I finally started Smart Bear Live. It’s “Loveline for startups,” where entrepreneurs get to ask any question about their startup and have me and a rotating co-host tackle the problem and devise constructive next-actions.
Like most ventures, it didn’t work the way I’d imagined. For the last year I envisioned it as a weekly call-in radio show, and in this incarnation it wasn’t call-in, it wasn’t on the radio, and it’s not weekly.
But we did it, it was a blast, and you can listen to it in my podcast (iTunes, or enclosed in the usual RSS feed, or raw mp3).
Why listen? Especially if you don’t usually listen to podcasts? ‘Cause otherwise you’ll miss out on stuff like this:
- How I illegally got 25,000 students at the University of Texas to use my FastScheduler software in the 90’s.
- We transform a company’s trajectory by rephrasing a long, confusing diatribe into a three-word pitch.
- When should a company focus on growth only, ignoring the business model and revenue?
- How to “size a market” when there’s no good data, and some common pitfalls when you try.
This episode was expertly co-hosted by Joshua Baer, founder of OtherInbox, progenitor of Capital Factory, angel investor, and previous founder of SKYLIST and UnsubCentral, both sold.
Thanks also to our sponsors who made it all possible:
- Capital Factory, Austin’s hottest startup accelerator, for buying everyone beer & soda
- ServerBeach, the entrepreneur-friendly, affordable hosting company, for buying everyone pizza.
- GroupCharger, the community organizer’s secret weapon, for renting out all of Cospace for the event.
- The Struggling Entrepreneur Podcast, Fred Castaneda for supplying the audio equipment and post-production work.
- Core Media for the awesome high-quality video embedded below.
So take a listen, and let me know in the comments what you liked and what we should do differently. And if you’re feeling generous, leave a review in iTunes so other people can find us that way.
Or, watch the video on YouTube:
Jason: All right. Great. So welcome to the inaugural edition of Smart Bear Live, which is a new thing that we’re trying. and if it’s awesome then we’ll do more and if it’s not, then we’ll never do it again. So I’m Jason Cohen, probably everybody here knows that I’m ‘a smart bear’, not smart bear, but ‘a smart bear’. And this is Joshua Baer, a different bear, no relation.
Josh is the founder of OtherInbox right now, and previously the founder of SKYLIST, and UnsubCentral, both of which he sold already. And he’s also the inventor of Capital Factory, which is Austin’s sort of version of like TextStart or Y Combinator, that kind of thing, we’ll talk about in just a second. But tonight, of course, the point is to answer some questions, get some start- ups unstuck, and hopefully be entertaining too in the process.
Now if you cast your eyes downward into your hand, many of you will notice it’s in the shape of a C. And the reason it’s in the shape of a C, because it’s holding beer. Yummy beer, from Black Star, co-op here in Austin. And that is provided courtesy of Capital Factory, buying everybody a beer, or a soda, if that’s what you like.
Since Josh is the inventor of Capital Factory and the buyer of the beer by extension, I’ll let him describe Capital Factory. I think that’s a good excuse to talk about Factory, that we got this from it.
Joshua: Great. Capital Factory is a, I think the in phrase for it is an accelerator, some people called it an incubator. It’s really, kind of like it’s own thing. But really it’s all about helping early stage companies to get to the next level. Which most of them is either getting their first customers, getting profitable, raising a round of funding, obvious kind of things most early stage company are thinking about.
And so what happens is we have a competition. In fact each year, we got a couple of hundred companies that apply, from around the country, from around the world. We pick five, and some of the people that have been with the program are here tonight. Those five companies each get $20,000 in cash, they get a place to hang out during the summer with all the other companies, where lot’s of mentors are. And then there’s 20 mentors, all have build and sold, usually multiple companies, some have take their company public, some have done other things. And we meet with them every week, and we yell at them every week, in a constructive way. And really try to help them push things forward and get them focused on the right things. figure out what’s really important to them. A lot of companies come in and up changing their name, or their business model, or lot’s of other things along the way. But I think everybody feels like they really get a lot out of it, it’s really helpful.
So we have a third class going right now, five really awesome companies, which we haven’t announced yet. And it you want to find out about them, we are going to be watching them all at Demo Day on September 7th, so about a month away. And something we’re doing a little bit different, Demo Day is always, we have our third one, it’s been just incredible. We have about 300 people, it’s always sold out, it’s tons of investors and bunch of press, and some entrepreneurs that get in. We tried to let all the investors in first. And the first year, Mike Naples, Jr, was one of the key notes, he’s a prolific, early stage investor, he’s involved in Twitter and bunch of other really great companies. Last year, Naval Ravikant, who founded AngelList, among a lot of other great things he’s done. But something really relevant right now is, if you are starting to raise money, you aren’t on AngelList, that’s your one take away you should come away with tonight and just go sign-up for AngelList, because it’s really helpful. And Dave McClure from 500 startup, was also our speaker last year.
And so this year, we got Bob Metcalfe, who invented ethernet and founded 3Com, is now professor at University of Texas. And Brian Sharples, who founded HomeAway, which just went public, a very great, awesome, success story. And then we have our five companies. And then something we’ve never done before, is we have 10 other Austin companies also getting to present as well. Because we have all these investors there and all these people as well, and so if we can we want to help other companies as well, and create a bigger draw for more investors to come.
So we got most of the spots filled, but if you know of a great company that’s, ideally is fund raising right now, that wants to get in front of a lot of investors, please have them reach out to me. Because we love to find out about them and see if we can help them get funded.
Jason: Very cool. And also the twitter hash tag is Sbelive. In case anybody is doing that. So let’s bring out the first victim, who is the first victim, Sarah?
Sarah: First up is David R.
Jason: David R. Okay. So remember, just say name and company name. That’s it. Come up here. Get’s to sit up here the whole time too. There’s your little microphone. This is going to be great. Just name and company name. That’s it, start with.
David: David. My company name is Raise Text.
Jason: Cohen: Race Tex? Like T-E-X?
David: The other one.
David: You got it.
Jason: Wow, RaceTechs. So if had to guess what this is I would say, I think it’s pretty obvious, right? Like if I’m a racer I’m planning a race, or maybe if I’m in a race, and I want to use technology to get better so maybe it’s to measure my heart race or my performance, showing me over time, predicting. That’s what I would guess it is. What do you think it is?
Josh: You’ve obviously never in a racecar. No, I think it’s all the measurement stuff around, like, the G forces in the car and how fast it goes and what your lap time is and what your fuel emission’s are.
Jason: Okay. So in just one sentence what is it?
David: Event management and performance measurement technology.
Jason: Event management?
David: For running cycling and triathlon.
Josh: Doh! We both went to cars!
David: It translates well into the market. The customer understands what it is.
Jason: Okay. And so what’s the question?
David: The question is what are the best practices for calculating total addressable market, customer acquisition costs, and the lifetime value of that customer?
Jason: I don’t know the best practices. Let’s do your customer lifetime value, your market size. That’s really the question, right? So event’s for triathlons and what else?
David: Running, cycling, and triathlons.
Jason: Okay. So running, cycling, and swimming?
Jason: But not swimming?
David: Well, it could be duathlons. There’s a number of combinations.
Jason: Okay. Well how many events are there a year, in just America, that do that?
David: Approximately 60,000 events.
Jason: Wow! That’s a lot of triathlons.
Josh: And running and cycling.
Jason: How much is running out of all that? It seems like running’s really popular.
David: Running would be over half. The fastest growing sector is triathlons. Market sizing is one of the challenges as a result of there being a Gartner Report and . . .
Josh: You don’t need those anyway.
David: . . . Nike and Adidas and Under Armor and some of those executives are advisers for our company and it’s a challenge for those companies as well.
Jason: So it may be a challenge but they sell into the whole market so they have no idea how big it is?
David: It’s the specific portion of the market, which would be multi- sport.
Jason: Well, how much do you think you can charge per event?
David: Our margins are something that I wouldn’t put onto a podcast.
Jason: No, not margins. When you talk to them, you’re like ‘I’m going to charge you $100. I’m going to charge you $1,000.’ What number do you tell them?
Josh: What’s an average bill?
Jason: Power of ten.
David: Well, the total adjustable market that we have since today?
Jason: No, no, no. You talk to one event planner and you say, ‘I’m going to charge you $100 and your going to get this or $1,000.’ What’s the number, roughly?
David: That ranges from 1,000 to 100,000 depending on the size of the event.
Jason: Woah, 100,000 for one event? I like that. Cool.
Josh: I think with this kind of thing, you can try to sound big or you can try to sound smart.
David: Another promise you’ll never deliver?
Josh: That wasn’t the direction I was going. Some people try to make is sound like ‘Look how big the market is!’ And in doing so they talk about things that aren’t really the market in which case all the investors just blow off whatever you say anyway because everyone know that it’s like, ‘It’s a billion dollars.’ but you look at it and it’s not really a billion dollars because then you start to slice it down all these different ways. We don’t get all of that, and this much is spent on the sport but there not spending that on the stuff that I do, right? Either your going to be in the ‘Here’s the size of the whole market because I have no idea.’ and so it’s really big and you can just assume that even though I’m not getting the whole thing there a lot of play in there or there’s room to create more value so if you can prove, people spend a lot on races in general, so there’s room for me to take something out of it. That’s one direction to go.
Or you can really razor sharp like, ‘Look, there’s this many events a year. There’s 60,000 events. I think they make on average $15,000 off each event. I think I can take 10% of that in fees, so that’s 1,500 X 60,000 and boom, that’s the size my market. It’s going to sound a lot smaller but people are going to believe and think, ‘Okay. That’s really what it is’, and you’re going to sound a lot smarter when you talk about it.
Jason: And by the way, it is smaller. It isn’t the whole market. All this, ‘I’m going to get 1%.’ No. That’s not the deal and that’s not how anybody thinks, actually, that I’m going to get 1% of whatever.
Josh: And this is your chance to sound smart. This is your chance to actually make it look like you actually do understand what your market is.
And the other thing I’d say is you want to triangulate. Usually you don’t have good information, especially if your in a start up and it’s not some really established thing. It’s great if you can look at a public company because lot’s of public companies have to disclose all kinds of information so you can go pour through their filings and their S1’s and their other things and find out how many customers they have or what there average payment is and lot’s of other things you could use to extrapolate it. Or you could see what they think the size of the market is and what piece they have. But, often what you’re going to end up doing is triangulate. You’re going so say ‘I think there’s 60,000 things and I think the average they make you pay is this.’ So that gives me one number. And then another way to calculate it is there’s this many runners and if I can get this many of them engaged and this many to participate in races and if I can get each one of them to pay a certain amount per runner, you can come at it three different ways and see if that triangulates and makes sense.
Jason: The other thing is you can go bottom up as well and you can say, ‘Look. We’ve already got a dozen people saying that they’ll do it and I wasn’t even trying. We can easily get 1,000 of those 60,000 over the next year or two. We just can.’ And if we did at, I don’t know what the average is let’s just suppose it 5,000 out of the one to 100,000. So we could be a five million dollar company a year just if we get to 1,000 and that sounds really easy. Now that’s not a pitch to a VC because it’s still five million a year which I think to most people in this room, me included, sounds like a really nice little business. For a VC looking for a huge Twitter like exit it’s not, but then again you’re in a market where there isn’t going to be a huge Twitter exit anyway. If you’re talking to an angel who would love to have a business that’s doing single digit millions in revenue and is profitable and is worth probably ten times that, that sounds great and very doable and then it doesn’t matter how big the market is. The point is this is a small piece of whatever it is and it’s very plausible you can get there.
David: Could I follow up with a question?
Jason: Please. We haven’t gotten to lifetime value yet.
David: With the size of the market do you address what you currently have a product to sell to that existing market or what we’re planning to build based on those revenue’s from the cash generating . . .
Josh: You’ve got to sell the dream.
David: The follow up as well.
Jason: When you’re raising money the investor’s betting on the next n years so it has to be on whatever you’re going to do. On the other hand the proof that you’re the right person to do it and they should bet on you is what you have today. It is both today because it’s proof that there is something and it’s a business and that people do want generally what you’re talking about and then, of course most of it is the vision of, and can be this. But I’m not going to believe you can even do that unless I believe that you’re doing it today in some capacity. So that’s why those very hard number are useful.
David: Thank you.
Jason: So in lifetime value usually you talk about, I mean you can talk about that for any business of course, but usually it’s recurring. I know there usually annual races but is the idea that you sign them up for multiple years or is this really one race at a time?
David: It varies. It could be single race, 100 participants. We also just landed a contract that’s 600,000 participants.
Jason: 600,000 participants? What is that? Can you say?
David: It’s the, well no.
Jason: That’s huge, how many could, I mean how….
David: It’s not a single event.
Jason: Oh it’s not? Okay.
David: It’s a single director.
Jason: That’s fantastic. It sounds like you don’t have a single lifetime value because you have different demographics of customer. You have these one-offs and the lifetime value is the one-off. Now you hope they come back next year, they probably will if it’s good software, right? You could maybe argue that the lifetime value is twice whatever you get in one year because maybe they come back or you can be conservative and say 1 or 1.5. That would all be fair.
David: Some of them stick around for 25 years.
Jason: But they may not get you again. That’s the point, right?
David: Not for certain.
Jason: So you might say 1.5 because maybe they would, maybe they wouldn’t kind of thing, because the probability of anything happening is 50/50. It’ll either happen or it won’t, so that’s easy. And then you have these big guys where it’s a huge transaction and maybe you can lock them to a big contract for a cheaper rate, which is super valuable. I feel like, again, it’s also easy because you’re talking about a three month contract or, I’m sorry a three year contract or a whole year contract, whatever the thing is. I feel like you want a segment and I think if you do a segment it’ll be really obvious how to do the lifetime value of each of those segments. And then the question is how many of those are there and I don’t think you have to have a perfect answer to that. I think you’ve just shown how it can grow in these different ways.
David: So the cushion is imperfection across the board for any of these calculations?
Jason: Yeah. I think when you’re selling the dream you sell big. When you’re trying to prove what you have already done and this is why the should invest in you in the first place because you’re the right person for it, you get super concrete and conservative so you don’t look like you’re crazy. You look like you’re telling the truth and the reason they’re investing in you is this bigger vision.
Josh: The one thing I’d say in order to navigate the selling division and where we are now is it’s okay to paint this really great vision and just make sure no one’s every confused about which part you’re talking about. When you’re talking about the vision they understand that’s the vision. They don’t hear the pitch and then think, ‘Oh, well that’s already all built,’ because then they’re going get really disappointed when they find out it’s not really all built and it doesn’t do all that. You don’t have to dwell on it. You can say, ‘Here’s the vision. Blah, blah, blah’. and then you can have one slide at the end that say’s, ‘Okay, here’s where we are now. We’ve gotten up to this point and through this, this, and this.’ You put yourself on that path, on that trajectory and you’ve still spent 90% of the time talking about what it’s going to be and everything else and you get them all bought in and excited about that but by the end of it they don’t walk away feeling like you pulled something over their head. They totally understand. Okay. There’s the vision, and they’re this far along, and that’s what they proved so far.
Jason: I guess maybe the final thing is, this may not be a market that’s super big. And that is fine, as long as that’s how you’re pitching what it is.
Josh: And don’t pretend that it is.
David: No, we just have a pivot plan. Down the road.
Josh: Is that because the market’s not big, or that because it doesn’t work?
David: No, we see that as a way to access that larger market.
Josh: I don’t know if I would call that a pivot.
Josh: Usually a connotation of a pivot is . . .
David: A redirect.
Josh: Yeah, something that doesn’t work, so I’m trying something else.
Jason: It’s sort of like Step One, and it’s going to be Phase Two where we’ll get something ten times bigger. nd so that’s fine. Not even having heard your pitch yet, I would guess that Phase One makes a lot of sense, and you’ve probably lots of data you’re doing to prove that you probably could do Phase One. And Phase Two, you probably have no data, maybe “I had a great meeting once kind of thing!” and no software, and not really any data other than that, you do have some experience and you’re going to be developing it, which is fine, because that is also normal. But that’s not going to be that compelling in terms of proving ‘I know this is going to be in our future.’
So maybe the way you can cast it is, there’s many ways to tenax this business. So here’s a core business that’s pretty easy to argue we can get. We have already one way in which we’re pretty sure is a way to tenax what this business is, that we’re not going to do tomorrow, but that this is going to lead to.
There are other ways too. We’re going to find them, because we’re building a real business, and we’ll be able to use all that to find it. This is one of them, but you don’t want to hang your hat only on the one, because A, we’ll all know you’ll learn something, and it’ll be something else by that time, and B, you don’t want it to be only one because then if it doesn’t work out that that’s the one, then what?
Josh: Kip McClanahan, who’s an investor here in Austin, has a blog called reoverthinking.com. He has a set of blog posts about what your invest index should be, and what your slide should be, and that’s my Bible for where to start if you’re going to go make an investor deck. In particular, he has a slide on there, he says it’s the money slide, and it’s the Phase One, Phase Two, Phase Three kind of vision. And his example had something to do with routers, so they were selling, this was fifteen, twenty years ago, selling routers into the home. So first, we go sell these cheap routers that people put in their house, let’s them get internet stuff.
But then, once we’ve got routers in a bunch of houses, now we can layer on this service layer on top of it where, now service providers can remotely check the router and see what’s problems there are and get information back and sell services on top of it. And once we’ve got a bunch of services on top of it, well then we can go and start delivering content down through the router or something else. It shows the vision where first we can dominate this place, and that by itself is good, that’s a good business. But then once we got that, that puts it in the position then, our business really shifts. Then we can get into this larger opportunity, this next piece, and kind of showing that vision is this succinct kind of way.
One other thing with that, consistent with that, is Bob Metcalf has chided me that my five secrets to a killer elevator pitch should be three secrets to a killer elevator pitch. Everything should be in threes. Just because that’s what’s easier for people to remember. So same kind of thing with that. Don’t have two phases, have three phases, because that’s just easy for everybody to understand and to deal with.
Jason: Okay. Good. Thanks.
Jason: Excellent. So before we bring out our next person, I got to tell you this. So recently at my company, we’re Press Engine, that’s wpengine.com, we’re in a bind and we needed to get a bunch of dedicated servers because our stuff is all about performance and speed and all that. We needed to get a bunch of servers up, and fast. You’re probably thinking Rackspace came to the rescue, because if you live in this area of the world, as it says on all our local news stations in Central Texas, ‘Your Central Texas news leader,’ not Austin. So you think of Rackspace because they sponsors a lot of stuff and they do whatnot. But the fact is, especially for startups like us, and I imagine you guys, they’re expensive. I don’t want to say anything bad about them, nothing wrong with them of course, but in this case, people that came to my rescue was a company called Server Beach, which is also from Central Texas, because they’re also in San Antonio. I think they and Rackspace poach off each other all the time. It’s all the same thing, really.
Josh: You found ServerBeach?
David: That’s correct.
Jason: So anyway, they are the one that came to the rescue. They’ve got great prices, they also have good service, though. I think a lot of hosting companies do now – or at least when they want to. And they’re really entrepreneur friendly. And in particular, for example, having lower price prices makes them more entrepreneur friendly, I think, that’s part of it.
And in particular, they’re sponsoring tonight as well. In fact, all the pizza that you got back there, on the other hand that’s not a C-shape, it’s kind of in that pizza claw shape, that’s from ServerBeach. And in fact there’s two guys here from ServerBeach. Over here’s there’s like the sales guy-looking guy in the white shirt, that’s Kevin, right? And then there’s the cool guy over there, I guess you’re both sales guys, really, right? Those are the sales guy.
That’s okay though, they’re really nice. See, you would think the sales guys are going to be like, slick guys, and they’re not. And that just shows you, because if the sales guys aren’t that bad, then you know the rest of everybody’s going to be super cool. So this is a good thing, right? Okay.
So anyway, talk to them. And they’ve offered everybody here, and I don’t know if they’re talking about the thousands of people on the podcast, we will find out maybe later, but if you tweet, is it @ServerBeach? Is that, would you like someone to tweet? Is someone listening to @ServerBeach?
Man: I mean, if anybody really needed hosting, then the idea was to reward you for coming here tonight. And if you needed a dedicated server and you’re not happy with the hosting you’re getting today, you’re welcome to come to us and you’ll get, I guess, the 30% off, no set-up fee and it’ll be on a month-to-month agreement so you can try 30 days at a time. So it’s very low risk which is a beautiful thing, being entrepreneurs. But just to kind of reward you, we’d like to sweeten the deal as well as sponsor it.
Jason: Yeah. 30% off, no set-up and they brought shirts, and pizza! So it’s kind of ridiculous, they’re obviously losing a lot of money, and we appreciate that. Okay. Let’s do victim number two.
Sarah: Okay. Next up is Renee.
Jason: Uh-oh. All right.
Renee: I’m used to it. They kicked me in the nuts every week for all last summer.
Jason: So name and company is not going to work, because we know, so let’s get right into it.
Josh: You’re supposed to make something up.
Renee: I’m Renee with Pizza Claw.
Jason: Pizza Claw? Okay. Well, I don’t think, like, when I eat pizza my fingers get all greasy. And I like greasy pizza but I don’t like greasy fingers, and so I imagine this is some kind of pizza glove or something I could get into? It’s only got like three finger holes, so in case I’m missing a digit it still works for me, and that’s how much forethought you have, because you’re focused. Am I right?
Renee: Yep, that’s the company!
Josh: Yes. We’re done!
Renee: And I want to make my Pizza Claws faster.
Josh: If it’s doable.
Jason: And more secure, with a smile!
Renee: So yeah, the Forecast is just a really simple way of telling your friends where you’ll be later. It’s like, Check-In tells your friends where you are now, Forecast tells your friends where you’ll be later.
So my question is something that we’ve always wrestled with at our company because we’re a social company. When do you transition from focusing on users and viral growth which is sort of, like, you know, the really hard nut to crack when you’re doing a social company, to caring about customers and business model? Should it be happening in parallel time or should you say fuck one, and concentrate entirely on one before the other?
Jason: Yeah, that’s a good question. I always go towards business model, always. That’s just me personally. If it doesn’t make money to me it’s a hobby and all that. However, you have a business where, if it’s a ‘social business’, and maybe a better way to describe it is a business in which if there’s under then a certain number of people doing it, whatever the thing is, whether it’s free or not free, and whatever they’re doing, if there’s not at least a certain kind of critical mass of people, it’s kind of useless. There is no business model of any sort ever; it’s impossible. But if there is, not only is it valuable but it gets more and more valuable as people are on it. All of a sudden, and this is like what Twitter is. You know, Twitter is worth some ridiculous billions of dollars.
Josh: 8 billion.
Jason: 8 billion, some stupid thing, and they’re not making any money. Nobody even knows how, they admit they don’t know how. It should be a joke but it’s not because it’s got so much and it’s so valuable, somehow, and we’ll just figure it out. Because if we can just figure out what it is, boof, we’re good, like Facebook did, right?
So I hate saying this but, the answer is, like, you need a lot of people before the business model and this is a good reason for VC. This is a good reason to go get a whole bunch of money so that you can afford to spend time getting people. But then your number one thing has to be growth. Nothing has to be more important than growth. Nothing, nothing, nothing.
Renee: So, where’s that inflection point where you start to worry about business model, so you don’t become Twitter? But that would that be a problem to have, right?
Josh: I mean, it’s going to be different for each company. I think you kind of, when you ask the question you already define socials to mean, ‘We don’t have to make money.’ That was kind of like the way you asked the question, like as if you were a social business. A social business, to be something that uses social, that doesn’t have to be something that needs to be built without making money. There’s social businesses that, you know, and there’s social monitoring tools, there’s social things for helping salespeople make, close deals. They make money right away, right. So your definition of social is, we don’t know how to make money. We’re just trying to get a lot of people using it. And if that is your model, which is the Twitter model, right? Then I think, like you said, you got to be totally focused on growth, because that’s all it is.
So OtherInbox was not a social business, but was a, we don’t know how to make money business, in the beginning. Or at least we didn’t have that part of it done yet. So we knew in order for us to really make money, we needed, we think we really need about 5 million users. And we knew we needed, just a million, to even like to test it. Even to do anything, we need a million users.
So we have to just focus on getting that number. And that number is a little vague, but I have a sense of that from like the testing that we’ve done. And we honed that over time and it turned out that was about the right number.
And so, until we have a million users, we couldn’t make any money. Like it wasn’t even like we got to focus on making money, there was nothing to focus on. It was just focus on going to get users. And which, we still tried a few times and found that it was totally useless, not worthwhile. Then once we got to a million users, we were at the point where we could test some stuff, it’s still actually wasn’t that important. Because still the amount of money we’re going to make off of it, wasn’t that significant, it wasn’t as significant as I wanted to be. It’s probably not enough to get profitable just on that.
And so, that’s kind of the next inflection point. If you get to a point where, if you were to focus on the business model, you can make enough money that you can be cash flow positive. Well, that’s a good decision to have to make. Like now, okay, shouldn’t we focus on that and get cash flow positive. Or should we just keep growing as fast as we can? And so now, there’s a great security that comes from being cash flow neutral. Because now, you don’t have to raise money and if you have a social app, that’s growing, even at any kind of a rate, like OtherInboxes we have almost, any given day, anywhere from 5,000 to 10,000 people a day signing up.
So if we can just hang out, we’re getting more valuable everyday. Right, like we can get to cash flow neutral, then it’s okay to just to hang out, let more users come in. Now, we don’t have to figure out the business model. We just need to be able to get enough money to keep the servers running and keep growing. And that’s completely different than maybe figuring it out, which is identifying the things that’s going to really scale into big exciting business.
Jason: At the same time just having growth of users, even if they are, ‘Active’ by some definition that’s reasonable. It’s still not necessarily valuable. So what I would do also, just think of this as, is just getting the growth, is the mass of users an asset? Is it a thing that has value? Would someone buy that thing, because it has some kind of intrinsic value?
For example, with your check ins, so there is bunch of people checking in. Is that important? Like if there is a million people checking in, at least once a week, is there like a myriad of ways you can imagine that’s valuable. Maybe there is, maybe it’s like everything, like you can advertise them, you can get patterns, there’s data, local businesses can do stuff like that, etc.
Or is this something that is kind of vacuous. So like, in fact one of the problems with Twitter is, so if I handed you Twitter, you still wouldn’t know what to do with it. Like all the data are already public, so it’s not like having it is valuable. If having that data were valuable you can predict something or you can sell some kind of analytics on it that nobody else could get, that will be valuable. But it’s not, it’s all open. Okay, so that’s not part of the asset. What is the asset of having that stuff? And so, I’m not sure what it is, I mean, well, there is different ideas, but we’re not talking about Twitter anyway.
So with OtherInbox, OtherInbox is categorizing email. Little kinds of interesting things that might come out of there. So one of the things that’s public is, there is a service called SubjectLines, and you can tell already from the name, what that means. If I see those email, when it gets delivered, I can tell you what subject lines in emails tend to get delivered better. That’s like the holy grail of email marketing. What subject lines get’s delivered better? Holy crap, that’s insane. That’s an asset, to have that.
What are some other ways? I don’t know. If you’re looking at e- mails all day, I mean I should say that, that’s taking it too far, there is always privacy things, they’re not looking at e- mails all day. I shouldn’t say that. But like if you have anonymous access to e-mail, like it’s kind of unreal, all kinds of things might be possible. And so that’s definitely an asset.
Where as, is check in an asset? So actually that’s a question. Is saying where I’m going to be, an asset? If it is then as it grows, you are getting something of value. And that growth is not just, ‘We’ll figure it out, it’s magical’. No. It is a valuable asset. And yeah, we still have to figure it out, but we’re sure it’s an asset somehow. But is it? Is check in, an asset? And foursquare and Gowalla as far as I know, so far haven’t figured out, if it is an asset, to how to think of it that way.
Josh: You think foursquare is at that size, they’re big enough, they can start monetizing it now. They’re starting to put some deal in right now.
Renee: It seems that they are trying to put that effort in, right now. But that’s the front foot of their business right now is figuring out that business model.
Josh: I think with foursquare, it’s actually in question. I mean, as much as everyone gets the idea of, ‘I’m going to give you a coupon for checking in somewhere a lot or for trying to get you to go’, like, I still think there’s a little bit of a question of how big does that business really get and what’s real. I would argue, I don’t know if Jason would agree, I think with Twitter, I think most people don’t question it. They realize that there’s a lot of really valuable communication and information going through Twitter and they still don’t exactly know how to monetize it, but they know that it’s still really, really valuable, and its obvious to me that its really, really valuable.
Tying back to the question from before about phases as well we talked about. So, for OtherInbox, it ties into the same pieces of what’s the critical mass to get them? So phase one was, get to a million users, and now we can, for example, we can’t really, like, we can do a little bit of targeted advertising but the audience, believe it or not, isn’t that big for doing that. We can now just start to pull out subject lines did and say, okay, let’s look for some trends. Let’s see what’s happening. And we get a taste of what kinda what comes next.
Now, at five million users, we see, we know which e-mails are receipts, and right now if we try to target something and say, let’s show this ad to everybody who bought something from, you know, from an airline in the past month. We’d get like 50,000 people, or like 100,000 people. Its starting to get, the airlines are probably good on this, its starting to get interesting. But at five million it gets to the point where we could be like, okay, let’s get everyone that’s bought something from Best Buy. And there’s 150,000 people that match that criteria. And now that’s big enough to be interesting to somebody. And so, you know, its another kind of phase milestone. Then you get to a million users, we can start to pull out some trend data. When we get to five million users, we can actually start to target really interesting segments. When we get to a hundred million users, I don’t know. Obviously we take over the world.
Jason: That’s a non-rhetorical question. What is it about checking in into the future that is an asset growing?
Josh: And any different than foursquare?
Jason: And one answer could be, its the same as foursquare in a sense that if foursquare figures it out then so will we. And that’s not the worst answer because a lot of people are betting on foursquare and [inaudible]. To me, its not a terrific answer because it means, ‘I don’t know either.’ I hate the argument that, but they could just do it. You know, anybody could just do anything, whatever, I don’t care.
But, you know, if that’s. But you could say if foursquare tries twenty things and only one works, that’s a bad sign. That means there’s not a lot of ways for this to work. Maybe not even one. So should you have some ideas? I don’t know that you have to have an idea of monetization, but you should have an argument for why its an asset.
There is a plausible out on this. There will be a way to monetize it because there’s something of intrinsic value of this happening already. For Twitter, you could argue it’s that people are using it and communicating kind of everything from overthrowing governments, oh my God, to trivial stuff. Everything is happening there and its happening on them. And so in the same way that a broadcast network has intrinsic value because they’re the ones showing NBC at night, there is value there, there’s going to be value there. What is the intrinsic asset that you can define in there?
Josh: Can I say right here then have you kick it back?
Josh: So, I think that the thing that’s really valuable is and different than the check-ins, you know, is we are catching people in a state of mind where they haven’t really made their mind up. This assumption hasn’t been tested yet. That they’re in a state of mind where they’re more influenced because they’re deciding where they’re going to go. They’re looking for some place to go, so you’re catching them in a different cycle than you are when they’re already someplace.
Jason: But isn’t also the idea currently that I broadcast where I’m gonna be because I would like to have a happenstance of someone meeting me there. And if part of the model also is that you are diverting me from that kind of breaks the social part.
Josh: Well I think there are two points there. I think if you catch someone right before they make a forecast, perhaps they’ve said they’re going to a restaurant or something, you suggest a different restaurant so you can bias them that way. If they’ve already said where they are going, you could suggest a complimentary place to go afterwards. ‘I’m going to a movie, there’s a bar that’s nearby.’
I think that’s different than foursquare because foursquare is very much present tense as where future tense and if its in the future you can still affect the future.
Jason: There’s got to be some weird, like, demo slash presentation about what you just said, like, ‘we know the future, we can still change it!’ In a world where Twitter is rich! Sweet. I don’t think that’s a bad, I don’t think that’s bad at all.
Josh: Okay. Cool. That’s generally what I say.
Jason: I also think its kind of testable, like, you could, I could see, like, you know, doing weird things to one percent of your user base.
Renee: That’s our next phase. To define, like, what I think of as a social company, its one where you start with doing user development as opposed to customer development where you’re solving a user problem that people aren’t going to pay for directly, but you’re solving the problem nonetheless. And I think companies that aren’t social, are the one’s that are solving a problem for somebody that are actually pay you directly.
Josh: I think that’s a freemium. I still think you’re abusing social groups.
Renee: Yeah, but we never expect our users to pay for anything ever. It’s not like there is a free one and more expensive one. And I think that’s like…
Josh: An ad supported model. It’s still not social.
Renee: Yeah, so maybe that’s a better way of…
Josh: Social means people interacting.
Renee: Right. So, yeah, it needs another term, rather than calling it a social one. But doing that customer development, when does that start? Do we start that experiment now, but I guess that goes back to when we started the conversation.
Josh: What’s the minimum you need to do it? Like there is a certain logic part of like Okay . . .
Renee: I think we can start doing it right now. It’s all about that distraction, like I think some business models we can test right now.
We got our users that are pretty evenly distributed around the globe, so I think there is some business models you can test better than other ones. Like if we tested like a hyper local thing, that wouldn’t really work, because we don’t have the density.
Josh: I don’t think you should worry about it.
Renee: Okay. Thank you.
Josh: You need to get lot’s of people forecasting. You’re not there yet. You know like when there is really lots of people forecasting, then your like okay, this is now figuring out what else to do with it.
Jason: Yeah, I think so too. And I think who ever was financing this part of it, I think a perfectly valid thing to say is, the goal of this round is to get, and you should have a goal, of what you possibly could get on this round, before this. But that’s the goal, we’re doing this to get this much activity. We do have some ideas of what that means and you do. So like, it’s not like we just run into the tunnel with no light at the end. We have some ideas how this could work. But obviously that’s a distraction right now. And if we can show this kind of growth curve that looks all pretty, we know we’ll get the next round because there is out’s and a big growing thing anyway. And that’s the plan, that’s the phase two is the next round. And I think planning for that is actually a good thing.
Renee: Depends on the business model until series B.
Jason: Well, I’ll have that plausibleness to it. That it’s an asset, there’s things we can do, there’s things we can manipulate. Here’s why it’s not foursquare. Those are vital, otherwise it’s just like, oh, it’s foursquare, except weirder and you’re not foursquare. Right? So did it work? No. Okay.
Josh: I think the other thing you need to be thinking about a fund raising or two is setting those goals. Say, our goal is to do this and especially because you don’t plan on being cash flow positive, or neutral at that point, you want to be finding investors now, that are signing up for the whole row.
You’re going to be like, ‘Okay. This is what we’re going to do, you give me a million bucks now, and we’re going to get a million people using it. Once we get a million people using it, you’re going to give me two million bucks.’ And right? And you get them to go like, ‘Yeah, when you get two million users, I’m going to give you two million bucks.’ That doesn’t really mean that they’re going to do it unfortunately. But at least you explicitly set these expectations, and then you can come back to them and be like, look I did what I said I was going to do.
Jason: The fact that it is nebulous, so many people up for this right, this particular kind of company, which there’s tons of. Like everyone invested in Gowalla and foursquare for example. It’s some kind of investment really.
Renee: Cool, I really appreciate you guys. Thanks.
Jason: So I guess everybody notice we are in this awesome co-working space. How many people are, this is the first time to cospace? Wow, like at least half. So now you know what an awesome place cospace is. This is like coolest co-working space, maybe the coolest space at all in north Austin. And it’s even more cool when it’s not full of folding chairs and stuff borrowed from next door. See these like cool blue chairs? It’s like that, like the nice furniture and nice desk. Not fold out tables or anything. It’s really nice space, it’s really bright, you can see all the windows. There’s lots of events like this. there’s classes, there’s all kinds fund stuff. This is a neat place to be.
However, we would still not be able to be here, well, we could, but it would cost us $100 per hour, I think, to rent out the place. A company called Group Charger is footing the bill for that. I’m just going through all the people who paid for stuff. Because I’m too cheap to pay for anything. See, that’s how this works. And so Group Charger actually bought us the space here at cospace for tonight.
And Group Charger is a neat company, as the name might suggest, they help group managers, add a lot of value to their groups. And this is what I mean. So let’s say you run a church group or a alumina association or something like co-working space like this. You’re used to things like newsletters and events announcements which are fine, everybody does that. But it’s not really, it doesn’t make a community out of it, it doesn’t really add that much value, it’s just a billboard.
So fore example what I do all the times is, I’m always introducing people to each other, right? Like I know some IOS west developer come up wants the business, and I don’t know anything he can do at the moment, so I say, I don’t know. And he wants to join a start up, and then I see some other start up, they needed IOS developer, so I introduced them. Right? This happens constantly. And if you’re a group manager, it really ought to be happening constantly, right?
So I’m running his email, little paragraph of the bios of the people and I’ve got to come up with a short bio for everybody. I mean, it just, it’s sort of mundane and it takes lots of time, but it’s super valuable for the people. And as a group manager, of course, it be incredible if you’re doing this like five times a day. And that’s just one of the things the GroupCharger does, is it facilitates those kinds of introductions and makes this super fast. And these other things it does too. But that’s just one example. So if you manage any group, GroupCharger is a much better way to actually add value to the members themselves. And so you can go to GroupCharger.com and check it out, if you want. And that’s Curtis’s company. There’s Curtis, Hey Curtis. So you can talk to him about it too, if you think it’s cool. So thanks to them for the space.
Okay. So third victim. Kyle’s the third victim. Kyle’s the third victim. Name and company only.
Kyle: My name is Kyle Simpson. My sort of a parent site company is Gigabyte Solutions with a project that I want to talk to you about, is called GoLookAt.
Jason: I think it’s like Hot or Not, except the idea is that you saw some chick or a guy at a club, and then you take a picture like, ‘Oh, my god’. But then it’s geo-located and it’s combined with where you’re going to be, or where you’re hoping to be. And you sent it out, and you’re like, ‘Dud, you got to go look at this chick’. And then that hopefully that brings your friends in. And then if they do, you get free drinks at the bar. And that’s how you make money at it.
All right. So what’s GoLookAt? It’s a great name, what is GoLookAt?
Kyle: GoLookAt is a three tier thing, it’s basically…
Jason: Oh God, no, no, no. Just tell me what, it’s not a three tier thing, just tell me what it is.
Kyle: It’s not URL shortening, but URL bettering. It is social bookmark sharing, and it is link safety.
Jason: Well, let’s pick one of those things. What’s the best one?
Kyle: The one that’s build.
Jason: Okay. Which one’s that one?
Kyle: The URL bettering.
Jason: Better. What’s that, better, means nothing to me, What is that?
Kyle: So people think about URL shortening . . .
Jason: No. What is bettering? It’s better because?
Kyle: The URL is shorter. I say the best URL makes more sense to people. It tells what it is and gives you more data about that URL, than the original URL.
Jason: So give me one example. Because I don’t get this at all. I think if it’s short I can say more stupid stuff in my Twitter thing, that comes before the little short URL.
Kyle: Yeah. So, I say, you say that in the URL, rather than as part of the disconnected text about the URL.
Jason: So it’s http://ohmygodyouhavetolookatthissoawesomeitstwitterfinallygoingt omakemoneytheyjustannouncedit.com? Or something?
Kyle: Sure. So, consider Youtube URLs, they don’t tell you anything at all about the content of that. When you shorten it to a bit.ly link, you also don’t know anything about the content of that video. You don’t know if it’s safe for work, etc.
But if you have a shortened URL that says, funny/cats/video, you know exactly looking at that URL what it is. You also have data about that URL that can start to categorizing information and make it easier to find.
Jason: But doesn’t if also have to be short, so I can fit it in a twit? Because that’s where most people use this stuff.
Kyle: If I’m writing out a twit, and I write out the sentence, ‘Go check out this funny video about cats’. That’s much longer than bit.ly/funny/cat/video. It’s self descriptive URL that’s shorter than the text that I would write in a tweet.
Jason: So you still use it in Twitter or you don’t?
Kyle: You can use it any where.
Jason: But that’s what you expect is that I would use in Twitter, and just say less?
Kyle: There are people using it. Yes.
Jason: Oh, they are using it. How many people are using this?
Kyle: It’s a build system. I got 60 people using it. There’s been three thousand created and over 200 thousand clicks on those website
Jason: Oh, that’s a lot.
Kyle: So the key here, but before we start, I just want to say, my question is a little higher level then what the guy before was asking. I’m not specifically asking about how to monetize this idea, or whether the idea is good. I’m saying if you have worked on trying to monetize an idea, like this idea, and you struggle with the monetization of an idea, does that mean you should abandon the idea and move on?
Jason: So you have tried to monetize it in what ways?
Kyle: I haven’t actually put monetization into code.
Jason: And so, you just said you tried and failed?
Kyle: I have done, talking to a lot of people about it. If I monetize this way, does it make sense? And I got a lot of feedback.
Josh: You failed to think up a way.
Kyle: I failed to make money on it, but it also doesn’t cost me anything since I host it on my own server.
Jason: Well, yes. It does, it costs the most valuable thing, which is all of your time and attention. Yeah. It costs a lot. Because if this is a bad idea, you’re wasting the thing that you can not buy and can not get back. And it’s not like you’re going to get like better memory and be faster, smarter, 10 years from now. None of us are, right? Maybe this guys are really young. So maybe that’s, but not us, this is really valuable time
Josh: For general interest definitely no. Usually if you can’t figure out even if money is offered for it, unless you’re super passionate about it, and think it’s worth doing it, and not getting paid for it, then you should stop.
Now the only exception is, if this is so mega viral and you think this could be so big, so able to use it, that it could be Twitter and it doesn’t matter. And it’s usually not. That’s what I said, usually the answer is no.
Now in your particular case, the whole business model is, does it make more people click on it? That’s all it is. And if it does, that’s super valuable. Your pitch is not, it’s better, it’s more descriptive, it’s more people click on it. That’s all you have to lead with, you have to be like, “We make URL’s that more people click on’. Then everybody gets it, right? And so all you need to do is test that. Which is really easy to test. You just prove that more people click on it, and if you can go put up this thing, ‘Hey, we can use this one instead of bit.ly, 10% more people click on it’. You’re done. This whole thing and you’re done and it’s really valuable. That sounds awesome if you got it.
Jason: So this is the feature benefit thing. We’ll get down the side track because this is useful. This is the feature and benefit thing. You came in and said what it is, is it puts things in the URL. No, it gets more clicks.
Now the reason it get’s more people click on it, is that they understand that it’s safe for work, or they understand, whatever it is, it’s better, because it’s descriptive, so they’re willing to click, that’s why they click on it. Which is super interesting, because it’s also different, but that’s not really the thing. Anything that got more people to click on it, I would just, in fact I did, because not that long ago, Okcupid, they have this great charts of all these bizarre stuff? Well, someone did something like that, I don’t know, if it was them, but someone did something like that, where they said, they showed all the URL shorteners on Twitter and the propensity for people to click on a link, based on the shortener, which you would think there’s no difference, it’s just a random jumble of characters. Bit.ly by far are clicked more often, not more bit.ly clicks, just because it’s used more, no. More clicks just because it’s bit.ly. Well, after that I just switched to bit.ly and never looked back. Is that still true, I don’t care, because I got my shortener, I just did, and I promise you a lot of people did when they saw that. So if you can say the same thing for whatever reason, who cares. And it’s more descriptive. Oh, bonus, right?
So don’t want to get off the side track, so also there’s so many ways to monetize. and if the issue is just, if people do click more or some other benefit, maybe, that is obviously number one, but if there is some kind of benefit. Then there could be lots of ways. For example there’s a website, Let me Google this for you, do you know that site? Do you know that they make lots of money? You know how they make lots of money?
Kyle: Google Affiliate Linking? I don’t know. How?
Jason: Because when you go to make one, it’s so fun and funny to make one, there’s a little ad on the bottom. If you’re trying to make $8 million a year, forget about it. But if just like trying to make a cool lifestyle business or you say like, ‘Okay. This is not a big business, but hey if this could just give me a couple of grant a month even. that be kind of cool, it’ll pay for servers and pay for the next thing’, and maybe the next thing is more URL stuff, and you’ll build on that. But it’s like it’s a place to start, and it’s a way for people to know who I’m. And by the way when I do my next thing, which is also URL shortening- ish, because it’s security in one of the other things. I’ll use this as a way to get eyeballs, just to see that I exist. Because I’ll just put in my own ad slot. In other words, you’re building some thing kind of nice. So is that a company, no, but that doesn’t mean it’s not valuable especially it’s not taking a lot of your time and a lot of money. Then you need more than 60 people, you need more than that. But like you could do that, you can just use that model and you’re done, like it doesn’t have to be more than that.
Josh: He just totally talked you down. This is big. You should go just make a lot of money helping people get more people to click on things. That’s a great example of like all these pitch stuff. Like your pitch, your best pitch is all 4th grade language, it’s we get more people to click on your links. You don’t have to say anything else. No fancy words, no we’re better-er, or no, just, we get more people click on your links. These our links, more people click on it. Like you just say it 10 times, really simple, like that’s all you have to ever do. And they will be asking you. How do you do that. Then you get to answer all these other cool stuff.
Jason: Yeah, forget those tiers and better. My reaction is what everyone is thinking, except what they do is they just turn off and stop listening to you, instead of doing what I do, which is to be rude and throw it in your face. Right? That is what they are doing, I guarantee you. What are three tiers? ‘Oh, my god, three tiers’.
Kyle: It get’s more people to click on links.
Jason: It does, what is it called?
Kyle: It’s called GoLookAt.
Jason: That makes sense. It says GoLookAt, I’m going to do it. That’s a great name. It fits. By the way, so let’s go down this, because it’s so big if you can do it. So how would you measure whether it gets more clicks?
What would you do? Because if you can answer that, you could set it up, where ever that is, and then you can find out, if it’s not, you could do things and try to make it so and you can seek this. So how can you measure that?
Kyle: Yeah, so, I had thought about that kind of idea like how do I actually figure out somebody is going to click on funny/cat/video link more than the YouTube link. I can’t think of any other way, other than A:B testing and tweeting.
But maybe there are other ideas, but I thought about creating URLs to really hot popular things that people are talking about on the Internet. Create two URL’s, one bit.ly url, and one with more descriptive tags. Maybe a couple of versions of some descriptive tags. Kind of like an SEO person who try to figure out the best things they can write in the URL. Put those out there on Twitter and then watch the statistic. I already got the statistic generation, and so I just have to watch it.
Josh: So the hard parts are someone’s likelihood to click on it, is going to vary a lot, based on the relationship between the follower and the person they are following. So you can’t like me twit it and him twit it and compare like, he’s got 2,000 followers and I got 2,000 followers, it just doesn’t work.
So I think what you want to look for is like, something that’s got recurrent twits. Something where they regularly, like once a week, or once a month, they do something to drive, that way they can like, alternate that maybe and try to get the same audience on the same thing. We definitely want so find somebody that does this.
Kyle: So somebody that does five tweets a day, have them take one day to do one set of length and the next day to do another set?
Josh: It’s never going to be perfect, but yeah. And then at least you’re comparing like the same set of people, the same thing.
Jason: You have another problem, which is you don’t have another end, you don’t have enough data points. So for example, let’s say you have, which is millions and millions of people to click on stuff all the time, everyday. Everyday a million people clicked on something that you made. Well, then you could do stuff, like you could say, ‘It’s going to be your shortener and it’s going to be in random letters, it’s not going to be tagged.’ And this and that, and you have so much data, that all that noise, all that error, could be canceled out. Because there’s so much data. But you’re not there, and like little things like, If I re- twitted one, and it went, then that will skew something.
On the other hand, one thing that does happen on Twitter, I have noticed is that, people re-shorten. Like I always twit, I have a new post on Monday when I have one, right? Every kind of weird URL shortnet comes out. Like bit.ly, the tcode and all that garbage, and then lot’s of those bit.ly one’s like, shouldn’t bit.ly just pick one random set of letter. I know there’s infinite number of letters, but still, don’t you wanna collapse the space a little bit? But they don’t, I guess.
So if that happens, so maybe you do have data, even when it does that, because it get’s moshed like that. But it still needs to be like, huge end for you to be able to say, all the error cancels out and I win. Right?
Josh: I disagree. I think you can do the simplest test in the world and say, look this went to hundred people and it get’s this many clicks, and we test another hundred people, and we get more. It’s all in the comparison. Then you get to do bigger tests, than you get to do bigger tests. Like go get the simplest smallest test you can find and just show lift and then you get to do bigger tests, you get to do bigger tests, you get to do bigger tests. As long as that keeps working, your good.
Kyle: I think the biggest danger I was trying to figure out in terms of comparing links is, it’s really hard to find two links that actually have like the same interests in value to people. Like a funny cats video against the video from TechCrunch, not going to have the same click statistics.
Josh: No, usually same video, same followers.
Jason: It’s the same thing. Same message.
Josh: I was searching Google, trying to figure out, if we could like do some kind of like buy search key words, put that as the URL. I was trying to see what it actually show you of the URL. It’s not like a perfect tests, but you can at some level, be showing two ads, and the only thing that is different between them is, one’s got the bit.ly url, and one’s got yours and more people clicking. It’s not perfect, but that might be interesting, and pretty easy to do.
Jason: Okay. Here’s a weird idea. Sometimes this tiny little psychological things have huge effects, right?
What if just by having GoLookAt.com/something, anything, even random letters again, make people click it more. I don’t know if that’s true. It’s a command, maybe it’s true. Sometimes that stuff works.
Kyle: You’re talking about the vanity portion of the URL, is that what you saying?
Jason: I’m saying, do you have GoLookAt.com?
Kyle: I have GoLookAt.com. I have GoLook.At. I have go.ly and bunch of others.
Jason: So what if it’s true and this will be pretty easy to test. That just GoLookAt.com/random letter, is better the bit.ly/random letter.
That’s something you can do without all those tagy stuff. If you can show any lift there, number one, maybe you can get people to start using it because of the lift. And number two like, okay, now you can get into complicated stuff like different tags, which tags should put nsfw, do I have to ask the users first before I tag it? That all sounds interesting but more complicated than just, it’s another shortener that people click more, which just the domain name might do, so you might have even simpler ways to do that.
Here’s a weird idea. What if you do duplicate twits. Like you literally twitted in rapid succession, like just one second after another the exact same twit, with the two things. You randomized the order that you do that in. And you just do that, even though it’s duplicate twits, and that sucks, but like people sort of get over it. And your immediate friends can understand, because you’ll just tell them what you’re doing. Your immediate friends can understand. And maybe even randomize in your own minds, hopefully. Because those 60 people, they could understand this, right?
Josh: You have to get someone else to do that, which it’s even harder. You can get some of your followers to do it.
Kyle: Just one thing to point out about how hard it is. Doesn’t require anything about my service, or the interface for you to tag. That’s part of the viral nature of this. If I see a link that has funny/video and then I think it needs the word ‘cats’ on it, when I share I add the word ‘cats.’ It didn’t require anything. I just captured the log.
Jason: Yeah, but nobody knows that.
Kyle: I know, but it . . .
Jason: Because that person . . .
Kyle: . . . it’s a psychological thing to connect the thing over with.
Jason: That sounds very hard for me because the person doing this doesn’t know you, and they don’t understand this thing. They don’t know they can do that. And there’s no other place on the internet, can I just add crap to URL and it works, so no one’s going to do that until they really understand who you are. I wouldn’t depend on any of that. Something that they’ll just do just like they would anything else. But GoLookAt.com is a great thing. If that alone does it, man.
Josh: So his website shortened tag share better. Not just shorter, but better URL. It just needs to say ‘Get more people to click on your links.’ That’s your headline.
Jason: Try this for a week and see. Now how are they going to know? They don’t have a way to test it either. So what? As long as they don’t see anything go down. Right? I’m serious. Why not?
Jason: I would try that. I would certainly try it for a week just to see. I don’t know how we would measure it, or know it, but if something good would happen to happen during that week anyway, I’d probably be a huge Gleer. You know that story about the guy who wants you to send him a thousand dollars a year for stock picking advice. This is what he does. He starts up by sending a letter. And it says, ‘Next week the stock market will go up.’ And you’re like, ‘Whatever.’ And it does. Okay. You get another letter in the mail. ‘This week it’s going to go up again.’ Alright. It does. Next, you get another letter, this time ‘It’s going down.’ And it does. This happens six times, eight times in a row. You’re like, ‘This guy’s amazing, I’m definitely sending him a thousand dollars. But what happened was, he started by sending out 32,000 letters. Half of them said it would go up, half of them said it would go down. Now, whichever one was right, he went to that half and he sent more. Right? So there’s going to be this segment of people who’s going to be, “Holy crap!” and is definitely going to sign up for a thousand dollars a year to get a stupid letter that means nothing. So I don’t see why you can’t take advantage to that effect, and say, ‘Your shit’s going to go up this week.’ All these people are going to try it, hopefully. For some of them, something’s going to happen. ‘We tweeted a bunch of time, I don’t know. You win.” It’s not an experiment. Why don’t you use that to your advantage? Okay. That sounds good. Thanks.
Believe it or not, I have another person to thank. I know. So you see all these microphones around. This is all due to Fred [inaudible] who is right over here. Hey Fred. He hangs out at cospace a lot, which just goes to show again how cool cospace is. And Fred’s doing all the audio, just saw his super expensive audio equipment and he described to me these things I’d forgotten now, whether this is at a 90-degree angle, or 120- degree angle. All the AV guys are like, ‘He’s such an idiot.’ Anyway, all this cool stuff, Fred set that up. And also, if you’re listening to this other podcast, he also mixed it and did a fantastic job. Hopefully. But you’ll see.
Fred has a podcast of his own called Struggling Entrepreneuer. Strugglingentrepreneurer.com. You can imagine what that is about, because it’s also a good name, and interviews people all the time and different phases of their business and it’s a bunch of fun. I’ve been on there once. Maybe I’ll be in there again if I’m lucky.
Fred: Your posts are always in there.
Jason: My posts are in there apparently, so there you go. So thanks Fred for doing all the audio.
Sarah: All right. So next up is P.J. He’s a cospace member. He’s going to read for someone who wants to remain anonymous. So go easy on him.
Jason: So picking this up, this is an anonymous person. I guess we’ll find out why in a second.
Josh: I tried to get the person to wear a disguise, but it didn’t go over.
Sarah: Well, he did. He’s disguised as P.J.
Jason: Very believable.
P.J.: Hey, I’m really glad to be sitting up here in front of everybody. Even though this isn’t my thing, so, I did speak with him for about five minutes about more of the situation here. My surrogate, I’ll just say, we help people in neighborhoods communicate and connect. So think, what about people can go build communities around it. I am a CEO that’s very passionate about what I am doing and I’m really committed to what I do, and I don’t necessarily want to have to pivot. But what should a founder do when it becomes evident that the correct pivot for a company’s product leads to an area leads to an area where he has little or no passion? Everyone’s telling me I need to pivot in this direction. Not passionate about it. Should I rework the product until people respond differently, find a new CEO, or what? I have investors.
Josh: It’s a great question.
P.J.: I have investors, that’s why I don’t want . . .
Jason: This is a great question, and that is a good reason to not want to do it in public. This is one of those that’s really hard to answer without being able to do Q & A because what it comes down to is what you really want and I mean in life and those kind of like big . . .
Josh: Look out there.
Jason: . . . questions, person. It really gets down to what’s important to you.
P.J.: Community building is important to me.
Jason: Yeah, so, no, that’s not what I mean. I mean what you really want. Do you want to be an entrepreneur? Do you care? Is it more important to be an entrepreneur and have a company or is it more important to do something, like build a community. You can be a community leader of five things and maybe that’s enough. That can be enough, you don’t have to be a god-damned entrepreneur. It’s okay, all right? There’s lot’s of ways to be fulfilled and to maybe even add more value to yourself, more happiness to yourself, and those very communities by being super involved in them. You know you don’t have to do this.
On the other hand, if you have investors, you do have a fiduciary responsibility to them, for the company. It could make sense to say, ‘Okay, I do have a real duty, maybe even an ethical one, to see this through somewhere,’ but again it’s very hard without being able to ask questions to come up with something very specific about what that could mean.
P.J.: He’s giving me some I mean . . .
Josh: Do you know how much money he’s raised?
P.J.: No, I don’t. I’d say less than $1 million would be my guess.
Josh: Okay. So that kind of helps. I would put it in a bucket based on how much money’s been raised and that’s a vague bucket, but really it’s more actually what the investors expectations are around that. If you raise $500,000 and you go try to do something and it doesn’t work, most investors I know, they’re investing at that stage and that amount of money, they shouldn’t be doing that unless they understand that there’s a chance they can lose their money, it’s not going to work. Most of them, I think, would not think your some terrible person if at the end of that you give it an honest try and they feel like you really put an effort in and it didn’t work. Then at the same time, if you, obviously, they can’t feel like you quit to early or you didn’t give it a real try.
But if you’ve raised a lot of money or it feels like you’ve really built it up and you sold that you were going to deliver on this, and you said you’re really committed to it. Then I think there’s more of an obligation to go try to produce a return for your investors or take care of them, take care of their money. From a selfish perspective, just because you might go see them again later and they’re not going to invest with you again, if they don’t feel like you acted responsibly. That’s kind of the fiduciary responsibility that Jason talked about.
I think it’s going to vary in there where you’re at, but it’s like, life’s short. You definitely shouldn’t be working on something you don’t want to do and your not excited about. I think that’s a great reason to say, ‘Great, that’s what we should do. I’m not going to do it, if there’s somebody else that wants to come in and do this or we can find someone else to do this, great, then I should step away and I should expect to give up a bunch of equity if I don’t want to do it. I’m going to give up a lot in that, too.’
At the same time, I think there is also an obligation of, ‘I’m not a quitter. I’m going to try and make the best of this, and see it through, and take care of my investors the best I can.’
Jason: Yeah. What I heard was that there is another path. There is a correct path to take. It’s not that it failed. It needs to pivot. It’s not a failure. It’s just different and your not up for the different part.
P.J.: To pivot, I think in this gentleman’s case, I don’t mean to interrupt you Jason, but there’s so many people who have already pivoted into this space and none of them are making any money either.
Josh: So, it’s not like it’s obvious this is the answer.
P.J.: Right. Because people are pivoting into [inaudible] or people are pivoting into geo-location or something. There’s a lot of people doing that kind of thing. We’re talking about community engagement within a housing addition or within a local community. I think what you said, is that can be enough in itself, but the pivot, if everyone’s saying pivot into these places where no one is making money, now what?
Jason: Are the investors one of the sets of people saying you have to pivot?
P.J.: I believe the investors are maybe putting some pressure on this gentleman.
Jason: Is it true that the business is really a fundamentally different business from when it pivots? It’s really like, you might as well start from scratch, except we got a team.
P.J.: When i talk to him it’s not fundamentally different.
Jason: So, if it’s not fundamentally different, this is why it’s Q &A, but . . .
P.J.: It’s the passion part.
Jason: I know, but if it’s not fundamentally different, then why is there no passion anymore, what happened?
P.J.: Right. I don’t know.
Jason: Is it a trivial change and suddenly you’re not interested at all? There is obviously is a reason, right? I don’t mean that facetiously, but it would help to know what it is, to be specific about how to fix it. I will say one other thing, especially if it’s a small amount, which means it’s not a big V.C., it’s angel’s, or friends, and family, or something. As entrepreneurs we feel like we go through all this gruff. We’re in our head and we have anguish for all this stuff and we’re worried about what other people think, and there’s expectations for us from our friends and family and investors and other people. What you forget is that when it’s an investor, especially an institutional investor, the investors have heard all of this shit before. None of this is new. You’ve gone seven years and you’re burned out and you don’t want to tell your investors, they know that. They’ve been telling you to take a vacation and you won’t.
In fact, I was once in a board meeting where they literally told somebody, ‘We want you to take a sabbatical for three months. We think it would really help. We can tell you’re burned out. If you keep doing this you’re definitely going to leave, and, I’ll tell you what, if you take the sabbatical for three months and you come back and you’re still burned out you can just leave. We don’t care. We’ll still pay you for the three months. But, we think you need this.’ Now, that’s a sophisticated board, but the point is that they know. So, if the choice is total flush it down the toilet I don’t care anymore I’m out and that’s it, that’s what you’re facing, then why not? Be super honest. Bring it in and say, ‘Look, I want to work this out. I don’t want to leave you on a break, and, by the way, I’m not going to run out tomorrow. I want to make this right even if it takes six months to a year to make it right. Let’s all figure out how to make this right so that I’m not running it anymore.’ I’m guessing this person doesn’t want to do that.
P.J.: No. He’s a very high level of integrity.
Jason: So, offline, or whatever you want to call it, we could talk a little bit more in detail and then come up with a specific way to do that or a couple of ideas for how that might come about.
P.J.: I’m sure he will be talking to you.
Jason: Yeah. I’m sure. Anymore it’s hard to do in the abstract.
Josh: Yeah. It definitely comes down to that. With everything in life you’ve got to balance when you quit. On the one hand, the winners are people that never quit, by definition. On the other hand, you’re stupid if you’re just banging your head against the wall.
P.J.: You have to cash out at some point. Well, I cashed out.
Jason: Are you speaking as you now or this other person?
P.J.: I’m speaking as me. Yeah. I’m sorry.
Jason: Oh. Well, congratulations. It’s not helping.
P.J.: Then I will just step aside.
Jason: Okay. Thanks. That’s good. Great. Okay. Number five.
Sarah: Okay. Franz.
Jason: All right. Name and company.
Franz: Franz-Smile and the company is Trackster.
Jason: Trackster. Is it spelled in a normal way or is it x’s and no vowels?
Franz: It’s C-K.
Jason: It’s Trackster. Okay. Well, you’re tracking something. When we first had a child, we had this log. My wife made this thing in Excel and it was every little thing. It had a poo-poo and a little poo-poo not a big poo-poo. It was green. It was brown. It was green and brown. It was green on the left, brown on the right. Her left, her right. You needed it because, god forbid, that poo-poo didn’t come out every day. We’re sitting there for 24 hours and it was a whole mess. There is software that we actually stared using to Trackster that stuff. So to me, the last time I had to track something that closely was that, so even though the name’s not there, I’m going with “Poo-poo Tracker”.
Franz: I need to check into what song you’re listening to. Well, it’s completely different from both of those. It helps students at UT track events on campus.
Jason: Events. Isn’t there all ready an event calendar somewhere that you can look at?
Franz: Yeah. But, it’s not very helpful.
Franz: Because it’s just a list in an e-mail and you can’t really tell what’s going on.
Jason: But, it’s a list in an e-mail of what’s going on, so why can you not tell what’s going on?
Franz: No one looks through it because it’s in plain text.
Jason: Okay. So yours is not. It is instead what?
Franz: It’s an interactive tool to help students find what they’re interested in and just explore.
Jason: I have no idea what that means. Is it a calendar? What do I see? What is it?
Franz: You put in your interests and what type of academic events you’ve been a part of and what you want to be a part of and it supplies you recommended events based on that information.
Jason: So, it’s a recommendation engine for events?
Franz: Mm-hmm. It helps you.
Jason: But just the UT or is that just where you’re starting because the data is there and so on?
Franz: It’s starting with UT because I’m going there right now.
Jason: Right. So it grow into next, for example, “Oh, you go to this event and other things in Austin, and you didn’t even know there was an event to do X,Y, and Z, but it’s telling you that and that’s super interesting to you, right?
Franz: That’s a possibility. But we’re starting out with academic events.
Jason: Okay. So what’s the question?
Franz: The question is what’s a good way to engage students to use the service or incentivize organizations to promote the tools?
Jason: Well I can tell you how I got 25,000 people, at UT, students, to use my software at UT when I was going in. And hopefully this won’t get me arrested because it was not legal.
So what I did is, at UT, I don’t know if they still do this, but there was a student directory in the mainframe system, which was UT cat, right? I don’t know if they still have UT cat for the, okay. Anyway, so, it’s a green screen, right? You know what that means? No? Okay. This is not going well. All right. Anyway, you know what telenet is? SSH? Have you done that? Oh, good. Okay. It’s like SSH, except that’s your whole world. It never gets better than that. There’s no Iphones. That’s it.
So you can go into this thing and you could search for a name and find names and it had an e-mail address for the student, in the UT cat, which of course now, I don’t know if they could even do that nowadays. So what I did is, I logged in and I searched for nothing, which gets you to the first name, and then it shows you ten names. Then I would do a screen print, except instead of a printer, I sent it into a text file. There’s all the characters, right? And then I would have the thing hit enter on the little search line, which gets you to the next page. And I did that however many, whatever 50,000 divided by ten. Well, I guess I know what that is, but divided by the page size is, and there’s this big ass text file. Then I wrote a script to go in there and get all the e-mails which is pretty easy because they’re all in the same place, because it’s the mainframe so it’s not like it word wraps or anything. Mainframe’s don’t do any of that kind of stuff. They just puts stuff in the same place every time. It’s really nice for that screencraping.
Then I got all the e-mails and guess what I did next? I emailed everybody! More than once and said hey, I got this really cool thing called Fast Scheduler dot com. It schedules all your things at UT. E-mail was pretty sweet already. Like I doubt if a lot of them even checked that, at that point. Even knew that existed. Anyway, then it got in the paper and all this stuff, and I got calls from the tower, where the people with money are. Which I thought I was going to get reprimanded from sending e- mails. But they didn’t know about that because they’re not that sophisticated either. And so what they really brought me in there is, that they wanted to have Fast Scheduler because they had no way of doing online class scheduling, and so this sounded pretty good. And here’s the big offer. So this is my first offer to have a company of mine be purchased essentially. And the offer was, that I could work there for $7 an hour. That was the whole offer. I declined the offer. Anyway, that’s how I got a lot of students at UT to look at Fast Scheduler. I’m not saying I condone it, I’m just saying it’s one way to do it.
Franz: So, I get into the computer school system, steal the e-mail addresses and spam everybody, all on Jason’s suggestion?
Jason: No, I’m not condoning it, just making an example.
Josh: My suggestion was pay them, students especially.
Franz: What if you don’t have any money to start off with?
Jason: Actually Josh’s good stories about getting college students to do stuff. Right? The trilogy, wearing the shirts and everything. Right?
Josh: Well, that’s still spending a lot of money though.
Jason: Yeah. Right. But you don’t have money, right?
Josh: So that’s the whole thing. It’s like so many people come with technology. I’m going to build this thing. It’s cool. I built this thing. Just logically used it and forecasted all the time and it’s great. And they don’t fundamentally understand that that’s the easy part, most of the time. Like that’s why it’s so easy to come up with. Yeah, like I know how to do that. I want to make something that let’s you check into a location, so I can make a list and I’m going to check in, they’re going to hit the check in button and then it’s going to write that into the database. They checked in. And that’s the easy part. The hard part is getting people to do anything. Like anything at all. For free or payment, is really hard. And so that’s like having a really good business idea is often more about having a really clever idea about how you’re going to get people to do something, than about what they’re actually doing. And it’s so depressing, right? Like you want it to be that, you thought of this great idea and now it’s the thing. And actually it was those damn marketing guys, that was what mattered, is that they knew how to go sell it.
Anyone know what Proactive is? They’re advertising that everywhere, right? I don’t know that much about it, but I’ve seen it and I’ve read about some case studies about it, and there’s nothing really that special about it. They’re just really good marketers and they figured out how to get it to the right people and the right way and the right marketing, and they went and pumped this product out, right? And made a crap load of money.
But then they didn’t really spend, it wasn’t like they had some really great secret sauce that actually really worked better than everything else, maybe someone will dispute that, but that’s just stuff that I write. I think a lot of things are going to come out that way so, for you that’s the thing can you come up with some really clever way to get it in front of everybody?
When Facebook started, when Jason did what you’re talking about, sometimes you can get in ahead of the system and then it’s like those don’t even apply anymore. You’re in a whole different world, can’t do that anymore. It used to be search marketing was a way you could do stuff and now it’s totally saturated and overpriced. It’s not nearly as good a place to get things.
Jason: I have some ideas for you, because Josh is right that is the hard part for almost every company on earth that’s the part that’s hard.
I have some ideas, because having tried to monetize Fast Scheduler I actually went down some of these roads, I have two ideas for you. The way to think about this is who is it that actually does care? The individual student sitting there in Jester, thinking god I am literally living in prison, I’m literally in a prison, did you know that Jester was designed, do you know this story about why a Jester looks like a prison? Jester was the second largest dormitory on earth, then this dormitory in Russia burned down so, now it’s the number one biggest dormitory on earth. Jester, and if anybody has ever seen it, it’s just a bunch of sepia toned brick with these tiny little windows, just like a prison. The reason is the person that designed it, designed prisons. That is what they did, they literally designed a prison and that’s Chester, with the fold out beds and all that kind of stuff and much the same activity to, from what I can tell.
This person sitting there in Jester mourning the fact that the bed has to slide away or else they can literally touch the walls, with both hands, they don’t care at all about your tool. They just don’t care. So the question is who does? Who has a vested interest in seeing you succeed? It’s not anyone in Jester. So I can think of at least two groups of people who care. Number one, is all those event organizers because they have the exact same problem you have. They want to get people to come to their event and they don’t give a crap, partially, because they just don’t and partially because they don’t know about in the first place. They have the same problem.
Your friends, for example, you can go to all of them, all of the events on campus, which you know obviously because you probably scraped it from somewhere and you can tell them all, ‘Hey, it’s in all of our interests to get all of our attendees to use this site. Because even though we will of course, introduce them to other events the people that came to your event already know about your event your not losing someone, but if we all do this we will all get more people to come out to events period.’ All of the events should promote to all of their members every time, you’re service cause it is in their personal interest to do so. Now will it make them do it? I don’t know but that’s a lot, that’s suddenly a whole lot of promotion because they want to.
The other set of people and this is getting more into the business aspect, is there’s this whole eco system around you. People who also want to get to the students who don’t care. Like [inaudible] who wants to deliver the pizza, and the bars on 6th street, who want you to go to that bar on 6th street right? There’s all these people who really want to get to students. It’s like one of the ideas I had for Fast Scheduler, if you just say advertising it’s like well, just a general advertising is not going to do anything, but what could, is you find just one business, just one, that’s somewhere in the campus area or in the 6th street area and so forth, just one, who wants to use you to get to students and give them the whole run of the site.
It’s going to be, what did you say the name of the thing was? Trackster. Pretty good name, but maybe, so anyway, it’s going to be ‘The sponsor, Trackster.’ It’s going to say, ‘Trackster brought to you by Papa John’s.’ Maybe not quite as obnoxious right, but it’s going to be just Papa John’s, or just [inaudible], or just the bar on 6th street, or just Sherlock’s but they probably don’t want students, I don’t know or maybe they do, I don’t know but just one and they have the whole run of the site. It’s in every newsletter, it’s on every page, it’s on every everything and it’s still not that many pages. It’s okay, that’s not what you’re selling that’s what you sell to generic advertisers.
There is someone who is sort of desperate like [inaudible], they went bankrupt. They probably want people to show up and they probably have some advertising budget and maybe it’s cheap, just to start out $100 a month. Maybe when you get more traffic you can ask for more, just get something, some kind of interest to get it going.
But here’s the other thing whoever that is they can distribute it. One of the things that I did is I talked to, I think it was Papa John’s operator near campus, and I said, ‘Hey, you should put a flyer on top of the Papa John’s box,’ because you know they always do that, ‘That goes back to me so, you’ll sponsor the site, you’ll promote the site, and if people follow they still see you again, you’re not losing anything, in fact, it’s better.’ Like the coupon thing except it’s you. And that’s what you want. You want every pizza that goes into your [inaudible] to have you on it. Big, big flyer they can’t miss it on top of the pizza. They can help distribute it and in exchange they’ll have advertising. Don’t worry about, am I still doing that in a year? No, your not, you’re doing this for a month just to see what the hell happens, right? So who has a vested interest in seeing you succeed? Go make friends with them and see if you can help each other spread the word about each other.
Josh: To me that sounds a little bit if I can paraphrase, that part of that was, get together all the people who have stuff that nobody wants to see, put all that in one place, and then tell all the people that nobody wants to listen to to yell as loud as they can, and see if then lots of other people see it. And then go to the company that’s bankrupt and try to get them to pay you.
So while that may work for Jason, because he’s a really good sales guy, I don’t really buy it. I think you need to think about, why is someone going to use it for the first time? What’s the benefit to them? For the URL better-er guy, it was we get more people to click on the links, right? Once you nail that thing, we’re all just assuming that’s actually true, that it’s going to make more people click on the links, but if that were true, that’s all you need to say and now I know why I will try it.
Jason: Well, I know what the one thing is, it’s more sex. It’s got to be meeting people. It has to be meeting people. It has to be.
Josh: Exactly, so that’s what it was. Get our newsletter and you’ll have more sex.
Jason: Yes. It’s got to be more sex. It’s more sex.
Josh: So, what’s the substitute for more sex? You can’t actually say ‘more sex’.
Jason: You could. You could say that.
Josh: Well, you could, but, you’ve got to really wrap your head around, the way you described it was like here’s what you’re going to do to get me to do the thing that you want me to do. You’re going to come in, you’re going to put in your interests. Nobody wants to come in and put in their interests! They want the thing at the end. They want the what am I going to get, and . . .
Josh: . . . sex. And I’m going to tell you what events to go to. You know, honestly, you’ve got to work on that one. That doesn’t sound to me, like, super compelling, really big problem. Like, wow, I’m going to really take some time out today and make sure to go sign up for this thing because I’m really concerned, I don’t know what events to go to. You’ve got to figure out how to make that more sex.
Jason: So you say you don’t want to go there. What do you want to go to?
Josh: He doesn’t want to be a porn site.
Franz: Yeah, that.
Jason: No, no. I mean, you’re not, you’re a means to an end. Everyone’s crawling around UT, what are they doing? What are they spending 90% of their time doing?
Franz: Looking for sex.
Jason: You sound so dejected. Is it true? Maybe it’s not true. Maybe they don’t want sex. No sex.
Franz: The thing we’d all get to do is just, like, help save time, and better your own personal goals.
Jason: Right, because that’s what everyone at UT goes around, you know, ‘Hey dude, what are you doing tomorrow night?’ ‘Dude, I’m bettering my own personal goals. I’m going to be so much better. You know why? Going to an event. Found it on Trackster. I’m so going to be better tomorrow than you, dude. What are you doing?’ ‘I’m going to a party, dude!’ ‘Oh.’
Josh: ‘Going to have sex.’ It sounds kind of harsh, but you’ve got to get over that, right? You’re describing as you’re going to help better yourself. That’s not how people talk, and that’s not how students talk. I’m bald, I’m not like a student any more, but I’m pretty sure that’s not how they talk.
Jason: So, the goal is, of course, to, you don’t have to say that, obviously, but that’s the kind of thing, okay. You could widen that a little bit and say ‘meeting people’, because, maybe I go to the event to learn stuff, but I go to class to learn stuff, and I know the events and the meet-ups and stuff are also about learning and stuff. Oh, okay. But I think it’s fair to say, without invoking sex, that also it’s to meet other people who are interested in the same stuff you are and to gather, do more of that stuff. That’s what the astronomy club is. You learn a little bit in the astronomy club, but mostly it’s going to be in the astronomy classes, and the club is just hanging out with other people who like to look at Mars, again, at 9:45 at the top of RLM. That’s what we’re doing. Okay, sex is probably also there and that may be the end goal, but it’s also meeting people, and that’s fine.
So, you could go there, meet people. Meet more people who like the stuff you like. Here’s one. Everybody says you go to college and you discover who you are and you find out, ‘Oh my God, there’s other geeks like me who like weird stuff like looking at Mars all the time, and everyone kicked the crap out of me in high school. And here, if I go to the roof of RLM, or wherever the hell it is, right, I get to look at Mars with other people who don’t think I’m weird. In fact, I might even be able to have sex with some people up here! Because they don’t think I’m weird, it’s not a turn-off. It’s the reverse!’
Okay. So even if you stop short of the sex, it’s still, you could tap into that I am going to college and part of that is I’m accepted by the other people on this roof in the middle of the night, and we should be. I can see look towards Mopac and I can see there’re these awesome parties that I’m not a part of over there, and I wish they would turn the lights downward, because I’m trying to see and there’s light pollution, right? Like that’s, everyone’s thinking that, so maybe you can tap into that aspect. Leave off the sex, even though that’s there, obviously, and go to the ‘find other people just like you. You’re not alone, people do want to do this.’ Did you even know that people are doing this? This is how it is. UT is one of the biggest campuses on Earth, if not THE biggest undergrad program on Earth, if not the biggest undergrad program in the country. This is part of what the experience is; you get up and let them go to sex in their own head and you don’t say it. It is absolutely true and they can go there themselves, and they will, of course. Does that sound good? So what is your line now? You should sign up here because you will?
Franz: Meet other people with your same interests.
Jason: That sounds better. I think if you worked on it, you are on the spot obviously, but if you can think about… I think that is better. Meet other people like you. For example, do you have a secret hobby? Do you have a secret interest? I guarantee you, on a campus of 50,000 people, there are hundreds of people who actually share that. This is how you find them, because you certainly cannot broadcast it. This is how you find them. That sounds pretty awesome. Okay. Thanks.
Jason: Do we have time for one more, Sarah? Great, come on up.
Josh: Do not worry, you will feel pain.
Jason: We will apply pressure to the pain point.
Man 2: Oh, I cannot wait now.
Jason: Your company name is?
Man 2: There is no company name.
Jason: Okay. That is fine. What is going on?
Man 2: There is a pain point when you into a big, huge store like Wal- Mart or Costco, when it comes to finding a little, narrow jar of olives from a particular place. Also, maybe you care about a sweater in some other stores.
Man 2: Because I have a hardware background, I know I am really close to solving that problem with…
Jason: What problem?
Man 2: Finding that little jar of olives.
Jason: Easy, I go to Amazon, it is there and I buy it. What else have you got?
Man 2: Okay. Well then those stores are in trouble.
Jason: No kidding. Of course they are in trouble.
Man 2: Yeah, definitely.
Jason: They started with the book stores and closed most of them down.
Man 2: Yes.
Jason: All right? Now they are moving on to the other ones, and maybe they won’t close them down, but if I want a specialty thing, I go get it.
Man 2: Yeah.
Jason: By the way, I said, ‘Amazon’ and not even that, I go put it into Bing, isn’t the whole point of Bing is that it can find me 27 different ways that I can get this thing? From the wholesale and some weird-assed retailer who is drop shipping directly, who even knows why, I don’t care. All I know is there is 20 things to pick from, they all have weird ratings. They have shipped these same olives 17,000 times and their rating is 4.9 out of 5, fine, buy it. Right?
Man 2: Mm-hmm, very true. Very true.
Jason: Alright, so?
Man 2: Most of the businesses, well most of the money, or consumers of that can happen, it happens indoors unless it is always going to be on the map.
Josh: You have a chip that finds where a product is in a store?
Man 2: Yeah. I think of it as earphones. It is just something really simple that you can add to your phone and it would be like earphones.
Jason: I am in Central Market, I am shopping around and I got my normal stuff, and I remember, ‘I need these weird olives.’
Man 2: Mm-hmm.
Jason: I go to the olive section, because I know where that is. I can ask somebody. I go to the olive section. I know it is not where the coffee is. I go to the olive section, right. There is this wall of olives and I think, ‘Oh my God!’ Is this chip accurate enough that it is going to tell me it is right over there?
Man 2: Yes, it would.
Man 2: Yeah.
Jason: How does that work?
Man 2: It would be like sending centimeter resolution, location systems are not that good, they are statistical and not always . . .
Josh: You should start with Home Depot; I am always lost in Home Depot.
Man 2: Yeah.
Jason: That is right.
Josh: Home Depot and . . .
Jason: Although the people that go to Home Depot, they just know where everything is.
Man 2: Yeah.
Jason: They are contractors, they would never walk around with a thing, right?
Man 2: That’s very true, and now they have more people waiting at the front to help you out.
Jason: So what is the question?
Man 2: The question was, how can I find what I want? You said you can go on the net and do a search.
Jason: Yeah, I think everyone does that.
Man 2: There is another issue that businesses have, they want to know if their floor layout is working. There was a story where some guy [inaudible] several walked in and then…
Josh: What’s the question?
Jason: Yeah, what is the question?
Man 2: Sorry. Businesses want to know . . .
Jason: No, what is the question? The question is…
Man 2: Oh, I’m sorry. The question that I have is, it is like an H.R. question. Where are the technical people?
Josh: You want to hire people?
Man 2: Yeah, sorry. I want to hire people. I want to hire like an . . .
Jason: Do you have money to hire them with?
Man 2: No, it’s really . . .
Jason: That is not really hiring people.
Man 2: Oh, okay.
Josh: Indentured servitude.
Jason: Right. So, you want people to be co-founders and are technical to do something?
Man 2: Exactly.
Jason: You have to have some great idea, which they are also going to buy into, wholesale, and they are going to want to forgo salary and do whatever they are going to do. They are going to quit their job for six months, or they are going to work on the side, whatever they are going to do, where they are there investing themselves into this. Whatever it is, which is obviously undefined at this point, because you talked for a while and we do not know what it is yet, if you could define what it is and make it really exciting, then maybe you can find someone who also thinks it’s really exciting and you’ve found a co-founder. Now, also it would be nice if it wasn’t just an idea, but the Home Depot in Austin, Texas, is all ready to go. We just have to build it, but they’ve already signed and said, ‘Look, we’re going to do it. We’re going to be a pilot. We get it. And if that works, we’re going to take it.’
It would great if that was all done which you should be able to do if this idea is so good. You don’t need a prototype. You don’t need a little gadget that fits in your ear. You should be able to walk in and go, ‘What if I had . . .’ and whatever the thing is which you haven’t figured out yet. It should be so amazing that they just go, ‘Oh my God. We’re in. We’re in. You should build this and come back. We’re absolutely in a 100 percent.’ And you say, ‘But I didn’t even tell you the price yet.’ They’re like, ‘Fine, $1,000 we’re in.’
If you have that, it sounds pretty good, but you don’t have that yet.
Man 2: I did a little built in prototype to see how well . . .
Jason: And, so, what store owner said I’m in for $1,000 bucks? Right. So, that’s the thing to do, forget prototype. You’ve got to get them to buy in on the thing before it exist. You don’t need anything to go figure this out.
Man 2: Okay.
Jason: When I started WordPress engine I started by just, I literally had nothing, no website, no domain name, no company name.
Man 2: Right.
Jason: I didn’t know what the features would be. I did’t know anything. I just thought, like, I need this thing for my blog. My blog goes down every time I get on HackerNews. So, it seems like other people might have this problem with their WordPress Blogs, maybe. I mean it’s plausible, right? And, so, maybe I’ll go out there and talk about how we won’t go down. Not TechCrunch themselves, but, like, if you’ve got an article on TechCrunch we wouldn’t go down. That kind of thing. And then also it would be faster in the process. Like, your site would load faster and something else maybe. I have a bunch of ideas about what those something else might be.
And I just started talking to people. I had nothing, no power points, nothing. I just started saying, well, if I had this thing and it was word precedent, it was scalable, would you buy it? And they say, ‘No.’ ‘Why not?’ ‘Well, you know, I do get a traffic sometimes, but it’s not all the time, like, I’m not going to switch and do all this stuff and pay more money and all of this crap just for that. No.’ Well, ‘Okay. Did I mention that also we’re super good at security?’ ‘Oh, no, you did mention that.’ Yeah.
WordPress isn’t actually that insecure. It’s usually the hosting company and other things around that and anyway that’s us. We do the blah, blah, blah, things to fix it. ‘Oh, that’s sounds better. I don’t want to get hacked.’ It’s sort of like backup ware. Nobody buys backup software and then they crush. One day they lose everything and they’re like, ‘Crap’, and then like the first thing they do when they get their machine back is they buy the backup software.
Anyone who’s gotten hacked is the same way. Because when you say hack, that someone got hacked, they go, bing, ‘I’m in. How much did you say, $50 a month? In.’ Right? Because they’ve had that. So, I talked to literally 30 different people and some of them got off on the security, some was the speed, some was the staging area, whatever. At the end of it I found, again, nothing. I had nothing but yacking like this, right? I finally ended up with, okay, there’s three things that if I do this they’ll pay $50 a month, price to, price has to be part of it to. Then we started and of course then people brought it. I already knew that because if I could find 30 and out of the 30, 20 said they’d do it, there’s going to be 20,000 of them to in a market as big as WordPress. So, you could do the same thing. If you had thing that was so good that you could find several store owners in Austin who said, ‘Well, I’m definitely in on the trial. I need to see this work. I would pay $1,000 . . . ‘ or whatever the hell it is. If it worked, if you found them and then you know if there’s three in Austin then of all the chains and stuff that you know then you multiply by orders of magnitude.
However, I don’t know what it is you’re talking about yet. But this is what you do in order to try to get the proof that this is even something worth doing. What is the idea? Is it solving something they give a crap about? And then you can go find a tech guy to give up his job.
Josh: And then you can go get money easy because you’ve done all that other stuff and you just got hire a tech guy because if you’ve proven all of that it’ll be easy to go get a check and say, ‘Hey, look, I’ve got these customers and they say they’re going to pay me this month once I build this thing, so, give me the money, so I can build the thing, so I can paid by them and . . .’
Jason: Yeah, it sounds so easy. I’ll just go talk to them and discover some stuff. It’s really hard and most people don’t do it. Like I’m telling you this and if I had to bet, I would bet definitely, like, very good odds that you won’t talk to anyone. The next best odds is you’ll talk to maybe three people and then make a decision one way or another. Neither of those is right. But that’s what most people will do. I don’t know if you’ll do it or not. I just bet it because that’s what people do. You tell them to go talk to 30 people, they hear me to say 30 people and they’re like, uh, and they go talk to three people and sort of make up their mind. That’s not it. It’s 30 people, not 3, 30.
We want to do some new stuff at WordPress Engine, right now. I’ve talked to 20 people. I need to talk to some more. I think I’ve got it, but I’m still going to talk to more. I’m not confident, even though I’ve talked to all of those people, even now and all of these things, that’s the deal and most people won’t do it and, so, they won’t put in the time.
Man 2: Okay. So you need certainly a better sample to get a better idea or if something’s going to be . . . .
Jason: You say things like people have problems finding the olives. The question is this: Does the person who runs Central Market think that’s a problem? It could be a problem but if they don’t think it’s a problem it doesn’t matter. There are a whole lot of things that have to work. They think it’s a problem, people aren’t buying olives as much as they should or whatever the hell. Which is probably not true; people go to Central Market to buy weird olives. All these things have to be true for them to think this is a problem. So it’s unlikely that they do. But you might find something else out. You might go in there talking about the olives and they go, ‘God, I don’t give a crap about olives but let you tell you something. My warehouse is a disaster. I just lost four pallets of olives because they were in the goddamned corner, we have nothing tracking that and all these olives that I imported from . . . that are supposed to go on the shelf rotted . . . ‘ I guess olives don’t rot so maybe that’s a bad example. But you know what I mean. Something rots in the corner because they didn’t know it was there. ‘I need the tracking system for the warehouse.’ Oh.
Who knows what you find out when you go talk to the people who are living this thing and have the money. I also would not be married to the nebulous sort of idea that you have, but if you have certain skills, like you know I’m good at geo, I’ve got some mobile, or whatever the hell it is that you’ve got, just be super open minded. ‘Oh, he just talked about the warehouse. Let’s talk about the warehouse some more.’ Don’t be fixated on this one idea. What is going on in there that maybe you could build?
Man 2: Okay. So find out what they really need in there in basically the real world where they’re facing problems?
Jason: Basically, the real world. Yeah. That’s the best place to be. Basically that. That plus a little bit of Narnia. Something like that. A little bit of Neverending Story. Great. All right. Thanks.
Well, thanks everyone for coming. This was a bunch of fun for me anyway. Did everybody like that? You want us to do this again sometime? Yeah, awesome? Well then we probably will. I think Sarah’s about to fall over, right? Let’s have a round of applause for Sarah, too. Organized the whole thing. And of course she’s a fundamental member at cospace so it just proves again how awesome cospace is. So anyway, thanks everybody for coming. See you soon.
22 responses to “Episode 1: Smart Bear Live!”
I really enjoyed it and look forward to the next one (…hopefully)!
(Oddly few comments … what’s up with that?)
Enjoying the show immensely, Jason/Josh – in your post, could you add links to the companies you talk to about in the podcast? I listen while running, and it would be really nice to follow up on these things when I get back without having to remember URLs.
First post here.. please keep these going!!
Thanks! Mind leaving a review on iTunes? Would mean a lot. http://bit.ly/ASBpodcast
Fun podcast, full of great ideas many of which apply directly to my start up.
Just wanted to tell you. Thank You very much!
Thanks so much! We’ll do more. A review on iTunes would mean a lot too: http://bit.ly/ASBpodcast
Re: URL shortener – I implemented such an idea… LessLink.com … perhaps the domain is still available – all yours!
Didn’t catch on because folks said it was easier to write a short description for a TinyURL (and TinyURL is trusted). The other problem is that the best ones get quickly locked in and they don’t expire as domain names. lesslink.com/Photoshop/Tips and such. Also a chore to find a good descriptor , another reason to use Tiny, everyone is ok with the cryptic chars.
And you will see that TinyURL advertising is very inexpensive (or it was the last time I looked after they had millions and millions of them) and they have Google Ads… if I had a nickel for every ad clicked….
I gave up on it because I didn’t have other business ideas I could segue to.
Please do more of these Jason!
Thanks for saying so! BTW a review on iTunes would help a lot: http://bit.ly/ASBpodcast
Jason, do you have an audio-only RSS feed? I don’t go through iTunes.
The normal RSS feed is also the audio-only RSS feed: http://feeds2.feedburner.com/blogspot/smartbear
thank you very much. this is help full for me
What an awesome idea Jason! I always LOVE listening to you think through business problems and this is a great way to do that while helping the startup community. Great first episode!
If you get enjoy it and stick with it check out Cliff Ravenscraft (podcastanswerman.com). He teaches people how to produce pro-level podcasts with zero post-production. I listen to lots of people he’s taught and they’re all top-notch.
Thanks, that’s very helpful!
The final example from this podcast was particularly relevant to a project I’m planning. I am likewise about to start a business (Internet marketing for small businesses) and my challenge will be sales which I’ve never done before. Do you have any advice on how exactly to make sales to local businesses?
Great question. One of the Capital Factory companies last year got into that deeply; I’ll see if they want to write a guest post on the topic.
One thing I’ll say immediately: Local doesn’t get online or social or mobile or anything else. It has to be super cut and dry: Do this, and people will appear. And even then, they have no money. Free samples to prove it works can help.