Ice Cream for Everyone!

“What is the most important thing I can be doing right now?” is a powerful question.  For me there’s a direct relationship between how often I ask myself that question and how good I feel about my work that day.

Checking in and realizing you need to change directions can be a great feeling.  You can tackle the right project with glee, knowing that in some parallel universe you’re still plodding down the wrong path.  (That’s another key to entrepreneurial success.  Always do business in the right universe.)

Two recent experiences:

1.  We’re moving from four servers to nine, so I called our host (ev1.net) to see if we can get a better deal than the posted price.  The sales guy offered to reduce our price by 5%, and though their prices are already quite reasonable it didn’t seem like much of a deal.

We talked for awhile, and eventually he said there was nothing else he could do.  I kept saying we had to find a way to reduce our costs, and so we kept talking.

Eventually he mentioned that on that older hardware they match any lower posted prices if you send the right people an email.  Lo and behold, we knocked off $200/month off our server costs.  It’s a great policy, but no-one had ever told us about it.

I spent about an hour on the phone and faxing contracts, and between the discount and the new hardware prices we’ll save $3,000/year. 

 
2.  The other night I spent two hours trying to install software that would save one measly click when trying to post something online.  In the end I couldn’t get it to work, and now I’ll never get that time back.

Also, some guy in a parallel universe is laughing at me.

A private beta is when a company starts with a small number of users, and expands by allowing those users to invite others. As Grant Storry describes nicely here, companies often use this technique to add buzz, and to grow at their own pace to ensure they can serve everyone well. 

Joost is a startup offering free TV over the internet, and until recently invites were doled out a few at a time. I’m guessing they needed enough users to prove their concept, but couldn’t push for wide adoption because they weren’t profitable without big-name advertisers.

Last week they threw open the doors, after this announcement:

Last week, Joost announced that it had signed more than 30 blue-chip brands, including The Coca-Cola Company, HP, Intel and Nike, as advertising launch partners. Beginning today, advertisements from some of the ad launch partners will begin to play on the platform. Advertisements from all ad launch partners will be on Joost later this month.

 
“Ok, we’ve got the money lined up, open the gates!”

Interestingly, while it’s pretty clear they want as many users as possible, the beta is still technically closed. You can’t download the app at Joost.com because they want you to hear about it from someone else.

Viral marketing at it’s best. A recommendation from a friend is more powerful than anything they can do.

It’s going to work, too. Joost is fun to play with and worth checking out. (It’s from the same folks who brought us Skype.)  Your geeky friends will know about it in 3-6 months and your mom might be watching in a couple years.

Congrats guys, nicely done. 

If anyone would like to give it a spin leave a comment below and I’ll send you an invite.

Because it’s so hard to measure the business value of good design, it naturally gets less attention from managers. It’s easier to watch things like visitors to a website, sales per day, rent and other costs.

Recently we got a chance to see how much it matters when we rolled out a redesign for our Freedback service. Here are some of the changes we made:

• Reduced the number of steps required to create a form from four to three.
  
• Removed list of forms on the left to reduce visual clutter.
  
• Added breadcrumb navigation so it’s easier to see where you are.
  
• Users now create forms first, then decide what happens when they’re submitted.

Results

To be honest, when we rolled out the new software we hoped to get lots of emails thanking us for the new interface.  Didn’t happen.  We did get a few phone calls, mostly from people reporting bugs, and by the way did we change something?

After squashing a few bugs all was well with the world.  We never did get much customer reaction, so we watched our graphs to see if we could see any change in how people used the software.

Number of forms created

Revenues

 
Thoughts and Conclusions

• When things are easy to use, people use them more.

• We didn’t see a dramatic increase in revenue from new users who had never seen the older version, but older accounts coming up for renewal were more likely to upgrade.  This agrees with previous experience from other system upgrades; existing users like to see software improving.
• Hopefully this will translate into more links, reviews and word of mouth traffic, but that’s harder to correlate to this change because it takes time.

 
Update:

My wife knows much more than I do about graphing data (she’s an astronomer), and was nice enough to plot a graph using the raw data that better showed the results we were seeing.

This graph is showing daily Freedback revenue before and after the change (note the y-axis doesn’t start at zero).

• The green dots are days.
• The black line is a four-week moving average.
• The 13% represents the difference between one month before and after the change. It held true for six weeks before and after as well.
• Our weekly revenue cycle (lowest on weekends) results in a lot of scatter.

I hope this data is useful to other entrepreneurs wondering if they should invest in design, questions or comments welcome. I’ll keep posting graphs and results from tests we’re running - if you’re interested you can subscribe to our feed.

On the way to the coffee shop today, instead of listening to a podcast I turned on the radio and heard an interview with the founder of Kiva.org  They’re one of several micro-lending organizations making it easy to lend money to entrepreneurs in developing nations. 

Instead of being a gift, loans are paid back with 0% interest, and the money can then be withdrawn or given to someone else.  The premise being that helping people to become self-sufficient is better than simply giving charity.

It’s working.  The Grameen bank pioneered the model in 1976 and has loaned out over six billion dollars so far.  Interestingly, their loans go mostly to women, who proved much more likely to pay back the loan and to spend the new income on their families.

Kiva.org brings the internet into the equation, allowing lenders (you! me!) to participate with amounts as small as $25.  Larger loan requests are spread across many people, minimizing everyone’s risk.  For example, while I’m happy to help Juma Rahimov towards the purchase of two cows, lending him the entire $800 he needs would require more serious research. 

I’d want to meet him, but he’s in Tajikistan.  I’d want to talk to him, but he probably doesn’t English…  Luckily for me, 96% of loans are repaid in full, and since I’m only lending $25 if Juma can’t pay me back I’ll be alright.

I found myself most interested in loans that might get people over a specific problem that’s holding back their business.  For example, Cecilia Tettey in Ghana buys corn from farmers and sells it to retailers in the city.  She needs better transportation, which could really big boost for her business if it meant more trips to the city or less time spent on the road.

It’s interesting to try thinking like an investor.  Along with the text, you find yourself studying the pictures for clues.  Would this person pay back the loan?  Do they look honest?  A hard worker?

Mehman Mirzayev

 
In the end we can’t help but be influenced by the images.  Somehow the man above reminds me of my father-in-law.  And my friend Ross who always stops to help people with car trouble.  Heck, even the fact that he’s working in the cold makes me want to help him.

Traditional economic theory is all about rational decisions.  Spreadsheets and calculators.  Lending like this is interesting because it  can’t be done rationally.  You just don’t get enough information.  A picture, a paragraph or two and your gut.  That’s it.

Somehow the lack of perfect information makes it fun.  With more information I might find myself trying to calculate return on investment.  Instead I find myself thinking “holy smokes lady! That corn looks heavy.  Maybe this loan will help you buy a truck.”

What do you think, is this the future of giving?  Would it change the equation if the rate of return wasn’t 0%?

We just got back from the SXSW interactive conference in Austin, Texas. 

Because we work remotely many of us had never actually met each other, let alone shared a time zone.  Being in one place meant we could match faces to voices and raise a glass.  It was great.  Handshakes when we got there and hugs when we left.

The sessions themselves were good but the highlight is always the hallway.  Meeting people in person, looking them in the eye and shaking their hand. 

Connecting.

Over the last few years I’ve met a few of my heroes there, the people behind some of the products or blogs I love.  It’s one of the reasons I go to conferences.

While you shake their hand and tell the OMG! in your head to shut up, a part of you realizes they’re not actually 7 feet tall and made of bronze.  And as you realize they’re not so different and they gingerly step off the pedestal in your mind, something shifts in your self-confidence.

That confidence shift is a big deal for entrepreneurs, because the limiter on what you can accomplish is what you believe you can accomplish.  You are your limit. 

Whether or not you believe you can do something is based on your past experiences and external examples from people you know.  “Have I ever done anything like this?” … “do I know anyone who’s done anything like this?”  The more similar you are to someone else, the more your brain uses their results as a proxy for your own.  In other words, “if they can do it, I can too!”

In 1953 Roger Bannister ran a mile in under four minutes, something few people thought possible. The world record had stood for nine years, but once he showed it could be done just 46 days later John Landy did it too and five others quickly followed.  Bannister was an inspiration to other runners because they were similar to him. His example was relevant.

It doesn’t make me think I could do it, because I’m not like him. Also because running fast when you don’t have to is for crazy people.

Aaron, Roben, Barb, Ned.

 
Thanks for making it a great conference, it was great meeting up with you… Grant Storry who’s making RSS feeds do cartwheels, Scott McDaniel and Christian Vanek from Survey Gizmo, Derek Scruggs from Enthusiast Group, Henry Copeland from blogads, John Unger from Typepad Hacks, Christine Liu who does amazing things with fashion and technology, Kelley Poturalski from puppet show new media, Samantha Warren from bad ass ideas, Dan Drinkard from display awesome  and David Cohen, who created the TechStars project in Boulder.

We recently posted a job looking for a designer for our startup.

We wanted a design geek who could banter usability theory on the phone, then hang up and make magic happen in the code.  Not an easy person to find, and ultimately we posted this job twice to find the right person.^[1]

We received over 250 applications, and going through them was an adventure.  As they came in I checked their portfolios and sorted applications into “oooh”, “maybe” and “no”.  This worked well enough, and I could move applications from one category to another as the process went along.^[2]

Along with all the generic “I want a job” applications destined for the trash, we heard from a diverse crowd.  One email might be from someone in New York requiring $120/hour, and the next from a small team in Poland competing on price at $7/hour.

We heard from print designers, web designers, illustrators, several programmers and a project manager at Microsoft.  Twelve people ended up with a the label “interesting”; not right for the job but I’d love to have a beer with them someday.

In the end, Roben Kleene impressed the heck out of us and is already doing great work.  Welcome aboard sir!

Hopefully this review will help other small startups when hiring a designer.  Happy to answer questions in the comments.

 

Results by site

	Cost	“Oooh”	$/”Oooh”	Notes	Rating*
	$185	1	$185	Not sure why we didn’t get more applications here.  I think they’re quite popular in the UK, perhaps time zones got in the way.
	$200	1	$200	I had some initial trouble posting the job (my fault), but Michael Arrington took care of it right away.*
(Authentic Jobs)	$250	2	$125	Designer found here!
	$250 +$300	5	$110	Great quality, very targeted.
(Craigslist)	$100	2	$50	Posted in Vancouver, Toronto, Los Angeles ($25), San Francisco ($75), Boulder, Austin & Seattle.   Craigslist reaches a lot of people, but the average application isn’t very good.
	$52	1	$52	Many applications, slightly more qualified than Craigslist.
(Joel on Software)	$350	-	-	The designer jobs section is tiny but I tried it anyway because of their guarantee.  Indeed the response was small, and I got a prompt refund with a smile.   Impressive.*
	free	-	-	Posting process was frustrating.
(Programmer meet Designer)	free	-	-	Neat concept and targetted to designers. Medium volume.
Totals	$1,312	12	$109.33	-	-

Volume is the answer.

[2]   Next time I’ll use a separate email account to receive applications.  That way they’re not mixed in with all my other email, and it enables sharing when appropriate with relevant team members.

Server loads for our Freedback form processing service went through the roof recently. As it turns out, Spin Magazine chose Freedback to power their artist of the year contest.

The servers aren’t even breaking a sweat, and we’re excited to be involved. Don’t forget to vote!

Inspired by Kathy Sierra’s get off yer duff post, we’ll just get started and see where things go. The right time to launch something new is always now.

I’ll be writing about entrepreneurship and innovation in small companies, sharing lessons we’ve learned along the way and talking about what we’re working on and learning about today. Thanks for checking it out!

- Aaron