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Building a Broken Product

29Jul10

“More expensive and less functional.”

That was the recommendation I had for a friend’s startup. Why? The free version of the company’s product works too damn well.

You’ve probably heard of Freemium. There’s also Previum and a dozen other variations I’m sure. The exact differences aren’t really worth getting into because all share the same truth: Something’s gotta break. And someone’s gotta pay to fix it.

But breaking a product is harder than it sounds. Products can break to different degrees and along many different dimensions. Time is one such dimension. With trial software, the user is given a few weeks to use the product.  If they like it, they continue using it. Rdio gave users three days to try it out. Balslamiq gives seven days. Basecamp gives 30 days. As you can see the degree of this breakage varies widely.

Another related dimension is usage in which the product breaks after being used a certain number of times. Or when a certain amount of use is reached. For example, Pandora breaks after 40 hours of usage in a month.

But most products are broken along some feature dimension. AirVideo converted me into a paying user in (a ridiculously fast) five minutes by making the product so broken that it demonstrated that the technology worked and was awesome, but I couldn’t browse all my videos making the product essentially unusable. And sometimes products are entirely broken, which is to say they exist entirely behind a paywall. Many dating websites continue to operate like this.

There’s a dizzying number of dimensions along with products can break. It’s limited only by a product’s feature set, a product’s complexity, and your creativity. Most products are simultaneously broken along several different dimensions, to varying degrees of breakage, and at different price points.

Building a product that’s correctly broken requires a strong product sense, and a willingness to experiment and charge money. Limit the free version too much and you lose users which could potentially be great sources of word of mouth marketing. Give too much away, and you’re cannibalizing your own business and shooting yourself in the foot. It’s a fine balancing act for sure!

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Filed under: Analysis, design, ecommerce, media   |  0 Comments

Five Pre-Funded NYC Startups To Watch

30Jun10

When a VC friend asked which young NYC startups I find exciting, I sent him a list of pre-funded companies that I’ve been watching. Afterwards I started writing them into a blog post. Well, I should have pressed publish sooner because as the post sat unfinished for the last week, several have since been funded! I’m including them anyway. Good times!

Here’s my short list of NYC startups I’m keeping my eye on:

JumpPost

Apartment hunting is broken.  JumpPost could be the fix.

JumpPost gives apartment hunters ‘first dibs’ on the best apartments. How do they get the best apartments?  JumpPost pays apartment dwellers $500 to add a listing to the site several months ahead of their actual move out date.  Sometimes it pays to plan ahead.

Jordan and his team is onto something big and they’ve already generated some good press (getting paid $500 for doing nothing is especially buzzable!).  I imagine they’ll need some product pivots before JumpPost truly takes off, but this one’s got potential. Personally I would add a social layer to the product and emulate AirBnB which has made finding places to stay fun, easy, and safe.  JumpPost can potentially bring that same user experience to apartment hunting.

SinglePlatform

SinglePlatform gives bars and restaurants a centralized tool to easily update multiple social media profiles: Facebook, Twitter, Yelp, Citysearch, Myspace, and their own website. It’s the same core concept as Postling, except SinglePlatform seems to be executing better.  The founder, Wiley Cerilli, spent the last 10 years running sales at SeamlessWeb so the company clearly understands the market they’re serving — a point that becomes immediately clear browsing their site: “One of the most frequent phone calls to establishments is regarding what games they are playing. SinglePlatform allows you to select which TV packages and team affiliations you have and then posts those games automatically.”

SinglePlatform also seem to be quite good at selling their product at a comfortable price: $450 for a year.  That upfront payment (versus a monthly fee) should help the young company with cash flow issues and also make paying commissioned sales staff easier.  This six month old company seems to be quietly staffing up - LinkedIn already shows 11 employees.  Their aggressive sales force is hitting the pavement hard and closing deals left and right and the product is already being embraced by their customers.  And to top it off, the company is profitable.  This ones gonna be big…

ChallengePost

ChallengePost is a self-described “marketplace for challenges.”  Essentially, ChallengePost is home to dozens of competitions such as NYC’s BigApps which gave $20,000 to developers who built the best mobile apps using NYC datasets. Creative challenges help organizations harness the creativity of the masses to solve tough problems and generate ideas.  It’s a powerful concept that will increasingly become the norm among large organizations struggling to be innovative (also check out Hypios).  Recently, ChallengePost was named the official challenge platform of the US Government.

UPDATE: Sharp-eyed Danny Moon points out that in June 2009, ChallengePost raised an angel round of $500,000.

Kickstarter

Kickstarter is a funding platform for artists, designers, filmmakers, musicians etc. Essentially, it helps people raise funding to accomplish cool things.  Kickstarter handles the headache of accepting donations and also drives eyeballs to your project.  It also imposes some business logic to the process:  like a Groupon deal, buyers (donors) are only charged if the project raises the target amount of money. And fundraisers can associate rewards for different donation tiers (ie T-shirt if you donate $50)

Kickstarter benefitted from the PR buzz stirred up by Diaspora, an attempt by four NYU students to build a private decentralized Facebook.  In Diaspora’s efforts to raise $10,000 on the Kickstarter site, they unintentionally found themselves with $200,000 of donations - effectively an angel round of financing.

Yipit

Yipit makes it easy to find the best deals in your city.  Local daily deals sites like Groupon are hot right now.  But there are literally hundreds of them. Who wants to subscribe to a hundred email newsletters?! Yipit sits above them all, aggregating the fragmented marketplace into a single customized daily deal newsletter with the categories the user wishes to receive.  This puts Yipit in a position to charge a referral/lead-gen fee for each sale it drives to the deal sites. Brilliant.

UPDATE: On June 30, Yipit raised $1.3M.

Other honorable mentions:

-Shoutworthy: A social recommendation system built on Facebook. Think Linkedin’s recommendation tool.  Now imagine a much better version!

-TopGuest: A loyalty reward system built on top of foursquare/gowalla etc.  Formerly known as UDorse.

-Endor.se: A way to find talented freelancers, gauge availability, and built a portfolio of people whose work you endorse.

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Filed under: Analysis, local, Startups   |  19 Comments

Do You Speak the Language of Visual Design?

18May10

…or “Why You Need a Graphic Designer”

The book’s title caught my eye instantly.  ”Visual Literacy”  Intriguing.  I took it home, and over the next few days, I learned just how blind I was to the art of visual communication. Completely illiterate.

The book begins with exercises: “By using four black squares of the same dimension, create a graphic image that best expresses the meanings of each of the following words:

order

increase

bold

congested

tension

playful

I gave it my best shot and then flipped the page, revealing sample answers from students at New York’s School of Visual Arts. Suddenly I realized just how illiterate I was.


I’ve since appreciated design more.  To further explore the importance of graphic design and visual communications, I dug up a few Exit Strategy NYC graphics.  I show our initial design attempts (done by yours truly).  At heart I’m a science/tech geek, so I’ll explain my inherently scientific thought process.  And then I show how a professional designer approached the same problem.

Exit Strategy Fans: enjoy this behind the scenes look!

Train Illustration.  How I approached the problem: Exit Strategy NYC shows subway riders which train door to use.  So each door needs an ‘on’ or ‘off’ state.  The MTA’s trains can be 10 cars, with 4 doors in each car.  That means 40 doors in a train.  We want the train to run vertically on the iPhone screen which is 460px high (it’s 480px minus 20px used by the time/battery/service strip at the top).  So dividing 460px by 40 doors means each door gets about 11px of space to indicate on or off.  With padding, there’s probably 5px of height for each door and 5px in between the doors.

Where I got stuck: 5px for a door isn’t large enough to stand out, even if it’s red and a few extra pixels wide.

How a graphic designer solved it: By making the train have a ‘slant’ to the side which increased the swatch of the door, allowing the red color to ‘pop’.  Also she made it 3D and beautiful.

exitstrategydiagram

Splash screen.  How I approached the problem: We wanted to communicate subway transit combined with the notion of exiting quickly. Inspired by an ‘exit’ sign, I attempted to overlay a transit like system on top of it. It’s hideous.

Where I got stuck: Everywhere! How could we possibly communicate something as intangible as “Which is the correct train door?” while keeping a transit theme.  Time to call in an expert.

How a graphic designer solved it: Sheer brilliance.  The zig-zag of the colored lines communicates subway lines.  These lines dump out at a subway door.  The ‘correct’ door is open with a silhouette of a running guy.  An arrow helps indicate that this is the right door. The entire image is done with bright and bold colors.

exit-strategy-logos

So if you’re wondering whether you really *need* that graphic designer — always lean towards ‘yes.’  They’ll bring a perspective to the product and the messaging that will pay for itself many times over.

Readers — have any embarrassing early design of your products you wish to share?

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Filed under: Analysis, design, media, products, Uncategorized   |  3 Comments

Please *Don’t* Come To My Birthday Party Tonight

15May10

(because it’s not mine!)

Many of you might have received an email about a birthday party scheduled for tonight.  Hopefully you’re not planning on coming because the party isn’t mine — it’s actually a humorous misunderstanding caused by an overly aggressive planning web service.

Perhaps you’re familiar with Plancast.com – ’foursquare for the future.’  Well, last week I received a facebook invite to my friend Madeline’s birthday party. The event was titled “My Birthday Extravaganza (i.e. Maddy boops is an old lady).”

When I RSVP’d for the event, Plancast scraped the event and added it to my profile.

Then it e-mail blasted this to all of my friends:

And at some point Plancast also announced the event from my twitter account.

Five different friends emailed me to ask about the event. Some were disappointed they weren’t explicitly invited (“no party invite? i’m hurt”)  Other expressed their regrets that they couldn’t make it.  And some were just confused (“I completely got all the way to adding the party to my calendar in outlook, when i finally realized that it wasn’t your birthday party and you’ve never once been called maddy boops or whatever in my hearing”).

This is partially a result of the confusing name of the event.  But it also caused by Plancast’s lack of focus around who actually planned the event.  In fact, on my Plancast profile page it proudly announced “You planned this!”  This isn’t an issue for large scale public events where the host doesn’t matter, but for private events the system is a little bit broken.

Regardless, I’ll be sure to let you all know when I have my own birthday extravaganza!

(P.S.  Did you notice the awesome picture at the top?  They’re binary candlesticks!! “The only birthday candle you’ll ever need. One candle with 7 wicks that you light depending on your age. Works for birthdays 1 through 127.”)

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Filed under: Uncategorized   |  4 Comments

Comparing Android, Blackberry, and iPhone App Sales

12May10
One way to compare how different mobile platforms are doing is to look at the usage numbers from a popular app. Facebook reports their usage numbers alongside other apps (see here here here & here).  I went and graphed the usage figures a few weeks ago and present them below [no guarantee they're 100% up-to-date...in fact it looks like the Android and Palm figures that Facebook lists have changed drastically since the time I originally started writing this post]:
Wow.  It’s easy to see that the Facebook app usage on the iPhone platform trumps all the others.  From what I’ve gathered talking to other cross-platform mobile developers, these results are generally in line (at least for free applications):  Blackberry generally has half the install base of iPhone, and Android and all the others continue to lag far behind. Let’s look at another free app: Foursquare, which shared their platform breakdown via a tweet.
Android has an impressive showing, which could make sense given the application’s early adoption by techie types. Unlike Facebook, it hasn’t (yet) gained mainstream adoption. The differences across platforms become even more stark when we focus on paid apps. Here’s what the breakdown looks like for Exit Strategy NYC:
Exit Strategy NYC launched across all the platforms on the same day.  As you can see, nothing holds a candle to the Apple platform. What’s especially interesting is how poor the sales are for Android despite all the hype and press it gets.  And it looks like we’re not the only ones who have been disappointed: Gameloft (a mobile game company) announced in November they’re going to focus less on Android because they’ve sold “400 times more games on iPhone than on Android.” And Larva Labs discusses “The well known game Trism, which sold over $250,000 in it’s first two months on the iPhone. On Android it has sold, to date, less than 500 copies. That’s $1,046 total earnings, max.” How can we explain the massive difference?  Lots of ways: different market sizes, different app store user experiences, different user expectations.  In fact, I could probably write a book on the subject (Pssst, O’Reilly: my contact info is along the right sidebar…). But instead, I’ll try to focus on what I think are the main drivers:
  • Apple’s app-focused marketing. Apple’s marketing focused strongly on apps. People buy the devices with the intention to purchase lots of apps! In fact, the average user has downloaded about 50 apps (over 4 billion apps have been downloaded and 85 million devices have been sold). Wowza!
  • Lack of an Android Touch. The iPod touch nearly doubles the amount of devices with access to the app store (from 50M to over 85M).  No equivalent device exists on Blackberry or Android. There simply aren’t that many Android devices yet.
  • Lack of awareness among BlackBerry users. Most Blackberry users don’t know they can download apps.  (I’ll go out on a limb here and say that Facebook has done a great deal to help, but awareness is still lagging.)
  • Poor penetration of Blackberry App World. Blackberry is a late comer to the app store game.  Blackberry App World only launched a year ago in April 2009. Blackberry App World doesn’t come preinstalled on new Blackberry phones! Users have to manually install the software to access the store.  This is ridiculous.
  • Blackberry’s App World’s bias away from paid apps. Blackberry doesn’t make you setup a payment method to access App World or download free apps. This creates a roadblock for paid apps and creates a huge bias towards free applications.  Paid apps require Paypal which many users hate.
  • Poor Android app store experience. Best explained here.  And for paid apps, Google checkout is required which hasn’t really hit widespread adoption.  So it’s not surprising that Admob reports 63% more app purchases for each iPhone user vs Android users (1.8 vs 1.1 monthly paid apps).  Even most Googlers can’t purchase paid apps because of weird restrictions on their employee unlocked handsets.
So those you have it — a few potential reasons for the differences.  At the end of the day I believe small developers are best advised to put their energy into developing for the Apple platform. Building products for the other platforms probably doesn’t make sense at present time unless you have a game-changing mobile vision for a product that’ll take years to complete and needs the openness that Android provides.  Or if you’re a startup showing traction that relies on a strong network effect to take over the world (ie Foursquare). Or if you’re a big company with tons of cash to build out your branded app — like Facebook, which tries to have versions available for every phone possible!  But gosh, I’d hate to be that engineer locked in a basement building for all six users of the Sony q7d3m1p$9!&9b7u64gph model phone.
(Notes on the fairness of the Exit Strategy NYC cross platform comparisons. The iPhone version was a ‘featured app’ on the app store for a week after launch. It’s also the one that received the majority of the attention from press.  It also received a significant overhaul and feature set upgrade in version 2.0 which launched in November ’09.  I believe these differences account for some of the variation in sales, but certainly can’t account for orders of magnitude differences.)

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Filed under: Analysis, Apple, monetization   |  3 Comments
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