I have an opinion piece in the the E-Commerce Times today about the need for openness as a critical factor in the way that retailers market their products. Rather, the way that retailers provide tools and content to their customers to help them market their products.
In unrelated news, we had some fun at the StyleFeeder office today:
Photo courtesy of Eric Savage. Eric, I “remixed” your photo! I just love remixed User-Generated Content (rUGC).
Radiohead’s Warm Glow – New York Times
Today, music lovers are left but two options: pay list price for an album, or perform what a fan might call a free download and a record company would call theft. Radiohead’s experiment suggests a third way out: let fans pay what they want and give them lots of touchy-feely reasons to want to give as much money as they can.
There’s nothing touchy-feely about it. Enough people are both willing to pay for the music (because they like it) and quite happy to contribute to an effort that is part of a wave of reform crashing down on the music business.
This week, I am guest blogging on the popular Dutch blog IN10.nl and I just put up my first post where I attempt a silly experiment to get in touch with the band Soko. I guess I am living in Holland this week, mentally, anyway.
I just put a post on the StyleFeeder tech blog about my new favorite webserver: Nginx.
François writes about east coast startups and Bijan writes some more, all in response to Scott Kirsner’s article in this past Sunday’s Boston Globe (shameless plug: StyleFeeder is mentioned briefly).
There seems to be a dimension of the conversation missing here, though. My view is that there is a veritable wellspring of local developers already working in the consumer space (and even more who want to be). If Boston has any deficiency of b2c/c2c Internet companies, it’s not for lack of technology talent.
It is substantially harder to hire good marketing, bizdev and design people who haven’t spent the last ten years working at banks, biotech companies or consulting companies (with financial services and biotech clients). In fact, most of the design work for StyleFeeder is done either by Canadians or Brazilians and not because they are cheaper or easier to work with than Boston-based designers. It’s because I can’t find a deep pool of design talent here. Boston designers tend to be fairly conservative, which generally isn’t what you want when you’re trying to build for consumers. If you’re a Boston-based designer who thinks I’m wrong about that, I’d love to hear from you.
Marketing and bizdev people with consumer experience are equally tricky to find, again due to circumstances that I have to attribute to the dearth of consumer companies in the area. Technology skills are reasonably portable across industries, but contacts (the proverbial rolodex) and “getting it” are not. We were able to attract a few great candidates to both of the positions that they now fill, but it took a while and required a lot of patience. Bringing Dina Pradel and Shergul Arshad to StyleFeeder rounded out a truly kickass team and we’re extremely fortunate to have both of them.
My message to local designers, marketing and bizdev people: speak up and get involved. The local venture/PE community can certainly help you connect with technology talent, plus there are many events in the area to attend.
Bea is back from BlogHer in Chicago where she spoke about food photography. In related news, dinner tonight was lovely.
Today, we launched a StyleFeeder Tech Blog for those of you who are interested in the black magic that goes on behind the scenes here. Jason‘s been doing all of the writing so far, mainly about our CF recommendation engine and Fast Maximum Margin Matrix Factorization. There’s some cutting edge stuff here.
For those of you who haven’t tried our recommendation system yet, you should check it out, mainly because it’s great for everyone. If you love to shop, this helps you find cool stuff quickly (and other people who shop like you do). And if you hate shopping, well, then this makes perfect sense for you because it’ll help you complete your tasks quickly so that you can get back to… well, whatever floats your boat.
Last week, the Boston Globe published an article about the differences between east and west coast investors and their attitudes towards startups. Someone pointed out that the main difference can be found in one line:
“The mentality of East Coast investors is ‘Show me revenue first, and then we’ll talk again.’ “
And while I wouldn’t say that it’s uniformly true, I believe that this fairly describes the current situation. Fast forward a few days when Twitter announced some funding. Elias points to Paul Kedrosky’s post about the degree of importance of a business plan for startups. Paul’s view is that business plans and profits have overrated importance in the startup world.
While there is certainly a coastal difference in the mentality that you’ll find as far as investors go, there’s another side this story that I recently heard about from someone who spent some time studying startup failures at HBS (names withheld to protect the innocent).
If you know what your business is and how to make money, then just go ahead and do it. But if you’re in a situation like Twitter where you have something that’s pretty popular and the path to profitability isn’t as clear, then a plan for profitability can be a killer. Why? The reason, according to my source, was that out of the companies that he investigated, the ones that focused initially on profit failed axiomatically (that was the word he used). The goal of making a profit can create artificial boundaries in the early days when things like execution speed, quality of service and user experience really ought to be at the top of the list. If you have 10M users, you can figure out how to make money. If you have no users, you’re toast.
Build some Ajax stuff into your site and you could save the user from having to click through five extra pages. But those five extra pages are opportunities lost for serving up ads. Which is more important? As a new user is signing up for your site, do you add in a few extra special offers for partner sites along the way? How do you make these decisions?
My acquaintance who studied these reasons for startup failures seemed to suggest that eliminating the focus on profits was one of the key ingredients for success of the companies that succeeded. Instead, focus everything on making your customers/clients/users happy.
Maybe the west coasters understand that. Or maybe it’s because they’re closer to the showbiz Hollywood world with people all around who understand the value of an audience (and how to sell popcorn and soda to them).