whether the flying object was taking photos. And, if images were taken, the case would have to prove that the pilot intended to catch the subject undressed.
As such, drone-related privacy is a difficult thing to legislate. For now, California, the home of Silicon Valley, has erred on the side of protecting drone enthusiasts and, by extension, the drone makers that cater to them.
For more stories like this, subscribe to the Ferenstein Wire newsletter here.
Lead photo by Don Mills
from ReadWrite http://ift.tt/1M24jSV
via
Apple Wants You To Peek And Pop For Info—Instead Of Googling
At Wednesday's media event, Apple unveiled the expected upgrades to its smartphone line, the iPhone 6S and 6S Plus, with upgrades to the chips and cameras inside.
See also: Apple TV Gets Voice, Touch, And Its Own Operating System, tvOS
For developers, the single most important feature in these new phones comes in the phones' screens, which are newly sensitive to the touch. Apple calls the feature 3D Touch.
Peek, Pop—Just Don't Search
3D Touch seems to be a less brain-dead rebranding of the offensively named Force Touch feature of Apple Watches and MacBooks. It detects pressure as well as position, enabling a different set of interactions on the phone.
Apple calls these interactions "Peek" and "Pop." You can Peek, or preview, a link within the context of a current app, allowing you to look at a photo, check an address, or browse a Web page within a text-message conversation without launching Maps or Safari. Press on the preview, and you Pop, or launch directly into, the app that handles that information type.
On the iPhone's home screen, a longer press on an app lets users pick from several different actions. Apple executive Craig Federighi showed Dropbox allowing users to launch straight into a file upload and Instagram offering a quick jump into recent activity.
More Functions, Fewer Apps
There are a couple of implications for app developers here.
One is that it may slow the fragmentation of apps that saw Facebook spawn Messenger from its core mobile app. If it just takes one touch and an extra tap to get into a specific function, developers may see less value in creating separate apps. This may favor well-known brands—for example, Yelp, which has built new features like delivery and table reservations into its core app, and can now make those features available faster.
The other implication is for Google and a handful of other big developers whose offerings compete with Apple's own built-in apps. While Google has persuaded many iOS users to download Google Maps, when you view an address within a text message, Apple Maps is what you Peek at and Pop into. With a Web address, it's Safari, not Chrome.
We already know that mobile users vastly favor apps over mobile Web browsing. Where they browse, it's often because a function is buried too far within an app. App-to-app links and deep linking are increasingly sending users from app to app without a Web search in between. 3D Touch's Pops and Peeks are, in some sense, deep links for the iPhone's home screen and built-in apps like Messages.
Google and other developers who see themselves disadvantaged by this interface change could respond by making use of it, of course, and building 3D Touch support into their iOS apps. YouTube, for example, might want to break out video-uploading functions from viewing clips or responding to comments.
The limitation here is people's attention spans. As users gravitate towards a few familiar apps, and download fewer and fewer new ones over time, Pops and Peeks augur a future where they spend more time in their favored apps and only take the briefest of glances at other ones.
It's bringing the gesture-and-glance economy of the Apple Watch and its condensed apps to smartphones, much as smartphones are forcing desktop apps to become more and more mobile in nature. Our "Retina Displays" are becoming bigger and richer, but the retinae with which we view them can only pop open and peek at so much in a day.
from ReadWrite http://ift.tt/1JWh6W4
via
Why Silicon Valley's Tech Talent Worked For Free Over The Holiday
This post appears courtesy of the Ferenstein Wire, a syndicated news service. Publishing partners may edit posts. For inquiries, please email author and publisher Gregory Ferenstein.
At around 10PM on Sunday over Labor Day weekend, I posted a coding problem to the popular software developer forum, Stack Exchange. In 30 minutes, a puzzle that I couldn't solve for weeks was settled by a friendly user who also burning the midnight oil. Not completely satisfied with that answer, though, another half dozen experts chimed in with their own more elegant solutions, making for a conversation that extended well past midnight.
This experience is perhaps more illustrative of Silicon Valley's work ethic then the viral New York Times investigation into Amazon's breakneck company culture. Since that article was published, a lot of ink has been spilled about tech CEOs exploiting their workers and perpetuating the industry's expectations of a workaholic culture.
See also: Amazon's Not Much Different From Other Tech Employers, Public Data Says
The users who solved my problem weren't being paid, however. They were just “geeks" who love technology. The mad pursuit of solutions seems to be in their DNA, and it just may be this inner drive—more so than any cracked whip—that drives technology forward.
Meeting Of The Minds
With over 100 million monthly users worldwide, Stack Exchange is just one of many developer networks that form the foundation of the tech industry. Much of the software that powers the internet is open source, incrementally pieced together by (literally) millions of people solving each others' problems and contributing their ideas for free.
It's nearly impossible to pay for this kind of help. Weeks earlier, I hired a freelance programmer to solve my problem. His code was inefficient, to say the least. Each time I ran it, it took 10 minutes to complete--and I needed to run it over and over again quickly. The solution that the Stack Exchange network found in 30 minutes had cut the processing time of the code down to a few seconds.
This is not to say that work should be done for free. Chances are, all of these skilled programmers are being paid a salary north of $100,000. But, top talent in the Valley often love their work. In my experience, it's exceedingly common for software programmers to each have their own side projects, built for free with the help of an underground army of forum users.
There Can Be No Innovation Without Passion
Here’s another detail that may have us re-examining the “horrible tech bosses” stereotype: On Glassdoor.com, an anonymous rating system for workplaces, users who mention long working hours are often likely to rate their company a perfect 5 out of 5 stars. Facebook, often the highest rated company in the industry, is littered with comments talking about a company culture that demands "long hours.”
Before we judge the Valley as a place rife with exploitation, it's important to realize that many (if not most) workers are voluntarily putting in more hours than their employers are asking in the first place—for free.
That’s not entirely surprising, if you trace back modern tech culture's social roots. Technical chops may be considered much cooler characteristics now, but that wasn’t always the case. Silicon Valley was built on the backs of of geeks who spent weekends in high school building computers and writing code, while their peers did keg stands.
For some people, technology was both safe haven and passion. Many still carry that inside, even though they've now grown into the men and women who are writing our connected future.
This is the nature of creativity. Innovation thrives where workers aren’t bullied or exploited, but are given the room to indulge the things that drive them. That might look like long work days, or giving up holiday weekends to hand out free advice.
Going into the future, the best questions aren't about work/life balance, but whether the we enjoy the work we do as much as we enjoy other parts of our lives. For the former kids who built robots over the summer or learned to code during nights and weekends, the tech industry can be a meaningful place to find that answer.
For more stories like this, subscribe to the Ferenstein Wire newsletter here.
Photo courtesy of Shutterstock
from ReadWrite http://ift.tt/1iwQhPh
via
Smart Homes: How To Keep From Missing The Greatest Tech Opportunity Of Our Time
Guest author Kent Dickson is the CEO and co-founder of Yonomi, a smart home app developer.
Smart homes should simplify our lives. When connected TVs in these residences come on, other devices are supposed to react. Ideally lights will dim, the phone’s ringer will mute and the speakers will stop playing music. When a smart household’s baby monitor notices an infant stirring in the night, the speaker in the nursery should begin to play a soft lullaby or white noise to sooth him back to sleep.
This type of simple and seamless functionality could be our reality. But for most people, it’s not—at least not yet. Whether it will ever be hinges on one crucial factor: whether those connected devices, produced by different manufacturers following various standards, can all work together one day.
See also: Google's Offering Smarter Tools For Smarter Apps And Homes
The industry, as disjointed as it is, needs to come together and create an ecosystem that's as comprehensive and inclusive as it is innovative. That’s no easy task, but it is critical for the smart home—especially now, with so much interest in connecting and automating our residences.
How To Bring The Smart Home Together
There are two ways to create this more unified ecosystem: either the industry groups agree on common, widely adopted interoperability standards, or the tech makers support open APIs (application programming interfaces) for more integration and support across software and services.
There’s some precedence for the first approach. After all, it’s how we got the World Wide Web, which rescued us from the proprietary walled garden hells of the old AOL and CompuServe platforms.
Back then, content and services were closely controlled by a few and, as a result, innovation was heavily constrained. Later, the Web’s open standard enabled anyone to build websites, services or content, and instantly make it available to everyone in the world. It paved the way for unfettered innovation and transformation ever since.
Unfortunately, the industry is not likely to reach consensus on a dominant smart home or Internet of Things (IoT) standard. The uses for connected devices are so diverse, finding a one-size-fits-all solution seem highly improbable. In fact, today there are dozens of competing standards, each with merit, that are evolving independently with no sign of consolidation.
In a broader and more inclusive IoT ecosystem could work, if all parties offer open APIs—which are essentially software access points that allow third parties to control devices and access data from the originating system.
Open APIs are relatively easy for product makers to implement, and their existence would then enable a raft of new products and services to link, coordinate and optimize a user's connected home. At present, these are our best hope for a thriving and innovative IoT.
Tear Down The Walls
Simply having these APIs is not enough, though. The product makers must make them equally available to all comers (within reason). Ultimately it should be the consumers—the users who bought these products and brought them into their homes—to decide which third party apps and services they want their devices to support.
Just like you get to choose the Web browser or mail application you like on your desktop computer, so too should you be able to choose the automation engine you use for your lights, music and locks, or the energy optimization service that controls your thermostat.
Fortunately, most connected device makers offer APIs, but they are allowing access to only a few closely held partners. It’s as if they don’t trust consumers to decide for themselves who should have access to their devices and their data.
Consider this a call to action: Tech makers, open your APIs to all comers, and let consumers pick the winners and losers. Openness is key. People need to be able to say, “I bought this product. Don’t constrain my choices or give me walled gardens.”
We stand at a precipice in time where the Internet of Things can go the AOL/CompuServe route or the World Wide Web route. It's still a toss-up, which way it will go. But we cannot just hope for the latter. We must demand it.
Lead image courtesy of Sony
from ReadWrite http://ift.tt/1IVXU6Q
via
On-Demand Startups: How To Conquer One City At A Time
Guest author Pablo Orlando is a serial entrepreneur and the co-founder and COO of Gone, an on-demand selling service that helps users rid unwanted items.
New on-demand services are springing up everywhere and changing business in nearly every possible way. But as legion as they might seem to be, getting them off the ground is no easy task.
Managing operations for a growing on-demand startup and launching services in new regions are extremely challenging feats. More often than not, the complexities can make for a total nightmare without proper planning.
See also: Can You Be The Next Uber? It's Easier Than You Think
There's no easy route to becoming successful. But for entrepreneurs who are on a mission to become the next "Uber for X [insert some unrelated industry]," the following advice is for you. Here’s how you can expand your on-demand service, one city at a time.
Go With What You Know
As a new on-demand service, consider the specific opportunities that each new city provides for your business. This could also be partnerships you have already established in a city, or how fast you think you can establish a presence before competitors can catch up.
For MeUndies, a premium underwear and basics startup, partnering with Postmates allowed them to offer on-demand delivery of shorts, briefs, T-shirts and more in Los Angeles within an hour or less. Postmates’ newly released API allowed third-party companies to offer local delivery via its on-demand service. For MeUndies, the partnership was a perfect opportunity to test a new distribution model in a popular city.
Another crucial matter: choosing the right region for your services’ expansion. In the selection process, you need to consider factors beyond market size.
When we launched Gone, our on-demand app to help people sell unwanted items in their homes, such as electronics or furniture, we first launched in just two cities: Austin and San Francisco. These were markets we were familiar with, thanks to our time at TechStars Austin and Bay Area team members.
Launching in just two cities allowed us to analyze safety and prove our concept on our home turf prior to broader expansion. Admirable companies pursuing similar strategies are Instacart (on-demand groceries) and Wag (on-demand dog walking), both of which solidified their home markets before expanding to nearby markets.
“If you haven’t unlocked the core market you’re in and really made your experience amazing, your chances of success declines with every city you expand into. Being first to the market isn’t winning. Being right is winning. It’s a race to liquidity; it is not a race to geography.” noted Simon Rothman of Greylock Partners in a recent conference on what’s happening with on-demand startups.
One Size Does Not Fit All
When the time comes to validate the success of your on-demand company, the quality of your service in each city should always exceed the quantity of cities in which your service is available.
However, though you should capitalize on the knowledge you’ve gained from your first launch, don’t assume a one-size-fits-all strategy will work everywhere. Take a lesson from the pioneer of the on-demand economy, Uber: The company credits the success of its city-by-city expansion to acknowledging early on that its strategy needs to be tailored to each new location.
Our company also knew it needed to understand the unique challenges and traits of each location. We kept some key frameworks in place, but also modified them according to the unique demands of each market.
For instance, with an extremely dense city like New York, we couldn’t necessarily apply the same logistics flow as our concierge pickup service in Austin. In Boston, which has a large student-oriented demographic, we needed to schedule our efforts to handle an increase in selling activity during the academic calendar year.
Take Quality Control Seriously
An excellent way to maintain consistent quality of your on-demand service is by noting repetitive processes and optimizing them. When you discover processes that work, keep an eye out for patterns and automate the repetitive actions. You want produce consistent results and fewer issues, regardless of location.
With on-demand services becoming more mainstream, consumers’ expectations for these services are also on the rise. Consumers now expect an increasingly higher level of timely, quality delivery service. This has led to the creation of a new slew of offerings designed specifically to help on-demand businesses successfully meet demand.
Quality control also applies to the expansion of your team. If city expansion requires you to hire an operations manager, pay thorough attention to that first hire. You want someone who not only has the expertise, but also the commitment to the same standard of quality you’ve achieved in other cities. Most on-demand startups require quite an undertaking on the operations and logistics side, so the proper domain knowledge on the ground will help you understand your audience and increase your chances of success.
Speed and Adaptability are Key
Finally, speed and adaptability are crucial for city-by-city expansion. You need to be able to establish your presence while also being able to move quickly based on market changes.
Following a drop in task-completion rate, errands marketplace TaskRabbit realized it was not being efficient in effectively matching supply and demand with the auction business model, where contractors would bid for tasks posted by users. The growing number of on-demand and one-day delivery services from companies like Uber and Amazon had altered consumer expectations and increased the demand for push-button offerings.
TaskRabbit quickly changed its model to match users with potential contractors, allowing users to book the contractor of their choice with just one click.
The company applied its new on-demand concept to a new city, London. After comparing the numbers, it decided to bring the model to its other established markets, even though it had already attained critical mass with its original approach.
Because market demands change all the time, balancing the needs of your customers—while guiding them through any service changes—will be a challenge. Customer relationship management plays a big role here, so allocate the proper resources.
Ultimately, you need to be open to altering your service—or prepare to be left behind. Focus on developing your own playbook filled with the right balance of replicable processes and tailored efforts, and you can conquer each new city with success.
http://ift.tt/1IOqxmu
from ReadWrite http://ift.tt/1NRFDiZ
via
Your Connected Product Could Be Your Best Customer Engagement Tool
Brian Solis is a digital analyst, anthropologist, futurist and author of X, What’s the Future of Business (WTF), Engage! and The End of Business As Usual.
In a time when connectedness is part of everyday life and people have become online media platforms, customer experiences either work for a company or against it. Those experiences, now widely spread and shared so easily, have become the new brand.
Brands are, as Amazon’s Jeff Bezos once put it, "what people say about you when you’re not in the room.”
See also: The Biggest Digital Marketing Mistakes Entrepreneurs Make
Think about all the ways businesses have to engage customers before, during and after the transaction: social, mobile, digital (i.e. web), wearable devices, email, POS, signage, packaging, word of mouth, and so on. There’s also an entirely new channel arising that's flying under the radar of marketers today.
While not new to engineers, developers and savvy tech execs, the Internet of things (IoT) is set to become the next big trend for marketers and anyone leading service and support, product management and e-commerce initiatives.
Connecting The Dots
My colleague at Altimeter (now part of Prophet) Jessica Groopman learned in her latest research on IoT that consumers are expected to own over 20 simultaneous connected devices by the year 2020. Some of us are already close.
For those unfamiliar with IoT and its relationship to customer experience, think of it this way: Imagine that everything is connected to the Internet via a private network—your camera, watch, car, printer, oven, thermostat, lights, and more. Now imagine that each device learns how you use it.
Not only does the user experience improve through technology, but the information is managed through an intelligent customer relationship management (CRM) system of sorts. The manufacturer can learn about the customer's usage, behavior and preferences, and also anticipate needs—all in the name of personalizing and improving the user experience.
Doc Searls, author of the groundbreaking book The Cluetrain Manifesto (1999), introduced the concept of "Products-as-Platforms” a couple of years ago. He asked businesses to look at possibilities beyond marketing gimmicks. He envisioned a scenario in which customers were in control of relationships before, during and after transactions. He called this VRM, or vendor relationship management. His point was that people should be in control of relationships and products, acting as conduits, not dumb terminals.
Products, As Customer Engagement Tools
Imagine that your printer is running out of ink. Instead of merely displaying an alert, the same screen could connect you to Amazon or your favorite retailer to order replacements.
See also: How Your Need For Detergent And Coffee Will Fuel Amazon's Smart Home
Amazon’s Dash button offers a similar premise, but requires manual input. However, this could happen even before you’ve run out, because the printer already knows your usage behavior and has anticipated the need.
This idea of “in product communication” is what companies like Aviata are working on. If they succeed, VRM not only becomes a viable option, it may even change the game for customer experience and ultimately the mathematics of the lifetime value of a customer.
Within the context of IoT, products can continue to work for your company, even after they’ve been purchased. These items could open new channels of proactive engagement, allowing you to redefine customer engagement beyond all of the channels you lean on today.
In other words, the product itself becomes a tool for engagement and personalized "experience architecture.” This is basis for the future of customer experience, a foundation based on personalization, meaningful engagement and additive value.
This new type of product communication is incredibly promising. It could change the dynamic for how companies build relationships with their customers, beyond warranty registrations and product support. This is the future of customer relationships. What it takes is to get there is vision, purpose, a sharp eye for what your users need, and the drive to give it to them.
Lead photo by William Murphy
from ReadWrite http://ift.tt/1hX1vwA
via
Tech Makers: Stop Treating Tablets Like Smartphones
Guest author Liraz Margalit, PhD, is a web psychologist at ClickTale, a company that provides website optimization software and consulting.
Smartphones and tablets both get us online, store our photos and keep track of our calendars. But they are not the same. In fact, user behavior varies quite a bit between the two.
While they're both portable and sleek, and used to get online access when users are away from desktop computers, people have different mindsets around them.
See also: The Biggest Digital Marketing Mistakes Entrepreneurs Make
In the course of my job as a web psychologist, I’m deeply steeped in research, much of which reveals distinct and separate usage patterns. The smaller devices, which tend to be carried on our person, tends to inspire active engagement, while the larger tablets are often used more passively.
For tech companies and developers for each device category, it’s crucial to understand these differences. If people come to their devices with different goals, then approaches catering to them and appealing to them need to be distinct and carefully crafted as well.
A Tablet Is Not A Mobile
There’s a penchant in the tech community to consider tablet devices as nothing more than jumbo-sized smartphones. Sure, tablets could qualify as mobile devices, with their apps, email access and 3G connections. But lumping them together is a mistake, because they each occupy different purposes in the lives of end users.
When you own a smartphone and add a tablet to the mix, you don’t end up using your smartphone any less. If both of the devices filled the same purpose, usage time with one would cut into that of the other. But they don’t compete, because users come to their tablets and smartphones for entirely different purposes.
A 2014 Mobile Behavior Report showed that only 14 percent of consumers associate the word “mobile” with their tablets and e-readers, despite their portability and wireless Internet access. So while our smartphones are in our pockets and bags, always at the ready, our tablets tend to be in-home devices.
The larger screen may seem ripe for productivity—and in some cases, if that’s the purpose driving the purchase, they may be—but don’t expect all (or even most) tablet users to actively engage them. Mobile phones travel with us, and we use them with a “goal-oriented” state of mind. Tablets, on the other hand, are considered more stationary and at-home and we use them with “browsing” state of mind. Usage of the larger device tends to be more passive, because people associate them with watching videos, movies and reading.
So, for instance, demanding active behavior such as registration or entry of personal details may cause your potential tablet customers to ditch your page or app all together.
Tablets And Buying Behavior: More Like Computers Than Phones
ClickTale’s extensive analysis of customer behavior on the websites of leading enterprises including Wal-Mart and North Face has shown that purchase behavior also varies widely between mobile, tablet and desktop.
Customers love to use their portable devices for browsing, “window-shopping” and pre-purchase activities such as price comparison. When it comes to actually whipping out their credit cards and closing the sale, however, desktops or laptops are still overwhelming the machines of choice, with tablets coming in second.
There's a psychological explanation for this. Our smartphones are the most intimate of our devices—they sit on our body; they are stroked with our fingers; they know the most intimate details of our lives and schedules. Desktops sit away from us, however. They feel much more separate and distinct. They don’t travel with us, and to access the screen we use a mouse, not our fingertips.
Here, too, tablets differ from phones by virtue of their in-home usage. People often think of them as a sister of the desktop computer, rather than the smartphone, which situates them somewhere in between the two.
Purchases on desktops, our analysts have found, tend to fall in the functional category—clothing necessities, for example, and essential non-luxury items. On mobiles, however, purchases are significantly more emotional: a last-minute re-booked flight from an airport departures lounge, for example, or a novelty item that restaurant companions discovered on their phones and decided, on a whim, to splurge on.
Tablets, like their function, fall in the middle ground. Tablet customers are motivated by both emotion and sensation. These purchases are not the necessities bought on desktops, and they aren’t impulse buys like those on smartphones. Tablet shoppers tend to take their time and let items sit in their cart before pulling the trigger and eventually buying.
Whether they realize it or not, people have developed specific mental schemes around these gadgets. It takes more than one-size-fits-all features and strategies to succeed in this multi-device (and multi-platform) age. In development and marketing, you need to consider the unique place that each occupy in people’s lives. Tailor your efforts for the device at hand, and you will find that users will be significantly easier to reach.
Lead photo by Clemens Löcker
from ReadWrite http://ift.tt/1PM92bQ
via
It's Time For Deep Linking To Move Past The Plumbing
Guest author Matt Thomson is the chief product officer at Bitly.
We've heard a lot about deep links so far this year. from Google at I/O and Apple at WWDC. My employer, Bitly, threw its hat in the ring, too. But I feel like the industry is stuck talking about how to implement deep links—and not why.
With 70 percent of mobile commerce taking place inside apps, marketers need to take control of app re-engagement—with deep links. Similarly, deep links make it easier to move users from app to app.
A classic example: Google Maps not only provides driving times but also offers Ubers—redirecting you right into the Uber app. The promise of integration is huge, but this is a one-off example. The question going forward is how we can enable these linked customer experiences all the time?
A Frothy Investment in Plumbing
A majority of initial and current hype around deep linking comes from the investment side. Venture capitalists hope indexing app content will be monumentally different than indexing Web content—and that the unindexed content within mobile apps will somehow be a Trojan Horse they can roll into Google's citadel.
The current problem: Deep links are being used for plumbing—if they've even be implemented. In many cases, they haven't even been installed, making app interactions hard to track. Many app developers and product pros are looking at deep linking as an afterthought. According to URX, only 28 of the top 100 apps even have deep links in place.
While some strides have been made, the deep-link market is still nascent. This poses a threat for startups because big VC money goes toward educating the market and the “capturing value” part of the conversation is either too far out or imminently dominated by a larger player. It’s important for companies to spend time educating customers about what deep linking is and why it’s valuable.
To accomplish this, startups need strong use cases to point to so the industry can move beyond deep linking implementation details and into customer experience.
Deep Links And The Mobile Search War
Deep-linking adoption got a boost when Google and Apple made it more enticing for all apps to name, expose, and index deep links. At its I/O developer conference, Google announced Now on Tap and recently unveiled ways for locations inside of apps to surface in search results via App Indexing. At its Worldwide Developers Conference, Apple announced Spotlight for iOS, and it’s expected that 70% of all iOS devices will have the new deep-linking capabilities within five months from rollout—which could happen as soon as this month.
Apple and Google are giving developers more incentive to create deep-link locations in their apps, while simultaneously educating the market.
App-To-App And Word-Of-Mouth Links Will Win
Beyond search, there are many other ways for the industry to locate hidden content within apps—for example, mobile-Web-to-app or app-to-app. The latter is particularly interesting, with users spending 84% of mobile time in apps.
The app-to-app experience is the market many power startups are pursuing. URX, Button, and Quixey are attempting to enable app discovery and engagement from within other apps. Like Google and Apple, they’ve built robust search and ad-serving technologies by scouring deep links to understand what inside an app is worth surfacing to users. These companies will have long lives, but the company who combines its technology with an ad form factor that feels more native will prosper.
Additionally, a huge opportunity exists for marketers to leverage other digital channels to drive app engagement. As many as 52% of consumers discover apps via social media—so deep linking within posts and tweets is imperative to capitalize on that massive opportunity, both organically (word-of-mouth) and inorganically.
When it comes to customer experience, it ultimately falls on the marketer to give customers the best ways to move in and out of a product, including enticing users into apps. Yet direct marketing such as email, SMS, and even paid media are still stepchildren when it comes to deep linking. These channels are key to reengaging customers over long periods of time on the Web.
Given the increasing need to trace the customer journey in and out of apps and solving problems such as sustaining app engagement, locking in high-lifetime-value users and making the app’s value clear to them, there’s a huge opportunity for the deep-linking industry. First, though, we have to move the conversation past the plumbing and into where the money flows.
Photo courtesy of Picbasement.com
from ReadWrite http://ift.tt/1KHNxcQ
via