A few months back I had the pleasure of traveling to Austin for the first time.  I’ve done enough traveling that I’ve exploring a new city is second nature to me.  And of course as a Tech Geek I take full advantage of the latest web and mobile technologies.  I thought I’d share my tips here for being a tourist in a web 2.0 world.

Embrace Google Maps/Transit

Google transit gives point-to-point directions using public transportation for over 400 cities.  The service especially shines on a mobile device.  Google maps on my iPhone was an indispensable part of navigating the city, helping me figure out exactly where and when to catch the buses.  I’m amazed by the number of people who don’t know their iPhone (and Android and some Blackberry phones) can do point-to-point train/subway/bus directions while incorporating the schedules too!

Get a Bike

Public transportation is great, but renting/borrowing a bike is a must.  Yes, it takes cajones to hop on and conquer the streets of a foreign city, but biking is without a doubt the best way to learn a new city.  You’ll cover much more ground than walking and avoid the headache of parking a car or waiting for public transportation.  Basically, you’ll get more done with your limited time.  And since bikes have zero variable cost, they strongly encourage exploration.  So go get lost on a bike! (but bring along your phone with Google Maps of course)

Connect with the Local Community

A few days before embarking, I asked the Austin Yelp community for suggestions of places to see and things to do.  “NYC Eliter Comin’ to Austin” garnered over 70 super helpful tips like: “6:30pm tuesday is the start of hippy hour at the continental club with the lovely miss toni price.”  Several of Austin’s fantastic Yelp members even sent me personal notes welcoming to the city.  If you weren’t already aware, I’m a big fan of Yelp and find it far and away the best source of hyperlocal information.

See the Heart of a Neighborhood

So you’ve picked a neighborhood to explore.  Great, but where exactly should you start?  Use Yelp to figure out the main commercial streets in a neighborhood!  From the homepage just click ’search’ (leave the search box blank).  Then filter the list by “Most Reviewed” and maneuver the interactive map around your destination neighborhood.  Red pins will help call out the main streets!  Around the UT Austin campus, Guadalupe Street stood out as the clear winner (see picture on left).  This feature also works really well from Yelp’s fantastic iPhone app.

Find Must-See Popular Hotspots

Again, click ’search’ on Yelp.com and leave the search box blank.  Setup the filters to sort by “Most Reviewed.”  This will show all Yelp listings in that city ranked by popularity.  For Austin, that includes Home Slice, Uchi, Guero’s, Polvo’s, and the flagship Whole Foods Market store.  In NYC, this list features Shake Shack, Magnolia Bakery, Ippudo, Pommes Frites, Katz’s Delicatessen, Grimaldi’s, Lombardi’s, and the Chicken & Rice Halal Cart at 53rd/6th.  You could certainly do worse as a tourist…

Find Weird Local Stuff

Most people know Yelp for its restaurant and bar listings.  But their ‘Local Flavor’ category has some seriously cool stuff.  Austin’s Local Flavor included the Cathedral of Junk, a massive three story structure created from decades of junk.  And my insider knowledge of the Bats Under the Congress Avenue Bridge seriously impressed the locals.  In San Francisco, this category led me to the Clarion Alley Murals and also the Seward Street Slides which turned out to be tremendously fun.

Bookmark Now, Retrieve Later

Bookmark places on Yelp.com that look interesting (you’ll need a yelp.com account to do so).  Then, from the Yelp iPhone App you can view those bookmarks on the go.  Best of all, the app shows your bookmarks ranked by proximity to your current location!  This is phenomenally helpful.

Log your Trip and Get Local Recommendations

I checked in on Foursquare at every place I went, despite having no Austin friends using the service.  Why?  Because afterwards I can view a minute by minute log of my trip on the history section of the Foursquare website! Equally cool, foursquare provided me great local recommendations.  Checking in at a random grocery prompted “Go to Green Mesquite and eat BBQ with friends!”  The tip was left by fellow NYC Foursquare user and friend Lee Semel and Green Mesquite was right down the block.  His trip to Austin occurred eight months prior but the virtual breadcrumbs remained!

Keep the Community Involved

Each night I updated the Yelp Forum with my accomplishments.  I also laid out my plan for the following day.  This united the Yelp community around my adventures and was really fun.  “You’re doing more things than most Austinites do in a year” wrote one Yelper. Seeing my plans even spurred Riki M., a former Brooklynite herself, to join me at the Cathedral of Junk.  The kindness of a tight-knit online community like Yelp is amazing.  Riki brought with her the Austin essentials: beer and bug spray.  And our mini picnic was fantastic — albeit buggy.

More Tips?

Since my trip, I’ve discovered plancast, which may prove very useful.  Readers: are there other tech tools I should be taking advantage of? Leave your thoughts and suggestions in the comments.  Thanks!

(This is the second in a two part post.  You should probably start at part one which contains a framework for thought.  Part two contains recommendations and my philosophy for first-time entrepreneurship).

The most basic principle of business is that profit is revenue minus costs.  Try considering all fixed costs as a rate — especially a daily or hourly rate — and then look around you.  You’ll find you have more insight into existing businesses or the potential of new ventures to succeed. 

And you’ll find that some business ideas simply don’t make sense.

Don’t plan on building a business by selling a product for $2 that takes an hour of time to produce unless you’re superhuman and don’t need sleep.

Don’t franchise a mobile RV arcade for “between $89,000 and $200,000″ a year which can fetch “$300 to $350 for a two-hour party appearance” without carefully considering the math — that you’ll need to book somewhere between 250 to 650 clients just to break even on your initial upfront investment.  I don’t know too many kids who have birthday parties on Monday nights..and there’s only so many hours in a weekend and only 52 weekends in a year.  You’re might be paying off these costs for eternity…and the high tech games will certainly have become stale by then.

And please don’t build an SMS mobile coupon company on an assumption that you’ll get a salesperson to hit up every local business selling your $10 service (so cheap that nobody will say no!).  As mentioned in my article about SMS coupons, an entry level salesperson earning $50,000 a year is a cost of $1000 a week or $200 a day or $25 an hour.  Make sure a sales person would earn more than they would cost.  If the numbers don’t work, your business won’t work.

But wait!  It’s not all gloom and doom. Thinking in terms of daily sales can actually be really inspiring for a first time entrepreneur:

If you’re quitting a job to start your own company, consider what it will take in daily earnings to replace your salary.  Better yet, consider how much you honestly need to be ramen profitable.

Most recent college graduates in NYC working a full time job are probably earning somewhere between $35,000 – $80,000 depending on industry and skill set.  Consider that $100/day for 365 days is $36,500 annually.  This is a livable wage for most scrappy 20-somethings (assuming you don’t have a family to support and you’re not drowning in school debt).  Consider that $200/day is a rather comfortable annual salary of $73,000.  (And yes, these numbers are based on working 7 days a week.  And they don’t take into account the unpaid time you’ll put into an initial product launch.)

If you need inspiration to get started, never forget just how ’small’ a start can be: just get to $100 a day.  Consider it milestone number one for your first entrepreneurial venture.  Let’s say you have a product idea that you think would sell for $20 with a 50% margin.  Ask yourself: “Can I sell 10 per day?”  Consider that again: 10 per day.  Consider that there’s six billion people in the world,  is it really so hard to find 10 customers each day?  Or if you’re working with a partner, 20 customers?

So consider David Heinemeier Hansson’s amazing advice (that I have echoed above) and stop thinking about your next billion dollar startup.  I believe first time entrepreneurs (of which I am one myself) should start small.  Go for the lowest bar of success: the $100/day idea.  Once you’ve conquered that, go for the $100,000 idea, then the million dollar idea, then the billion dollar idea.  Along the way you’ll meet fantastic people, gain skills and confidence, and maybe even have some fun.

Now if only my 2c could be put towards rent…

(This is the first in a two part post. Part one contains a framework for viewing the world.  Part two contains resulting recommendations).

Apple’s app store taught me that living in New York City is expensive.  How expensive? $1.25 an hour.

Consider that the rent for my (rather modest) Brooklyn apartment is roughly $900 a month including utilities.  There are roughly 30 days in each month, so $900 / 30 days means I’m paying $30 a day and $30 spread across 24 hours in each day means I pay $1.25 an hour.  Ouch.  Suddenly $2.25 per subway ride doesn’t seem all that bad…

Most people I tell about Exit Strategy NYC ask “How much did it sell?”  They phrase the question in past tense.  This is fine for fad-like novelty apps.  But for utility apps like Exit Strategy NYC the question is best phrased in the present tense: “How much does your app sell?” (Marco Arment refers to these types as two different app stores).  Selling apps in the app store is an on-going business.

Apple’s app store has changed the way I look at the world. iPhone app sales figures are available each morning for the prior day.  As a result, I’ve gotten in the habit of checking app sales first thing each day.  But more importantly, I now view the world around me differently: it’s all about rates.

In the manufacturing world, the question is whether a product can be sold at a price and volume high enough to cover production costs.  But many businesses sell products which are almost pure profit.  I’m not just talking about software or service businesses.  Consider your local coffee shop, bar, or video rental shop.  The items they sell are almost entirely profit.  In these cases, the more useful question to ask is can they sell *fast enough*?

The phrase ‘Burn Rate’ is typically applied to pre-revenue startups calculating how long the business can survive (ie their ‘runway’).  But the concept is applicable to all businesses and individuals: Is money coming in faster than it’s draining?  Simply put, is the bathtub filling? Or draining? (the photo is a metaphor by the way…not a picture of my $1.25/hour apartment)

Is that cool new coffee shop in your neighborhood going to succeed?  Consider all the costs as rates.  If their rent is approximately $3000 a month, that’s $100/day.  If they have two full time employees, tack on another $100/day for each.  The owner should make at least $100/day to make the business worth running. So that’s an on-going cost of $400/day.

If the main product being sold is a $2 cup of tea, unless 200 people pass through the doors each day, don’t count on that business staying around too long.

Let’s break that down further.  If the shop is open 10 hours each day, that’s 20 customers an hour.  Or one purchase every three minutes. They better start upselling those croissants real fast..

There are a number of businesses in my neighborhood (specifically places on Atlantic Avenue in Boerum Hill) that I’m afraid won’t exist much longer.  Consider the perpetually empty video store.  If rentals are $4 and it’s a one man business, he’s going to have to cover $200/day to stay afloat assuming he’s willing to work 7 days/week.  Is he doing 50 video rentals a day? It certainly doesn’t look like it.

Businesses aren’t the only thing that should be analyzed this way.  Break anything down into a micro-rate and it really makes you think about ‘value’. I pay roughly $90/month for my AT&T iPhone service, which comes to $3 a day.  Do I get more than $3 of value and enjoyment out of my iPhone each day?  Absolutely. Similarly, my gym costs about $75 each month.  Does considering my gym subscription as a $2.50 daily expense motivate me to get my money’s worth (almost) every day?  Absolutely.

[Continue to part 2]

Every year at Thanksgiving, alumni of Friends’ Central School flock home.  They drop by campus and visit their old classrooms and teachers.  And every year I go back, I’m struck by a single realization: so little has changed.

It’s been over six years since I graduated from FCS, a small and intimate Quaker high school near Philadelphia’s Main Line.  In that time, the country has been through several presidents, wars, terrorist attacks, and a recession.  In the technology world, dozens of startups have grown from idea to multi-million dollar acquisitions, and thousands of others have faded into obscurity.  In my own life, I’ve moved to NYC where I started and finished college, I’ve met thousands of people, cycled through different apartments, jobs, and friends.  My world view has changed radically.  But somehow FCS hasn’t changed a bit.

In a world where two years is considered a ‘long’ time to hold a job, FCS seems like an anomaly.  The place seems ageless.  The same faculty has been there for decades.  The same photographs, plaques and decorations are on the walls.  The classrooms look the same — the chairs and desks are in the same arrangements as the day I left.

In a world that seems to move a mile a minute, it’s nice to know that some things never change.

Happy Thanksgiving.

This post about competitive dynamics has been stewing in my mind for months now and it’s still a work in progress.  At its heart is a framework for thinking about a common type of tech company:  the aggregator.   The aggregator takes disparate items, gathers them, and presents them as a unified front.

Aggregators can exist for both content and also products/services and there’s thousands of examples of them across every category:  Google News (news content), OpenTable (restaurants), Expedia (airlines and hotels), Lendingtree (loans), SeamlessWeb (restaurant delivery), Digg (web content), Servicemagic (service contractors), Zocdoc (doctors), Admob (mobile ad units), AdWhirl (mobile ad networks), Pontiflex (marketing leads), GymTicket (gyms).

Convenience is often the key value these aggregators offer: a one-stop stop for customers to find what they’re looking for without going to ten different places.  The ability to compare items is also important. 

In almost every case there’s a interesting tension between these ‘aggregators’ and their ‘constituents.’  Let’s consider Google News.  Google news is increasingly the starting point for people looking for news on the internet. Newspapers hate that Google News is scraping their content and eroding their brand value — but at the same time, Google News drives a significant proportion of their web traffic.  They’d be stupid not to want that. As a member of an aggregator, they’re ensuring they get web traffic.  Unfortunately they’re helping build the Google News brand rather than their own.

Are they shooting themselves in the foot?

This issue arose in my post about Opentable.  One commenter wrote restaurants participating in OT, build the OpenTable brand rather than the restaurant’s own brand. It’s true!  But what can done?

Once established, the aggregator has the upper hand. All the individual entities/constituents act in their own self-interest and therefore will remain part of the network.  No single constituent can defect without suffering harm.  And widespread rebellion / mutiny is unlikely — it’s unlikely that all the restaurants are going to band together and start their own version of OpenTable.  It’s a tragedy of the commons, and the aggregators benefit handsomely from the resulting lock-in network effect.

As an established aggregator, risk can come from only a few places:

1) Competition in the form of another aggregator

2) One or more constituents decide to sidestep you.

#1 is hard to avoid.  #2 is rare, but extremely interesting when it does happen.  One example of this is Southwest Airlines, which isn’t listed on any of the travel booking sites.  Similarly, Admob refused to serve ads through AdWhirl, an ad network aggregator (and when that didn’t work they bought ‘em!)

Occasionally the constituents themselves will ally:  One example is Hulu, a joint venture between NBC, FOX and ABC, which aggregates all their content into a single place.

And once in a blue moon a constituent will creatively embrace aggregation in their attempt to fight the aggregators.  For example, Progressive Auto Insurance proudly shows you the prices of their competitors alongside their own prices.  Fascinating strategy.

The more fractured and crowded the marketplace, the less likely a mutiny or rebellion.  Are the thousands of restaurants on Seamlessweb suddenly going to unite to form their own online ordering system and destroy Seamlessweb?  Not likely.  Are the dozen or so large newspapers going to unite to rally against google news and demand to be de-listed or compensated better?  Absolutely.

As the number of constituents increases, the dependency on any one constituent decreases.  And as an aggregator grows its brand, it becomes extremely difficult for a constituent to break away.  Doing so requires an extremely strong brand and unique offering (like Southwest Airlines) and an alternative sales/delivery channel.

This is most important in the context of a offline company: Consider that Brick and Mortar stores like Walmart are essentially product aggregators.  Shoppers go to Walmart because they know it has a wide selection at great prices.  Suppliers don’t want to miss out on the huge volume that the Walmart sales channel delivers.  The more Walmart grows, the more crucial they become to their suppliers’ businesses.  And the more suppliers they gain, the more crucial they become to consumers.  At the end of the day, Walmart has incredible pricing leverage over its constituent suppliers. There simply aren’t many alternative channels.  Suppliers are trapped.

I’m going to end the post here because it’s already way too long.  But please leave your thoughts and help me push this topic further.  Thank you!