Games, Mobile

Why I’ll quit playing your mobile game

The mobile gaming space is really exciting right now. Anyone notice that AT&T is offering the iPhone 3GS for $0 now? The user base (e.g., TAM) is rapidly growing and there are no dominant players in the space. Major game companies from console and social platforms (e.g., EA, Zynga) are starting to take notice and want a piece of the mobile game action. It seems that almost every other small game company is joining in as well. However, there are major challenges for developing games for mobile devices. The major ones are working with the limitations of a mobile device (e.g., different screen sizes, different OS platforms, less memory, less bandwidth & speed, etc.) and leveraging mobile user interaction for game play (e.g, touch, GPS, etc.).

When I start to play a mobile game, I look for a few things before I decide to quit playing.

  • Slow load time – Do I have to wait long for the game to load? when I have a few minutes to play a game, I’m not interested in waiting a minute to kill a minute.
  • Boring graphics – Are the animals or people cute and playful? Does the game have a lot of color and is it eye-catching? Visually appealing games are fun to look at.
  • No first-time user tutorial – Can I learn how to play the game in less than 30 seconds? Is there a step-by-step tutorial to help me buy my first zoo animal or build my first house? Games need to make sure players know how to play the game from the beginning. I get frustrated when I do not know what to do next and will stop playing instantly. Some say that tutorials will convert users to the next step 90% of the time. Don’t waste your customer acquisition costs.
  • No story line & boring goals – Are there cute stories that go along with the different game goals? it’s one thing to say “decorate your zoo with trees” and another thing to say “your zoo visitors like shading on hot days, decorate your zoo with trees”.
  • Initial game play with real money – Does the game need real money to keep playing at the beginning? I had this one game experience where I was asked to buy game currency on the first day of playing. This was probably 10 minutes into the game. I wasn’t hooked on the game yet, so I decided to quit playing the game indefinitely. Believe it or not, there are users who will never pay real money to play a game. Games should also consider doing in-game ads (e.g., Angry Birds) or having an offerwall (e.g., Tap Zoo) for other sources of revenue.

For existing game companies looking to port to mobile, be careful not to disappoint users into thinking the same game will be just as good on mobile. For instance, Zynga has CityVille on Facebook and has CityVille Hometown on iOS. Zynga was smart not to use the exact same game title. The iOS version has a different story line from the original CityVille, on the iPad it looks bare for my taste (e.g, has too much open space on the screen), and the games seems to be crashing quite a bit on mobile devices.

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Mobile

To insure or not to insure iPhone 4S

Last Friday, I stood in line for 1.25 hours for an iPhone 4S at a Verizon store.  The last time that I stood in line for something was for Britney Spears and then before that Bill Clinton.  As you can see, I don’t just stand in line for anything.  Hahahaha.

As the #8 customer, I was quickly whisked away to the nearest cashier station and received my white 32 GB iPhone 4S.  Then the sales associate asked me if I wanted a screen protector, case, and insurance.  My head starting hurting because there were a lot of things that I hadn’t thought about before.

I am not a big fan of extra insurance for products.  My number one reason is that I hate jumping hoops to get a claim through.  I don’t believe that an insurance really covers everything.  And insurances are a cash cow for companies.  However, I am a fan of buying insurance if the risk of losing or breaking the item is high and if it will cost close to $1K or more to replace the item.

My insurance choices were AppleCare+ and Verizon.  I didn’t look into third party insurance because I hadn’t researched them at the time of purchase.

Both AppleCare+ and Verizon need to be purchased on day 1 of getting the iPhone.  Both have deductibles although Verizon’s deductible is much higher by $100.  AppleCare+ is $99 one-time whereas Verizon is $9.99 per month with cancellation at any time.

My decision came down to coverage of when the phone is lost.  You will not get this type of coverage with many of the other insurances.  According to MicroTax, about 113 cell phones are lost or stolen every minute in the US.  I will buy insurance until the break even point of having insurance and getting a replacement Verizon iPhone.  My numbers come out to be 15 months.  After 15 months, I will cancel my insurance and take my chances.

Here are the numbers:

  • iPhone 4 (not 4S) on craigslist is $350
  • Monthly insurance price $10 times “X” months
  • $200 deductible for insurance claim for iPhone 4S 32 GB
  • Solve for “X”, 350 = 10X + 200, X = 15 months

If you decide to not sure your iPhone 4S, at least protect your glass because I think cases are useless.  When I had my iPhone 3, I dropped it face down on my driveway and bam glass all broken.  It still worked but was cracked.  I took it to some guy’s apartment to get fixed for $60.  After two to three months, 1/3 of the screen became unresponsive so then I had to borrow an old iPhone 3 from a friend.

For my new iPhone 4S, I got a Ghost Armor screen protector at a local mall.  For $35, you can get a plastic protector for the front, back, and sides of the iPhone.  They have a lifetime warranty.  If you need the front or back protector replaced, bring the iPhone back with the protector and you can get a new one installed for $5 each side.

From Verizon’s website:

Total Equipment Coverage combines the benefits of Asurion’s Wireless Phone Protection with the Verizon Wireless Extended Warranty program. If your device or covered accessories are lost, stolen, accidentally damaged, or malfunctioning due to a manufacturing defect after the manufacturer’s warranty expires, you are covered. Verizon Wireless customers can only enroll in Total Equipment Coverage within 30 days of new account activation with a new equipment purchase.

Other Devices

  • $9.99 per month per covered device
  • $169 non-refundable deductible (8GB, 16GB iPhone® 4 and 16GB iPhone® 4S) per approved claim
  • $199 non-refundable deductible (32GB iPhone® 4 and 32GB, 64GB iPhone® 4S) per approved claim
  • 2 Replacements in a 12-month period with an equipment maximum of $1500 per claim (in New York, 2 claims per policy year)

Replacement devices may be remanufactured equipment. If the same model is not available, a comparable model will be provided. You may cancel at any time and receive a prorated refund of your monthly fee.

From Apple’s website:

Every iPhone comes with one year of hardware repair coverage and 90 days of telephone technical support. AppleCare+ for iPhone extends repair coverage and technical support to two years from the original purchase date of your iPhone and adds coverage for up to two incidents of accidental damage due to handling, each subject to a $49 service fee.1 With AppleCare+ for iPhone, Apple experts can help troubleshoot issues over the phone or at an Apple Retail Store. They’ll answer questions about iOS, Apple iPhone apps such as Mail, iMessage, and Calendar, and help you solve interconnectivity issues between your iPhone and Mac or PC. And if your iPhone needs service under the plan, Apple technical support representatives can even set up a repair during the same call.

From SquareTrade’s website:

2 years of coverage: The SquareTrade iPhone warranty covers your iPhone for up to 2 years, starting on the date of purchase.

Covered Issues: Both accidents (e.g., broken screen or other damage through drops AND liquid damage including full immersion) and out-of-warranty normal use failures (e.g., battery no longer charging or other hardware failures) are covered. We do not cover loss, theft, willful damage or damage occurring through gross misuse.

Deductible: There is a $50 deductible when claiming on an accident (e.g., drops, spills). There is no deductible for a normal use failure (e.g., power issue).

How it works: You can file a claim online or on the phone. Depending on the issue, we will either fix your iPhone or arrange for a replacement. To fix your iPhone, we give you free overnight shipping to-and-from our depot and 80% of iPhones are fixed the day of receipt. If you prefer the convenience of your local Genius Bar, you can take it there and we will reimburse your repair costs.

Repair or Replacement: Based on what happened to your iPhone, we will let you know if it’s suitable for repair, otherwise we will arrange a replacement option.

Older iPhones: This coverage is restricted to iPhones purchased in the last 30 days. Older iPhones can still be covered through the SquareTrade iPhone application (available in the App Store).

Our 5-day service guarantee: We will replace OR fix and ship back your iPhone within 5 business days of receiving it at the depot. If it takes longer, let us know and we’ll be happy to refund the cost of your warranty.

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Mobile

Who will win the mobile payments game?

At a GigaOM mobile conference, Visa, PayPal, Intuit, and Verifone talked about the state of mobile payments.

I personally think the strongest player is Visa.  If its mobile payment solution doesn’t catch on, then they can always fall back to its lucrative credit card business.  Remember that cash and credit cards still dominate payment options.  Mobile payments need to be just as easy as them.

Visa is pushing merchants hard to adopt its mobile payment infrastructure.  By 2015,  if merchants haven’t upgraded their infrastructure to use Visa’s mobile payments, liability for fraudulent charges will shift from the credit card company to the merchant.  How’s that for a little nudge.

PayPal is focused on an end-to-end mobile payment solution.  They are doing many acquisitions in this space for mobile and X.Commerce cloud solution.  One thing that PayPal kept emphasizing was that they are doing more than  just payments whereas some of the panelists were solely focused on payments.  It will be a challenge for PayPal and many others to make the transition from online to offline payments especially if they don’t have an offline footprint already.  In general, online to offline anything is going to be an exciting space.

Verifone is a huge backer of Google wallet and NFC.  In fact, Verifone kept talking about how NFC is going to win out while the other panelists said it’s too early to tell.  Just the other day, I shopped at Old Navy to find that the Verifone card swiper indeed took Google wallet.

Intuit is hedging its bets.  They are 1) embracing the current mobile payments environment and 2) staying involved with the forefront of change (e.g., NFC).  Currently, they are empowering people with credit card readers like Square.  I can see the added value of record keeping and analytics that complementary Intuit software can offer above and beyond a lone Square solution.

The world is leading in mobile payments with the US leading in mobile e-commerce.  It will be interesting to see what happens in the next couple of years.

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Funding

Godfather of Silicon Valley shares angel insights

Ron Conway, known as the Godfather of Silicon Valley and part of SV Angel, came to Campbell to talk some shop, angel investing.  Of the many companies he has invested in, some noteworthy ones are Google, Facebook, PayPal, Square, AskJeeves, Foursquare, Mint.com, and Napster.  He may know a thing or two about funding the next big thing.

Since 1994, Conway has been doing angel investing in solely internet software.  He is one of six people for SV Angel, which is on its third fund of $30M.  In 1999, 80% of the portfolio went out of business with him commenting, “Thank G*d we invested in Google”.

SV Angel investing priority is 1) idea, 2) people, then 3) market size.  They invest an average of $50K-$200K.  For $3-5M company valuations, they usually own 1-2% of the company and when there is liquidity (e.g., IPO, aquisition), they typically own 0.5% of the company.  About 1/3 of its portfolio fail, 1/3 are base hits and get 1-3 times money back, and top 1/3 are big hits and get 4-5 or “Google” times money back.

About 2.5 years ago, SV Angel picked a broad theme of real-time data with concentration in sectors such as social, mobile, big data, social commerce, social collaboration, and offline to online.  They will invest in 20 companies in each sector.

Getting SV Angel funding is as easy as sending a one-page executive summary via email.  However, the email is typically from someone they know or through a reference.  After receiving a deal via email, a weekly investment committee votes on whether they make a phone call.  After the phone call, they vote whether to have a face-to-face meeting.  By the time that they meet the company face-to-face, the companies are actually further along than the company thinks in getting funding because of the evaluation process.  I personally asked him when do they invest in just the idea without any prototype or traction, he answered, when they personally trust and know the entrepreneur’s track record already.  As an example, Conway thinks very highly of Sean Parker.

The stats on your chances to get SV Angel investment:

    • 25 deals per week from email
      • 5 new deals a day via email, which are usually from people they already know or through a reference
    • 10-15 deals per week get phone call meetings
      • 2-3 deals from emails a day DO NOT get a phone call meeting
    • 5 deals a week get face-to-face meetings
    • 1 gets invested typically out of 30

Not ready for funding yet, but want to know if you are a good entrepreneur investment for SV Angel?  Here are some traits that Conway seeks when evaluating entrepreneurs.  The term “flexible entrepreneur” was mentioned several times during his talk.  Can a person be a leader?  Form / recruit a team?  Ninety percent of the time, the founding team is a group of 3.  Good group dynamics is very important.

Lastly, if you are clueless about starting up and you want to do an accelerator program, Conways says “The Harvard of accelerators is Y-Combinator”.

From the ZURBsoapbox website:

Ron Conway has been called the “Godfather of Silicon Valley” as well as “the man who has placed more bets on Internet start-ups than anyone else in Silicon Valley.”

He has been making “angel” investments long before angel investing became cool. In fact Conway has been doing it for such a long time and so prolifically that he has revolutionized the angel business.

For the past 15 years Conway has invested in more than 500 companies among which are Google, Facebook, Napster, Digg and many many others. Conway’s first fund, Angel Investors I, raised and invested in 1998, generated a 7 times return. His second fund raised and invested during 1999 saw a 1.5 times return.

 

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Business, Mobile

Latest Square on the block

If you haven’t heard about the startup Square, you are in luck.  I’m going to give you the latest on them.  Keith Rabois, COO of Square, joined 14 months ago when there were 14 employees and no users.  At Mobilize, he talked about how a small, white, square pluggable hardware piece is making its dent in the payment space.

About 26M US businesses do not accept credit cards today.  In order to process credit cards, you need to pass a credit card check yourself (e.g., FICO score) and provide your last year’s business sales.  For a person just starting out, this is an instant fail on two accounts.  Then steps in Square.

Today, 750,000 merchants accept Square, just 10% of companies who accept credit cards.  Before Square,  50-60% of users would not be able to accept credit cards.  Of those who apply for Square, 93% are accepted and can accept payments in less than 3 minutes.  What about the FICO score and sales requirement?  Square uses automated and manual analytics to observe unusual transactions for fraud protection.

When asked about NFC and other payment options?  Rabois said, “We don’t worry about what other people are doing”.  He doesn’t think that NFC will resonate with mainstream America.  He further adds that Google is interested in NFC to track spending habits which is better ROI for ad spenders which includes top 100 retailers.

Square will be having two major releases in October – one for Square, one for Card Case.  Then in December, they will have some things to say, but on the hush hush.

Rabois puts it plainly, “Square is Paypal for the real world”.

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Mobile

End of unlimited mobile data plans

Late September, 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.

Cable companies like Comcast are starting to limit internet bandwidth.  Mobile is following the trend.   AT&T got rid of its unlimited data plans.  People are moving from mobile content consumption to mobile content creation and participation.  By 2014, 66% of mobile data will be video alone.  Are the days of unlimited mobile data plans gone?

At Mobilize, the wireless heavyweights T-Mobile, Sprint,  and Alcatel-Lucent talked about the latest in mobile data trends.

Let’s look at numbers for T-Mobile:

  •  over 200M American subscribers
  • 4G is the largest than any other carrier in the US
  • this year 2Q, 75% of devices sold by T-Mobile are smart phones
    • 90% of smart phones are Androids
  • data traffic doubling every six months
  • 10M 3G & 4G phones make up 15% of total T-Mobile phones
  • Smart phones make up 1/2 of data traffic
  • T-Mobile has stepwise pricing for data plans, usually next level is $10-15 more
  • Many consumers want monthly plan, not annual contracts

If the other wireless carriers resemble T-Mobile, we are looking at a rapidly growing trend of smart phones and mobile traffic that will exceed network infrastructure capacity.  Sprint says they have to drop operating network costs 90% per year.  Before, the network infrastructure was built for voice, now they are optimizing it for data.

To help cut costs, wireless carriers are constantly monitoring data usage and looking at ways to charge customers.   Some are looking at charging differently based on data transmission speeds, “Not every bit is created equal”.

Another way to combat costs is to go higher up the stack.  Wireless carriers think app developers and them need to work together to ensure a good user experience.  Imagine apps bundled with the pricing of bandwidth so that users do not need to figure out what data plan they need in order to use an app.  There are opportunities for middleware solutions that will help apps manage the network usage.  Squeezing more bits is going to be a profitable space.

May the best apps that manage data well, optimize battery life, and have fast performance win!

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Business, Technology

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.

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Business

Mobile strategy to not be ignored

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 hot topic was mobile development strategy mainly around designing for better adoption and technology choices.  The people speaking on the topic were from SalesForce.com, Verizon, MeLLmo, and Rhomobile.

Companies need to create a completely different team focused on mobile development and not use the existing web development team.  The differences between web and mobile development are big enough that one panelist said you will fail if you use the web team.  Another panelist urged companies to rethink all of their development processes and products from the ground up, especially to be based on simplicity like mobile apps.  Do.com (part of SalesForce.com) designed for the tablet then made the web look like it.

When designing a mobile app, companies should think about the end user (whether customers or employees) as people have lower tolerances for bad mobile apps.  At Verizon, they create storyboards about the end user experience and then develop apps from there.  At SalesForce.com, they put a lot of emphasis on personas and develop workflows.  Features such as disconnected/offline capabilities, refreshing part of the app (not the whole app), and a lot of drag and drop (for tablet apps) make for a good experience.

The verdict is still out about native vs HTML5 as the panel was mixed on their recommendation.  Some are hedging their bets like SalesForce.com who is building native and HTML5 apps.  Another panelist says you can go native but leverage HTML5 (like a iOS webUI view).  Using webUI is not the same as native in my opinion although it is an easy way to say to go “native”.  The big supporters of HTML5 said that a native interface can be mimicked with HTML5.  One disagreed saying not all of the great native interfaces are available.  The big advantage with HTML5 is that it is not locked into any mobile OS and you can design once and make it available for all mobile devices.  I agree with the theoretical strategy, but the HTML5 app will be restrained to the limits of the mobile browser, still in its infant stage.

All the panelists seem to be on the same page that leveraging the native features of the phone/tablet are important for the user experience.  One panelist said that you can’t have a high performing app unless you go native.  This statement is correct as of today, but companies like Google are pushing for improved mobile browser standards.  The debate continues…

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Business, Technology

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.

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Business, Technology

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.

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