#FloodHackI attended a meeting today at Number 10 Downing Street, called by the UK government, to discuss what the tech and developer community could do to help with the flood crisis engulfing the UK.As part of this meeting, the Environment Agency agreed to open up real-time data on flood levels/status, mapped across the UK, so that developers can utilize the data for free.We’re organizing a hackathon THIS SUNDAY in Shoreditch, London, to build apps on top of the data to try and help people keep up to date with the issues in their area (or areas they’re traveling to), and get the data they need on how they can get help, how they can volunteer etc.There are more details below, and on the hackpad page.This is an amazing opportunity to build something that could help thousands of people. I hope to see you there on Sunday.-Calling all developers!We have been hit by the worst flooding and weather the UK has seen in our lifetimes. Getting the right information to people about the problems affecting particular areas, and the right places to turn to help (or for information on how THEY can help volunteer) is crucial. The government has near real-time data on flooding levels and alerts, mapped out across the entire country, which they want to put to the best possible use.Following a meeting called today at Number 10 with leading technology companies, the Environment Agency, the Government Digital Service, the Open Data Institute and the Cabinet Office are working to open up this data to the public for the next three months, allowing developers to build innovative applications that can help those affected by the flooding.This Sunday at 10am, join developers from Google, Facebook, Twitter, Conversocial, Datasift, Mother, Taskhub and more for a hackathon, hosted by Tech CityUK at Google Campus in Shoreditch, where the Open Data Institute will share the flood level data with developers and be on hand to help throughout the day. The Cabinet Office will be choosing the most useful applications demoed on the day to be promoted to flood victims across the country.Please register for the hackathon here.Your country needs you!
First to Market vs First to Mass Market
Is it better to be the first to market (“first mover advantage”), or to be a fast-follower, and come along with a better product once a market has been created? I was reminded of this debate recently, reading ‘The 30 Best Pieces of Advice for Entrepreneurs in 2013' from First Round Capital. Tip number 2:
You don’t have to be first to market to win.
Dropbox Founder and CEO Drew Houston should know. By the time he applied to Y Combinator, cloud storage was already a crowded space. But he wasn’t deterred. While many entrepreneurs assume they have to be first to market to win in a category, this is almost never the case. Just look at how Google trounced Alta Vista, Yahoo, and Ask Jeeves. “The fact is that there’s a problem with being first,” Houston says. “You create a market, and if you’re too early, you essentially leave the door open behind you for someone else to do it better.” So he tuned out the naysayers, and 200 million users later, Dropbox is in the lead.
This sounds great, but is it really just as simple as ‘someone else doing it better’? If that’s the case, surely all it takes to displace the most recent winner is for someone else to come even later, with an even better product. But that doesn’t seem to happen. Instead, there seems to be one final winner of a market, and then that winner stays there on top, sometimes for decades. And often with a product that ends up falling far short of more modern standards. But it still keeps on winning. (See Peter Thiel’s class notes from CS183: Startup for more on this subject)
It’s easy to look at Facebook, Google, Dropbox etc now and be amazed at how superior they are to the multitude of early competitors that existed in their markets. But they didn’t start that way. All of them started with relatively simplistic products, often less featured than competitors.
There wasn’t a single mainstream social network before Facebook
There were a lot of social networks before Facebook. Faceparty, Friendster, Myspace etc. Facebook executed very well in terms of building their core technology (whereas Friendster had issues with their fast growth). But they also hit the market at the right time, and managed to capitilize and execute on that growth in the right way in order to reach a mainstream audience, giving them a mass market majority that now makes them unstoppable at being a general social network.
Peak MySpace users: 75.9 million in December 2008
Peak Friendster users: ~100 million
Current Facebook users: 1.3 billion
The market adoption they have reached is over 10x any of their early competitors. It’s possible that had Friendster, MySpace etc executed better they could have reached this position, but they didn’t, and Facebook was the first to capture the truly mainstream market.
Similarly, there were a lot of search engines before Google. But all of them peaked in a period before mainstream broadband adoption. Google, however, executed their core product superbly while growing along with the rise in mainstream broadband adoption. They built a dominant position in the mainstream market that no search engine had ever captured before (reaching over a billion users in 2011).
Technology adoption curve
In many ways this is just a slant on the technology adoption lifecycle. As Geoffrey Moore wrote about in Crossing the Chasm, there is a significant gap between the early adopter market and the mainstream market. Being successful with early adopters does not guarantee mainstream market success; and most start-ups die in the attempt.
Although success with early adopters (who are eager to try new things) is usually an essential precursor, the mainstream market works differently. They require social proof from people like them. In the B2B world, this means that to get mainstream buyers in a particular market, you need to show other mainstream customers in that market. For consumers, your mum probably won’t pay attention to a tech-geek saying he’s found a powerful new search engine, but would pay attention to a recommendation from a friend who was similar to her. This is why creating a social app that relies on network effects for most of its value is so difficult.
It’s a chicken and egg situation that every successful start-up has to get past. But as my friend Zander Rafael likes to say, ‘screw the chicken, make an egg’. Doing non-scalable activities that don’t make long-term sense often fit this bill - Paul Graham has a good post on this subject.
Can you displace a dominant mass market company?
Once a company reaches a near-monopoly position in the mass market, they are almost impossible to displace. If you were to try to build a better search engine today, it would be incredibly hard–not least because Google already empoyes the majority of the world’s top search engineers. They are relentlessly improving their product (even though they already own the market) which means new entrants will find it almost impossible to win head-on. They can out-spend, out-hire, and out-market anyone that tries to attack them. A company that reaches this position is highly likely to be remain extremely valuable for decades.
The company can only really be displaced by changing behaviours, or creating new products that re-segment the market in some way (e.g. new tech offering slightly lower performance but with a dramatically lower price). You can’t build a better social network… but you might build another way of connecting with friends, using photos on a smart phone, that works differently (Instagram). You can’t build a better search engine, but could you build a different way of finding information altogether (Google are trying to preempt this with Google Now). The reason it can be difficult for already succesful companies to compete with new or segmented markets is described in The Innovator’s Dilemma, another must-read for technology entrepreneurs and executives.
First to mass market
Being the first to do a product isn’t the most important. It’s being the first to get a product past the early adopter curve and into the mainstream market. Doing that depends not just on building a superior product, and operational excellence, but also on ensuring you don’t suffer from external constraints (eg mass adoption of the required underlying technology, or a behavioural shift), which is another way of saying getting the timing right. If you can be the first to do that, and build a dominant market position, you will build a hugely valuable and sustainable business. And if you continue to execute (hiring the best engineers, constantly improving your product and business) you will be impossible to touch. Until the innovator’s dilemma kicks in, and a plucky entrepreneur changes the game.
Thank you to Zander Rafael and Kieran O’Neill for reading and giving feedback on this post.
Flywheels and the long, slow ramp of death in SaaS
If you run a SaaS business, this video by Gail Goodman, CEO of ConstantContact, is a must-watch. It drills into the detail of attaining that “magic” number of customers, where your monthly recurring revenue (MRR) finally matches your burn rate. You may have been cash-positive before, since you charge for a few months upfront. But this is the point where your business starts looking more than investable: it’s profitable.
And guess what? This path usually doesn’t look like a hockey stick. There is no silver bullet. It isn’t selling via partners or signing that one big account. It’s a long, slow ramp of incremental improvements. Persistence pays. As it should.
Building a SaaS business can be a hard slog. Finding and acquiring customers takes time. But if you ensure you deliver the best possible product, with amazing service, you will have high customer retention - and bit by bit the recurring revenue base will build up into a significant force.
Building a Great Company Culture
Conversocial - Christmas 2011
Conversocial started in 2009 with just a few of us sitting together in the corner of the iPlatform office. 18 months later and we had moved to our own office, but there was still just six of us, all working together, day in day out. I was always interested in articles about company culture, but it was largely irrelevant - we were the company culture. I was interacting with everyone in the team every day. Either we acted in a certain way or we didn’t - there was no need to write it down.
In the last year we’ve grown from ten people to over thirty. Everyone in the company is now in a functional team with their own leader. We have offices in London and New York; and I travel between them every month. This means that some new hires hardly interact with me day-to-day; or even see me at all in their first few weeks, if I’m in our other office.
This is a difficult time for a growing company. Many start-ups, when they go through this stage, end up with a bad company culture. The values that were in their small founding team get dissipated. They end up with middle-management, internal politics, and cross-team committees. They make bad decisions - or slow decisions. They fail to innovate on their product. They struggle to deliver great service to their customers. Their best staff leave, taking valuable knowledge with them.
It was really important to me that this didn’t happen at Conversocial. I want to build an amazing company. A great place to work, with committed staff, awesome products, and happy customers. So how could I ensure that we kept the great culture we’d built as a small initial team now that we were growing up?
I started researching and reading everything I could about building company culture, and I tried to articulate our own culture in a meaningful way. I thought it would be straightforward - but it turned out to be one of the hardest things I’ve ever done. Something would sound great in my head, but it would come out on the page as meaningless management dribble. I’d try again every couple of weeks, and share with my leadership team and board… and often got the same feedback: sounds great, but what does it actually mean? How does this change actual behavior?
I decided to split my answers into two sections:
1. What kind of company are we building?
This was the easier part. It was logical and thought out; and relatively easy to articulate. It was based on decisions that had been actively discussed by management (e.g. our no committee rule; how we use OKRs (objectives and key results), that we buy lunch for everyone every day).
2. What are our values?
This was where it got much harder. After re-writing, and re-writing, and tearing my hair out in frustration at my lack of ability to articulate something I knew was so important, I had a revelation. It was one simple thought - what kind of behavior makes me want to keep and promote someone? I started to think back to times when I’d felt really happy about someone in the team, and what had caused it. From this I was able to quickly articulate the behavior and values we look for.
I spent some time creating a presentation about our culture. I talked through it with our leadership team and board, and presented it to everyone in the company. Then I implemented a new practice: on the first day of every new starter, I sit down with them for an hour to go through the background and history of the company, and talk them through the culture we are trying to create. The presentation I go through is embedded below.
Company culture only exists if it is actually carried out by everyone in the company; by me as CEO, our leadership team, and every individual. I’ve always encouraged everyone in the company to speak out when they disagree; and I explicitly ask everyone to ensure that all of us - leadership included - act in accordance with these values.
As we grow, and learn, and add more team members and experience, I expect our culture to evolve. This is a living document; although created to help make and define our culture, as soon as it stops becoming a reflection of reality it becomes worthless. And it is now up to everyone in the company to help contribute and add to our culture as we grow.
Here are a few great articles and presentations on company culture I learnt from:
If you have others, let me know. I would love to read them and share.
Tweet this post if you like it. Follow me on Twitter here.
iPlatform Joins Betapond
I met Dan Lester at a Facebook Developer Garage evening at the beginning of 2008 (I’d helped set the events up in 2007, and went on to run them until the end of 2010). Bebo and MySpace had launched their application platforms to compete with Facebook, and I had an idea in my head of building something which could combine all three platforms, allowing developers to build once and run everywhere. Then I met Dan - and it turned out he’d already built something similar, an app that could convert Open Social applications (built for Bebo or MySpace) into Facebook applications. We started speaking about teaming up, and eventually in August 2008 we signed our shareholder agreements, and iPlatform Ltd was born.
Over the next six months, we brought our idea to reality. But it soon became apparent that MySpace and Bebo were going downhill, and Facebook was emerging as the major winner. Our idea was largely defunct. Around the same time, we had entered a competition to build a Facebook application for the charity Comic Relief. Our app won, and Comic Relief asked if they could pay us to build another one. Comic Relief had a whole host of high profile organisations and agencies who supported them, and suddenly we were thrust among them as experts in Facebook apps. Many of those organisations hired us to build apps for them too, and we started to build out a team of developers and project managers. iPlatform the app development agency was born
As mainstream digital budgets started to shift towards Facebook in 2009, a lot of companies started asking Facebook who could build apps. By that point, I had been working with Facebook for years with the Facebook Garage, and iPlatform had built up substantial experience with some major brands (although on small, experimental budgets). Facebook began recommending us - a relationship that was later formalised, when they launched their Preferred Developer Consultant program. iPlatform was one of the first ever preferred developers - out of just 14 worldwide - and the first in the UK. Our revenue started to grow quickly.
Although excited with our success, Dan and I really wanted to focus our efforts on building a technology product. We believed that social was the future of communication online, and that this would revolutionise how companies communicated with their customers. At the end of 2009 we decided to start building software that would help companies manage this change. Conversocial was born.
As 2010 progressed, it became clear that Conversocial and iPlatform were two very different offerings; sold differently, to different people in a business. iPlatform was focusing on marketing campaigns, working closely with agencies; whilst Conversocial was focusing on customer service, and selling direct to brands. We realised that for Conversocial to realise our grand ambitions, it would require external VC financing. We decided to separate the companies, operationally at first, and then legally (just before Conversocial closed its Series A).
Over that time we handed over management of the iPlatform business to senior staff, Suzannah Baker and Leighton James, who become Commercial Director and Technical Director respectively, so that Dan and I could focus on Conversocial. Together (and with the rest of the team) they took iPlatform to new levels, working with major new brands and building some of the biggest and most ambitious applications on Facebook (eg the first live voting app using Facebook credits, for Big Brother).
Suzannah had got to know Betapond, and as soon as Dan and I met them we were impressed. They were delivering large sophisticated social projects with major brands. They had raised money and had big global ambitions. In many ways they were what Dan and I would have worked to make iPlatform become had we not decided to focus on Conversocial instead. There was great chemistry between the iPlatform and Betapond teams, and we believed in their management vision. It was a natural fit; and we felt that iPlatform’s vision would be best met by joining with Betapond rather than going it alone.
And now, as shareholders in the combined entity, Dan and I will get to share in their combined vision and ambition.
A massive thanks to Suzannah and Leighton; to all of the iPlatform staff (past and present) who made it a reality; to my family who supported me (with money, food and places to live) whilst we first got iPlatform off the ground; and of course to Dan - we’ve gone a long way since that first Facebook Developer Garage evening.
How to present
I get really bored in most presentations. They’re too salesy, it’s some guy just droning on through a big slide of text, I’m reading the text and stop listening, I lose the point of what they’re telling me etc.
A friend of mine who’d never presented before asked me for some pointers on the fundamentals. I ended up writing quite a bit, so thought I’d re-post it here.
I’ve done a lot of presentations over the years, and watched even more (I was chairman of the Facebook Developer Garage London for 2+ years, meeting monthly often with 6 or more people presenting each night). I’ve also spoken a lot at conferences and for clients. I’m not a pro but do have developed some basic principles for doing a good presentation.
The basic rule is to keep a presentation really simple. You’re there to talk, the slides are just a visual guide. So don’t, whatever you do, put up a slide full of text. Keep each slide to just one point, ideally with a big image and maybe a header. If you don’t have an image that fits, keep it to a simple big one line. Use size 30 font - if you need smaller then you’ve got too much text. Keep it really visually simple and clear, choose a nice font, probably just on a plain white background or similar.
To plan the presentation, I sketch out a mind map plan on paper first, then get this plan into keynote in a very rough way, then start adding images, and gradually refine.
The basic structure should be:
1. Tell them upfront what you’re going to tell them
2. Go into the detail and tell them
3. Summarise by telling them what you’ve just told them.
Whatever your content, don’t do a salespitch. It sucks. Always deliver real value, even if you’re in a sponsored slot or whatever. Give people something interesting they can take away and they’ll remember you, and you’ll get much more value out of it. As long as it’s relevant then they’ll come up and talk to you about your business after, they’ll be warm to follow ups etc.
When you’re actually doing the presentation, main thing is to talk slowly, and pause between points. It’s really easy to talk very fast, but actually it should feel almost uncomfortably slow to you. Give people time to listen and understand. Pause between points, give it time to sink in. Keep your head up, and after making a point look around the room - make eye contact.
Remember people won’t remember much of what you say, so you need to keep it to key points, strong visuals that will make people remember, and repeat key things you want to get across.
The rise of social customer service
Back in 2007, when I saw my first Facebook app, I was struck by a strong feeling that these would be an important way for companies to interact with their customers. I went on to help start the Facebook Developer Garage London and co-founded iPlatform, the UK’s first official Preferred Facebook app development company.
In 2009, with fan pages and Twitter on the rise, the feeling struck again - how companies communicate with their customers was changing, permanently. It was two-way, in public, and it was the future. That feeling led us to develop Conversocial, which launched publicly in July 2010.
As Conversocial got into the wild, we discovered that one of the biggest pain points created by this change in communication was in customer service. Big consumer brands who sold directly to customers (retailers, telcos, financial services, travel etc) were getting direct, real customer service complaints and questions on their Facebook pages and Twitter accounts. Not just people complaining in public ABOUT them, but people speaking directly TO them - something they can not ignore. The type of issues that lead people to phone in if their problem isn’t solved.
The only way companies can deal with this at scale is to plug their customer service teams directly into Facebook and Twitter. But the public nature of the complaints and responses, specific norms of social media, and the fact that they are in a combined marketing channel make this a difficult step for most companies.
Next week we are sponsoring a Chinwag event on social customer service where reps from Facebook, Nando’s, Marks & Spencer, Cap Gemini and We Are Social will be discussing the challenges that companies face in reacting to this shift. Early bird tickets are only on sale for a few more days.
Find out more about the event here
And buy tickets directly here