Archive for April, 2010
Lost In Translation
JumpPost is getting some nice love from the press. Here’s a sample of our coverage.
WPIX Eveneing News: http://jumppo.st/c3CZbQ (VIDEO)
New York Times: http://jumppo.st/cJ7lSS
NY Post: http://jumppo.st/bNbCp3
Gothamist: http://jumppo.st/aktNeD
Curbed: http://jumppo.st/aKa9AU
Generally speaking, I think the press is doing a great job of communicating our value proposition and story. We are supremely grateful for the attention and kind words.
One point of clarification: The NY Post said we are now raising $1 Million. That’s not true. I told Jennifer (who is awesome) that when we are ready to raise, we will likely shoot for north of $1 Million. We aren’t quite there yet. The time element of our fundraising goals was lost in translation. I only clarify because whenever I read in the press that a company is raising money, I interpret that to mean “the company has been in the market and is having a tough time raising money” (Foursquare type rounds excluded)
Not the case with JumpPost. We have not pitched a single investor for outside capital in our 7 months of existence. When we do, I probably won’t advertise it in the newspaper 🙂
Experimenting on the Edges of Your Product
The other day I had the pleasure of spending some time with Joshua Schachter. Over the course of our conversation, I grew to really appreciate his perspective, to the point where I sort of opened up the kimono about the future of JumpPost and the vision that we are testing. What most see on our site today is a small fraction of the vision we are working toward. As I shared more of our thesis, it came out that he and I have been thinking about a very similar problem and some very similar potential solutions to that problem. As we rifled through the various concepts that could revolutionize online classifieds as we know them, we arrived at a point where I asked him the following question:
“so, you see how many untested assumptions we are making about the future of this market and what it needs. The product we’ve built so far has taught me 80% of what I’m going to learn from it, and now my question is how would you start building these new datasets while preserving an existing product that is growing and poised to generate nice cash flows?”
Internally we have been hesitant to run tests within our core product of JumpPost.com, for fear of confusing our community who is just starting to understand our existing value proposition. We were not sure if we should introduce new features or products under our current brand, or perhaps build independent micro-products to collect data that could inform the direction of the mother ship. Also on the table was the option to delay testing these new learnings and assumptions altogether, in the spirit of dedicating 100% of our effort to optimizing our core product and realizing its full potential in its current form.
He told me a story about how he once built 15 prototypes around a concept he was trying to figure out, before finally settling on a long term direction for the project. His advice was to build lightweight tests for all of our assumptions, in separate environments. The reasoning behind his advice was so smart. He said, “when you’re building a product, you come to realize that there are some fundamental design axioms, where you must choose to either go right or left. Rather than arriving at a compromise between the two, use these independent tests as an opportunity to crank the amplitude in either direction to 11 (on a 1-10 knob).” I had been talking to him about looking for signals (or blips) in our dataset, and he explained that when you pick a direction and max out a product based on one direction, you get very clear signals as to whether that was the right direction or not. These signals and learnings can than influence the direction of your core product, even if the appropriate amplitude for consumers within the mother ship is a 5 or 6 in that direction.
I loved this advice. It seems quite logical to me that we are at a point where we can either push our early product onto the market, or we can listen to the market and push it on our current and long term product vision. Many of the learnings we’ve acquired in the last couple months are around axioms that were not even a part of our original consideration for JumpPost. They have broadened our ambitions and exposed weaknesses in our market that we did not conceive of initially. Joshua’s advice helped guide us toward a plan for collecting a new data set not available through our existing product. It makes total sense to me. Why limit your decision making to a single silo of deep data and a ton of superficial market data when you can test the edges and limitations of your deep dataset with complimentary/adjacent product mechanisms?
If anyone has experiences or lessons learned either supporting or contradicting this strategy, please share.
Read Full Post | Make a Comment ( 4 so far )A Parable for 3rd Party App Developers
It used to be that a startups were islands. At the onset of a venture an island consisted of a sandy beach, a jungle, 2 founders, and 2 computers. At first the founders, and then all those who came to work on the island (employees, management, investors, etc..) were focused on building the island into a city the size of Manhattan. Everything that was built on the island was 100% owned and operated by the island. Everything they learned, and everything they did stayed within the island. The reason: in order for any new island to become Manhattan, it had to compete to attract millions of people to its population (users/customers). In order to maintain an edge over the competition, islands did not open up their learnings (data) to new and competitive islands.
The islands that most quickly developed (built out indoor plumbing, public transportation systems, etc)…became the most desirable islands to live on, and their populations began to grow. The first island with a public transportation system began growing fast. As its population grew, the demands of inhabitants began to outpace the rate at which those working to build the island could develop solutions. Inhabitants demanded a hospital, but the founders and employees of the island were still building roads. The smart founders realized that they could not build a hospital fast enough on their own, so they sent a ship to Manhattan, found the guys who built Mount Sanai Hospital (3rd party application developers), and brought them back to the island to build one (3rd party applications) that would be owned by the hospital builders and not the island. The founders and the island supported the hospital builders with local knowledge (open API and dev support), the hospital opened, and the inhabitants were happy. Because they were so happy, inhabitants began to call their extended friends and families on other islands with invitations to come join the island with a new hospital. The island’s population doubled in 2 months, the public transportation system generated 2x the revenue it did pre-hospital, and the island flourished.
A neighboring island, who had not yet built a public transportation system, but that had the best local fruit of any island in the sea, saw the success of this new hospital, and inquired as to whether these magic hospital builders would come build a hospital for them. The hospital builders visited the island, saw that there were 1/10 the inhabitants on fruit island, and explained that they were concerned about their ability to operate a profitable hospital on an island with so few potential patients. The fruit island founders explained that the fruit on their island was going to attract 10 times the inhabitants of public transportation island. The hospital builders, lacking a competitive project at the time agreed to take on the new project, built the hospital, and fruit island’s population grew on a similar trajectory to public transportation island. They island sold 2x the local fruit, and they flourished.
All new islands began to perceive the value of having a hospital (3rd party application), and the hospital builders all of the sudden had more islands calling then they did time and bandwidth to complete the projects. The builders decided to prioritize the projects by which islands had the most inhabitants (user/customers) that would become patients the day the hospital opened its doors. These islands would be the ones where they could recoup their development costs the most quickly. As such, it became harder and harder for new islands to build hospitals, and thus harder for new islands to attract inhabitants.
Public Transportation Island saw a symbiosis in its relationship with the hospital builders, and decided to invite school builders, power utilities, and pretty much any builder from Manhattan to come and build out businesses and infrastructure. All visiting builders could own and operate their projects on top of the island. This time, every other island saw Public Transportation Island’s move, and now understanding the benefits of this concept, immediately extended the same invitation. Public Transportation Island had the largest population, and so had no problem attracting these 3rd party builders, and the question became: how do less scaled islands compete to create the necessary infrastructure to attract inhabitants despite the scale of Public Transportation Island.
Promises of future growth, like that of Fruit Island’s to the hospital builders, became a dime a dozen, and then a group of visionary islands had a break through. They said, “why do we ask these builders to come build our island, create the infrastructure that will help us scale our population, but still consider them visitors and not a part of our island? We believe in cementing our relationship with those that help us grow. From this day forward, those builders who build our hospitals and schools will become owners of our island, a part of our island, and enjoy not just the benefits of their own project’s growth, but the benefits of our entire island’s growth.
Public transportation was not prepared to match this offer because they were already so large, and builders started to leave Public Transportation Island, to build for islands that recognized them as true members of the community…The visionary island chain was able to attract builders who gave up near term revenue opportunities on Public Transportation and other scaled islands, for a piece of the visionary island’s growth (stock options), and this is how a small island was able to grow faster than a scaled island.
Lesson: It’s time for platforms to think of 3rd party developers as team members. Carve out a piece of the rock, reward those who create the most value in your ecosystem with equity in your platform…we understand that Twitter and Apple need to make money, but let the companies on who’s back you built enjoy some of the upside as your platform scales. If you don’t, they’re going to start scaling other environments to supplant you.
Read Full Post | Make a Comment ( 3 so far )Apple hit’s “RESET” on the LBS market
By now you have probably read Dave Mcclure’s post positing that Foursquare will lose to Facebook in the Location Based Services race. He argues that applications like Foursquare and Gowalla are not capable of scaling fast and cost effectively enough to beat out larger platforms like Facebook and Google, and delivers a sobering message to some of the more hyped early stage companies in the venture/startup community. I agree with Dave’s assertion that Foursquare is going to have a hard time winning here, but for a completely different reason than any he suggests.
I’ll start with the assertion that the location space will not be won or lost at the consumer application level. I was talking with my partners at Lerer Ventures a few weeks ago about whether or not I’d invest in Foursquare at the meteoric valuations being thrown around in the press, and my answer was yes…but not because I thought it was such an amazing consumer experience that it would grow to 400 million users and become the next Facebook. My thesis was that the first company in the “check in” space to build a critical mass of users and check ins would expose it’s API to 3rd party developers and become the default platform on which all future applications wishing to leverage the all-valuable location data point would build. Location is such a clean and highly monetizable dataset that I believe many applications will wish to use it as input in their services, and I thought Foursquare stood a decent chance of being the provider of this data, very similar to how Facebook has become the default API on which every developer wishing to leverage the “social graph” will build. Fred Wilson recently wrote a post which in my opinion correctly stated that in order for a platform to truly dominate, it must be successful in attracting 3rd party application developers to build out the surrounding ecosystem. Foursquare had the potential to do this.
I use the past tense in light of a recent announcement made by Apple, which I believe was largely overlooked by Mcclure, and to be honest I haven’t really seen anyone talking about what I perceive to be an overnight and massive disruption to the entire “check in” market. Foursquare and other “check-in” based applications were working toward the most interesting location dataset I know of, but even it is still quite incomplete. In the absence of “persistent tracking”, which would be a continuous line of a given users movement through the physical world, “check in” companies began to collect multiple location data points per user. If you mapped those data points, it would look more like a constellation than a smooth and continuous line. Apple just announced that with their new operating system, applications will be able to engage in “persistent location tracking.” Basically, they opened the door for any application that successfully acquires a database of “smooth lines” to supplant Foursquare as the default API on which other application developers will build. If I am a 3rd party developer, I would much rather build atop the “smooth line” database than a few spotty check-ins per user, and the “check in” is not a mechanism that was designed to capture “smooth line” data. If the LBS market were a game of Contra, Apple basically just hit the “RESET” button when Foursquare was on Level 7, and now Foursquare, like Facebook and every other platform chasing this attractive dataset, is back to “up up, down down, left, right, left, right, B, A, B, A, Select, Start.” Game On.
P.S. If I have misunderstood the implications of Apple’s announcement, please feel free to bombard me with insults.
P.P.S. Now that I think about it, if I’m Foursquare, this development would be an awfully good reason to take the early exit offer from Microsoft…
Read Full Post | Make a Comment ( 14 so far )Founder / Life Balance
This is the first day in about 3 months that I have had trouble concentrating on work. I have been more or less laser focused on building JumpPost and our new seed fund, to the point where I sit down at my computer at 9:00AM, blink, and it is 11:00PM. There is a benefit to this level of focus, which is that you get a shitload done in a given week, create value for your shareholders, etc…but there is also a hazard. The hazard is that when you allocate so much focus toward pushing your professional ambitions forward, you don’t realize how badly you’ve been neglecting everything else that’s worth living for…
Now, I am all for sacrifice in the name of building and creating, and there isn’t a day that goes by that I question the decisions I’m making and how I’m prioritizing the various aspects of my life…but even within the bounds of what I know is important to me at this stage in life, I realize there are times when life can become imbalanced. Today, it is 4:04 PM, I’m sitting in my office with all the windows open, the sun is shining through and there is a warm breeze blowing all the papers on my desk ever so gently. It is good Friday, half the world isn’t working because of holiday, and the other half (at least in New York where this is the first Spring day we’ve had in weeks) is checked out and catching some rays, and I am sitting here, staring at a double monitor, a to do list a mile long, and if this were any other day, I’d be cranking for another 4-8 hours…
But, today is a day where I am not focused. Refreshingly unfocussed for that matter. Today is a day that I have decided to remind myself that there is work and there is life, and it’s okay for work to be life, but it’s ALSO OKAY FOR LIFE TO BE LIFE. I think I’ll go buy an ice cream, walk to union square, talk to a few strangers, go out for a nice dinner, find a bar with an outdoor area, meet some interesting people, not check my email all night, and believe it or not…neither my company, nor our fund, nor any other ambition that I have been focused on will fall apart between now and tomorrow morning.
Too often in startup world, especially when the message of relentless sacrifice is drilled into us by fellow founders, investors, and the community at large, we suffer for the sake of suffering…it is easy to get into the mindset of not allowing ourselves any leisure or break from the mission…but as much as you’d like to think you are a machine, and as much as you’d like your investors and peers to think you are a machine, the reality is you’re human, and the sun on your face and a breeze in your hair is an important part of life that is worth grabbing when it presents itself. Computer off, leisure on. If you need to get in touch with me and it’s urgent…DON’T.
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