Archive of ‘Technology’ category

GigaOM Mobilize 2012: Square and Starbucks

I was going through some of my draft postings and ran into this one about Square from GigaOM Mobilize 2012 conference.  The talk is not fresh in my mind, so I’ll piece together what I can remember, but thank goodness I documented some good notes.

The then COO of Square, Keith Rabois, did a one-on-on interview on stage and talked about the landscape of mobile payments and Square’s latest customer win with Starbucks.

At the time, Square had 400 employees and an unconfirmed evaluation of $3.25B when they raised $200M (date not sure).  From a COO perspective, Keith said that people keep him up all night.  He wants to be sure that everyone is aligned (strategically) at the company.  Square is “building a vertically integrated a payment system” that can scale for every person and treat every person as a VIP.  Back in late 2012, 35M total Americans have paid with Square.

The conversation then moved onto Starbucks which I found more interesting since PayPal could have very well been the mobile payment partner instead of Square.  From the first meeting with Starbucks to close, it was over a period of 8 weeks.  I believe someone knew someone which is why the deal closed so fast.

Keith said (at the time) the #1 search in Square was for coffee.  He also commented that about 40M Americans shop in Starbucks every month with about 75% of these transactions being anonymous (I’m assuming not with Starbucks card, not with credit card, paid in cash).

He claimed that by having Starbucks forge a relationship with Square, Square can help Starbucks know the identities of their customers and help Starbucks treat all of their customers like a VIP.  Hmm, I wonder if this is the case today.  Last I heard, some Starbucks employees don’t even know what Square is and don’t know how to process Square payments.  Where’s my VIP treatment Starbucks?!

In terms of mobile payments, Keith is a believer that ”NFC is going nowhere in the United States” and that the technology isn’t any good, it has no value proposition.

Keith did make one comment that made me chuckle a bit:

Moderator: “You have 400 people, but PayPal has 6K in customer service alone…”

Keith: “They obviously need it!”

Box is geeking out

I’ve been to many, many Bay Area Girl Geek Dinners, but not often do I feel the need to write about them either because the event content was so-so or I just didn’t have the time.  In this case, Box had some blog-worthy content worth sharing.

Let’s look at Box’s tech stack and stats (at one point in time)

  • Mostly PHP (1M+ lines), some Ruby, some Scala
  • Mostly MySQL, some NoSQL (HBase)
  • MySQL sharded based on user ID and files and folders
  • Over 1B+ queries a day
  • Millions of users
  • Tens of millions of folders
  • Hundreds of millions of files

The talk that I most enjoyed was given by the Director of Engineering, Kimber Lockhart, on ways to become an engineering leader.  She offered some tips that anyone could take away whether engineering or not.

My favorite takeaways

  • Set a target or goal no matter what.  Kimber puts pictures of her 2012 goals in frames in her living room.  Her boyfriend puts his goals on his desktop image background.  It’s one thing to have goals and another to have it in your face everyday.  I have to try this.
  • Read the top 20 books in your field.  I completely agree.  I’d like to extend this and say either read books or do hands-on learning like coding or writing business cases for your field and/or job type.
  • Identify blockers and attack.  If there’s something that you really want, find out why you aren’t getting it.  In my opinion, no one is going to hand you things just because.
  • Do the work of the job that you want.  Key piece of information, don’t forget to outperform at your real job too.  I tell others that doing stuff outside of your core job is just icing on the cake.  No matter how good the icing is, the cake still has to taste good.  Dominate your core job while building skills for the job that you want.

GigaOM Mobilize: Zillow Tackling Mobile

This is another posting about GigaOM Mobilize conference in San Francisco.  If you missed the one on Mobilizing the Enterprise.  Check it out.

Alright.  So, I generally like hearing companies talk about mistakes that they’ve made in the past when it comes to mobile, starting up, launching, etc.  It helps me make a mental note of what not to do.  Spencer Rascoff, CEO of Zillow, a real estate search engine, took the stage at Mobilize to talk about “Getting to #1 through Mobility”.  What I like about Zillow is that I can take any address and find out what the Zillow market rate is.  Also, the mobile app is great especially when I’m in a desired neighborhood and quickly find out that the homes are out of my price range.  Thanks Zillow for reminding me that I’m dirt poor in the Valley (in comparison to other Valley ballers).

Mobile is the “it” topic at every company.  I keep hearing time and time again, we must think of mobile, we must think of mobile.  Yes, I agree, but how are we going to think about mobile differently from others.  Mobile doesn’t equate to just designing for a smaller screen.  It needs to be injected in all aspects of a company.  At Zillow, they think about mobile in a way that often gets overlooked by others.  For example, all the projectors in the meeting rooms have mobile dongles.  I’ve never seen that before.  Imagine whipping out a phone and showing what the native app or mobile web looks like on the projector.  At my work, I’m happy to find Mac dongles in every conference room.  Baby steps for me.  Another thing that Zillow does is make an effort to have their mobile-friendly emails sent to their users.  I can’t tell you how annoyed I get when I receive email from Yahoo! groups and LinkedIn on my iPhone.  I either can’t read the text because it was too small or the indentation is so bad that there are skinny columns of text.

With a lot of mobile to do, how does Zillow do it all?  When it comes to talent, Zillow realized that it was difficult to find great mobile developers.  So they shifted recruitment to finding great developers who can learn mobile development.  Nice.

Mobile monetization is on every exec’s mind.  People spend a lot of time using their phones so how can companies cash in.  Zillow makes money by connecting users to realtors (e.g., one click call to real estate agent) while providing realtors a subscription advertising platform and premiere real estate agent tools.  However, other companies struggle to find the right balance of good monetization and good user experience.  Companies like Twitter and Facebook, who have locked in users, will provide advertisers different ad products, but they may or may not deliver results depending on receptiveness of the users.  Eventually, advertisers may just take their money elsewhere.

Needless to say, Zillow has a solid business model and I’m excited to see what more they will deliver on mobile.

Zill Stats

  • started in 2006
  • 600 employees
  • 1/2 usage is on mobile
  • 30M users per month
  • 13 native mobile apps – iPhone, Android, Blackberry, Kindle, Windows, etc
  • Users are 3 times more likely to contact a real estate agent than using other sites

GigaOM Mobilize: Mobilizing the Enterprise

Last week, I attended GigaOM Mobilize in San Francisco.  It’s a conference on the latest mobile trends ranging from apps to wireless carriers.  You name it, someone is saying something about mobile this or that.  I really like the intimate setting where anyone can ask questions to the movers and shakers on stage and the GigaOM folks make sure to stick to the fast-paced schedule, double brownie points.  In the next few blog postings, I’ll write about my takeaways.

During a break, InterDigital sponsored a 7-man panel on “Re-imaging Wireless”.  I was most interested in the discussion around the convergence of enterprise and consumer mobile market.  In case you didn’t know, most often the money is with the enterprise market.  It’s a more solid stream of revenue than consumers although (IMHO) the consumer market is sexier and easier for grandma to understand if you hit it big.  Nowadays, consumers expect something for nothing.  Thanks to Apple for setting the bar at free or $0.99.  For every paid mobile app downloaded, about 300 free apps are downloaded.  This is why I recommend mobile app developers to consult rather than develop their own mobile apps unless developing apps is for fun.

The general consensus of the panel was that the difference between enterprise and consumer mobile apps is becoming less and less.  Enterprise requirements include privacy, security, data-oriented, and easy for IT to manage.  For consumer apps, it’s mainly social, fun, entertainment, but will soon (if not already) address many of the enterprise requirements.  One day there’s going to be a merge of the two markets.  Imagine using your iPhone to view spreadsheets with animated bright, bouncing numbers getting eaten by monsters.  I love it!

Now most companies are looking 18 to 24 months out for their mobile app needs.  In reality, these companies don’t really know what about mobile that they need to do, they just know that they need to do something mobile.

One panelist said that his consulting company is deploying 20-30K iPads to large enterprises.  He declared that companies will not continue to pay $600 to $700 a tablet (hint: this is directed to Apple) and that someone will come out with a tablet (made in China) with a $100 price tag.  If the tablet gets lost, the company can just buy a new one.  Here!  Here!  Where can I buy this tablet?  Samsung?  :)

Stay tuned for follow-up postings about Mobilize.  Enjoy!

Mobile, will you marry me? Get engaged!

On 9/26 Monday and 9/27 Tuesday, GigaOM held its Mobilize conference in San Francisco.  Over the next couple of posts, I will talk about the trends that were discussed during the conference.

Unless you live under a rock, it’s hard to ignore that mobile advertising is exploding.  According to Smaato, mobile advertising is a $11.4-$20B market in 2011 alone.  At Mobilize, AT&T Interactive, Kiip, Pontiflex, and Appsfire grabbed the stage to talk about this hot topic.

The current landscape of mobile advertising is still evolving.  One panelist said it took about a year ago for ad networks to target ads based on location, previously it was just based on clicks.   Imagine the days before Groupon and LivingSocial.  Pontiflex and Kiip say about 48-60% of mobile ads are clicked on accident.  Some app developers are gaming the system by putting ads right next to frequently pressed buttons (e.g., pause button).   This implies about 50% of your mobile ad budget is wasted.  A big challenge is that the definition of engagement has a wider range of possibilities than web advertising.  Is engagement a call to the store?  Entering the store (offline/online)?  Measure on size of (offline/online) purchase?  Use of a coupon?  If Google Wallet catches on, Google will be able to track ads all the way down to the point of purchase in a brick and mortar store.

One company Kiip focuses on achievements as a cost of engagement.  For example, when a player completes a level, they will show a mobile ad at that very moment.  For a BestBuy campaign (assuming because it was described as a yellow large electronics retailer), Kiip got a 15% conversion.  They believe that people will want to “engage” when they are in a happy moment.  In fact, they are working with experts in cognitive and happiness to improve their service.  Appsfire is at the promotion level.  AT&T Interactive is doing search advertising.

Mobile advertising can be helpful and it’s not all bad and intrusive.  An example coming from web advertising, when Google took off its ads off of the websites, people complained because the ads were useful.  Pontiflex says when it comes to mobile advertising, there are three major groups involved in order to make mobile advertising a success – ad networks, app developers, and users.  You can’t ignore any of these groups.  Appsfire says you have to trust app developers to know where to place the ad and give them flexibility.  Most importantly, you have to let users figure out how they want to engage with you.  For example, 1 in 5 do not want mobile coupons.

Tips for app developers, you need critical mass with make money with ads.  If you have local mass, it’s even better because a lot of mobile ads are local.  It helps to have your app translated to other languages too.

One tablet, phone for work and play

On 9/26 Monday and 9/27 Tuesday, GigaOM held its Mobilize conference in San Francisco.  Over the next couple of posts, I will talk about the trends that were discussed during the conference.

One of the hot topics was the disruption of tablets and personal smart phones in the workplace.

Tablets and personal smart phones are making their way into the business space whether the company encourages it or not.  This uncontrollable trend is consumerization, devices becoming popular in the consumer space then moving into the business space.  One panelist observed that more people today are carrying just iPhones (both work and personal) than 6 months ago when they were carrying both Blackberrys (work) and iPhones (personal).  The surge of tablets in the workspace is a push to get more business-oriented, customer-facing employees to be more efficient and mobile.  At Salesforce.com, all sales people carry iPads, no one carries a PC.

With the convergence of personal and work devices into one device, companies like VMWare and Cisco are looking to figure out how to separate (e.g., expense, secure) corporate data from personal data.  Cisco believes that security should be built into the fabric of the network (e.g., containers).  The end point (e.g., devices) can change all the time.  They say that a MacAfee or Symantec solution is not enough.  VMWare is looking at ways to virtualize corporate phone images to personal phones starting with the Android platform, working with LG and Samsung and others.  They are even looking at virtualizing two sim cards so that you have two different numbers on one smart phone.  Imagine getting a ring tone that is different based on whether it is a personal or business contact.

Companies are realizing that they can’t stop people from using their personal devices.  They are embracing the idea of people using personal devices for work and play.

GigaOM Mobilize is an event to not be missed next year as it is full of who’s who in the mobile space.

The untold story of Posterous

Sachin Agarwal on left

There are a lot of blogging sites out there – WordPress, Blogger, Tumblr, and then there’s Posterous.  Sachin Agarwal, founder of Posterous, told a story which seemed to be a collection of happenstances.  At a talk last Friday, Agrawal talked publicly for the first time since Posterous spaces launched.  He started by saying that he will be talking about things that he hadn’t shared before.

Agarwal describes himself as a backend engineer guy with no frontend and web programming experience and not a product guy.  So how does a former Apple Final Cut Pro developer start a blogging website?  Now comes the problem and the solution.

He wanted to easily upload photos to his blog via email.  So he developed the function just for him to use.  Eventually, his friends and family liked the function and it caught on.  This led to him getting into Y Combinator and then launching at TechCrunch.

People were calling Posterous blogging by email or easy blogging.

The 3 main innovations that made Posterous unique:

  1. The ability to email one email address to post to your Posterous site.  This came about because he didn’t know how to set up an email server.  Unlike other blogging sites, you did not have to send emails to an obscure email address like 123abc@WordPress.com.
  2. It’s very easy to set up a new Posterous account.   He didn’t want (or maybe didn’t know how) to create a registration page.  If a sender email address is not recognizable by Posterous, then it will assume it’s a new account and create a new Posterous account.
  3. When you post to Posterous, it’s easy to post to other social accounts.  No story here.

Posterous had two main products – sites and groups.  It started to confuse people especially new users.  Also, over time, Posterous team started to notice a lot of people creating private blogs and add contributors.  The idea for spaces came from this.  It is a way to simulate how people share privately through email, but with Posterous hosting the site and archiving the data.  Unlike Google+ and Facebook, Posterous sharing is symmetrical, everyone in the posterous space can share with one another equally not just sharing by fanning out to contacts (asymmetric).  Tip: Monitor how your users interact with your product.  There may be an opportunity to capitalize on unforeseen patterns.

Posterous had a lot of design debt and they were faced with keep the old or go with the new.  For every new feature, a button would appear.  Existing customers were happy with this approach, but new users didn’t feel the same way.  Tip: Top talent do not want to work with outdated technologies (e.g., older versions because of technical debt) and confusing code.  Tip: Technical debt will make your website slow “like Friendster”.

In a bold move, Posterous decided to scrap everything and start from scratch.  This decision was mainly driven by the technical debt that they had accumulated over time.  For 6-8 months, they  spent time building a new Posterous focused on mobile, email, and controlled sharing.  Nothing was sacred, any feature can go if it didn’t make sense.  The entire company can participate in the redesign.  Tip: The whole company / team must be onboard for such a dramatic change to be successful.

The strategy was to redesign the mobile site first.  The goal was to complete one screen a day for 30 days (total 30 screens).  Someone would make the screen and send out for immediate feedback.  At Posterous, the mobile and web developers are on separate teams.  It just so happened that while the mobile team redesigned the mobile site, the web team built the backend APIs.  Agrawal said it was an accident in terms of efficient resource allocations.  After the APIs were completed, then the web team worked on the website leveraging much of the mobile redesign work.  Agrawal believes that the mobile and web sites should look and act the same.  Tip: Consider developing the mobile site first before the website so that you focus on simplicity and performance.

During the process, Posterous spent a bit of time getting user feedback.  To get users, they posted ads in Craigslist, vetted out candidates using Wufoo forms, and compensated them afterwards.  Twenty-four hours after a user session, they would whiteboard a new design and get a working prototype 3 days later.  They saw trends pretty quickly with just 3 users.  One thing that Agrawal wished that they had done was bring in more existing users for feedback.  Tip: Don’t alienate your existing user base who made your company.  Well the only exception to the rule is if you are going after a bigger, different market and abandoning the existing user base.

When they finally rolled out the new “spaces” Posterous site, it had already been running internally and for select users publicly.  It was just a matter of turning on the switch for everyone.  Tip: Many companies do the best practice of testing company-wide internally before launching publicly.  Employees get the benefit of learning the new product and the company gets user testing by different types of users.

I admired Agrawal for being candid about the things that led up to Posterous and then to spaces.  I got the feeling that they were unsure about many of their decisions, but took the risk to see where it would take them.  Good job!

Other tidbits:

  • Agrawal said that ”Y combinator is awesome”, it’s good for people who don’t know the business side of starting a business.
  • VCs/Angels want to either see you get a certain number of users by a certain time or a particular revenue number by a certain time.  It’s not always about the money, it can be about user growth too.
  • Posterous uses Mixpanel and Rackspace.

From ZURBsoapbox website:

A Bit About Posterous
The concept of Posterous was decidedly simple: email is the gateway for sharing any content online (be it text, photos, or videos). Instead of logging into Facebook or WordPress to post photos, videos or writing your thoughts down you simply email post@posterous.com and Posterous figures out the best format for the content and publishes a blog post for you automatically with the content you emailed.

In the summer of 2008 Sachin Agarwal received $15,000 from YCombinator and launched the first version on TechCrunch shortly after.
Posterous has taken off since then. The service currently has 35M+ pageviews a month from 15M+ unique visitors to the site. They have a consistent traffic growth of 20%-30% every month. They have also raised a $4.4M round from Trinity, Redpoint Ventures as well as one of our upcoming speakers Ron Conway.

Posterous has yet to turn a profit. The revenue idea which Sachin has talked about is a premium plan they can sell to big businesses using the service. Posterous has also been facing tough competition from Tumblr a very similar service.

A Bit About Sachin
Sachin has been named by Inc magazine as 30 under 30. He has worked on designing Final Cut Pro at Apple for 6 years before getting an idea for a service to make it easier to share pictures, videos and stories with others. Since then he has grown Posterous to 35M+ pageviews a month.

90+ pitches at SF AT&T Park

Through one of my SF New Tech emails, I found out about Pitch San Francisco ’11.  I snagged a ticket and checked it out out of pure curiosity and because it was at AT&T Park.  Who doesn’t love the Giants?  Dodger fans, please do not respond.

When I first got there, I was overwhelmed with all the startup pedestals, over 90 in attendance.

Here are the ones that I visited and my two cents:

  • JustShareIt – peer-to-peer vehicle / motorcycle rental website, like a GetAround competitor (who recently closed a round of funding), I heard that they do not have insurance in the mix which is a bad business decision, it’s an accident waiting to happen (no pun intended).
  • BackBlaze – Mozi backup competitor but charges by the month ($5/mth) for unlimited data backup, Mozi charges by the GB now, I asked the founder why I hadn’t heard of them, he told me they do zero advertising and rely on word of mouth, I should have asked how many TB of data they back up.
  • HeyStaks – community-based internet search, you can pick an interest community to be apart of, then when you do searches, then it shows the popular search results of that community for the same keywords, not sure if this is good or not, you need a lot of people in a community doing a lot of searches for it to be a really good search, I also wonder if people want to share their search results, today Google gives you different results for different people, how does that gets normalized w/ HayStaks usage?
  • TauMobility – has many products but showcased telemedical diagnosis system, basically a doctor in another location can see a patient and see her medical data (e.g., blood pressure, heart rate, etc), they have medical devices that collect the data and upload it to servers to be shared instantly (real-time?) with doctors, I learned that the medical devices like a stethoscope with a USB connection needs to have FDA approval because it’s medical-related, they are trying to get into hospitals, so far one in New Jersey and maybe another one.  I heard getting the medical industry to go electronic all the way is hard.
  • MomoLocal – I didn’t get a chance to talk to these guys, but from afar, it reminded by of Zaarly, they tout themselves as a “community marketplace for anything by anyone”, I’m a bit Zaarly-biased because I met some of the guys at Where 2.0 conference.
  • Schwinkers – drinking made social, if you’re lonely and need a drinking buddy, use it to find drinking partners, they are doing a big push in the Mission District in SF, so if you live there, check it out.  I was drawn to the pedestal because I liked the big mustache logo and wooden background, I am very scientific.  It would be interesting to see a Groupon-like approach to buying drinks incorporated into the service.
  • Short Enuf – temporary URL shortening service, think Bit.ly but with a time limit, the founder told me that you can share long URLs easily using the service especially on a mobile device where you don’t want to type in the whole URL.  If there is real value in this, I don’t see why Bit.ly wouldn’t just add time limits.

Unfortunately, I couldn’t get to all the pedestals.  There were some pedestals that had a lot of people, HipMunk being one of them.  It would have been great I was surprised that there wasn’t a lot of schwag being given out.  I got a bunch stickers though.  :)

You can find out more at the official event website.

How Google makes GMail mobile fast

When I saw the title of the Meetup talk, “High Performance Mobile” and that it was in the south bay, I was sold in an instant.  Who doesn’t want to know how to make their mobile web apps go faster?  The SF Web Performance Meetup talk took place at LinkedIn who graciously provided space, drinks (non-alky), some appetizers, and a foldable water bottle with LinkedIn on it.  Not too shabby.

The speaker, Steve Souders, is a Head Performance Engineer at Google and previously worked at Yahoo! as Chief Performance Yahoo!.  He’s written a couple of O’Reilly books and created many performance tools.  You can tell that he is very passionate about web performance.  In fact, you would think that he was talking about kids because of how excited he was talking about performance.

Let’s get started about the talk take aways.

Why web performance is important?  If your web application is slow, this can cost you money.  Fred Wilson from Union Square Ventures said about successful web apps, “Speed is the most important feature.”  NetFlix turned on gzip and saved about half of their outbound traffic.  Just about all smart phone ads talk about fast this, fast that.  These companies know what sells phones.

Mobile in general is exciting because there is so much more growth to be had.  If you compare the same relative point in time of when mobile web browsers were introduced versus desktop web browsers were introduced, mobile web is almost 5 times the number of desktop browsers.  In 2010, 2.6% of eCommerce purchases were made via mobile.

Souders says web performance optimization will drive traffic, improve user experience, increase revenues, and cut costs.  A lot of the tips that he covered are applicable to desktop web also.

Of the many tips that he talked about, here are the top important 3:

  1. Make fewer http requests
    • Combine files into fewer files, use sprites, inline images, canvas, and SVG
  2. Reduce DNS lookups
    • The number of DNS lookups is equal to the number of unique hostnames in the web page.  Reducing the number of unique hostnames reduces the number of DNS lookups.
  3. Avoid redirects
    • Shouldn’t have different URLs for different clients (desktop, mobile, tablet), should be same URL for all, “it’s a mistake to have different best practices for mobile and desktop”

It seemed that java script is a thorn in Souders’ side when it comes to performance.  He recommends that java script be put at the bottom of the HTML page. When java script is downloading, rendering of the page is blocked (aka stopped).  This is a bad user experience especially if java script is not helping paint the picture of the web page.

For GMail mobile, in the background, they download the java script, but wrap it in comment tags.  This is so the file gets downloaded without affecting the rendering of the web page.  When they want to execute java script, they get the script DOM text elements and remove the comment tags and use eval().  In a way, they are prefetching java script that may not be needed, but have a way to execute the java script if needed.  Genius!

Another cool thing that companies are doing is writing java script and CSS blocks to HTML5 localstorage.  Bing and Google both do this for their search pages.  When you download a webpage on your mobile browser, they will set key/value pairs of unique IDs pointing to java script and CSS.  So the next time, you visit their sites, they don’t need to download this information again.  Souders did a quick demo where he sniffed the packets and dumped the info being downloaded in the first website visit and in the second.  He showed us that indeed there were unique IDs pointing to blocks of java script and CSS in the first trip then less data transmitted on the second trip.  The only problem with localstorage though is that you don’t have a way to see how much storage is left/available.  All you can do is keep saving until it throws an error.

More tidbits:

  • Check out Steve’s blog at SteveSouders.com, you will find the slides of his talk there along with tons of information about web performance.
  • Use “DSUG” discount code for 40%-50% off of O’Reilly books – it’s for awesome SF Web Performance Meetup members!
  • Blaze.io will show you waterfall performance of your mobile website
  • Httparchive.com will show you the average download sizes for desktop web and mobile web – website download size is 490k, mobile is 311k
  • Most people close SSL connections which is bad because it takes so long to set those up
  • Performance and parameters for tablet browsers are more like smartphone browsers, visually create like to desktop but aim for perf like smart phones
  • Browsers caching are too small and purging algorithms are poor

Last, but not least, Souders was very adamant about mobile applications being open.  Maybe it’s the Google in him hahahaha.  He said that he wouldn’t look into improving performance of native mobile apps as part of his research.  Too bad for me since I am an iOS developer, but maybe I should consider HTML5?  Hmm…

I really enjoyed this Meetup because there were some invaluable discussions going on.  Until we meet again!

How 99Designs.com came to be

I love hearing stories of entrepreneurs, it keeps me motivated and there are always great lessons to be learned.  Today, I went to an event in the city of Campbell to hear Matt Mickiewicz, Founder of SitePoint, Flippa, and 99Designs, talk about how he got started.  At first glance, Mickiewicz is a very happy-g0-lucky type of guy, but don’t be fooled because he is a serious entrepreneur.

Back in late 1990s, there wasn’t a lot of of information on how to build websites, so Mickiewicz decided to pull all that information together on one website called WebmasterResources.com.  Hahaha, I laugh because later in his talk he mentions another website with a long name.  Alright back to the talk.  He coded WR using MS FrontPage which he jokingly said he pirated.  Did I mention that he was only 15 years old when WebmasterResources.com was started?  During lunch at school, he would have sales calls with customers and say that he had a hard stop at 1pm.  Unfortunately his customers didn’t know that his hard stop was really his social studies class.

Later, Michiewicz partnered up with someone much older (not 15) who had the business know-how to take WebmasterResources to the next level.  WebmasterResources then got rebranded to be SitePoint.  SP had a lot of tutorials that were downloaded a lot.  All of them for free.  He figured out quickly that there was a demand for printed tutorials.  For $35, people can get a printed copy of a tutorial so that they can use while creating a website.  He said they found some sh*ty online print on demand service who could take credit cards and went from there.  Today, SitePoint gets 2.5M visitors per month and has 1.5M email subscribers.  They were able to outgrow a competitor who had $3M in funding when SitePoint only had $300K in funding.

It is often asked how entrepreneurs come up with their ideas and then how do they validate and build the business.  For Mickiewicz, he was keen on monitoring the conversations on the vBulletin forum on WR.  Organically, graphic design competitions were happening with no money involved.  Then people started offering money to have directed contests.  Mickiewicz saw this and decided to build a MVP product within SitePoint.  He also implemented a $10-$20 listing fee for the contests.  Soon people from coffeeshops and non-tech businesses were finding their way to his SitePoint site and posting design contests.  The design contests were buried in the forums so Mickiewicz knew that he was onto something.  Later, 99Designs was spun off and the rest is history.

Another website, Flippa, is a website auction site which started in the forums on SP too.  To this day they have auctioned off $55m worth of websites with 55% of website sales ending above it’s initial sales price.  A notable site is FaceSmash which sold for $30k the week the movie Social Network came out.  Even Perez Hilton blogged about Flippa because of its relationship to FaceSmash and Social Network.

One idea that never took off was NameMyThingey.com where you can crowdsource business names.  People would get 50-100 name recommendations and be indecisive and not choose a name after all.  The name brainstormers got pissed because of this.  Oh well, you can’t win it all.

I really enjoyed hearing Matt Mickiewicz talk about all of his business ideas.  I had no idea that 99Designs was just one of many companies that he started.  I wish him luck with Flippa and a new eLearning video website that he’s working on.

Tips from Matt Mickiewicz:

  • To keep costs low try swapping services for other services. He would trade ad space on WebmasterResources for free hosting services.
  • If you are deciding to get an MBA, maybe try finding someone really smart in the Valley and volunteer to work for them for 2 years.  I guess this makes sense.  If you are going to forgo salary for 2 years why not do an apprenticeship.
  • Track your competitors, look for their sales process, what’s going on on their front page, and their conversion rates.  Since 99Designs has started, a bunch of other graphic design contest websites have popped up.  He said CrowdSpring actually did a contest on 99Designs for its logo.  Funny!
  • Pick up a book on sales and negotiating
  • Don’ts: 1) Don’t hide from customers, his personal cell phone was on SP website 2) Don’t trust  vendors and prepay for things.  Some vendors go bankrupt.
  • Consider using Amazon EC2, 99Designs uses it, they get 5.25TB of images uploaded frequently, EC2 helped them scale with customer demand
  • Initial team members of founding team should be 4-5 people – 2 developers, 1 designer, 1 product manager, and maybe 1 marketing person.  This is probably one of the first times that I’ve heard product manager and marketing person at the very beginning.  I agree.
  • If there isn’t positive feedback early even when it’s a less than perfect product, then you should abandon it.  He said loyal customers will stick it through and give you feedback to make it better.
  • It’s possible to outgrow other competitors who have a lot more funding than you.  The main difference is that they were able to leverage their distribution channel.  He mentioned that an idea is worth nothing and often times fails because lack of distribution channel.
  • Consider partnering up with forums and pay forums who send customers your way.  He told me that one dating website had over millions of users and he asked them how they did it.  The dating website basically partnered up with forums overseas and acquired customers that way.  Since this was in other countries, their customer acquisition costs were much cheaper than the US.  After establishing a foreign user base, the the dating website came to the US.  I have never thought about launching in other countries especially since it’s cheaper to acquire customers.  I’m going to have to try this one day.
  • You can get more sign-ups using viral techniques.  The dating website mentioned above leveraged user’s imported email contacts to get more sign-ups, for every 100 email contacts imported, they got 10 new users (10% conversion rate).  I think this method has worked well for Facebook.  I know that I went through my gmail contact list to see who I can “friend” on FB.
  • If a product is not part of your core business, consider spinning it off / rebranding it.  This is interesting because I personally wonder why Amazon keeps Mechanical Turk and EC2 under the Amazon brand.

ZURB.com’s blurb on Matt Mickiewicz:

It’s not often that you hear of a 15 year old who was closing $10,000 advertising deals for his newly launched site in between classes at school, earning enough to buy himself a new BMW with cash by the time he was just 16.

That’s the story of Matt Mickiewicz the founder of Sitepoint, a site which, back in 1999, was the first online forum for web designers and developers. It has matured to be a massive web community and tutorial/resource archive for web developers and designers now. Matt has spun off three other businesses based on observing how his 1+ million users use Sitepoint.

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