Varud

All,

I would just like to announce that a friend of mine, whose mother has ALS, is doing her fourth annual “Walk for Hope”.  I encourage people to donate and to take part in the walk and the raffle.  For those who are unfamiliar with the disease, I encourage you to watch “So Much So Fast” which chronicles a family coming to grips with this heart-wrenching, life-changing ailment.

• Provide realtime feedbck for actions.
• Provide rewards.
• Provide objectives through quests.
• Level people up.

These are notes from O’Reilly’s talk.  Clay Shirkey’s talk was very interesting (about privacy) but I only did the first half as it was hard to sum up in words and he didn’t have a thesis per se.  Mostly, what he was saying is that we don’t yet have good filtering paradigms for the type of information that has become, and is becoming, available nowadays.

Tim O’Reilly: Web meets the world: We’re moving away from collaboration on the keyboard.

For instance, a college student has setup the dorm washing machines to twitter their availability.  The Quake Catcher Network allows macs to be part of a distributed earthquake sensing mechanism.  Caty London is using Asterisk to allow a hydration sensor in her plants to Twiter her when they’re too dry.  Photosynth (Microsoft I believe) allows photos to be made into a melange that allow synthesized images.  Whirl (and brightkite) allows users to  collaborate based on location (from iPhone, etc…).

What makes the phone company different from Google?  They both have massive data centers, data gets better, data from customers.  In a Web 2.0 world, real time user-facing services based on that data – that’s not available on the phone network.  Dell has set up ‘Ideastorm’ to get users.  But they actually are web 2.0 from the start.  Users would request different components and that would impact the purchasing of the company at large.  This is unlike the previous PC companies that pretty much forced a premade model to the user with little user input (except the purchase itself).

For the enterprise, going 2.0 involves letting users into the back office, turning the company inside out.  Let the users influence how the company acts.

Bubble

Are we living in a bubble?  Not an investment bubble, but a reality bubble?  The ‘best and brightest’ are working on witty Facebook apps and beer drinking games on iPhone.  In business, ’scenario planning’ is a tool used to come up with possible outcomes.  Unfortunately, it’s hard to anticipate all the possible scenarios.  In order to do scenario planning, you start with boundary conditions and then come up with strategies that make sense even at either side of the presumption box.

What’s important is to create more value than you capture.  This is an ethos at O’Reilly.  Our new Pascal’s Wager is that we have to presume that things won’t work out.  We need to presume that and strive for better, not just assume that things will be better.

InSTEDD is using collective intelligence to isolate diseases.  Ushahidi is using mobile phones to coordinate disaster response in Africa.  The Berlin Airlift moved 2.3M tons on 277K flights, one landing every 2 1/2 minutes, 24 hours a day for 15 months, planes unloaded by local residents – volunteers -10 tons in 10 minutes.  It developed the modern air traffic control system even.  Benetech is another technology company helping people.  The Omidyar Network funds profit and non-profit companies.  Google.org is now in a partnership with GE on clean energy.  AMEE is trying to make an open source framework for carbon trading.  Click Diagnostics is using cell phones for medical diagnostics for the rural poor.  

Organizations have to have ‘big, hairy ideas‘.  We must use the web to make a better world.  We must fight greater beings – if we lose, we lose decisively but we are changed.  The allegory relates to Jacob fighting an Angel on his way back to his homeland and his brother Esau.  After that fight, he became Israel and was made anew.

Clay and filtering privacy

Clay is talking about data overload.  Everybody’s been talking about it though.  Is it really the same story from the last 15 years?  Is this a surprise?  Isn’t information always growing?  Gutenburg, with movable type, injected information abundance.  By the 1500s, the cost of producing a book became low enough that finally, an average citizen could own more books than could be read in a lifetime.  He also introduced the problem of publishing risk.  One had to print before selling and hope that people buy.  The solution is that the publisher had to be choosy about what gets produced.  Since then, publishers had two roles – printing a copy of something AND choosing what to print.  The Internet, for the first time, challenged that by making the cost of production extremely cheap.  Nonetheless, the overload is still a problem.  The past always looks like easy street with less data and the future looks crushingly full of data.  Facebook and other paradigmatic, structural challenges to information mobility, require new forms of filtration that don’t yet exist.

Joshua Porter (bokaro.com) gave a great presentation this morning at the Web 2.0 Expo in New York today.

Getting people to sign up on a site or app is difficult – there’s a natural ‘friction’ that keeps people from signing up.

Real sign-up numbers from real companies:

• 8.0%
• 6.76%
• 4.7%
• 16.0%
• 0.003%

Usability is of course one of the main factors affecting the sign-up rate.  Gmail for instance has correct tab order, they end with “@gmail.com” so it’s clear to the user what they’re creating with a login name.  Checking availability is also possible without a full submit.  The password box tells the restrictions (6 characters) and check immediately.  Security questions can be a real burden for people who are new to sign ups.  Other questions like location also deter.  ”Letters are case sensitive” means very little to the common user.  In other words, Gmail does a great job but not a perfect job.

Boston.com forces one to fill out virtually all fields.  They do tell you what to do right on the page but the number of unnecessary data points becomes a burden – people don’t want to put in what their job is just to get the paper.  Instead of saying to the user, “We are using this info to customize the paper/ads for you”, they say nothing.  Even after all that, they want the user to sign up for newsletters and then for information from advertisers.

Improving the use of forms involves

•  Reduce number of fields
• Pre-submit username check
• Password security right on the password input box
• Following conventions like having ’sign-in’ on top right of screen
• Have a clear privacy policy

This is from Neil Patel – a smart, young branding guy

What is a social networking?  Social networking is not just about Facebook but also about social news, bookmarking, etc…

Social News – Digg.com is a clear example of a site that allows users to ‘create’ the home page of news for specific people

Social Bookmarks – Del.icio.us allows users to publish and share their bookmarks.

Niches – There are many social networks and ‘zones’ for users to congregate: political, environmentalist, etc…  Marketing through those niches has to be respectful of the niche otherwise nobody will follow the trail.

Success:

• Learn to follow the rules – This helps out with your reputation which is critical to getting other’s to vote for you
• Provide value through content – If the content doesn’t apply to the end user, it won’t work.  You can grease the wheels by helping the users (iPod for content), etc…
• Be a part of the community – You must be part of the ongoing community related to your product.

The thing is that social network marketing is more about improving your PageRank (through links and community referrals).  If you get a ton of uniques from Digg, it will help get density with relation to your competitors – helping to show that your site overall (even if only one article was linked to) is a quality site.

Right now I’m at the Web 2.0 Expo in New York (The summit in San Fran is too expensive even though I was able to snag an invitation).  The speakers are Charlie O’Donnell from Path 101 and Albert Wenger at Union Square Ventures.  Charlie is very much a networker, talks about having a thousand (real) connections on Linked In.  He seems like a nice fellow that believes in extreme openness (i.e. anti-stealth).  I definitely agree with his thinking on this.

Albert says to do a convertible note with no valuation for angels.  Also, do not give out more than 20% equity to angel investors otherwise it will be very difficult to raise any future money.  VCs are going to want 20% at least and VCs don’t want to end up in a majority shareholder position because they don’t want to actually run the business and the goal is to get the entrepenuer working hard for cheap – which only happens if they have alot of equity.

Albert also says to not presume that ’strategic’ investors will actually be strategic – these relationships are usually founded on a hope of working together but then the major C-level executive who signed over the money in the first place usually has alot of other stuff on their plate.  It’s great if you can get that money, but don’t think too much of it.  Also, strategic investors may scare off future investors if those future investors are in competition with the initial strategic investor – that could cause problems from both sides.

Charlie says that pro rata rights (the ability for investors to increase their investments) are good, and most VC funds don’t mind that for smaller initial investors.  The problem is if too many people have it, then it becomes a burden to get everybody to sign over their rights on the next round.

Albert is passionate about knowing that the team will need to be upgraded as the company grows.  Different types of people are needed for working on a small team of 3 versus a larger 15 person organization.  Founders often get forced out when they don’t realize this and find a way to get people moved around as the company changes.

Who doesn’t like cupcakes?  These girls clearly love ‘em.  I know this blog is supposed to focus  on the pressing issues of social networking applications and predictions markets, but I find their cupcake blog kind of interesting.

First, here is the blog: http://cupcakestakethecake.blogspot.com/ – It is written by three people.  This is a good number, one produces too few posts and more than 3 introduces a lack of focus.

Secondly, each writer has her own blog, such as Nichelle Stephens’ – This is very smart because it allows the writer to post about other topics without interfering with the thrust of the main blog.  Nichelle Stephens, et al. are very smart cookies (pun intended).

Third, even something as seemingly trivial as cupcakes wants press.  They want to be on the food panel at SxSW – which of course is very smart.  No one of them may become the next Martha Stewart.  However, being the top of a niche, even a small niche like cupcakes, is critical to success.  Regardless, cupcakes is big business.

Fourth, they’re advertising to tastemakers (I know thes puns are unbearable) on semi-related events like the Microsoft mixer for the Web 2.0 Expo.  This is how I found them.

Well anyway, I’m proud that New York has so much going for it, including a strong cupcake trio like Rachel Kramer Bussel, Allison Bojarski and Nichelle Stephens.  I hope they get what they’re looking for.

One thing I hope for is better cupcakes north of 14th street.  Crumbs and Magnolia bakery are garbage.  Apparently Magnolia used to be good and they’re not as bad as Crumbs but there’s definitely room for more competition.