I hate to break it to everyone. Despite what we’ve all been taught, we really do judge books by their covers. The way something is presented to us has a profound effect on the way that we perceive that item. That is what I was reminded by an article from Lifehacker entitled: “Why We Can’t Tell Good Wine From Bad.” In the article, they discuss how people choose between different items based upon different queues that may have nothing to do with the actual quality of the products being chosen. For example, if people were told that one wine was expensive and the other was inexpensive, they would prefer the more expensive wine, even if both glasses actually held the same wine. In another case, the brand with the better marketing trumped the other even though in a blind taste test, people couldn’t tell them apart.
That seems like a frustrating result because it means that people don’t always choose the best product. It is frustrating, if you have the best product. We’d all love our products to stand on their own merit. This proves that having the best product isn’t good enough though, so instead of lamenting that, get to to work! Use these findings to your advantage. Fix the design of your product, work on your branding and put some thought into how you price your product. That might have as much effect on the success of your product as the features/benefits you provide.
Entrepreneur.com recently featured an infographic from Founder Institute, which I believe warrants me putting aside my usual feeling for info graphics: disgust. Inforgraphics are so overdone these days that I automatically want to dismiss them. If the topic is good though, I force myself to at least scan them.
I’m not going to lie, this information would have been much better presented in a regular blog post. The information is worth checking out though, so I encourage you to do so. I’ll also concede that including the info in an infographic might be why they were able to get that specific collection of information on Entrepreneur.com. So, infographics aren’t all bad.
The three points that they picked out that always make me cringe are:
1. Projecting $1 billion in revenue for year 5
There is no reason to believe that most businesses will ever reach those types of numbers, let alone in that short a period of time. I don’t recommend being realistic the way your dad might tell you to be, but don’t be ridiculous either.
2. Not connecting the financial model to the narrative
A pitch is essentially a story. A good story should feel connected throughout and as if everything follows logically. If the financial model feels outside of the story, then it can feel tacked on and like it will be more likely to fail.
3. Not knowing your TAM(Total Addressable Market) and SAM(Serviceable Addressable Market)
If you don’t know how big the market you are attacking is or how large a segment of that market your product addresses, then do you know what you are doing? Any investor worth their salt will question that right away.
Doing the math, 10-3=7, tells me that there are still seven useful points for you to learn, so head on over to the article on Entrepreneur.com and check it out. If you have a favorite tip you want to share, the comments are right below!
Have you ever hit the snooze button to get a few more minutes of sleep? Many people do it. I never really understood the practice. That’s mainly because I always set my clock as late as I could afford to get up. If your goal is to get more sleep, that seemed to make the most sense to me. Well, according to a video from AsapSCIENCE, I’m mostly right. The video says that you’re better off getting up when your alarm first goes off. The alarm breaks up your sleep and if you go back to sleep, you’ll end up in a deeper sleep state when you next wake up, making you even more groggy.
I have a friend who used to swear by his snooze button. I think it was a combo of his habit of never getting enough sleep and the belief that if he didn’t hit the snooze, he’d fall asleep again and not wake up in time. For him, I would recommend hitting the snooze as he tries to struggle awake. At least if he failed, he would have the alarm to save him from oversleeping. As for me, I’ll try to get my sleep schedule a little more regular as the video recommends. That way I can get the best results from the sleep I do get. Watch the video for a couple more tips.
Trust is a very important thing in business. Without it, you can’t maintain a relationship with your customers. If your customers don’t trust you, they’ll just go elsewhere. It’s one thing to lose a customer based on price. Once they have enough money or believe the value in your product has returned, they’ll often come back. If they leave due to lack of trust though, it’s hard to get them back. Why would they think you would behave in a better manner in the future?
This is a problem that I think a lot of companies are running into lately. Facebook seems to violate the trust of their users regularly by continuously changing their users’ privacy settings. Path ran into something similar when they downloaded contact information from their users’ phones without their permission. Not every breach of trust has to be as extreme as compromising users’ privacy though.
Lately, there have been many companies shuttering services that their users count on. Most are due to the company being acquired or going out of business. Most, but not all. Google has been quite busy shuttering “underperforming products” since Larry Page took over as CEO. It’s true that those products didn’t have mass appeal, but most had groups of loyal users. The latest to cause an outcry was the closing of Google Reader. Reader was a beloved product for people that use RSS feeds to read the news. It was a very valuable service that people counted on as a part of their news reading day and, in the case of tech bloggers, as a part of their workflow. Google eliminated that service with little notice and with no real competitors ready to handle the customers that were abandoned. That broke the trust that a lot of people had in Google.
We’ve all wondered how that stupid idea we saw years ago became a multimillion or multibillion dollar idea. Or how a startup populated by people with seemingly no business sense jumped to popularity. Is the problem that the world is just full of stupid people or that life isn’t fair? According to a guest post, by the esteemed “Fake Grimlock” on ReadWrite.com called Win Like Stupid, it’s due to the fact that it’s the stupid that succeed.
It’s a great article and you should read it, but here’s the gist of it. If you’re smart and worried that others think that you are smart, you’ll tend to overthink things, be afraid of failing and never take the big risks. According to the article, stupid people are too stupid to fear and too stupid to think they’ll fail. So eventually, even though smart people keep trying to pick apart their ideas, stupid people will win with one of their dumb ideas. That’s mostly because they keep plugging away until it turns out that one of their dumb ideas really wasn’t that dumb, after all.
It sounds counterintuitive at first, but when you think about the arguments, it makes complete sense. It’s a good thing I can be stupid when I need to be. I’ve got to go. I have a dumb idea or three that I need to go work on!
Yesterday, the Financial Crimes Enforcement Network(FinCEN), a bureau of the US Department of the Treasury, issued “interpretive guidance to clarify the applicability of the regulations implementing the Bank Secrecy Act (“BSA”) to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
You can find the full text here. The fear about this guidance is that it could be setting the stage for the government to impose regulation on virtual currencies like bitcoin in a very heavy handed way. In fact, the guidance could be interpreted as meaning that you would need a license in order to convert bitcoins into other currency. If you operated through an exchange, the exchange would be responsible. If you did a peer to peer currency conversion transaction, however, you might need to have a license yourself. This is troubling to those people that gravitated to bitcoin to eliminate government oversight/control over their financial transactions. To see more of the discussion, check out the Hacker News article that tipped me off to this.
Kickstarter is very popular because of the tremendous success that it has achieved in helping companies to crowdfund their projects. As of March 17, 2013 they had raised $439 million for successful Kickstarter projects. Of the 90, 319 projects that had been launched on their site up to that date, 43.63% were successful. While most people focus on how Kickstarter was able to help a number approaching half of those creating Kickstarter projects, I would argue that they helped 100% of the projects that attempted to get funding.
The true value to Kickstarter is in how it validates potential projects. Before the project gets too far along, it allows people to put their money where their mouth is. The 56.37% of projects that don’t achieve funding learn something very important from Kickstarter, as well. Either that their product isn’t very compelling or that they aren’t pitching their product in a compelling way. With that information, they can decide whether to scrap their idea or to make the fixes necessary to make it compelling enough for people to be willing to back it.
While getting the money in advance is a great benefit for those Kickstarter projects that are successfully funded, it’s not the greatest benefit. The greatest benefit is in getting a gauge of how much demand is out there for what they are building. One good example is the Pebble ePaper Watch, which raised over $10 million. If you knew that your product would have that much demand when it came to market, you would definitely bring it to market. What’s more, if you could convince others of that demand, you would be able to get the financing you needed to make it happen. So, while the crowdfunding portion of the Kickstarter value proposition is supremely valuable in getting great projects the money they need to get started, it’s knowing whether or not you have a viable project yet that provides the most value.
The key to success is often being somewhere at just the right time. That takes a lot of luck, a lot of foresight or a little of both. In the case of Feedly, I think it was the latter. According to Feedly’s blog, they picked up over 500,000 Google Reader users in 48 hours, due to Google’s announcement of the impending closure of Google Reader. As a result, they had to increase their bandwidth by 10x and add more servers.
From what I’ve heard, Feedly’s service was a bit slow under the sudden crush of new users, but I’m sure they’ll get all of that straightened out with time. Especially since, unlike many of the other services proposing themselves as options, Feedly has been working on creating a replacement for Google Reader’s API, which they call Normandy. That will allow users who switch to Feedly before July 1st to make a seamless transition. How’s that for being in the right place at the right time?
As impressed as I am with Feedly, I haven’t switched over to their service yet. Since there are still a few months until Google Reader is shut down, I’m going to wait at least a month to see how all the different services shake out and to let Feedly stabilize their service a bit. I will, however, take the lesson they have given me to heart and focus even harder on trying to be where the ball is going, rather than on where it is now.
As I was reminded by Wired.com, the “Leahy-Smith America Invents Act” took effect today. Gone are the days of being able to invent something and relying on lab journals or other documentation as prior art. If someone files a patent application on your invention before you, they get the patent, even if they weren’t the first to invent it. There are a few exceptions though, including situations where the invention is in use, for sale or disclosed in a publication other than the inventor’s own.
So, if you have something that you invented and haven’t patented yet, now is the time to patent it. You can’t wait a couple years until you have time to further develop the idea because someone else might patent it first. This feels like even more pressure on the little guy since a large corporation could patent thousands of concepts quickly to prevent another company from holding the patent. They don’t even have to worry if someone else invented it first. If they’re first to file, they’re golden. As a nod to smaller inventors, the law provides a larger discount for micro-entities with less than three times the national median household income and less than four previously filed patent applications. That’s small consolation though since the majority of the costs of filing are related to attorney fees. For some more information on the implementation of the law, including some videos on prior art, visit the USPTO site.
After I dropped my kids off at preschool today, the road I usually take home was blocked for some serious tree cutting. So, I was left with a choice. Should I take the most direct route home or a slightly more roundabout way that would take me through some neighborhoods that I had never seen before. Since I like to see new places and getting lost is never something I’ve worried about (As if it’s possible with smartphones these days.), I decided on the scenic route.
I enjoyed winding my way through the hilly and wooded neighborhoods well above the waterfront that everyone pictures when they think of Monterey. Eventually, I decided that I should probably find the quickest way back. Before I put that idea in motion, something large and white walked across the road in front of me. I slowed the car and parked at the side of the road amazed. Crossing the street was an albino deer.