Career Choices: Corporate vs. Startup
What would you do? Are you thinking about making a career choice? Here’s what I did, being a freelancer/startup enthusiast who went big time corporate for 2 years and then started a company right afterwards:
Opportunity
Some late winter-day in 2007, I heard about an internship call at Microsoft. I was working for a small company in Vienna, Austria / studying / freelancing on the side at that time. I figured it might be worthwhile trying to to see how far I’d get. So I sent in my documents.
Fast-forward, 6 months later, I’m interning in Redmond, as a Product Planner for Microsoft Office. Of all positions offered, this was the absolute uber-best fit I could possibly ever be matched with. I identified with the internship, the role, the company (don’t judge, the brand is one thing, but there’s tons of incredibly smart folks behind that) and eventually got a full-time offer.
Now, this brought up a problem for me.
I have always been a freelancer on the side, startup enthusiast and really chasing the dollar on my own terms since I learned how to use a computer (at around age 10). Working for somebody else, was always just a thing I did to learn more, to experience environments, to apply my skills to real-world problems and such. Small companies rarely paid good cash, typically averaging at around 15 to 20 USD an hour maybe, when employed. With freelancing on the side, I made up to a 100 USD the hour with US clients. I was perplexed as to what sense it would make going to work daily, when I made a day’s worth of cash between breakfast and the 10am meeting at work already from home.
I am not allowed to post salary details for my role at Microsoft, but I’m sure you’ll find all the necessary ranges online somewhere. Hiring bonuses, awards & stocks included, all bells and whistles, it was a good, lower 6-figure salary for my first year.
Now, this made sense again. Working for Microsoft, was paying me what I felt I was investing, time/effort-wise. I had a great, demanding job, but it was not a crazy Goldmann Sachs crack-job, far from that. I did 9-5, sometimes less, sometimes slightly more. It gave me a life outside of work. I loved traveling for work, doing focus groups and so forth.
But still, I was having this one question hanging high above my head every day:
Will I ever quit and join the startup craziness? Or, live my forever corporate life?
Being at Microsoft, surrounded by nice people, great nature, serious money, the high-rise apartment with city-view I always wanted, I figured, wow, this could be a life. What a stupid question to ask oneself. Life is good! Nonetheless, I figured I might never know what’s going to happen in the first 2-5 years, so I decided to start saving cash, lots of it, as strict as I was able to manage (damn you apartment leases). I eventually gave in and bought a car, it was, however, a used Chrysler Sebring for around $7.000, so I sort of saved after all.
Then, I received a call by the attorneys working on my green card application (I’m an Austrian national), explaining how they messed up something and it can’t be changed and instead of 2.5 years waiting for the green card, I was looking towards 7 years. I have a long-distance relationship with a perfectly smart, hot and brilliant girlfriend in Austria, the US doesn’t want me for now, my bank account was loaded (for me, a guy coming from rural country-side in Austria, it definitely was), I had the corporate tattoo on my resume and it all started to make sense, all of a sudden. I filed my resignation, 30 days later, I filed for incorporation in London, United Kingdom. That day, http://www.twentypeople.com was born.
The power of being taken seriously
When I was doing some freelance work, I occasionally talked startup/business ideas with many different people. First thing you’ll notice is that people rarely tend to believe you are being serious, qualified and standing a tiny chance of being actually successful. There’s so many people, with so many ideas. Go to a StartupWeekend. There’s one every weekend around the globe now, with new ideas, new groups, new big plans. And, despite the occasional exception to the rule, most people are not being taken seriously outside of this startup bubble. Try this: You think you have a great idea? Go to a bank, ask for a USD 50.000 loan to fund your first one/two employees. Tell them about your idea. You’ll feel like a 10-year old explaining how time-travel works. Nobody is going to take you seriously, unless you have serious traction.
At Microsoft, one of the things a manager once told me was, “you know, life is a bit different here. If you call someone and get to voice mail, mention you’re calling from Microsoft, and you will surprisingly always get a return call.” – And that was true, every time. And not only that, checking in at hotels, talking to customer support, bank managers, border patrol, the police, etc. – you have a tiny but notable joker.
I met tons of CEOs (of serious companies, traded on stock markets, making music videos, you name it) and it felt like being among peers. Not because of me, but because of who they suddenly saw in me and consequently decided to treat me.
I thought, giving up that corporate card (there actually is a corporate card, but that for another story) by quitting my job, I would lose all of these benefits. Turns out, almost none of it changes:
“I recently left my job at Microsoft to start a company, I was wondering….”
— HOW CAN I HELP YOU SIR?
And, while this will totally not resonate with ANYBODY who hasn’t gone through a large corporate brand, trust me, it’s golden card that only helps if played wise. You can make a serious dick out of yourself pushing sentences like that, but sometimes, it’s the magic butter you were looking for.
This way is probably the easier way: Here’s why
Now, there’s a gazillion startup founders out there who never worked for a large brand, not Google, Amazon, Microsoft, Apple or Facebook. None of them. Yet, they are or will be successful. I truly believe there’s a lot of you out there, hey, you reading this, might just be that person. Chances are, however, you are not. People are dicks, they don’t believe shit anymore. Showing up at a meeting/event outside of the startup bubble, explaining your grand-masterplan of how you’re going to change the world, most of the time, will result in responses like, “ahh, nice, sounds interesting” - “hm, sure, great to hear somebody is after this”, “wow, that’s so cool, your own company” …. but nobody, ever, takes you seriously enough.
Working one year for Microsoft and putting some cash aside, gives me enough leeway to live and work on a startup for about a year, with no further income.
Two years at Microsoft, probably amount to two years of leeway. This might vary depending on your role/salary/company/saving-habits/expense. But it’s about right for most people intending to go self-employed afterwards.
Having two-years of “not doing distracting, annoying, time-consuming freelance gigs on the side” is pure gold. Mind you, this does not mean it’ll be worry-free. You will be seeing your bank account going downhill in seriously intense steps. You work, work and work - and yet, your bank account drops, drops, double-drops (Christmas), and drops some more. It’ll make you think fast about revenue models, fine-tuning, customer acquisition before your money runs out. It’s like a dry-run investment. You paid for it. And, in my opinion, it’s the best kind of investment, albeit the emotionally most hardcore instance of investments.
I was always wondering what life would be like, had things progressed the other way around.
I start a company, great idea, nobody takes me seriously but I pull through. I manage to stay alive for a year or so until money runs out and I face consequences. I get a job on the side, work through some freelance gigs. Work starts to suck. I wonder if I should travel more to get my head free. I don’t have money to travel. Maybe I should see if I could go corporate, make some serious dough, come back afterwards. Applying might be tougher, I might not even feel like applying for anything, it’s like giving up. And even if I’d get a corporate job, I can only assume life would suck. I would be there only to leave again, since I know I failed in my past life and had to do this for the money.
This brain-fuck gets worse with every minute. I understand there are A LOT of people out there going down that path. But hell would I fail at it. Not saying I haven’t succeeded yet, but things definitely look much brighter from where I’m standing now, looking at my resume, the future probably will be fine, either way.
A note to dreamers and haters
Sorry to insult the dreamers. I’m one of you. But at the end of the day, if you live a life among others, have family, girlfriend or anything important nearby, it will demand your time and happiness. Being out of cash, out of inspiration and without much ahead of you will not make the day brighter. Dreaming will be dead by then. So go and do your resume some good, make sure your professional profile is set up for going wild before you actually go wild. There will be enough time, just read these words again, there will be enough time for you afterwards.
What we learn from the first 1.000 users
For most startups, getting to a 1.000 users is a serious marathon. People say it gets a lot easier after the first 1.000, and even more so after the first 10.000. I wouldn’t necessarily agree with it, since it really depends on how active these folks are, if they ever return after their first visit and so forth. Anyways, here’s what we learned from our 1.000 users at http://www.twentypeople.com
1. There are many, many different ‘types’ of users
We cater to corporate users as well as individuals. So we figured, that means we are targeting two audiences: Employers, and well, regular (and extraordinary) people. So we went ahead, figuring out what ‘regular user’ wants to do and why ‘corporate user’ would stop by. Communicating with both types of users, actually surprised us by leading us to realize that there is actually a pretty large amount of different ‘regular users’ – and I don’t mean personalities only. A few archetypes we noticed:
- Early-adopter Startup Founder
Tries to figure out if you’re big yet, if there’s anything he/she likes and could incorporate into their service. Saw it on Hacker News or met the founders at a conference/event. Will never really use the service. Just wants to evaluate the potential. - Privacy-Warrior
Complains about not being able to use the site without creating an account. Will always want to use a demo account. Will eventually sign-up, never specify a real name, access the site often with cookies turned off, using Firefox, often from Linux. Will fill out feedback form, mostly contains a message very similar to: ‘Your site does not work with cookies disabled. I can not use it and people will not want to turn on cookies just for this site all the time. This is a privacy fail.’ - Power-User
Signs up and does everything there is to do. EVERYTHING. Fills out every form, clicks every checkbox and spends more than half an hour on the site, if not more. You never met the person before, have no idea where they are from and there’s a 50/50 chance you’ll never be able to contact them for feedback. Only about half of them actually respond to your awkward excitement e-mail, thanking them for their engagement in this. - Super-Minimal User
This person you should be testing for. Seriously. If your website becomes richer, or really starts unfolding once a minimum amount of information is entered, make sure you keep testing/iterating from the absolute minimum anyone can possibly just enter to get by with and work your way up, ensuring the user experience is fluid and makes sense. This person will try to use a fake e-mail account, doesn’t care about verification e-mails, will try to use an OpenID provider, possibly Google E-mail or Twitter rather than Facebook and just try to get behind authorization without identifying too much / getting any future e-mails. Once in, the person will click around, not enter anything, at all, pursue no selections that would shape the user characteristics (gender/interests/skills/etc.) and just expect to get to the absolute beef of the service. This is a big problem if there is no data to work with. The return on time spent on twentypeople.com becomes much, much bigger once you pass a certain time involved, defining your personal preferences. So with a no-involvement user, there’s barely any chance to give them great visuals/data to make them spend more time on this. Suggestion: Provide rich demo accounts, or explain which bits and pieces would severely enrich your experience at any point. - The Developer
Signs up, wants to figure out what this is about and also understand the technologies, workflows and overall implementation. Will point out any flaws, like visible script file extensions, lack of HTTPS, absence of smart URL forwards, call out certain frameworks, like why jQuery might not be ideal, why Bootstrap looks so old and cheap and definitely call you out on rendering flaws between IE/Firefox/Safari and Chrome. Will provide you with helpful advice, but is not interested in really using the service. Just wants to evaluate it, from dev to dev. - The VC
Signs up, enters some data, clicks on what he/she considers a tiny bit above minimum information, stops half-way through (typically being on the phone during that time, pending to answer a question), asks rest of the questions on the phone, closes browser and will likely never come back to use the site. - The Computer Novice
You don’t really know how they found you so early in the process, but they are here. They will try to sign up, and probably use the wrong user-type (mix up corporate users vs. normal users), make a typo when entering their e-mail address or contact you because their login does not work. Support helps them to login, everything works with support, nothing worked without. Developers spend a day to figure out what happened, won’t find anything wrong with the authentication. Almost always uses Windows, Internet Explorer 7 or 8 and will scare the shit out of your developers. Casually notifies you about major UI issues (blaming themselves of wrongdoing), will try to use the services, possibly fail to continue since the site might be too complex for them to fully emerge into it. Anything you touch, regarding UI/UX, talk to these folks. Watch them, communicate with them. They resemble the computer literacy of your parents, or that friend who never really touches a computer other than using Facebook and checking Hotmail. They are the masses you need to become big. make sure they understand the service, very well.
2. Nobody sees what you see
You have been iterating of the idea, the concept, the pitch, the tests, the features – everything, a hundred times. You know exactly what this site does. You summarize it, put it on the front page and assume people will basically unzip this small summary on the front page to the huge concept you have in your head, right now. That’s not happening. There’s nothing more fun, shocking, devastating and motivating, than being at a party, talking to two people who have recently tested your service. Take the opportunity: Fetch a third person. Ask one of the users to explain the site to the third person (who ideally never used the site). You’ll be (likely) shocked to hear how another person, not familiar with your great master plan, will describe your site, in a simple sentence. They will cut, disregard, forget and ignore everything you worked on so hard, they’ll use one sentence to describe how they think the site is to be perceived. It gets really exciting (devastating, etc.) when the second user joins in, only to correct the first user, explaining how, strangely, he/she thought the site was actually supposed to be used for this and that… It’ll be a defining moment, trust me.
Make sure you keep doing this. I often ask my girlfriend, parents or even friends not very literate with computers to take a look at the site for a minute, maybe allow one or two clicks and then have them summarize whatever they know about it. This tells you a lot about how much you still need to refine your statement, the two lines on your front page.
3. The first thousand are just stopping by
Most of your first 1.000 users will never come back. This is really sad. But they’ve been confronted with several iterations of your idea, where with every iteration, maybe a bunch of them will actually stick around for long. But the type of people who decide to use your service, because they saw it on Hacker News, heard about it at a conference or through a tech blog, are the kind of people who probably have over 500 accounts total, having signed up with every other startup/service just as well. They come, see, and leave. They didn’t show up because you are solving their problem, for which they were trying to hunt down a solution. They stop by for completely different reasons. Don’t get all sad about this. Some will stick. And, most importantly, they’ll enable you to pitch your idea to more people, test your features with not 5, but hundreds of people (send out an e-mail, it’ll re-active a lot of these folks for a few moments) and boost confidence, somewhat.
4. They won’t tell you much about the potential of your idea
One thing I constantly read across all these startup advice blog posts is the idea that once you pass a certain number of users and you keep listening/watching them closely, they will clearly guide you through re-shaping the product to absolute success. This is wrong, in my opinion. They will certainly help with new ideas, pivots and such, but their opinions are very different than the opinion your average user will have. The average users will start to show up afterwards, once you pass the first thousand. Make sure you keep that in mind when iterating. Suggestions/thoughts will be strong, coming from the first thousand, you will be happy and open to integrate/iterate on them, and things will become very confusing very fast. MAKE IT MORE PRIVATE! You allow to hide usernames. MAKE IT MORE USEFUL AND PERSONAL. You suggest to re-enable usernames. THERE ARE TOO MANY CHOICES. You auto-select preferences. THE DEFAULTS ARE CREEPY AND ANNOYING. And so forth…
5. They represent your hard work
Passing a thousand users, for most people/startups, is a big achievement. You might hit bulls-eye being covered on TechCrunch, maybe you even launched through TechCrunch Disrupt, DEMO or anything like that. Then your first 1.000 users will be easy to accumulate. But if you are, like most of us, booting from the ground up, you’ll be required to spend a lot of time, hard work, desperation to reach the magic 1.000. It’s definitely a magic number in many ways, but I find the most magical part about that is this:
Once you reach the area of around a thousand sign ups, you’ll notice how things keep going all by itself. You stop posting on Twitter, you don’t mention your service much or have some quiet time in the press/blogs – yet, people still sign up. On some days, up to 20 new people come along, out of Google, someone’s suggestion and other mysterious sources. They are the interesting ones, they’ll often stick around much longer, than anybody else.
As usual, use the comments to share your experiences. Would love to hear about your first 1.000. Contact me at @mittermayr or follow my company at @tphq (http://www.twentypeople.com). Would love to hear your thoughts!
The Art of Design Validation
These are more or less my private thoughts. If you want to check out my business projects, head on over to twentypeople.com, pareer.com and fruji.com. Questions? Reach out via Twitter, ping me @mittermayr.
It is a classic trap for almost any recently-incorporated, hyper-passionate startup: The angst around not entering the market fast enough, the urge to go wild and code like a monkey on speed, to just do whatever it takes to push out the first release. People need to see the product, and once it’s live, they will totally love it, right? Right!? — Well, not so fast, intrepid entrepreneur! Here is why you might be missing a highly powerful but little talked about methodology: The Art of Design Validation.
You might say that you’re different, you see the product, you envision it and most importantly, you absolutely know your customers. Of course. After all, why else would you do this? Truth be told though, there’s a pretty high chance you’re just hoping to get lucky. Even usability maniacs like 37signals have recently embraced the power of testing design concepts. Why? Because they make a lot more money with it!
Look at it this way: If you’re a guy, there will be a point in time when you get lost, with your girlfriend right next to you in the car, suggesting that you pull over and finally ask someone for directions (Why Don’t Men Ask Directions?). While (as a horde of guys is threatening me to better write that) it is clearly an insult to the power vested in us, the male population, made to hunt for food and totally know directions — our reluctance to give in, frankly, is just a clear statement that we actually got totally lost and don’t want to admit we could probably use some help.
And that’s exactly what is happening with our self-perception of being a perfectly good designer and developer, and probably among the most creative people this era has seen. Fact is: most of us are not that brilliant. It’s motivating to think you’re the Bear Grylls of Design, but the odds are against you (especially if you are featured here, here or here). And if you don’t happen to have Jony Ive doing some design freelancing for you, here is what you should be doing instead:
One of the great luxuries large companies frequently take advantage of is an array of research methodologies typically not available for the smaller budget. Focus groups, surveys, demographic screeners, conjoint analysis, EMEA, cultural perception, customer segmentation studies — you name it. They all do it, albeit only some companies, like Microsoft, openly admit it. Even the Huffington Post did it (A/B testing their headlines). Most companies though, aren’t very open about these tactics (as Steve Jobs once said, “We do no market research”). Yeah, right.
Research that fits your budget: With almost no money at hand, you can still get some serious, highly professional customer research done. There is a whole world of free (or really low-cost) prototype, design and idea concept testing tools out there. Most of them are great implementations of crowd-sourcing projects. Some of the tools are specifically made for concept testing, like PickFu, AllOurIdeas, FiveSecondTest, Concept Feedback, usaura, Feedback Roulette, Qriously and even Google offers free help. These tools provide incredible feedback in less than a day’s wait. And others, like UserTesting.com, Feedback Army and Amazon’s Mechanical Turk, might cost you a little bit, but can deliver, with amazingly fast turn-around and large datasets of feedback.
The Experiment
As an experiment, I decided to spend $5 and about an hour of work. I programmed a simple survey question and posted it on Mechanical Turk. And I got back plenty — over 100 responses plus some 30 comments of individual feedback. Not surprised by the numbers? Well, try finding a hundred individuals elsewhere, in an hour, in front of their computers, expensing their valuable time at $0.05 a pop for the effort.
So, what do you test? You can do a lot more than just simple A/B testing or short surveys. Start a crowd-sourced brainstorm, do your own affinity exercise or simply have people visit your site and respond with a simple comment on what they didn’t like about it. Paraphrasing from the 37signals experiment mentioned earlier, Jason Fried’s mantra while testing was: “We need to test radically different things. We don’t know what works. Destroy all assumptions. We need to find what works and keep iterating.” And that’s exactly what you should be doing as well. Go and experiment.
There is a whole set of arguments one could have over this. I’ll address two of them here:
- How representative is a random sample on Mechanical Turk?
Answer: It’s going to be early adopter types, not the most representative for a large operation — but we’re talking budget here. Make sure you add an optional test question; increase the number of responses you’re shooting for and maybe cut those who didn’t answer the optional question. - Why would I need this in the early days? This sounds more like a post-prototype methodology to me.
Answer: You need this right from the beginning and even as early as when you’re designing your logo. Create two versions, put them up and run it by a hundred people. Have them vote on the one they associate with your name, and let them explain what comes to their mind when they see it. Your logo, after all, will stick with you for at least a few years, if not longer. You will be very surprised.
Keep in mind: When doing (budget) research, the rule is to always remember that your participants are unlikely to have strong opinions about things that have happened in the past, and are also unable to predict the future. Your focus should be on today and on one situation, which you’re putting right in front of them for their reaction.
Are any startups using this methodology already?
You bet. I’ve asked a lot of startups to comment on this Quora question and received some great responses: “We crowd-source every change we make to our site. A/B testing our website is of critical importance to the success of our company. We need to know which page designs get customers through the door — and which don’t”, says Sander Daniels, from thumbtack.com. “People love answering the questions and we get valuable real time feedback that plays in our iteration cycle”, says Benjamin Young, CEO of nexercise.com. Or, a comment from Alex Schiff over at Fetchnotes.com, “We learned a lot about what resonates with users and that brought us to our current iteration.”
Unfortunately: If your idea doesn’t fit the market, design validation will not make that overnight success happen for you either.
Founder’s Hell: Competitive Horror
EDIT: This seems to be getting a lot of traction on Hacker News. Just wanted to say, you guys are the opposite of TechCrunch in so many ways. I really like hanging out at Hacker News, you rock. Follow me at @mittermayr - would love to hear about your thoughts and companies. Happy to give feedback!
EDIT2: Our website at twentypeople.com has major issues with the sign-up process. This couldn’t come at a better time, pushed updates yesterday, today the internet visited. Sorry! We’re working hard to fix this right now.
EDIT3: Should be fixed. For those who just want to see what it looks like without signing up, use this demo account wisely (20demo@binkmail.com / twentypeople) - thanks a lot guys.
When working for Microsoft, I learned that competition is an awesome thing. It really helps you get a perspective on your own work. Despite many people believing otherwise, Microsoft actually is a hyper-innovative company. I’ve met people and saw things I never ever would have attributed to Microsoft’s innovation labs. Fact is though, Microsoft isn’t known as the innovator, rather more as a company waiting for markets and products to establish and later land the enterprise on that market, crushing out all the little startups. That’s why they’re having a hard time being known as an innovative business - that’s also why I was jumping around when I learned that they finally decided to release the PhotoSynth iPhone app. If you haven’t tried it, do so.
This post is about something else though.
My job transformed into a “Competitive Product Planner” position after about a year at work there. I evaluated competitors, their perspective on things, their traction, plans and models. Not to imitate, but to drive innovation. Are they on a market worth exploring? Are the masses just crazy and it’s a fad, or is it actually a trend?
At the beginning of 2011, I left my job at Microsoft and started my own company, twentypeople.com. I figured I’d be a whole lot different than most startup founders. My experience with competitive intelligence would make me a different person. I would not fear competition, I would hope for it. I would want really, really good competitors. It would validate the market and what not.
About 11 months in, I have probably wanted to crash this whole idea more than a dozen times since I started. I have lived the absolute horror. And good times. But also fucking horror. Let me tell you about the horror, just a little bit more:
You start with an (obviously) great idea. You go hunting on the web, trying to find people who are in the same business, possibly the same idea. You find maybe one or two similar services, but come up with great ideas on how to differentiate almost immediately. Things are looking good, let’s roll!
A while after, it’s more often than not a TechCrunch post, you read an article about a company doing something very close to what you are working on. You feel somewhat motivated, but also stressed out, they’re ahead. What if they are soon known for being the go-to-place for what you wanted to offer? Time to speed up, you add features, you move faster, you long for early reviews/previews/beta-testers. Feedback is scarce, and not very insightful. You would pay for good feedback. Then, huge investment announcement for this random company you never heard of, they just got shitloads of cash. You, well, you still have your lousy personal bank account, thousands of lines of PHP code and a dream. Albeit a slightly deformed one already. You need investment, it’s the best PR after all, and you’ll be able to find employees easier with cash. You’ll prepare some slides, spend hours in Photoshop and Keynote and feel good about the result. You pick investment companies based on their investments and what it would sound like, would they invest in your company. You send them pitch decks. Most respond, which sort of makes you feel there’s success just around the corner, until you realize pretty much everyone was just nice telling you to come back later. You met one or two investors, it’s an awesome conversation, you already wonder about where to put all the money and what to spend it on (you actually have that in the deck) and what not. Weeks later, you get the e-mail. It’s worse than a break-up text message. “After careful consideration, yadadadaa….”
Uhm, so, what’s next? Time off! You’ll need a break, you feel unease creeping in and you don’t want to risk losing interest. Vacation it is, or parties, or whatever.
A bit later, you’re back in the game. You have new spin on the idea, a perspective you didn’t have before, this will unlock the masses. Let’s go crazy on it. Full dedication, lots of code written and you simply can’t wait to push it out. As days go by, your hyper-excitement fades out, maybe it’s not a good idea after all, maybe it’s a waste of time. You release a tiny preview, nobody cares. The internet moves on, you’re stuck.
So my idea isn’t good enough?
Minutes later, your feed reader delivers new depressing updates. Huge investment, everyone’s in it, from Ron Conway, Adreessen Horowitz to Dustin Moskovitz (one of the Facebook founders). You’re fucked. That team will beat your team anytime, even if they’d call everyone and their mum an asshole on the front-page. They’d still make more traffic than you. Why, why, why? Maybe you picked the wrong investors? Maybe your deck wasn’t good? Maybe timing wasn’t perfect, or maybe your location simply sucks? Was it the lack of co-founders? The wrong team? WHY WHY WHY TELL ME INTERNETZZZ!! No answer…
So, time to move forward. You pause a bit, see a new perspective and take another stab at it. Things continue, you feel it’s moving. Yet the only thing ticking forward like a clock is the negative, linear progression of your bank account, seemingly coherent with the increase of lines of code of your product. You create more, yet you have less.
Panic creeps in. It’s been a long time, the end of year one is approaching. Profit? A few hundred, maybe a few thousand dollars, maybe nothing. What’s next? Keep doing what you do? This is what everybody says, right? Don’t give up….
What if though, everyone who didn’t quit but kept going actually had a really good idea and your idea sucks? What if I have the worst idea in the world and I’m stupid enough to believe it could be working out, since, I’m not one to give up easy! I’ll stick to it, right? Or, do I? These are the best of your nights. Sleepless, ready to just quit the fuck out of this whole game of nonsense.
And to make matters worse, and I’d like to name-tag this oddity please, suggestions welcome, as you think you might be on a track worth staying on for just a little longer, someone releases a product, with hundreds of thousands of users. Complete nobodies, how could you miss them?? And they do what you do, but they do it really, really good. They have cash, they have an absolute stunning design, the right vision, they are fucking nice on their website and if you weren’t competing against them, hell, you would post that idea all over the internet because it rocks.
That particular moment, my friends, is what I would love to put in a little can and sell it. Anyone quitting a job, thinking entrepreneurs are having the time of their life and such, should get such a little can of horror. Pop it open, enjoy. If you can withstand that horror, you’re ready for the startup game.
It’s insane, and I often hope that people will make appropriate decisions when going through this horror. If it’s too much, go back to what you love, if you’re scared about the money, hey do something on the side, get a temp job or do something you always wanted to try out despite the low salary or whatever. It will all quickly remind you again of why you went into all of this.
I have the absolute deepest respect for everyone in this game, everyone who pulls through this shitstorm of pure horror and comes out stronger on the other side. It’s a deeply personal fight, happening between going to bed and falling asleep, walking home from this or that startup event, finishing reading the wrong TechCrunch article… It’s often a tiny trigger moment, ensuing absolute horror for hours or days.
Try to stay sane, make sure your life is hooked up with things outside of this world. Have an awesome girlfriend (which is why I stay sane), play sports or learn an instrument, hell, have a band and make weird music (which is my plan B) and just remind yourself of things outside of crazy town. You’ll be fine, this sounds like it’s all a big deal, fact is, it’s not. Your real life is more important, and it’s happening outside of all this weirdness.
I think success often is around the corner, but crazy town is where everybody else hangs out, so you naturally go and idle around, waiting for things to happen, for TechCrunch to cover you, or for a random investor to make you a success… It’s not going to happen, unless you’re the kind of person who likes betting on the 0 in roulette…
There’s a plethora of successful businesses, ideas, projects and products, all happening outside of TechCrunch, investments and startup weekends. It’s all out there. I wish we could take that insanity out of the “startup” culture, and come back to what it really is. Work, business, and money.
Good luck.
The Reality of Life, Money and Society
This will be controversial. For you, to enjoy this, I am assuming you have grown to realize atheism is not a trend but merely a step forward to understand why we here. We are going to need your believe in evolution to get you through this. It well help understand why I am writing what I write here. If this is new, give it a try, you might enjoy moving forward in your adventure of finding meaning. Confused? Perfect, it’ll be absolutely not religious, promised.
The past weeks, if not months, I can’t help to escape the terror going on. Terror? Do I mean the #occupy movement? Do I mean Egypt or Syria? Do I mean the insane Black Friday queues? The Euro crisis? Greece going down? Japanese politicians drinking radiated water? US debit collectors and refinancing? Justin Bieber’s psycho fan-chick expecting to get away with the story? - YES. Yes, that all is exactly what I mean.
I like my little snippet of world news from time to time, I want to know where people are trying to get out of trouble, need help, where nations are getting ready for their next step as a society and all that. I’m not the brightest person in oh so many things, but I definitely have an idea of how severe certain things really are - and what really is just a great morning for a news desk ready to rock. I am so shocked, seeing what all these news leave behind, when people turn off their TVs, put away their papers and iPads… It leaves the most baffling mix of absolute panic, and absolutely ignorance. You, reading this, might be different. I understand. But not your parents, friends or co-workers. And they are definitely more than you.
But let me start, well, at the start. Evolution helps us upgrade our bodies, we move from simple survival, to co-existence, to dominance, to social grouping to major dominance to social classes, pure power and what the hell is going to come next. At some point, someone figured out, well, if I have something the other person wants (or, going back further historically, needs), then I can get the other person to do stuff for me, maybe things I can’t do, or don’t feel like doing right now. Read: I’ll trade you one of my new-born sheeps, if you go hunting while I build my house. Cool. Move forward, way, way forward. People figured the more people you have working for you, the more important of a person you are. It brings power, you can do things that are fun, and others do things that are not fun but need to be done. For instance, you eat, while everyone else has to sit through the night hunting for you. Better to have three people go hunting while you bang their ladies. Sure thing. Now, move forward.
Money. After a while, it got boring and people decided it’s pretty hard to keep trading sheep and shit all the time for little transactions. Maybe a nice stone for the lady? A pair of comfortable sandals? A sword? A coin? Money. The more I have of it, the more I can rule shit and not do stuff myself. Hence, make (get) lots of it, in any possible way, spend it to live the life. The concept worked from day one. People might say now, why the hell introduce something that would immediately establish power and become a dangerous driving force of daily life? Well, it was probably the most beneficial modality to have people help each other out and keep society moving forward. We can assume that most people wouldn’t spend their day building a house for that random guy on the other side of town just because he asked you to (why not? Well, he would just enjoy life while you spend your limited life-time for him, hence, he would trade you something to make your time worthwhile, next step, money, we’re being recursive here). So, it helped us support each other, getting something in return. I give you bits of my life-time, you give me something that allows me to buy back (hopefully the same or more) life-time of someone else, later.
Up until here, things make sense, I assume. It’s a pretty natural progression. If today, the monetary systems break down, and all money on this planet goes up in flames, well, we’d be back to a similarly established system, possibly in the next 5 to 10 years, all over again. We’d be trading stuff, we’d be establishing new forms of vouchers representing value. We’re back. Agreed, nobody would have to pay off any debts or other bills from the past, so that’d be nice, in a way (although, probably unfair, since I said earlier, you took life-time from someone else and didn’t give it back). But more about the chaos in a bit.
Having moved from life to money up until here, on to money and society.
As said, a smart person would find a way to get a lot of money, arbitraging the shit out of any possible transaction to end up with more buying power than having invested. I go to work, spend 8 hours day, come home, get to spend the money I earned in 2 hours at work on my housekeeper, who cooks and does the laundry, working a full day. I win. Socially, this is pretty much a very sad situation. Logically, it does make sense, however. More free time, more time with things I love, family, outdoors, traveling, reading - whatever it is you do. But well, you see the problem. Why does that one person qualify as a housekeeper and you would never come to think to look after someone else’s house for some $7 an hour? Since you could easily switch jobs to the other bank or IT company. You will keep moving to easier (more comfortable things) if your position in society allows you to. So what do you, as a socially responsible person, in a very ideal world, suggest? You’d suggest, I’ll pay the housekeeper equally well, or maybe, even better since he/she does harder work than I do. You end up having no house anymore, no housekeeper, and no free-time, since well, you spent all the money on the housekeeper. Damn system. So, option two: What if (and we hear this over and over again), we could create a perfect world? Everyone earns the same amount of money, doesn’t have to do hard work and we all have equally much on the bank? Or wait! Even better: Screw money, we get rid of it. We clean our own houses, we don’t buy anyone’s services, at all anymore. Cool! Let’s try this:
So, you’re trying to build yourself a house. It’s really hard and you might not have the skills, or simply, the strength to put everything together. So you ask a couple of people nearby if they’d be willing to help for a few weeks. If they help you though, you’re having them work for you, them investing time of their life. We’re all alive on this earth for some 80 years or so. So eventually, people will figure out that some are more happy to help and others are not (even if there is no money and pure equality). And some will be pissed that they ought to help building your house while they struggle finding someone who helps them. What if one person sucks at building houses and others are really good at it? Will the really good ones never get to have free time again? And while they help you, they can’t go fetch food, they’ll be hungry. Maybe someone else helps them, maybe it gets really tricky after a while, since we really love the internet, or newspapers, or books, and someone needs to do a lot of work which will be hard to trade your genius qualities for… What if you have absolutely nothing to give back? Will people still help you? You see how romantic this whole scenario is, but how miserably it would fail. It would fail like a first-week high-school class. There will be blood and tears.
Alright, so this wouldn’t work, and you will agree, if you push aside the romantic thought and let reality in for a bit.
So how the heck can we introduce fairness, if, in a fair world (meaning golden fairness, where there are no inequalities), nobody would care to help anybody else (there is no tension, no incentive, no reason other than pure chance and occasion). We would not move at all. There would be no computers, no internet, no great food, no traveling, no seeing the world, no movies, nothing that makes life fun. I know, this line alone is enough for some people to prepare a negative comment already, but be real. You like a lot of the things we have - and I don’t mean to be materialistic. Screw the computer, screw technology. Yet, after all I have seen now, I would actually like to be able to fly to Paris, see New York and visit Singapore. I want to see cultures, food, music, people. Guess what, all that won’t happen, without a lot of incentives in place, to get a lot of people to do a lot of hard work.
Fine then. We need a little inequality to keep things buzzing. Would be a nice, still somewhat romantic concept. Problem is, we’re in a really dynamic system. We’re locked into it. Our desire to live, our limited time on earth - this is the core factor of all this craziness. I am here, I had no choice in being born. My parents decided it for me. So, being here, I better do what I can. This is a world that has been developing for millions of years and it hopefully will much longer. I’m only one tiny bit active in this whole cycle, but I am active. The day I was born, I was given a chance to do something with it. I could have died on the second day. I might have been breathing for one day, and it might have been awesome. I might live until I am a hundred years old, and there’s a lot of things that might have been awesome. Maybe only for me and nobody else. Life is a little bit like jokes sometimes, there’s always something in it that only you find funny, really, really funny. And that’s the important part: Make it what you want to.
Now, cue in the third world. Not everybody is born with the same chances, in lovely environments, with hipster parents. I agree, and it saddens me that we can’t make that happen with all this genius intelligence around us. I mean, what the fuck, we can implant artificial hearts, so what’s the matter. Keep in mind, a lot of people on this planet will not live as long as you will, never touch a computer, get rick-rolled or have ever heard of Thanksgiving. But they still can be happy. Very happy. It only becomes real tough if we introduce them to a world of our standards, and show them what they are missing out on. But this is for another article. That’s a really tough one and constantly bugs me since we are bound to have a clash here - but this ain’t something occupy stands for, by the way. This is one floor down even, basement. For the sake of this post, let’s hook back into the core point here: We’re here to live our life. And we rarely want to waste it, give it away, not spend it the way we want to. Sometimes, we need to help others, but this alone would not (don’t be romantic, read again what I wrote above) suffice to help us move forward and grow as a society. And, simply, it would have some people trying to escape the system. Somewhere, someone will get three not so smart guys together, have them build stuff for him or her, resell it or trade it, pay them less than he made, inequality will develop. Fast. Very, very fast.
There is no escaping. Well there sort of is. In a world, where machines, or other forms of technology would be able to build (without need for maintenance, power, financing, supplies, etc.) and do everything we don’t want to do, without us needing to invest a lot of time in keeping this system running, then well, we could get rid of inequality and all enjoy life. Go hiking, build stuff, sleep, sing, dance, and what not. Yet still, someone would escape the system, and it only takes a few to start a new downfall of a happy world. But this won’t happen, since we can’t let the machines take over, they’re evil, also, our information would be out there, what the hell, how shocking …….. (sarcasm) …. It’s really, really tough.
So, we need money (or a trade currency / voucher system), we need inequality. If both would be dismissed, we’d be unable to function and it immediately would re-develop and establish itself in some new form, with similar dynamics. Over and over again.
So, we’ve moved from life, to life and money, to money, to money and society. Now, let’s talk about the #occupy movement for a second, and therefore: Society.
Inequality is a bitch that won’t die easy. No student sitting out any pepper spray strike will change this. That’s a fact, if you don’t believe it, you’re a romantic. I congratulate you, and hope you don’t have decision power over others in life, since you are likely to have lost touch with reality. Bill Clinton said it pretty well a few days ago, when he welcomed the power and spirit of the Occupy movements. He also said that he’d much rather see these people become influencers, do stuff that makes a change and not just expect the world around them to change magically through the simple act of blocking things, occupying fields. The police men are not an alien force fighting against you. Guess what, they have kids, some of your parents are police men, a lot of these people are very, very nice folks. They see what you want to say, but their bosses, and those bosses’ bosses don’t want to lose their job (money) - so they need to go there and see what they can do. There are, sadly, always absolute idiots among them who set things on fire, emotionally (and sprays, physically) - but it’s the same on the other side, students burn buildings, cars and block things. They are not your enemy. If one guy walks around and pepper sprays students, 1.000 students go nuts and call police men, politicians, every other person not occupying shit and the 1% - and who not, responsible for this mess. Everyone is responsible, correct. Everyone includes you, students. Striking through occupying is like a fight among kids. It surely has an effect. But man, we’ve grown since then. And if some guy calls me a fat person, I’m not going to rip him apart (like I’d do in school). I have better ways, I have grown. I know a lot of students just really, really love the spirit of occupy. The movement. The let’s do shit together, let’s go against the government, let’s make shit happen, let’s be a part of a world we want to create, let’s what the fuck dude, anything works.
Don’t get me wrong here (really, try not to!). I really like seeing these people spend their life-time (we’re reconnecting, you notice) on hope that they can call for that change of shifting the inequality that we actually need, back to a little more stable levels. I would join immediately, if there is a way that brings change. With this methods, however, there isn’t. Sitting there, expecting the world to change won’t just happen. It won’t. Even if a politician introduces a law, it will blur out faster than you guys graduate. There will be victory, parties, the night with that girl you never met again, awesome times, sad times. You hopefully had a fucking good time, but nothing more. If you really, really (deeply) want to change the system, then try to understand it first. Figure out where change needs to happen, figure out who can make that change and why that person is socially and physically unable (or unwilling) to. Become a politician, if you hate them so much. You think the political system sucks? Create a new system, be smart about it, use the internet, use whatever we have that people a hundred years ago didn’t have. But don’t, please don’t, sit in parks and hope the world will be pissed off enough at one point and change it for you. Seriously? This, won’t, happen – important note though: We’ll soon read news that things are moving and laws are being introduced and what not. There will be some sort of victory claimed. After all, a new or old president will want to be elected, promises will be made. But this all feels more like removing shit-stains from your ice cream, when you really want to remove the broken pipe bursting that stuff onto the ice machine. Find the pipe, fix it. And no, the pipe are not the 1%, not the politicians. There are, for sure, a whole lot of crooks in there, assholes, socially irresponsible freaks who couldn’t stop the run for money. They need to be extracted, outed and blocked from enjoying their false advantages, sure thing. But not through sitting in a park.
And lastly, the point that started all of this for me tonight: If you think that the world is going to collapse soon, the Euro will default, Greece and the whole damn European Union will go down the drain, the United States will be bought and squeezed out by the Chinese and we’ll all end up in large insane fights – well then you are much more in love with the sadness of our historical past than with the opportunity ahead of us, the intelligence we gained and the fact that most of us are figuring out that life is here to be lived, enjoyed and not spent with stupid fights, sit strikes or other forms of violent pressure aiming for change in someone else’s path. We’re reaching the last paragraph, I love you already for reading through all of it:
If tomorrow morning, as you turn on the TV, the news anchor announces that the Euro has crashed, banks are defaulting, the European Union can not back up the debt, the United States does not have the money and China is not willing to help or whatever happens after that …. Will you suddenly walk over to your neighbor and burn down his house? Will you go to your bank and kick the shit out of your best friend working there because he is a fucking banker? Will you burn a politicians house? If any of this is true, then, well, you hopefully are the last of your generational type. If my money at the bank vanishes, my investments and debits purely bust in nothingness, if everything just goes away… I will walk over to my neighbor and ask him if there is anything he needs help with. I will ask friends to join me. I will organize, work and start everything again. I will be coming out first, when everybody else is still trying to set the bank on fire. I will hope you guys don’t ruin it for us. I want this world to change, but let us all be smarter about it, use intelligence and not force.
I actually like to live my life. Money is a great enhancer, it helps you with a lot of things. But even if all goes away, life will continue. Sad fact at the end: If you are expecting the world to crash soon, a group of sheep might be a better investment than your next real-estate…
Thanks for reading. Please comment. Go nuts.
Real Trading Experiment: Be a Fast Chicken
Now, this post will most likely spur criticism, if not complete denial or hate. What I hope though is that it will share some light onto things a lot of people don’t have access to, knowledge of or experience with. I will be giving you a short overview of how I finance my traveling, gadgets or christmas presents - and more importantly: Make a new investment and have you follow along in real-time.
Before you get too excited: This is a highly risky strategy, it involves dealing with a lot of money and is barely (marginally) better (if at all, at times) than hitting a casino. There is no sure-fire way to achieve wealth, but if you have an interest in (attempting to) understanding and playing highly complex structural institutions (by that I mean the financial markets), read on and evaluate:
This year, if the math adds up (more or less), I paid for all of my flights, hotels and gifts with my stock market earnings. Little by little, one after the other. My strategy is dead simple. For my system, Warren Buffet’s way does not work (although, fundamentally, this is the right thing to believe in, in times where Goldmann Sachs and banks didn’t really participate in the stock markets). He invests long-term, in well-established big market companies, with trustworthy executives (haha) and has no issues staying in for 30 years if needed. I don’t have that time or will. My investments will happen as fast and short-term as feasible. And that’s rule 1 of my strategy:
RULE 1
Good times: Don’t be greedy, be a fast chicken instead.
Bad times: Pretend you’re dead, but don’t die.
In good times: You invest money, the stock goes up, would you sell now, it would net you a nice $200. But there is sooo much more potential, right?! – I’ve had this happen to me so many times, where I exited early, and saw the stock price go up more to $500, $800, $1200 net earnings, except that I had already sold at $200. This hurts, despite having made an easy $200. But that’s what I mean by greedy. Your only goal is to make a profit, however small.
Every trade comes with a trading fee (mine is around $8 per buy/sell each, with Fidelity), so the minimum for me is $16. That’s easy. I am typically aiming for $200 to $600 in profit. If I reach the happy zone, I’m giving it a maximum of two or three more days if things look really really good, otherwise, I’m out (like a chicken).
In bad times: I’ve had a big investment with Expedia, it went up to $600 and I waited one more day. The next day, Expedia crashed by -30% and I was in for the long run. This is though, emotionally. But nothing else. I’ve had the same happen to me a couple of times (A-TEC Austria, ProSieben), where my stocks went down -50% and didn’t recover for a while. If something crashes by more than 20%, you have to evaluate if the company will go bust (it happens, Lehmann Brothers) or if the whole market is being pushed down (check the indices). If you really believe in the company, and absolutely don’t understand this big drop, then stick with it. It took me 4 years to sell ProSieben (but I made a 800 EUR profit, which is better than my bank would ever be able to give me). I wanted to sell hundreds of times, same with Expedia (made a $470 profit after it stabilized). If this happens, your money is locked, that’s everything you have to worry about. Only invest money that you can afford to be locked away for up to 5 years. Most of the time it takes 2-3 months to recover, in a stock market crash it’ll take a year or marginally longer. Pretend the money is dead, but don’t sell and cut the losses…
These are my past three investments and exits:
I have sold all of them and made a little bit of profit. My typical investments are between $6.000 and $15.000 (at the very max). This might be a shocker to a lot of people new to trading, but it’s an ideal trade-off between short-term gains and risk. If you have $10.000 in the bank, and that’s all you got, don’t, EVER, think of investing more than $2.000 or so. It’ll turn you days into living nightmares. It’s too much risk. Revisit this post later, when you are feeling easy to lock away $6k to $10k, possibly for years. It’s your own fault if you don’t follow this advice, it’s the only thing I can guarantee, you will not be happy if things don’t go well. This is rule 2:
RULE 2: The world above zero is limited by your greed, the world below zero by your patience. Don’t make the investment, if you can’t afford the patience.
TODAY’S PURCHASE
Anyways, I made a new investment. I thought it would be a great experiment to have you all participate live in this. I understand this is sort of weird to have on the internet, but I also understand that we need to break some barriers and people should learn about things, even if it’s not necessarily something they would do by themselves. And, most importantly, this is the real deal - if I lose money, you’ll be sitting at homing laughing your ass off and not have spent a single dollar.
This is my investment:
What I do is, once the order goes through (I’m on European time, so we’ll have to wait until 3:30pm here), is to update this page with a link. I programmed myself a super simple ticker that only shows me how much profit I already have, would I sell right now. This makes investing (through my strategy) super simple and straight forward - and saves me a lot of time during the day (I check it on my phone).
UPDATE:
Follow the experiment live on this website.
Well, this is what the numbers look like after day 1. I wanted to show you this to make you understand the often tough times when things are starting to roll. We’ll be fine, but this is often how it starts and can/will make one uncomfortable.
Legal disclaimer:
I am not a financial expert, consultant or otherwise versed in the financial industry. I am purely interested in this as a hobby and did not imply this is what you should be following, copying or doing. Keep in mind that short-term trading has tax implications (considered short-term gains) and this will be taxed higher than long-term investments. It’s your duty to report your trading activity on your yearly tax forms. Consider this material as an inspirational piece, never as advice despite its format. I urge you to stay real, honest to yourself and don’t ruin anything you or someone else close to you built with real hard work. Stay happy.
The Average Resume
We recently did a little experiment, fine-tuning and testing our API (more here: http://www.twentypeople.com/api/). One of the things we were evaluating was filetypes.
What file format is your resume in?
We were surprised to see that based on a set of one hundred resumes, Word documents (the older .doc format) were the most prominent format.
Average Number of Words
Now, the other thing we tried to investigate, was the average length (in words) of a standard resume. Again, we analyzed over a hundred resumes and learned that typically, people need around 2026 words.
File Size
Out of a hundred resumes, only one had more than 1 MB (a PDF, with photo). Six resumes were over 100KB (which is still fine), and most files were between 10KB and 90KB, which is really impressive and would be considered professional.
The Power of MTurk
I still have issues with the fact that Amazon calls one of it’s most fascinating products, “Mechnical Turk”. I get the story of it and stuff, but well, it has its weirdness.
More importantly, I think it’s a revolutionary concept, over and over again. Let me illustrate, again, how I saved myself a lot of money, time and work by investing an hour worth of time into this little genius.
My company, twentypeople.com (do us a favor and try it out, it’s absolutely free and it will give you a great overview of your skills), is currently preparing a product called Resume Analyzer. It automatically scans hundreds of resumes (CVs) in minutes and classifies (sort of “understands”) them. This is a tremendous help for larger companies, allowing to pre-categorize and file all the job applications they are receiving. Find out more here: http://www.twentypeople.com/api/
Now, the interesting thing is: We need a lot (A LOT) of real resumes to test and fine-tune our algorithms. Where to go for help? You could either partner with an HR firm and source a lot of resumes, at an insanely high price, or you could ask around the community, your users, Twitter, etc. for help. Both didn’t fit the bill or vision here, so I thought I’d try and see what MTurk can do for us.
Right now, a new resume is sent through our parsers every minute or 30 seconds. It just keeps going, at around 10 cents a pop. I am currently looking for around 100 resumes, so this will be $10 ($11 something with fees/taxes) spent for real-life, original resumes uploaded to the database. Plus, I added a little explanation that while the resume will be deleted after the scan, people can opt-in to leave the resume with us in case they are looking for a job. And one out of 5 or 6 seems to like that and decides to leave the CV with us. That’s fascinating! It even makes me wonder, how many companies are spiking their sign-up rates with this, it’s shocking. When I pay $0.50 - $0.60 cents a click on Facebook, for an ad-click-through, and I get to pay $0.10 for a full-blown activity cycle (like uploading a resume and actively using my site for the procedure) - there’s no question what’s more bang for the buck.
I’m super fascinated by it, highly happy with the high quality of the results and most thrilled by the execution speed of this project. Beware though, it’s always up to your design and flow of the task you create. If people don’t get it, they will make mistakes, or bypass it. I might post more on how to create a really nice and smooth task without any room for error soon, but for now, I’m just excited and keep watching our parsers. That’s a nerdy morning.
The Art of Keeping People Busy
As the year 2010 was breathing its last moments, I finalized my resignation letter to Microsoft. It was a tough e-mail to write (yeah, I tend to break up by e-mail) – but, it wasn’t without a new challenge ahead, something that would keep me very, very busy. And that’s good, especially since the trend on my bank account reversed, a pretty depressing fact of being a so-called entrepreneur. I’ve spend most of the first part of 2011 with designing, iterating, developing and touching up what is known as twentypeople.com today. A lot has changed with each iteration, but one thing still puzzles me: The Art of Keeping People Busy… here’s what it’s all about:
You start designing a site, people tell you it’s nice (nobody expects anything). Then, you realize the site looks terrible, you re-design, iterate, re-design. Then you love it, visually. But it’s not selling the point good enough yet. You work on the copy, on the concept, you iterate, drop parts, add new parts. You push it out again, people come in, sign up. Silence. You talk with other entrepreneurs, where, weird enough it seems, everyone is concerned about getting users to sign up, to press that button, to pass the 5-second yes/no/maybe span of attention. But this didn’t happen at all, with my site. I have a tough sign-up process, it takes some 2 to 10 minutes getting all set up. A LOT longer than anyone would recommend. Yet, a lot of the visitors (real people) go ahead and sign up. That’s absolutely not a problem, nothing I’d find in need to improve. But what puzzles me is, people come in masses, try everything out, fill out their profiles, and then they go. Goodbye, forever.
It seems like this links up with a simple thought: There was nothing for them to do on the site. True, that could be the whole explanation. But think of LinkedIn, Flickr, Tumblr, Ebay, etc. – most of these sites require a trigger event to happen, in order to get you going and actually visit the site - compared to other sites, which naturally should be expecting insane amounts of traffic. What? Read on, here’s a comparison of triggers:
- LinkedIn/XING: The broad masses revisit LinkedIn when someone added them or a message was received. Rarely otherwise.
- Flickr/TwitPic/: Someone invited you to see a set of pictures (event/vacation), or, you just came back from vacation and need a place to host/share the photos.
- Tumblr: You are bored and are clicking through places that entertain you. Means: You read other people’s stuff, or you get it together and write a bit yourself.
- eBay: You can’t find an item cheap enough at major vendors, or you really need to get rid of stuff and get some money back now.
Now, some might already prepare to fire a comment that Flickr does have a lot of professional users, or that LinkedIn is used by recruiters, or that Tumblr is a great place to discover photo feeds and more of that. Again, I’m not talking about professional/niche/nerd users. I’m talking of masses, wide and broad masses. Major traffic.
To make sense of the above list, here’s a list of sites that have a completely different model:
- Facebook: You want to know what’s going on, you need to know. You feel out of touch if you don’t check up on your friends. And, best place to share what’s going on in your life, in everyone’s face.
- Google: There are more questions than answers in most of our day-to-day problems, and we head on over to Google to ask it anything. Really anything that comes to our mind. It takes us places, it gives us answers. There’s daily need.
- Spotify/Pandora: Most people don’t just listen to music every other month. Fact is, a lot of us want music daily. At work, at home. And we want new stuff, all the time. While I barely get bored by John Mayer songs, listening through the albums over and over again, most people will pass albums quickly and want new stuff. Music is a healthy drug and has a lot of consumers. Spotify truly entertains people, daily.
- Groupon: I hate Groupon, deeply. But I see why it took off so wildly. Buying at heavy discounts, being that person who got that cooking class for 30% of the price everyone else pays, that’s hardcore addiction-ready material to the masses. Check back, every day, more deals please.
- Twitter: Alarm clock rings, you wake up. You want to know what’s been happening while you were asleep, so you naturally fire up Twitter. You run into an old friend, you tweet it. You retweet your friends graduation photo, you tweet about why your day sucks. Twitter is in your phone, with you, everywhere.
And, if you’re still reading, here’s the last piece that ties the above blabla together:
There is a clear distinction between businesses who are operating on a “help with a random problem” issue, versus companies who are your daily companion. You go through design iterations (and notice, hell, even have opinions about them) and if someone shut it down, a dent in your daily schedule would be left behind, for a while at least.
Now, currently, my business is a trigger business. People need a new job. Or, an employer might be desperate about filling an open position, sign up and promote the job. It’s triggers. Then they wait. They will come back when something happens again. But spend their days with more important things, while they have time to do so.
And, if you’re eBay - who cares! Flickr? Nothing to worry about. These sites have climbed up the ladder to endless traffic momentum. There’s always someone, in this world, being triggered. Well, some hundreds of thousands, to be precise.
But, as a startup, this is depressing. I assume a lot of smaller companies out there constantly question the quality of their site, the design, the pitch/message. Wonder why VCs aren’t interested right now, or why people visit once and never come again. Question yourself what type of business you are building.
Ask yourself whether your concept might have enough potential to actually steal time from people’s precious schedules (and give them something worthy back). Remember, everyone only has a few hours a day to spend doing random shit vs. getting on with life.
There is absolutely no need to be that daily companion type-of-business. But if you are, lucky bastard. It’s tough these days, finding a place to develop new things, that movie’s always sold out.
If not, think of ways to give people daily benefits. Make them happy, enrich their day, reward them for spending even the shortest minute on your site, checking on things. Or, invest a lot of money into marketing to scale up to reach natural momentum.
Thoughts? This is work in progress.
Scammers Ruined Me (socially)
Today, while looking busy at the mall here in Jakarta, I notice a group of 6 or 7 students following me, giggling. It’s one of those weird things here in Jakarta, way waaay more intense than any of the other cities in the past few days, EVERYONE looks at you. They stare you to death. You take one tiny bit of some food, a group of 15 people nearby watch you in super high-tension focus throughout the process. What’s so weird about me? I’m just a freaking tourist. There’s billions of us (ok not in Jakarta). Anyways, so here’s what happened today:
Moments later, the bravest of these kids approaches me: “Sir, sir! Can I ask question?” - and that was basically my cue line - I’ve seen this before in Shanghai and Beijing. A supposedly “recently arrived” group of students, who happen to study English and something else, will turn out to be really friendly, asking question about your country, yourself and your travel plans and tips. Minutes pass by, expecting them to ask for money or some sort of deal. Nothing happens for a while, nice conversation, but THEN, they’ll ask you if you want to join them for some tea. Why? Well, because you’re such a nice person and the foreigner they always wished they could talk to for a bit! And you, curious traveler, always up for new local friends. And that’s where they get you, they’ll take you to an expensive tea shop, you get to have the bill, plus, you won’t get out of that weird alley-street basement without also looking at some souvenirs, priced considerably higher than at any airport of this world. It’s a known scam, I think they even call it the Beijing Student Scam. Anyways, back to the story:
I answer her question: “Let me guess, you are students, right?” - she nods, “yes!” - “… and you just arrived here?” — she looks a bit puzzled, also says “yes!” — “… and you would love to talk to a foreigner, correct?” — “Yes sir! Can I ask question?” ….
And that’s about where I explode. I go nuts at that little poor girl telling her I know what they’re trying to do. I am not just some random tourist they can scam just because I’m running around in an expensive mall. I know exactly what they’re after and how the scam works and I was in China and I’ve seen it all!!!
Girl gives me a shocked look, other girl comes over, “sir, it’s for a school project, our teacher said this” …. and I think, man, don’t they get it? I KNOW THE SCAM! I KNOW EVERY BIT OF IT! So I say: “Alright, I know you’re about to trick me and I’ll make sure you all end up at security if this continues, so, what is that question you supposedly have???”
Girl checks her bag, finds a sheet of paper with hand-written questions and asks: “Can I record?” - I nod - “Ok sir, where are you from?” - Austria - “What food do you like in Jakarta?” - Not sure - “What languages do you speak?” - English German - “What have you already seen in Jakarta?” — I stop her, starting to wonder if this ends up in some sort of figuring me out then giving me advice plus ripping me off and say: Alright, where is this going? How many questions?” - “8, she says”… and continues. After answering all of it, I start getting a weird feeling that they’re all genuine. The girl is shaking like I just scared the shit out of her and her friends stand like 2m away, giving me the creepy scared looks. Final question was if she can take a photo and get my email address? I say ok, why the email address? She says because her teacher said that they have to try to find pen pals.
Nice. So, I’ve been super mad at these people, basically the most asshole I can be. And that to a group of 15-16 year olds who will never talk to a foreigner again. Nice work, Roman. Plus, she was shaking like crazy when she gave me her e-mail address and I said it’s ok, but they were close to running away I assume.
As they were about to head off, I called them back, asking for the kid with the best English (which was another kid of course, the shyest nerd of the group, as usual) and explained my temper. Not sure if they understood what I was trying to tell them. I told them about Beijing, and Shangai, and scammers, and that all tourists will think they are scammers and it’s going to be tough for them. The girl finally responded: “Ok sir, thanks for the trick!” …. what? I will never know.
So, that means I’m pen pals with a 15-year old girl from Jakarta now. And I complained about the weirdos hanging out with teenage girls in Bangkok. Look at me…
